-----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, OfmjHWzdkdse62xuOr6M+dQEEMshwl75Kgo7uKdQxNL59W+AS6BVfkrp11jLlCmM fglF1N8YcAJ7+T3eWDSkNQ== 0001072993-00-000561.txt : 20000922 0001072993-00-000561.hdr.sgml : 20000922 ACCESSION NUMBER: 0001072993-00-000561 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 34 FILED AS OF DATE: 20000803 DATE AS OF CHANGE: 20000815 GROUP MEMBERS: ALUWILL ACQUISITION CORP. GROUP MEMBERS: CAREY INTERNATIONAL INC GROUP MEMBERS: CHARTWELL INVESTMENTS II LLC GROUP MEMBERS: FORD MOTOR COMPANY GROUP MEMBERS: LIMOUSINE HOLDINGS, LLC GROUP MEMBERS: VIP HOLDINGS II, LLC GROUP MEMBERS: VIP HOLDINGS III, LLC GROUP MEMBERS: VIP HOLDINGS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CAREY INTERNATIONAL INC CENTRAL INDEX KEY: 0000747201 STANDARD INDUSTRIAL CLASSIFICATION: 4100 IRS NUMBER: 521171965 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: SEC FILE NUMBER: 005-51263 FILM NUMBER: 685770 BUSINESS ADDRESS: STREET 1: 4530 WISCONSIN AVE NW STREET 2: STE 500 CITY: WASHINGTON STATE: DC ZIP: 20016 BUSINESS PHONE: 2028951200 MAIL ADDRESS: STREET 1: 4530 WISCONSIN AVE NW STREET 2: STE 500 CITY: WASHINGTON STATE: DC ZIP: 20016 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CAREY INTERNATIONAL INC CENTRAL INDEX KEY: 0000747201 STANDARD INDUSTRIAL CLASSIFICATION: 4100 IRS NUMBER: 521171965 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 4530 WISCONSIN AVE NW STREET 2: STE 500 CITY: WASHINGTON STATE: DC ZIP: 20016 BUSINESS PHONE: 2028951200 MAIL ADDRESS: STREET 1: 4530 WISCONSIN AVE NW STREET 2: STE 500 CITY: WASHINGTON STATE: DC ZIP: 20016 SC TO-I 1 0001.txt SCHEDULE TO - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- SCHEDULE TO (Rule 14D-100) --------------- TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR SECTION 13(E)(1)OF THE SECURITIES EXCHANGE ACT OF 1934 CAREY INTERNATIONAL, INC. (Name of Subject Company) ALUWILL ACQUISITION CORP. CAREY INTERNATIONAL, INC. (Offerors Filing Schedule) CHARTWELL INVESTMENTS II LLC LIMOUSINE HOLDINGS, LLC VIP HOLDINGS, LLC VIP HOLDINGS II, LLC VIP HOLDINGS III, LLC FORD MOTOR COMPANY# (Affiliates of Offerors Filing Schedule) COMMON STOCK, PAR VALUE $0.01 PER SHARE (Title of Class of Securities) 141750109 (CUSIP Number of Class of Securities) --------------- Vincent A. Wolfington Todd R. Berman Chairman and Chief Executive Officer President Carey International, Inc. Chartwell Investments II LLC 4530 Wisconsin Ave., N.W., Fifth 717 Fifth Avenue, 23rd Floor Floor New York, New York 10022 Washington, D.C. 20016 (212) 521-5500 (202) 895-1200 (Name, Address and Telephone Number of (Name, Address and Telephone Number Person Authorized to Receive Notices and of Person Authorized to Receive Communications on Behalf of Aluwill Notices and Communications on Behalf Acquisition Corp., Chartwell Investments of Carey International, Inc.) II LLC, Limousine Holdings, LLC, VIP Holdings, LLC, VIP Holdings II, LLC, VIP Holdings III, LLC and Ford Motor Company) --------------- With a copy to: John P. Driscoll, Jr. Russell W. Parks, Jr. James E. Dawson Paul A. Belvin Nutter, McClennen & Fish, LLP Akin, Gump, Strauss, Hauer & Feld, One International Place L.L.P. Boston, MA 02110 1333 New Hampshire Avenue, N.W., Suite (617) 439-2000 400 Washington, DC 20036 (202) 887-4000 CALCULATION OF FILING FEE - - ---------------------------------------- - - ----------------------------------------
Transaction Valuation* Amount of Filing Fee* - - ---------------------------------------- $214,868,310 $42,973.66 - - ----------------------------------------
* Estimated for purposes of calculating amount of filing fee only. This amount assumes the purchase of all outstanding shares of common stock (the "Shares") of Carey International, Inc. (the "Company") at the tender offer price of $18.25 per Share. As of July 24, 2000, there were (1) 9,848,729 Shares issued and outstanding and (2) unexercised options and warrants to acquire 1,924,877 Shares with an exercise price of less than $18.25 per Share. Based on the foregoing, the transaction value is equal to the product of (1) the sum of 9,848,729 Shares outstanding and 1,924,877 Shares subject to options and warrants to purchase Shares with an exercise price of less than $18.25 per Share, and (2) $18.25 per Share. The amount of the filing fee, calculated in accordance with Section 14(g) and Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. [_] Check the box if any part of the fee is offset as provided by Rule 0- 11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. Amount Previous Paid: Filing Party: Form or Registration No.: Date Filed: [_] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X]third-party tender offer subject to Rule 14d-1. [X]issuer tender offer subject to Rule 13e-4. [X]going-private transaction subject to Rule 13e-3. [_]amendment to Schedule 13D under Rule 13d-2. - - ------- # Only Carey International, Inc. is deemed to be a Rule 13e-3 filing person. Aluwill Acquisition Corp., Limousine Holdings, LLC, VIP Holdings, LLC, VIP Holdings II, LLC, VIP Holdings III, LLC, Chartwell Investments II LLC and Ford Motor Company are filing persons only for purposes of Rule 14d-1. Check the following box if the filing is a final amendment reporting the results of the tender offer: [_] - - ------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------- This Tender Offer Statement on Schedule TO relates to the joint tender offer by Carey International, Inc., a Delaware corporation ("Carey International"), and Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), to purchase all of the outstanding shares of Carey International's common stock, par value $0.01 per share, at a price of $18.25, net to the seller in cash, without interest. This joint tender offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase") and in the related Letter of Transmittal (the "Letter of Transmittal"), which, as each may be amended and supplemented from time to time, together constitute the "Offer". Carey International and Acquisition Company are collectively referred to herein as the "Offerors". VIP Holdings, LLC, VIP Holdings II, LLC and VIP Holdings III, LLC, each a Delaware limited liability company (collectively, "Holdings"), Limousine Holdings, LLC, a Delaware limited liability company ("Parent"), Chartwell Investments II LLC, a Delaware limited liability company ("Chartwell") and Ford Motor Company, a Delaware corporation ("Ford"), are affiliates of Acquisition Company (the "Affiliates"). This Tender Offer Statement on Schedule TO is intended to satisfy the reporting requirements of Section 13(e) of the Securities Exchange Act of 1934, as amended. The information in the Offer to Purchase and the related Letter of Transmittal, copies of which are attached to this Schedule TO as Exhibits (a)(1)(i) and (a)(1)(ii), respectively, is incorporated herein by reference in response to all of the Items of this Schedule TO as more particularly described below. ITEM 1. SUMMARY TERM SHEET. The information set forth in the Summary Term Sheet in the Offer to Purchase is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the subject company/issuer is Carey International, Inc., a Delaware corporation. The Company's executive offices are located at 4530 Wisconsin Avenue, N.W., Fifth Floor, Washington, D.C. 20016. The telephone number of Carey International at such offices is (202) 895-1200. (b) The class of securities to which this statement relates is the common stock, par value $.01 per share, of Carey International, of which 9,848,729 shares were issued and outstanding as of July 24, 2000. (c) The information set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Section 5 (Price Range of Shares)" is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a)-(c) This Tender Offer Statement is filed by the Offerors and the Affiliates. The information set forth in the sections of the Offer to Purchase captioned "The Tender Offer -- Section 7 (Certain Information Concerning Carey International)," "The Tender Offer -- Section 8 (Certain Information Concerning Chartwell, Holdings, Parent and Acquisition Company)" and "The Tender Offer -- Section 9 (Certain Information Concerning Ford)" and on Schedules I, II and III to the Offer to Purchase is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a)-(b) The information set forth in the Offer to Purchase is incorporated herein by reference. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (a) The information set forth on Schedules I, II and III to the Offer to Purchase is incorporated herein by reference. 2 (b) The information set forth in the sections of the Offer to Purchase captioned "Introduction," "Special Factors -- Section 1 (Background of the Transaction; Contacts with Carey International)" and "Special Factors -- Section 7 (The Merger Agreement and Related Documents)" is incorporated herein by reference. (c) The information set forth in the sections of the Offer to Purchase captioned "Special Factors -- Section 7 (The Merger Agreement and Related Documents)" and "Special Factors -- Section 8 (Interests of Certain Persons in the Transaction)" is incorporated herein by reference. ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS. (a) The information set forth in the sections of the Offer to Purchase captioned "Introduction" and "Special Factors -- Section 4 (Purpose and Structure of the Transaction)" is incorporated herein by reference. (b) The information set forth in the sections of the Offer to Purchase captioned "Introduction", "Special Factors -- Section 7 (The Merger Agreement and Related Documents)" and "The Tender Offer -- Section 1 (Terms of the Offer)" is incorporated herein by reference. (c) The information set forth in the sections of the Offer to Purchase captioned "Introduction", "Special Factors -- Section 4 (Purpose and Structure of the Transaction)", "Special Factors -- Section 5 (Plans for Carey International after the Transaction)", "Special Factors -- Section 7 (The Merger Agreement and Related Documents)", "Special Factors -- Section 8 (Interests of Certain Persons in the Transaction)", "Special Factors -- Section 9 (Financing of the Transaction)", "The Tender Offer -- Section 10 (Source and Amount of Funds)" and "The Tender Offer -- Section 11 (Effect of the Offer on the Market for the Common Stock; Exchange Act Registration)" is incorporated herein by reference. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) and (d) The information set forth in the sections of the Offer to Purchase captioned "Introduction", "Special Factors -- Section 9 (Financing of the Transaction)," "The Tender Offer -- Section 10 (Source and Amount of Funds)," and "The Tender Offer -- Section 12 (Conditions to the Offer)" is incorporated herein by reference. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) The information set forth in Schedules I, II and III of the Offer to Purchase is incorporated herein by reference. (b) The information set forth in the sections of the Offer to Purchase captioned "Tender Offer -- Section 7 (Certain Information Concerning Carey International)", "Tender Offer -- Section 8 (Certain Information Concerning Holdings, Parent, Acquisition Company and Chartwell)," "Tender Offer -- Section 9 (Certain Information Concerning Ford)" and Schedules I, II and III to the Offer to Purchase is incorporated herein by reference. ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED. The information set forth in the sections of the Offer to Purchase captioned "Introduction," "Special Factors -- Section 11 (Fees and Expenses)," and "The Tender Offer -- Section 14 (Fees and Expenses)" is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS. (a) (1) The audited consolidated financial statements of Carey International as of and for the fiscal years ended November 30, 1999 and November 30, 1998 are incorporated into this Schedule TO by reference to the Consolidated Financial Statements of Carey International included as Item 8 to Carey International's Annual 3 Report on Form 10-K for the fiscal year ended November 30, 1999 filed with the Securities and Exchange Commission (the "Commission") on February 28, 2000.* (a) (2) The unaudited consolidated financial statements of Carey International for the three and six month fiscal periods ended May 31, 2000 are incorporated into this Schedule TO by reference to Part I of the Carey International's Quarterly Report on Form 10-Q for the quarterly fiscal period ended May 31, 2000 filed with the Commission on July 17, 2000.* (a) (3)-(4) The information set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Section 7 (Certain Information Concerning Carey International)" is incorporated herein by reference. (b) Pro-forma financial statements of Carey International are not material to the Offer. Each of Holdings, Parent and Acquisition Company is a newly- formed entity with no material assets or liabilities. See the information set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Section 8 (Certain Information Concerning Chartwell, Holdings, Parent and Acquisition Company)". ITEM 11. ADDITIONAL INFORMATION. (a) (1) None. (a) (2)-(3) The information set forth in the sections of the Offer to Purchase captioned "Introduction," and "The Tender Offer -- Section 13 (Certain Legal Matters; Regulatory Approvals)" is incorporated herein by reference. (a) (4) The information set forth in the section of the Offer to Purchase captioned "The Tender Offer -- Section 11 (Effect of the Offer on the Market for the Common Stock; Exchange Act Registration)" is incorporated herein by reference. (a) (5) None. (b) The information set forth in the Offer to Purchase is incorporated herein by reference. ITEM 12. EXHIBITS The exhibits listed in the accompanying Exhibit Index are filed as part of this Schedule TO. ITEM 13. ADDITIONAL INFORMATION REQUIRED BY SCHEDULE 13E-3. The information in the Offer to Purchase is incorporated herein by reference in answer to the information required by Schedule 13E-3 that is not included or covered by the other items of this Schedule TO. - - -------- * Information is available to the public at the website maintained by the Commission at http://www.sec.gov. 4 SIGNATURE After due inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: August 3, 2000 Carey International, Inc. /s/ Vincent A. Wolfington By: _________________________________ Name: Vincent A. Wolfington Title: Chairman and Chief Executive Officer Aluwill Acquisition Corp. /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title: President Limousine Holdings, LLC /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title: Manager VIP Holdings, LLC /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title: Manager VIP Holdings II, LLC /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title Manager VIP Holdings III, LLC /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title: Manager Chartwell Investments II LLC /s/ Todd R. Berman By: _________________________________ Name: Todd R. Berman Title: President Ford Motor Company /s/ Kathryn K. Lamping By: _________________________________ Name: Kathryn K. Lamping Title: Assistant Secretary 5 EXHIBIT INDEX (a) (1) (i) Offer to Purchase. (a) (1) (ii) Letter of Transmittal. (a) (2)* Letter to Stockholders from Vincent A. Wolfington, Chairman and Chief Executive Officer of Carey International, dated August 3, 2000. (a) (3) See exhibit (a)(1)(i). (a) (4) Not applicable. (a) (5) (i) Notice of Guaranteed Delivery. (a) (5) (ii) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a) (5) (iii) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a) (5) (iv) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a) (5) (v) Press Release dated July 19, 2000. Incorporated by reference to Carey International's Schedule TO-C filed on July 19, 2000. (a) (5) (vi) Letter to Employees, Subsidiaries and Licensees dated July 20, 2000. Incorporated by reference to Carey International's Schedule TO-C filed on July 20, 2000. (a) (5) (vii) Summary Advertisement dated August 3, 2000. (b) (i) Senior Credit Facility Commitment Letter, dated July 12, 2000, by and among Chartwell, First Union National Bank, Fleet National Bank, First Union Securities and Fleet Robertson Stephens Inc. (b) (ii) Senior Subordinated Note Commitment Letter, dated July 12, 2000, by and among Chartwell, GarMark Advisors L.L.C. and First Union Investors, Inc. (b) (iii) Form of Loan Agreement by and between Acquisition Company and Carey International. (c) (1)* Opinion of Benedetto, Gartland & Company, Inc., dated July 15, 2000. (c) (2) Presentation by Benedetto, Gartland & Company, Inc., made to Carey International's Board of Directors on July 15, 2000. (c) (3)* Opinion of Friedman Billings Ramsey & Co., Inc., dated July 15, 2000. (c) (4) Presentation of Friedman Billings Ramsey & Co., Inc., made to the Special Committee of the Board of Directors on July 15, 2000. (d) (i) Agreement and Plan of Merger, dated as of July 19, 2000, by and among Carey International, Acquisition Company, Parent and Eranja Acquisition Sub, Inc. and certain exhibits thereto. Incorporated by reference to Exhibit 2.1 to Carey International's Current Report on Form 8-K dated July 19, 2000 and filed on July 26, 2000. (d) (ii) Stock Option Agreement, dated as of July 19, 2000, by and among Parent, Acquisition Company and Carey International. Incorporated by reference to Exhibit 4.1 to Carey International's Current Report on Form 8-K dated July 19, 2000 and filed on July 26, 2000. (d) (iii) Employment Agreement, dated as of May 12, 2000, by and between Carey International and Vincent A. Wolfington. (d) (iv) Employment Agreement, dated as of May 12, 2000, by and between Carey International and Don R. Dailey. (d) (v) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and David H. Haedicke. (d) (vi) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and Devin J. Murphy. (d) (vii) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and Sally A. Snead. (d) (viii) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and Guy C. Thomas. (d) (ix) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and Eugene S. Willard.
6 (d) (x) Severance, Change of Control and Noncompetition Agreement, dated as of May 12, 2000, by and between Carey International and John C. Wintle. (d) (xi) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Vincent A. Wolfington. (d) (xii) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Don R. Dailey. (d) (xiii) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Richard A. Anderson, Jr. (d) (xiv) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and David H. Haedicke. (d) (xv) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Gary L. Kessler. (d) (xvi) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Devin J. Murphy. (d) (xvii) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Sally A. Snead. (d) (xviii) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Guy C. Thomas. (d) (xix) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and Eugene S. Willard. (d) (xx) Agreement to enter into Option Exercise/Cancellation Agreement, dated as of July 19, 2000, by and between Acquisition Company and John C. Wintle. (e) (i) Form of Letter Agreement to be entered into by and between Chartwell and Acquisition Company. (e) (ii) Form of Management Consulting Agreement to be entered into by and between Carey International and Chartwell. (e) (iii) Form of Management Consulting Agreement to be entered into by and between Carey International and Ford. (f)* Section 262 of the Delaware General Corporation Law regarding Appraisal Rights. (g) Not applicable. (h) Not applicable.
- - -------- * Included in copies of the Offer to Purchase (Exhibit (a)(1)(i)). 7 EX-99.A.1.I 2 0002.txt EXHIBIT (A)(1)(I) EXHIBIT (a)(1)(i) CAREY INTERNATIONAL LOGO August 3, 2000 Dear Stockholders: On behalf of the Board of Directors of Carey International, Inc. (the "Company"), I am pleased to inform you that on July 19, 2000 the Company entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with Limousine Holdings, LLC ("Parent"), Aluwill Acquisition Corp. ("Acquisition Company"), a subsidiary of Parent, and Eranja Acquisition Sub, Inc., affiliates of Chartwell Investments II LLC, a New York private-equity firm, and Ford Motor Company, pursuant to which the Company and Acquisition Company have today commenced a tender offer to purchase all of the outstanding shares (the "Shares") of the Company's common stock at $18.25 per Share in cash without interest (the "Offer"). Your Board of Directors has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger (as defined below), and has determined that the Offer and the Merger are advisable, fair to and in the best interests of the stockholders of the Company. Your Board of Directors unanimously recommends that stockholders accept the Offer and tender their Shares in accordance with its terms. In arriving at its recommendation, the Board of Directors gave careful consideration to the factors described in the enclosed Offer to Purchase (which has been filed with the Securities and Exchange Commission), including, among other things, (i) the recommendation of a special committee composed of outside members of the Board and the opinion dated July 15, 2000 of Friedman Billings Ramsey & Co., Inc., the financial advisor to the special committee of the Board, that, as of such date and subject to the assumptions, limitations and qualifications set forth in the opinion, the $18.25 per Share cash consideration to be received by the holders of Shares in the Offer and the Merger is fair to such holders (other than certain management holders) from a financial point of view and (ii) the opinion dated July 15, 2000 of Benedetto, Garland & Company, Inc., the financial advisor to the Board, that, as of such date and subject to the assumptions, limitations and qualifications set forth in the opinion, the $18.25 per Share cash consideration to be received by the holders of Shares in the Offer and the Merger is fair to such holders (other than certain management holders) from a financial point of view. Consummation of the Offer is subject to, among other things, (i) at least 5,216,072 Shares, which number of Shares constitutes a majority of the Shares outstanding (including the Shares issuable upon exercise of certain outstanding options and warrants), being validly tendered and not withdrawn prior to the expiration of the Offer and (ii) receipt of funds from lenders to the Company and Acquisition Company and Parent's capital contribution to Acquisition Company sufficient to, among other things, purchase the Shares tendered in the Offer. Following the successful completion of the Offer, upon approval by a stockholder vote, if required, Acquisition Company or Eranja Acquisition Sub, Inc. will be merged with and into the Company (the "Merger"), and all Shares not purchased pursuant to the Offer or in related transactions will be converted into the right to receive $18.25 per Share in cash without interest (except any Shares as to which the holder has properly exercised appraisal rights). In order to facilitate your review of the Offer we are attaching the Offer to Purchase and various materials relating to the Offer, including a Letter of Transmittal, which are necessary for tendering your Shares in the Offer. These documents state the terms and conditions of the Offer and provide instructions on how to tender your Shares. I urge you to read these documents carefully in making your decision on whether to tender your Shares pursuant to the Offer. Very truly yours, /s/ Vincent A. Wolfington Vincent A. Wolfington Chairman of the Board and Chief Executive Officer Offer to Purchase for Cash All Outstanding Shares of Common Stock (Including the Associated Preferred Share Purchase Rights) of CAREY INTERNATIONAL, INC. at $18.25 Net Per Share by ALUWILL ACQUISITION CORP. and by CAREY INTERNATIONAL, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, AUGUST 31, 2000, UNLESS THE OFFER IS EXTENDED. THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF JULY 19, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG CAREY INTERNATIONAL, INC. ("CAREY INTERNATIONAL"), LIMOUSINE HOLDINGS, LLC ("PARENT"), ALUWILL ACQUISITION CORP. ("ACQUISITION COMPANY") AND ERANJA ACQUISITION SUB, INC. THE BOARD OF DIRECTORS OF CAREY INTERNATIONAL HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER (AS DEFINED HEREIN) AND THE MERGER (AS DEFINED HEREIN), AND HAS DETERMINED THAT THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF CAREY INTERNATIONAL. THE BOARD OF DIRECTORS OF CAREY INTERNATIONAL UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT THERETO. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST 5,216,072 SHARES, WHICH NUMBER OF SHARES CONSTITUTES A MAJORITY OF THE SHARES OUTSTANDING (INCLUDING FOR THESE PURPOSES SHARES ISSUABLE UPON THE EXERCISE OF COMPANY OPTIONS (AS DEFINED HEREIN) BY PERSONS WHO HAVE NOT AGREED TO ENTER INTO OPTION EXERCISE AGREEMENTS (AS DEFINED HEREIN) AFTER GIVING EFFECT TO THE CANCELLATION OF ANY SHARES PURCHASED BY CAREY INTERNATIONAL) AND (2) CAREY INTERNATIONAL AND/OR ACQUISITION COMPANY HAVING RECEIVED OR HAVING AVAILABLE THE PROCEEDS FROM THE FINANCING CONTEMPLATED BY THE FINANCING COMMITMENT LETTERS (AS DEFINED HEREIN) AND THE PROCEEDS FROM THE CAPITAL CONTRIBUTION (AS DEFINED HEREIN), INCLUDING, BUT NOT LIMITED TO, PROCEEDS SUFFICIENT TO (A) FINANCE THE PURCHASE OF THE SHARES THAT CAREY INTERNATIONAL AND ACQUISITION COMPANY ARE AGREEING TO PURCHASE PURSUANT TO THE OFFER, (B) PAY THE MERGER CONSIDERATION (AS DEFINED HEREIN) PURSUANT TO THE MERGER, (C) PURCHASE CERTAIN SECURITIES OF CAREY INTERNATIONAL PURSUANT TO THE CAREY PURCHASE AGREEMENTS (AS DEFINED HEREIN), (D) REPAY OUTSTANDING INDEBTEDNESS OF CAREY INTERNATIONAL AND ITS SUBSIDIARIES AND (E) PAY THE FEES AND EXPENSES REQUIRED TO BE PAID IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN THIS OFFER TO PURCHASE AND IN THE RELATED LETTER OF TRANSMITTAL. IMPORTANT If you wish to tender all or any part of the shares of common stock registered in your name, you should carefully follow the instructions described in "THE TENDER OFFER -- Procedures for Tendering Shares," including completing a Letter of Transmittal in accordance with the instructions in the Letter of Transmittal and delivering it, along with your share certificates and any other required items, to United States Trust Company of New York, the Depositary. If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you desire to tender your shares, you should contact the nominee and request that the nominee tender the shares for you. Any stockholder who desires to tender shares and whose certificates for such shares are not immediately available or cannot be delivered to the Depositary or who cannot comply with the procedure for book-entry transfer or whose other required documents cannot be delivered to the Depositary by the expiration of the offer, must tender the shares pursuant to the guaranteed delivery procedure set forth in "THE TENDER OFFER -- Procedures for Tendering Shares." To tender shares properly, you must validly complete the Letter of Transmittal. You may request additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery from D.F. King & Co., Inc., which is acting as the Information Agent, at its address and telephone numbers set forth on the back cover of this Offer to Purchase. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES IN THIS OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR REPRESENTATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR AUTHORIZATION AS HAVING BEEN AUTHORIZED BY THE OFFERORS. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction or passed upon the fairness or merits of this transaction or upon the accuracy or adequacy of the disclosure contained in this document. Any representation to the contrary is unlawful and a criminal offense. ii SUMMARY TERM SHEET This summary term sheet highlights certain information from this offer to purchase. To understand the offer fully and for a more complete description of the terms of the offer, we urge you to read carefully this entire offer to purchase and the related letter of transmittal. We have included page references parenthetically to direct you to a more complete description of the topics in this summary. Questions and Answers About the Offer and the Merger Q:Who is offering to buy my securities? (Page 1) A: Aluwill Acquisition Corp. (which we refer to in this section as Acquisition Company), and Carey International, Inc. (which we refer to in this section as Carey International) are making a joint offer to purchase your securities. However, you will only tender your shares to a single depositary which will receive payment from either Acquisition Company or Carey International. VIP Holdings, LLC, VIP Holdings II, LLC, VIP Holdings III, LLC, Limousine Holdings, LLC and Acquisition Company are all newly formed entities created by Chartwell Investments II LLC to effect the transactions described in this offer to purchase. Ford Motor Company is an investor in and affiliate of Limousine Holdings, LLC. In the event that the shares tendered in the offer, plus shares acquired by Acquisition Company from (1) Carey International and (2) certain members of management of Carey International, constitute greater than 90% of the outstanding shares, Acquisition Company will purchase all tendered shares. If this requirement is not met, but all of the conditions to the Offer have been waived or met, Acquisition Company will purchase up to 5,232,876 shares and Carey International will purchase all shares tendered in excess of those shares purchased by Acquisition Company. Q:What are the classes and amounts of securities sought in the offer? (Page 1) A: We are offering to purchase all of the outstanding shares of Carey International's common stock, or any lesser number of shares that stockholders properly tender in the offer, assuming the conditions to the offer are met. Q:How much are the bidders offering to pay me and what is the form of payment? (Page 1) A: We are offering to pay you $18.25 per share in cash, without interest. Q:Do the bidders have the financial resources to pay me for my shares? (Page 46) A: We expect we will have sufficient funds to purchase the tendered shares. We have entered into commitment letters with senior secured financing, subordinated debt financing and equity financing sources. In these commitment letters, the financing sources have committed, subject to certain conditions that we believe are customary, including the execution of definitive agreements, to provide all financing necessary to purchase all shares that are tendered in the offer. The offer, however, is conditioned upon our obtaining these funds, and there is the possibility that we will not obtain these funds due to the various conditions in the commitment letters not being met. Q: Is the financial condition of the bidders relevant to my decision on whether to tender in the offer? (Page 64) A: No. We do not believe that the financial condition of any bidder is important to your decision since we are paying you cash for your shares and we are offering to purchase all outstanding shares of Carey International's common stock. Q: When does the offer expire? (Page 55) A: The offer expires on August 31, 2000, at 5:00 p.m., New York City time, unless we extend it. If you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure. This procedure is described later in this offer to purchase. iii Q: Can the offer be extended and under what circumstances? (Page 55) A: Yes, we may extend the offer at any time, subject to the terms of the merger agreement. However, we cannot assure you that the offer will be extended or, if extended, for how long. If we extend the offer, we will make a public announcement of the new expiration date not later than 9:00 a.m., New York City time, on the day after the day on which the offer was scheduled to expire. Q: How do I tender my shares? (Page 57) A: If you hold your shares "of record" (meaning you hold stock certificates issued in your name), you can tender your shares by sending the enclosed letter of transmittal to United States Trust Company of New York at the address listed on the enclosed letter of transmittal. The letter of transmittal must be received by United States Trust Company of New York not later than the time and date on which the offer expires. If your broker holds your shares in "street name" for you, you must call your broker and instruct him or her to tender your shares. If your share certificates are not immediately available for delivery to United States Trust Company of New York, you must comply with the guaranteed delivery procedure described in the offer prior to the date the offer expires. If you have any questions, you should contact the information agent or your broker for assistance. Q: What is the purpose of the offer? (Page 22) A: Our offer to purchase your securities is one part of a multi-step transaction that will result in Limousine Holdings, LLC owning approximately 92.0% of the outstanding shares of common stock of Carey International, and certain members of management of Carey International owning approximately 8.0%. As a result of this transaction, Carey International will no longer be a publicly-traded company. Q: What are the most significant conditions to the offer? (Page 68) A: Our obligation to pay for any tendered shares depends upon a number of conditions, including: . There being validly tendered and not withdrawn prior to the expiration of the offer at least 5,216,072 shares. . Obtaining sufficient equity and debt financing: (1) to purchase the shares tendered in the offer, (2) to pay for any non-tendered shares in the merger, (3) to pay for any securities of Carey International to be acquired pursuant to the various agreements executed in connection with the merger agreement, (4) to repay certain outstanding indebtedness of Carey International and (5) to pay for the various fees and expenses incurred in connection with the merger and the offer. . There being no legal action pending, threatened or taken that might adversely affect the offer or the merger. . There being no breach of any representation or warranty in the merger agreement by Carey International that would have a material adverse effect on Carey International. Q: Until what time can I withdraw previously tendered shares? (Page 59) A: You may withdraw your tendered shares at any time before 5:00 p.m., New York City time, on August 31, 2000 or, if the offer is extended, the last day of the period for which it is extended. In addition, if we have not agreed by October 1, 2000 (or such later date as may apply if the offer is extended) to accept your shares for payment, you can withdraw them at any time until we accept shares for payment. Q: How do I withdraw previously tendered shares? (Page 59) A: You can withdraw shares that you have already tendered by sending a written notice of withdrawal to United States Trust Company of New York while you still have the right to withdraw the shares. iv Q: What does my board of directors think of the offer? (Page 10) A: Your board of directors, based upon the unanimous recommendation of an independent special committee of the board of directors, has unanimously approved the merger agreement, the offer and the merger and has determined that the offer and the merger are advisable, fair to, and in the best interests of the stockholders of Carey International. Your board of directors unanimously recommends that stockholders accept the offer and tender their shares. Q: How did my board of directors make sure the price per share I will receive in the offer and subsequent merger is fair? (Page 14) A: The board of directors formed a special committee consisting of four independent directors to evaluate and negotiate the terms of the merger agreement. The special committee independently selected and retained a financial advisor to assist it in the negotiation, and received the written opinion from its financial advisor, Friedman Billings Ramsey & Co., Inc., dated July 15, 2000, on which the special committee relied, to the effect that as of that date, the $18.25 per share you will receive in the offer and the subsequent merger is fair to you from a financial point of view. A complete copy of the Friedman Billings Ramsey & Co., Inc. opinion is attached as Exhibit A to this offer to purchase. Your board of directors also received and relied upon a written opinion, dated July 15, 2000, from Benedetto, Gartland & Company, Inc. to the effect that, as of that date and based on and subject to the assumptions, limitations and qualifications set forth in the opinion, the $18.25 per share cash consideration to be received by holders of Carey International's common stock in the offer and the subsequent merger was fair to such holders, from a financial point of view. A complete copy of the Benedetto, Gartland & Company, Inc. opinion is attached as Exhibit B to this offer to purchase. Q: Will Carey International continue as a public company? (Page 23) A: No. Because we are purchasing Carey International's common stock in a tender offer and intend to engage in a merger that will result in the securities of Carey International being held by less than 300 persons of record, this offer is considered the first step in a going-private transaction. Q: Will the tender offer be followed by a merger if all common shares are not tendered in the offer? (Page 22) A. Yes. If the number of shares tendered in the offer, plus the number of shares acquired by Acquisition Company pursuant to various agreements entered into in connection with the merger agreement, constitute greater than 90% of the outstanding shares, the merger will occur immediately following the purchase of the tendered shares. If this requirement is not met, but all of the conditions to the offer have been waived or met, Carey International will call a stockholders meeting to approve the merger. Since, at that time, Acquisition Company will own more than 50% of the outstanding shares of Carey International's common stock, stockholder approval of the merger will be assured. If we complete the merger, stockholders who did not tender their shares in the offer will receive $18.25 per share in cash (or any higher price per share that is paid in the offer) in the merger in exchange for each share of Carey International's common stock that they own. It is a condition to our obligation to consummate the merger that we have available the funds contemplated by the financing commitment letters necessary to pay for the shares not tendered into the offer. The availability of the financing for the merger is subject to the satisfaction of several conditions, including the condition that no material adverse change has occurred in the financial condition or prospects of Carey International. You should be aware that, if it is necessary to call a stockholders meeting to approve the merger and the conditions to the financing are not met at the time the merger is approved by the stockholders, the merger will not be consummated and stockholders will not receive $18.25 per share in cash for the shares not tendered in the offer. If you want to avoid this possibility, you should not wait for the merger and the stockholders meeting (if one is held), and should tender your shares in the Offering. v Q: If I decide not to tender, how will the offer affect my shares? (Page 22) A: Stockholders who do not tender their shares in the offer will receive in the merger, if it takes place, unless they perfect their appraisal rights under Delaware law, the same amount of cash per share that they would have received had they tendered their shares in the offer. Q: What is the market value of my shares as of a recent date? (Page 60) A: On June 27, 2000, the last full trading day before Carey International announced it was in negotiations regarding a possible acquisition of Carey International, the reported closing sale price for one share of Carey International's common stock was $11.5625 per share. On July 18, 2000, the last full trading day before we announced the offer and merger, the reported closing sale price for one share of Carey International's common stock on the Nasdaq National Market was $14.50. On August 1, 2000, the penultimate trading day before we commenced the offer, the reported closing sale price for one share of Carey International's common stock on the Nasdaq National Market was $17.9531. We advise you to obtain a recent quotation for the common stock in deciding whether to tender your shares. Q: If I object to the price being offered, will I have appraisal rights? (Page 24) A: You will not have appraisal rights in the offer, but you will have appraisal rights in the subsequent merger. You may elect not to tender your shares in the offer, not vote in favor of the merger, comply with the requirements of Delaware law to perfect your available appraisal rights and have the "fair value" of your shares paid to you following the completion of the appraisal process in the Delaware courts. Q: Who can I talk to if I have questions about the tender offer? A: If you have more questions about the tender offer, you should contact: D.F. KING & CO., INC. Banks and Brokers Call Collect: (212) 269-5550 All Others Please Call Toll-Free: (800) 628-8510 vi TABLE OF CONTENTS
Page ---- QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER..................... iii INTRODUCTION............................................................. 1 SPECIAL FACTORS.......................................................... 5 1. Background of the Transaction; Contacts with Carey International...... 5 2. Recommendation of the Board of Directors of Carey International; Fairness of the Offer and the Merger.................................. 10 3. Opinion of the Board's Financial Advisors............................. 14 4. Purpose and Structure of the Transaction.............................. 22 5. Plans for Carey International after the Transaction................... 23 6. Rights of Stockholders in the Offer and the Merger.................... 24 7. The Merger Agreement and Related Documents............................ 26 8. Interests of Certain Persons in the Transaction....................... 43 9. Financing of the Transaction.......................................... 46 10. Certain United States Federal Income Tax Consequences................ 52 11. Fees and Expenses.................................................... 53 THE TENDER OFFER......................................................... 55 1. Terms of the Offer.................................................... 55 2. Acceptance for Payment and Payment for Shares......................... 56 3. Procedures for Tendering Shares....................................... 57 4. Withdrawal Rights..................................................... 59 5. Price Range of Shares................................................. 60 6. Dividends and Distributions........................................... 60 7. Certain Information Concerning Carey International.................... 61 8. Certain Information Concerning Chartwell, Holdings, Parent and Acquisition Company................................................... 64 9. Certain Information Concerning Ford................................... 65 10. Source and Amount of Funds........................................... 67 11. Effect of the Offer on the Market for the Common Stock; Exchange Act Registration......................................................... 67 12. Conditions to the Offer.............................................. 68 13. Certain Legal Matters; Regulatory Approvals.......................... 70 14. Fees and Expenses.................................................... 72 15. Miscellaneous........................................................ 72
Schedule I--Information Concerning the Directors, Executive Officers and Certain Stockholders of Carey International Schedule II--Information Concerning the Directors and Executive Officers of Holdings, Parent and Acquisition Company Schedule III--Information Concerning the Directors and Executive Officers of Ford Motor Company Schedule IV--Information Statement Pursuant to Section 14(f) of the Securities Exchange Act of 1934 and Rule 14f-1 Promulgated Thereunder Exhibit A --Opinion of Friedman Billings Ramsey & Co., Inc. Exhibit B--Opinion of Benedetto, Gartland & Company, Inc. Exhibit C--Section 262 of the Delaware General Corporation Law vii To the Holders of Common Stock of Carey International, Inc. INTRODUCTION Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), and Carey International, Inc., a Delaware corporation ("Carey International"), hereby offer to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Carey International (the "Shares" or "Common Stock"), and the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of June 20, 2000, between Carey International and Computershare Trust Company, Inc., as Rights Agent, as amended on July 19, 2000 (the "Rights Agreement"), at a price of $18.25 per Share in cash (such amount or any greater amount per Share paid in the offer being referred to as the "Offer Price"), without interest thereon, on the terms and subject to the conditions set forth in this Offer to Purchase and in the related letter of transmittal (the "Letter of Transmittal") (which, as each may be amended and supplemented from time to time, together constitute the "Offer"). See "THE TENDER OFFER -- Conditions to the Offer." For the purposes of the Offer, Acquisition Company and Carey International are collectively referred to as the "Offerors." VIP Holdings, LLC, a Delaware limited liability company, VIP Holdings II, LLC, a Delaware limited liability company, and VIP Holdings III, LLC, a Delaware limited liability company (collectively, "Holdings"), Limousine Holdings, LLC, a Delaware limited liability company ("Parent"), and Acquisition Company, a wholly-owned subsidiary of Parent, are all newly formed entities, which were created by Chartwell Investments II LLC ("Chartwell") to effect the transactions referred to herein. Chartwell is an advisor to, and manager of, private equity funds that invest in growth financings and buy-outs of middle market companies. Ford Motor Company ("Ford"), an investor in and affiliate of Parent, designs and manufactures cars, trucks and automotive components, and sells them throughout the world. Unless the context otherwise requires, all references to Shares or Common Stock shall include the associated Rights. The Offer is a joint tender offer by Acquisition Company and Carey International to purchase at the Offer Price all Shares tendered pursuant to the Offer, assuming the conditions to the Offer (the "Offer Conditions") are met, with Acquisition Company to pay for and purchase no fewer than 4,931,506 Shares. In the event that the Shares tendered in the Offer, plus the Shares acquired by Acquisition Company pursuant to the Carey Purchase Agreements (as defined below), including Shares issued upon the exercise of Company Options (as defined below), would constitute greater than 90% of the outstanding Shares (the "Short Form Requirement") and permit the Merger (as defined below) to be effected pursuant to Section 253 of the Delaware General Corporation Law (the "DGCL"), Acquisition Company will purchase all tendered Shares. If the number of tendered Shares, plus the Shares to be acquired by Acquisition Company pursuant to the Carey Purchase Agreements (as defined below) (including Shares issued upon the exercise of Company Options), would not result in the Short Form Requirement being met, but all of the Offer Conditions have been waived or met, Acquisition Company will purchase up to 5,232,876 Shares and Carey International will purchase all Shares tendered in excess of those Shares purchased by Acquisition Company. Stockholders whose Shares are registered in their own name and who tender directly to United States Trust Company of New York, as depositary (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Offerors pursuant to the Offer. Carey International will pay all charges and expenses incurred in connection with the Offer by the Depositary and by D.F. King & Co., Inc., as information agent (the "Information Agent"). See "SPECIAL FACTORS -- Fees And Expenses" and "THE TENDER OFFER -- Fees and Expenses." The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 19, 2000 (the "Merger Agreement"), by and among Carey International, Parent, Acquisition Company and Eranja Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Acquisition Company ("Acquisition Company Sub"). The Merger Agreement provides that, among other things, as promptly as practicable after 1 consummation of the Offer and the satisfaction or waiver of the other conditions contained in the Merger Agreement, Acquisition Company or Acquisition Company Sub will be merged with and into Carey International (the "Merger"), with Carey International continuing as the surviving corporation (the "Surviving Corporation"). At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held by Acquisition Company, Shares in the treasury of Carey International, Shares held by holders who perfect their appraisal rights in accordance with the DGCL, and certain Shares held by certain members of management of Carey International (the "Management Investors")), will, by virtue of the Merger and without any action on the part of the holder thereof, be canceled and be converted into the right to receive an amount per share (the "Merger Consideration") equal to the Offer Price, without interest. As of July 24, 2000, there were 9,848,729 Shares issued and outstanding, no Shares held in the treasury of Carey International, no shares of preferred stock issued and outstanding and 1,918,427 Shares issuable upon the exercise of outstanding options granted under Carey International's stock option plans ("Plan Options"), all of which have an exercise price that is less than the Offer Price), and 6,450 Shares issuable upon the exercise of outstanding warrants other than Plan Options (collectively, the "Other Options" and, together with the Plan Options, the "Company Options"). The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer at least 5,216,072 Shares, which number of Shares constitutes a majority of the Shares outstanding (including for these purposes Shares issuable upon the exercise of Company Options by persons who have not agreed to enter into Option Exercise Agreements (as defined herein) after giving effect to the cancellation of any Shares purchased by Carey International) (the "Minimum Condition") and (2) Carey International and/or Acquisition Company having received or having available the proceeds from the financing contemplated by the Financing Commitment Letters (as defined herein) and the proceeds from the Capital Contribution (as defined herein) (the "Financing"), including, but not limited to, proceeds sufficient to (A) finance the purchase of the Shares that Carey International and Acquisition Company are agreeing to purchase pursuant to the Offer, (B) pay the Merger Consideration pursuant to the Merger, (C) purchase securities of Carey International pursuant to the Carey Purchase Agreements (as defined herein), (D) repay outstanding indebtedness of Carey International and its subsidiaries, and (E) pay the fees and expenses required to be paid in connection with the transactions contemplated by the Merger Agreement (the "Receipt of Funds Condition"). The Offer is also conditioned upon the satisfaction of certain other conditions described in "THE TENDER OFFER -- Conditions of the Offer." The Short Form Requirement is not a condition to the Offer. The consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including the approval of the Merger Agreement by the requisite vote of Carey International's stockholders if the Short Form Requirement is not met and satisfaction of the Receipt of Funds Condition. Concurrently with the execution of the Merger Agreement, and as an inducement to Acquisition Company and Parent to enter into the Merger Agreement, (i) certain holders (the "Option Holders") of Plan Options have agreed to enter into Option Exercise/Cancellation Agreements with Acquisition Company (the "Option Exercise Agreements"), pursuant to which, among other matters, the Option Holders will agree (1)(A) to exercise all of their Plan Options immediately prior to the Effective Time and, upon the request of Acquisition Company, to sell to Acquisition Company all of the Shares issued upon such exercise (collectively, the "Option Exercise Shares") for consideration equal to the Offer Price per Share, or (B) if Acquisition Company does not so request, to exercise their Plan Options immediately prior to the Effective Time and to hold the Option Exercise Shares for conversion in the Merger into the right to receive cash and shares of the Surviving Corporation as provided in the Merger Agreement, and (2) not to tender Shares (other than Option Exercise Shares) into the Offer unless requested to do so by Acquisition Company, and (ii) Carey International has granted to Acquisition Company an option (the "Acquisition Company Option") pursuant to a Stock Option Agreement (the "Stock Option Agreement") to acquire from Carey International in certain circumstances a sufficient number of Shares (the "Acquisition Company Option Shares") that, when taken together with all other outstanding Shares to be 2 acquired by Acquisition Company pursuant to the Offer and the Option Exercise Agreements (such agreements, together with the Stock Option Agreement, the "Carey Purchase Agreements"), allow the Short Form Requirement to be met. The Offer, the consummation of the transactions contemplated by the Carey Purchase Agreements, the Carey International/Acquisition Company Loan Agreement (as defined herein) and the Merger are sometimes collectively referred to herein as the "Transaction." In the event that the number of Shares tendered pursuant to the Offer, plus the Shares purchased by Acquisition Company pursuant to the Carey Purchase Agreements (including Shares issued upon the exercise of Company Options), would be sufficient to satisfy the Short Form Requirement, Acquisition Company will purchase all Shares tendered pursuant to the Offer and consummate the Merger immediately thereafter. If a lesser number of Shares are tendered pursuant to the Offer, then, assuming all of the Offer Conditions have been waived or met, (i) Acquisition Company will purchase up to 5,232,876 of the Shares tendered and Carey International will purchase the balance of the Shares tendered pursuant to the Offer and (ii) Carey International will call a stockholders meeting after the closing of the Offer to approve the Merger. The terms and conditions of the Merger Agreement and the Carey Purchase Agreements are more fully described in "SPECIAL FACTORS -- The Merger Agreement and Related Documents." Subject to the perfection of appraisal rights under the DGCL, Shares not tendered in the Offer (other than Shares held by Acquisition Company, Shares in the treasury of Carey International and certain Shares held by Management Investors) will be cancelled in the Merger and converted into the right to receive the Merger Consideration, without interest. Stockholders who hold their Shares at the time of the Merger and who fully comply with the statutory appraisal procedures set forth in the DGCL, the relevant provisions of which are attached to this Offer to Purchase as Exhibit C, will be entitled to perfect their appraisal rights under the DGCL and have the fair value of their Shares (which may be more than, equal to, or less than the Merger Consideration) judicially determined and paid to them in cash pursuant to the procedures prescribed by the DGCL. No appraisal or dissenters rights are available to stockholders in connection with the Offer. See "SPECIAL FACTORS -- Rights of Stockholders in the Offer and the Merger." Carey International's Board of Directors (the "Board"), based upon the unanimous recommendation of an independent special committee of the Board (the "Special Committee"), unanimously (i) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, (ii) determined that the Offer and the Merger are advisable, fair to, and in the best interests of the stockholders of Carey International and (iii) recommends that Carey International's stockholders accept the Offer and tender their Shares pursuant to the Offer. The Board formed the Special Committee consisting of four independent directors to evaluate and negotiate the terms of the Merger Agreement. The Special Committee independently selected and retained a financial advisor to assist it in the negotiation. The Special Committee received from its financial advisor, Friedman Billings Ramsey & Co., Inc. ("FBR"), a written opinion (the "FBR Opinion"), dated July 15, 2000, on which the Special Committee relied, to the effect that, as of that date and based on and subject to the assumptions, limitations and qualifications set forth in such opinion, the $18.25 per Share cash consideration to be received in the Offer and the Merger by the holders of Shares was fair from a financial point of view. Benedetto, Gartland & Company, Inc. ("BGC"), financial advisor to the Board, also has delivered to the Board its written opinion (the "BGC Opinion"), dated July 15, 2000, to the effect that, as of that date and based on and subject to the assumptions, limitations and qualifications set forth in such opinion, the $18.25 per Share cash consideration to be received in the Offer and the Merger by holders of Shares was fair from a financial point of view. A copy of the FBR Opinion and a copy of the BGC Opinion, each of which sets forth the assumptions made, matters considered and limits of the review by FBR and BGC, respectively, in connection 3 with such opinions, are attached to this Offer to Purchase as Exhibit A and Exhibit B, respectively. Holders of Shares are urged to read each opinion carefully in its entirety. Pursuant to the Senior Credit Facility Commitment Letter, dated as of July 19, 2000, among Carey International, Acquisition Company and the lenders signatory thereto from time to time (the "Lenders"), First Union National Bank, as Administrative Agent and a Lender ("First Union"), and Fleet National Bank, as Syndication Agent and a Lender (the "Senior Credit Facility Commitment Letter"), the Lenders, subject to certain conditions, including the execution of definitive agreements, have committed to provide to Carey International a $160.0 million senior secured credit facility (the "Senior Credit Facility"). The Senior Credit Facility will be composed of (i) $100.0 million of term loans to be divided into two primary tranches of $40.0 million and $60.0 million, (ii) $25.0 million of revolving credit facilities and (iii) $35.0 million of acquisition facilities. Pursuant to the Senior Sub Note Commitment Letter, dated as of July 19, 2000, among Acquisition Company, First Union Investors, Inc. and GarMark Partners, L.P. (together, the "Senior Sub Note Purchasers") (the "Senior Sub Note Commitment Letter"), the Senior Sub Note Purchasers have committed, subject to certain conditions, including the execution of definitive agreements, to purchase $40.0 million of senior subordinated notes of Carey International (the "Senior Sub Notes"). The Senior Credit Facility Commitment Letter and the Senior Sub Note Commitment Letter are together referred to herein as the "Financing Commitment Letters." A portion of the proceeds from the financing contemplated by the Financing Commitment Letters will be loaned by Carey International to Acquisition Company (if the Short Form Requirement is met) pursuant to the terms of a Loan Agreement to be entered into between Carey International and Acquisition Company (the "Carey International/Acquisition Company Loan Agreement"). The remainder of the funds necessary for Acquisition Company to consummate the transactions contemplated by the Merger Agreement and the Carey Purchase Agreements will be in the form of a capital contribution from Parent to Acquisition Company of $98.5 million (the "Capital Contribution"). The Offerors believe that the proceeds, if obtained, as contemplated from the Senior Credit Facility, Senior Sub Notes and the Capital Contribution will be sufficient to satisfy the Receipt of Funds Condition. See "SPECIAL FACTORS -- Financing of the Transaction" and "THE TENDER OFFER -- Conditions to the Offer." This Offer to Purchase and the Letter of Transmittal contain important information which should be read carefully before any decision is made with respect to the Offer. 4 SPECIAL FACTORS 1. Background of the Transaction; Contacts with Carey International. In October 1999, members of the Board expressed concern regarding the lack of recognition that Wall Street investors and analysts were giving to micro and small cap companies, in general, and the undervaluation and volatility of the trading price of the Common Stock, in particular. Management expressed its belief that the trading price of the Common Stock on the Nasdaq National Market did not adequately reflect the financial performance and prospects of Carey International and that this lack of recognition persisted despite Carey International's consistent record of strong financial performance. Management did not believe that market conditions were likely to change in the near term. The Board discussed whether Carey International should explore strategic initiatives as a means to enhance stockholder value. At a telephonic meeting of the Board held on December 21, 1999, Vincent A. Wolfington, Carey International's Chairman and Chief Executive Officer, recommended that Carey International engage an investment banker to advise it on possible strategic initiatives, including strategic investments from third parties and a possible sale of Carey International as means of enhancing stockholder value. The Board unanimously authorized Carey International to engage BGC to serve as Carey International's financial advisor to assist it in exploring strategic alternatives. On December 31, 1999, Carey International formally engaged BGC. Beginning in January 2000, BGC began the process of identifying candidates that might be interested in acquiring or making a strategic investment in Carey International. BGC concluded, based upon Carey International's position in the chauffeured vehicle services industry and Carey International's knowledge about other companies in the industry, that it was unlikely that a company in the chauffeured vehicle services industry would be interested in or capable of completing such a transaction with Carey International. Over the next month, BGC contacted 16 companies and institutions to inquire about their interest in discussing a possible transaction with Carey International. Three of the entities contacted, one of which was Chartwell, expressed interest in exploring a possible transaction and entered into confidentiality agreements with Carey International. Management from Carey International was acquainted with Chartwell as a result of an informational meeting that was held between representatives of Carey International and Chartwell in April 1999. No proposals were made or due diligence performed as a result of that meeting. At a meeting of the Board held on January 21, 2000, M. William Benedetto from BGC briefed the Board on the process BGC was undertaking on behalf of Carey International, including a list of the parties contacted and the level of interest expressed by those parties. He reviewed possible strategic alternatives for enhancing stockholder value and expressed the view, based upon his preliminary analysis, that the most viable method of enhancing stockholder value was a leveraged buyout of Carey International by a financial buyer. The Board requested that management and BGC continue to explore various methods of enhancing stockholder value. From January 22 through March 14, 2000, various members of senior management made presentations to Chartwell and the two other entities that had entered into confidentiality agreements regarding Carey International, its business, markets, assets, employees, financial position, financial results and prospects. On behalf of Carey International, BGC delivered information to the three entities to assist them in their evaluation of Carey International. During this period, one of the interested entities elected to discontinue its evaluation. On March 2, 2000, Mr. Wolfington contacted senior management of Ford to discuss Ford's interest in either making a strategic investment in Carey International or in participating in a going private transaction. Discussions between management of Carey International and Ford continued from time to time during March and April 2000. At a meeting of the Board held on March 23, 2000, Mr. Benedetto updated the Board on developments since the last Board meeting. He reviewed with the Board certain information regarding Chartwell and the other party that had indicated a strong interest in Carey International and stated that Chartwell and the other party were continuing their due diligence. He also reviewed the methodologies that would be used in the valuation of 5 Carey International. The Board engaged in a lengthy discussion with Mr. Benedetto regarding the relative benefits to the stockholders of a sale of Carey International in a leveraged buyout transaction and a private equity investment in Carey International by a strategic investor. Thereafter, the other party referred to above joined the meeting and made a presentation to the Board expressing its preliminary interest in a leveraged buyout of Carey International. At a meeting of the Board held on April 3, 2000, Mr. Benedetto again updated the Board and reported on his most recent discussions with Chartwell and the other interested party, both of whom had completed their preliminary due diligence. He reported that both parties were attempting to resolve a number of issues including Carey International's first quarter operating results and Carey International's continuing investment in its information technology systems. Mr. Wolfington stated that Ford had expressed an interest in exploring a strategic investment in Carey International or in participating in an acquisition of Carey International as a minority stockholder. On April 4, 2000, Carey International announced that while it reported strong first quarter revenues, its first quarter operating results were below analysts' estimates. Carey International also reported in its press release that it had previously retained BGC to examine strategic alternatives in order to enhance stockholder value. The closing price of the Common Stock on the Nasdaq National Market declined from $17.06 on April 4, 2000, before the announcement, to $9.56 on April 5, 2000, after the announcement. At a meeting of the Board held on April 12, 2000, Mr. Wolfington reported to the Board on his meetings with representatives of Ford. He also updated the Board on the continuing interest of Chartwell and the other interested party. He advised the Board that the parties had requested additional meetings with management to discuss Carey International's first quarter operating results and other issues. The Board reviewed the opportunities available to Carey International for enhancing stockholder value in light of the recent significant decline in the trading price of the Common Stock following the announcement of Carey International's first quarter operating results. At a meeting of the Board held on May 3, 2000, Mr. Wolfington reported to the Board on the follow-up meetings and the due diligence sessions with Chartwell and the other interested party and on meetings that management had held with Ford. Mr. Benedetto reviewed with the Board his valuation analysis of Carey International. He also reported that a valuation of between $14 and $15 per Share in cash was being considered by the other interested party in a possible leveraged buyout of Carey International. Thereafter, representatives of Chartwell made a presentation to the Board in which they expressed their preliminary interest in proposing a leveraged buyout transaction at between $17 and $18 per Share in cash. (Chartwell had initially proposed a range of $16 to $18 per Share to Mr. Benedetto, but increased the bottom of the range to $17 per share after conversations with Mr. Benedetto). Representatives of Chartwell reviewed the possible structure of the transaction and the requirement that Carey International's current management continue with Carey International. They also outlined the conditions relating to a possible transaction including the need to conduct more extensive due diligence before making a final proposal. After the representatives of Chartwell left the meeting, the Board concluded that while Chartwell's proposal was superior to the expression of interest from the other party, Chartwell should be asked to consider a higher price range and clarify other aspects of the proposed transaction. The Board also discussed the advisability of adopting a stockholder rights plan and the need to consider adoption of a stockholder rights plan at its next meeting. On May 4, 2000, Chartwell informed Mr. Benedetto that Chartwell would increase its preliminary price range to between $18 and $19 per Share in cash. On May 11, 2000, Messrs. Benedetto and Wolfington met with representatives of Chartwell to discuss the structure of a possible leveraged buyout transaction and the scope and terms of management's continuing role with Carey International after the consummation of a transaction. At a meeting of the Board held on May 12, 2000, Mr. Benedetto reported on his recent discussions with Chartwell and the other interested party and reviewed their preliminary proposals and preliminary price ranges with the Board. Mr. Wolfington updated the Board on recent discussions with Ford as a possible strategic investor. Mr. Benedetto reviewed with the Board Chartwell's need to undertake a final due diligence investigation before making a final proposal and Chartwell's request that Carey International agree to pay up to $1.5 million 6 of its due diligence expenses in the event that Carey International elected not to pursue a transaction with Chartwell. The Board viewed with concern Chartwell's insistence on such a significant reimbursement of expenses in light of the price range and the number of details regarding a transaction that had yet to be resolved, including, financing. After lengthy discussion, the Board concluded that it was in the best interests of Carey International and its stockholders not to pursue a sale of Carey International based upon Chartwell's preliminary proposal and expense reimbursement requirement. The Board also concluded that the proposed preliminary price range of the other interested party was not sufficient to warrant further investigation. The Board instructed Mr. Benedetto to inform the parties of these decisions. The Board, however, authorized management to continue to explore a possible strategic investment by Ford as an alternative to a possible sale. Following presentations by Carey International's legal counsel, Nutter, McClennen & Fish, LLP ("Nutter McClennen"), and by BGC, the Board of Directors adopted the Rights Agreement and the dividend of rights thereunder to Carey International's stockholders of record on July 2, 2000. On May 10, 2000, Ford signed a confidentiality agreement with Carey International and commenced its due diligence investigation, including a series of due diligence meetings with Carey International's management from May 10 through May 23, 2000. During this period, Carey International's management discussed with Ford the nature of Ford's involvement in a possible transaction with Carey International, including either a strategic investment in Carey International or participating in an acquisition of Carey International as a minority investor. During this period, management of Carey International also renewed discussions with Chartwell and Chartwell proposed modifying and clarifying its preliminary proposal. At a meeting of the Board on June 2, 2000, Messrs. Benedetto and Wolfington reported on additional discussions that had taken place with Chartwell. As a result of those discussions, Chartwell had revised its preliminary proposal. The revised proposal included more details on the capital structure, financing commitments and initiatives for retention of management. The revised proposal also reduced, from $1.5 million to $333,000, the amount of due diligence expenses for which Carey International would be required to reimburse Chartwell in certain circumstances. Mr. Wolfington reported that representatives of Ford were in discussions with Chartwell about participating with Chartwell in a possible acquisition of Carey International. The Board concluded that it was in the best interests of Carey International and its stockholders to encourage a final joint proposal from Chartwell and Ford and authorized the execution by Carey International of an expense reimbursement agreement with Chartwell. On June 2, 2000, Carey International entered into an agreement with Chartwell, which provided that Carey International would reimburse up to $333,000 of Chartwell's due diligence expenses in the event that Carey International declined to proceed with a transaction with Chartwell, provided that on or before July 1, 2000 Chartwell presented a definitive final proposal for the acquisition of Carey International at a price per share of $18 to $19 per Share in cash. Thereafter, Chartwell and Ford commenced their final due diligence investigation of Carey International. At a meeting of the Board held on June 19, 2000, Mr. Wolfington advised the Board that Ford and Chartwell had substantially completed their due diligence investigation and would likely make a final joint proposal, on or before June 26, 2000, for the acquisition of Carey International in a leveraged buyout transaction. Mr. Benedetto reported on his discussions with Chartwell and Ford and on the broad parameters of the joint proposal, including management's participation in the transaction. In light of management's proposed involvement in the possible transaction, the Board appointed the Special Committee composed of independent directors, Robert W. Cox, Nicholas J. St. George, Joseph V. Vittoria and Dennis I. Meyer, to negotiate and determine if a proposed transaction with Chartwell and Ford would be in the best interests of Carey International and its stockholders. Upon the advice of the members of the Special Committee, the Board also approved the engagement of the services of FBR to act as financial advisor to the Special Committee in connection with the possible transaction. On June 20, 2000, Akin, Gump, Strauss, Hauer & Feld, L.L.P. ("Akin Gump") provided Nutter McClennen with a first draft of the Merger Agreement providing for: (i) a joint tender offer by Carey International and Acquisition Company for all outstanding Shares (other than certain Shares held by the Management Investors) 7 followed by a merger; (ii) the rollover of certain Shares by the Management Investors, including Mr. Wolfington; (iii) conditions to closing the tender offer, including the tender of more than 50% of the outstanding Shares; (iv) the right of Acquisition Company to extend unilaterally the tender offer for certain periods; (v) restrictions on Carey International's ability to address acquisition proposals after the execution of the Merger Agreement; (vi) several events requiring the payment of a termination fee and reimbursement of expenses and (vii) the grant of an option pursuant to a Stock Option Agreement under which Acquisition Company, subject to the closing of the tender offer, could acquire a sufficient number of shares of Common Stock to enable it to effect a short form merger under Section 253 of the DGCL (the "Short Form Merger"). Telephonic meetings of the Special Committee were held on June 22 and June 23, 2000, at which the Special Committee and Nutter McClennen reviewed the initial draft of the Merger Agreement and negotiated the terms and conditions of the proposed transaction with representatives of Chartwell and Akin Gump. A meeting of the Special Committee was held on June 26, 2000 at the offices of Mr. Meyer, the Chairman of the Special Committee, at Baker & McKenzie in Washington, DC with two members of the Special Committee participating by conference telephone. Representatives of Nutter McClennen reviewed the status of negotiations, the terms of the Merger Agreement and the Carey Purchase Agreements, and the various resolved and unresolved issues, including Chartwell's request for a termination fee of approximately $11.7 million and unlimited expense reimbursement in the event that the Merger Agreement was terminated in certain circumstances. Representatives of FBR reviewed their methodology for evaluating the proposed transaction and provided their preliminary analysis as to the fairness of the transaction, assuming a price of $18 to $19 per Share. Mr. Wolfington was invited to join the meeting to respond to questions from the members of the Special Committee and FBR regarding Chartwell's proposal and the terms of management's participation in the transaction. Representatives of BGC then joined the meeting and presented BGC's methodology for evaluating the proposed transaction and BGC's preliminary analysis as to the fairness of the proposed transaction assuming a price range of $18 to $19 per Share. Thereafter, representatives of Chartwell joined the meeting and presented the final terms of their definitive offer for Carey International including a price of $18 per Share in cash. After negotiations between the Special Committee and Chartwell, Chartwell agreed to (i) increase its offer to $18.25 per Share and (ii) reduce the termination fee to $7.5 million and limit the amount of reimbursable expenses to $3.0 million in the event that the transactions contemplated by the Merger Agreement were not completed for certain reasons. The representatives of Chartwell stated that the definitive offer was subject to receiving final commitment letters and term sheets from their financing sources, including Ford, all of which were expected to be received on the following day. On June 27, 2000, Akin Gump provided revised drafts of the Merger Agreement. On June 27, 2000, a meeting of the Special Committee was convened at the offices of Baker & McKenzie to consider Chartwell's final proposal. Nutter McClennen reviewed the revised terms of the Merger Agreement and the Carey Purchase Agreements, and the various resolved and unresolved issues. FBR reviewed in detail with the Special Committee its analysis of the transaction represented by the final proposal and orally expressed its view that the price of $18.25 per Share in cash was fair from a financial point of view to Carey International's stockholders. FBR stated its willingness to issue to the Special Committee its written opinion to that effect. BGC also reviewed in detail its analysis of the transaction represented by the final proposal and orally expressed its view that the price of $18.25 per Share was fair from a financial point of view to Carey International's stockholders. BGC also stated that it was prepared to issue to the Board its written opinion as to the fairness of the transaction. After discussion and analysis, the Special Committee unanimously determined that the final offer and the proposed terms and conditions of the Merger Agreement and the Carey Purchase Agreements, and the Offer and the Merger, were advisable, fair to and in the best interests of Carey International's stockholders, and unanimously recommended that the Board accept Chartwell's proposal and approve the Merger Agreement, subject to the receipt of detailed commitment letters from Chartwell's financing sources satisfactory to the Special Committee and satisfactory resolution of the remaining unresolved issues. On June 27, 2000, immediately following the conclusion of the meeting of the Special Committee, the Board met to receive the report and recommendation of the Special Committee as well as the preliminary oral 8 opinion and draft report of BGC. The Board unanimously approved acceptance of the report and the recommendation of the Special Committee. Upon the request of Chartwell for the opportunity to update the Special Committee on the financing commitments, the meeting of the Board was adjourned and the meeting of the Special Committee was reconvened. Representatives from Chartwell provided the Special Committee with a draft of the Senior Credit Facility Commitment Letter and indicated that they were awaiting a final commitment from Ford with respect to its portion of the Capital Contribution. More significantly, however, the representatives reported that there was a delay in obtaining a subordinated debt financing commitment. After discussion, the Special Committee advised Chartwell that the Special Committee was prepared to continue negotiations with Chartwell and postpone its final approval of the transaction if a final offer with definitive financing commitments was received by July 14, 2000. On June 29, 2000, Carey International issued its press release regarding Carey International's second quarter operating results and included in the press release a statement that it was in negotiations regarding a possible acquisition of Carey International and that it did not intend to comment further on the negotiations until a definitive agreement was reached or negotiations were terminated. From June 28 through July 14, 2000, the Special Committee, Chartwell and their respective legal counsel negotiated the final terms of the Merger Agreement and the Carey Purchase Agreements. At a meeting of the Board held on July 7, 2000, representatives of Chartwell advised the Board that they had received verbal commitments from a subordinated debt financing source and that they expected to receive definitive commitment letters from the Lenders, the Senior Sub Note Purchasers and Ford in the next few days. On July 13, 2000, Nutter McClennen distributed to members of the Board (including the Special Committee) updated copies of the Merger Agreement and the Carey Purchase Agreements, proposed resolutions regarding the transaction, copies of the Financing Commitment Letters, and FBR's final Board presentation book and draft fairness opinion. A special joint meeting of the Special Committee and the full Board was held by conference telephone on July 15, 2000. Mr. Meyer provided a general overview of the transaction and its status. Mr. Meyer and Nutter McClennen provided a detailed summary of the terms of the Financing Commitment Letters that had been received by Chartwell from its Lenders and Senior Sub Note Purchasers and the terms of Ford's commitment letter. FBR presented its final report and analysis on the transaction and stated that it was prepared to issue to the Special Committee its written opinion to the effect that the $18.25 per Share in cash to be received by the stockholders in the Offer and the Merger is fair to such holders (other than the Management Investors) from a financial point of view. BGC also presented its final report and analysis and confirmed that it, too, was prepared to issue its written opinion concerning the fairness of the transaction. Nutter McClennen then provided a detailed summary of the terms of the Merger Agreement and the Carey Purchase Agreements and reviewed the proposed Board resolutions. Nutter McClennen reported that the material unresolved issues had been resolved except for issues concerning the rollover of the Management Investors' equity interest. After discussion and analysis, the Special Committee unanimously determined that the Offer and the Merger and the terms and provisions of the Merger Agreement and the Carey Purchase Agreements were advisable, fair to and in the best interests of Carey International and its stockholders, and unanimously recommended to the Board that it approve the transaction subject to resolution of all remaining issues and approval by the Chairman of the Special Committee or another member of the Special Committee and by the President or Chief Executive Officer of Carey International. The full Board, after receiving the recommendation of the Special Committee, unanimously determined that the Merger Agreement and the Carey Purchase Agreements and the Merger and Offer were advisable, fair to and in the best interests of Carey International and the stockholders and unanimously recommended to the stockholders that they accept the Offer and tender their Shares, and approve the Merger and the Merger Agreement, subject to the terms of the Merger Agreement and subject to final approval of any remaining issues by the Chairman of the Special Committee or another member of the Special Committee and the President or Chief Executive Officer of Carey International. On July 19, 2000, legal counsel to Chartwell and Carey International resolved the remaining open issues and documentation and, following approval by a member of the Special Committee and Carey International's Chief Executive Officer, the parties executed the Merger Agreement and other agreements contemplated thereby. 9 On July 19, 2000, Carey International issued a press release announcing the execution of the Merger Agreement. On August 1, 2000, the Special Committee and the Board unanimously ratified the Merger Agreement as executed. 2. Recommendation of the Board of Directors of Carey International; Fairness of the Offer and the Merger. The Special Committee of the Board of Directors In evaluating the Offer and the Merger, the Special Committee relied upon its knowledge of the business, financial condition and prospects of Carey International as well as the advice of financial advisors and legal counsel. In reaching its decision to recommend the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, to the full Board, the Special Committee considered a number of factors, including the following: (i) Market Price and Premium. The Special Committee considered the historical market prices and recent trading activity of the Shares, including the fact that the $18.25 per Share cash consideration to be paid in the Offer and the Merger represents a substantial premium over the trading price of the Shares prior to the announcement on June 29, 2000 that Carey International was in negotiations regarding a possible acquisition of Carey International. The Special Committee also considered the significant decline in Carey International's Common Stock price that followed the announcement on April 4, 2000 of its results for the first fiscal quarter and the length of time that could be expected to pass before the effect of the decline is reversed. (ii) Current Business Strategy and Future Prospects. The Special Committee considered the business, financial condition, results of operation, current business strategy and future prospects of Carey International, and, in particular, the fact that Carey International's ability to grow through strategic acquisitions is limited by the historically volatile and recently low trading price of the Shares. The Special Committee reviewed the anticipated capital requirements of Carey International for acquisitions and enhancement of its information technology systems. The Special Committee also recognized that as long as Carey International is perceived as an industry consolidator and industry consolidators continue to be undervalued by investors, the trading price of the Shares may suffer correspondingly. (iii) Special Committee Formation and Arm's-Length Negotiations. The Special Committee considered the fact that the Merger Agreement and the transactions contemplated thereby were the product of arm's-length negotiations among Acquisition Company, Parent and the Special Committee (and their respective advisors) and the fact that the Special Committee consists of four independent directors who are not employed by or affiliated with Carey International (except in their capacities as directors of Carey International). (iv) Offer Price and Merger Consideration. The Special Committee concluded, based on its negotiations with Acquisition Company and Parent, that the Offer Price and Merger Consideration represent the highest price that Acquisition Company and Parent would be willing to pay for the Shares. This determination was the result of the Special Committee's personal participation in the negotiations with Acquisition and Parent, as well as the advice of the Special Committee's advisors, in an attempt to obtain the highest possible price. (v) Fairness Opinion of Friedman Billings Ramsey & Co., Inc. The Special Committee considered the advice and the financial presentation of FBR that it has received since June 19, 2000, and FBR's final financial report and oral opinion delivered at the meeting of the Special Committee held on July 15, 2000, which was subsequently confirmed in writing on July 15, 2000, that, as of the date of the FBR Opinion and subject to the assumptions, limitations and qualifications set forth in the FBR Opinion, the $18.25 per Share cash consideration to be received in the Offer and the Merger by the holders of Shares (other than the Management Investors) was fair to such holders from a financial point of view. 10 The full text of the FBR Opinion is attached to this Offer to Purchase as Exhibit A. The summary of the FBR Opinion set forth in this Offer to Purchase is qualified in its entirety by reference to the full text of the FBR Opinion. Carey International's stockholders are urged to read the FBR Opinion in its entirety for the procedures followed, assumptions made, other matters considered and limits of the review by FBR in connection with its opinion. The FBR Opinion was prepared for the Special Committee and was directed only to the fairness from a financial point of view, as of the date thereof, of the consideration to be received the holders of Shares (other than the Management Investors) in the Offer and the Merger. The FBR Opinion does not constitute a recommendation to any of Carey International's stockholders as to whether such stockholder should tender his or her Shares or how such stockholder should vote on the Merger, should any such vote be required. (vi) Ability to Consider Alternative Transactions. The Special Committee considered the terms of the Merger Agreement, including (a) the provision providing that the Board is permitted, if the Board determines in good faith that it would be inconsistent with the Board's fiduciary duties to Carey International stockholders, to furnish or provide access to information concerning Carey International to, and engage in discussions and negotiate with, third parties who make a bona fide unsolicited request or inquiry that the Board reasonably determines may lead to an acquisition proposal that the third party is capable of consummating in a timely manner that would be more favorable from a financial point of view than the Offer and the Merger and (b) the ability of the Board, in the exercise of its fiduciary duties, to terminate the Merger Agreement in order to permit Carey International to enter into an alternative transaction with a third party. The Board did not consider the $7.5 million termination fee and up to $3.0 million of expenses that would be payable to Parent in the event that the Board exercises its fiduciary termination right to be a material impediment to a superior proposal from a third party. (vii) Transaction Structure. The Special Committee considered the fact that the transaction is structured as an immediate cash tender for all of the outstanding Shares, which gives Carey International's stockholders the opportunity to obtain cash for all of their Shares at the earliest possible time, and the fact that the consideration to be paid in the Offer and the Merger is the same. (viii) Receipt of Commitment Letters. The Special Committee considered the fact that Acquisition Company and Carey International had received definitive commitment letters from debt and equity financing sources to arrange, fund and administer the necessary financing for the Offer and the Merger. (ix) Few Regulatory Approvals Required. The Special Committee considered the fact that relatively few regulatory approvals or consents are required to consummate the Offer and the Merger and the favorable prospects for receiving such approvals and consents. (x) Availability of Dissenters' Rights. The Special Committee considered the fact that dissenters' appraisal rights will be available under Delaware law with respect to the Merger. (xi) Projected Financial Performance and Related Risk and Uncertainties. The Special Committee considered the financial projections prepared by Carey International's management. See "THE TENDER OFFER -- Certain Information Concerning Carey International -- Financial Projections." (xii) Discussions Regarding Sale of Carey International. The Special Committee considered BGC's work on behalf of Carey International in identifying possible acquirors of Carey International as well as the efforts of management of Carey International from time to time to find potential financial and strategic acquirors who would be interested in a transaction that would result in a premium to the stockholders similar to that being offered in the Transaction. (xiii) Management Investors' Role in Transaction. The Special Committee considered the financial stake that the Management Investors would have in both the Transaction and in the future growth of Carey International. (xiv) Possible Decline in Market Price of Common Stock. The Special Committee considered the possibility that if a merger transaction with Acquisition Company and Parent is not consummated and Carey 11 International remained a publicly-owned corporation, the price that might be received by the holders of the Shares in the open market or in a future transaction might be less than the $18.25 per Share to be received by stockholders in connection with the Offer and the Merger. (xv) Thin Trading Market in Common Stock and Market Capitalization. The Special Committee considered the relatively thin trading market of the Common Stock. The Special Committee also considered the fact that as a small or micro cap company, Carey International has limited prospects for creating significant institutional interest in its Common Stock. The Special Committee noted, in particular, the recent loss of coverage of Carey International by a number of analysts and the recent removal of the Common Stock from the Russell 2000 Index. (xvi) Management. The Special Committee considered the effect on Carey International and the trading price of the Shares, of Carey International's possible inability to retain key management and the anticipated retirement of Carey International's President. In addition to the factors listed above, the Special Committee considered the fact that the consummation of the Offer and the Merger would eliminate the possibility of Carey International's stockholders (other than Parent and the Management Investors) participating in any future growth in the value of Carey International. The Special Committee concluded that this loss of opportunity was appropriately reflected in the $18.25 per Share to be paid in the Offer and Merger. The Special Committee also considered the potential risks of the Offer and the Merger, including (1) the fact that the fees and expenses required to be paid by Carey International by the terms of the Merger Agreement upon termination of the Merger Agreement for certain reasons would make it more costly for another potential bidder to propose an acquisition of Carey International on a basis that would be superior to that contemplated by the Merger Agreement, and (2) the possibility that the conditions set forth in the Financing Commitment Letters to the obligations of the financing sources to provide the funding necessary to consummate the Offer and the Merger may not be fulfilled or waived. The Board of Directors In reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, the full Board considered and relied upon the conclusions and the unanimous recommendation of the Special Committee that the full Board approve the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and the considerations referred to above as having been taken into account by the Special Committee, as well as the Board's own familiarity with Carey International's business, financial condition and prospects and the advice of financial advisors and legal counsel. The Board also considered advice and the financial presentations of BGC that it has received since January 2000 and BGC's final financial report and oral opinion delivered at the July 15, 2000 meeting of the Board, which was subsequently confirmed in writing on July 15, 2000, that, as of the date of the BGC Opinion and subject to the assumptions, limitations and qualifications set forth in the BGC Opinion, the $18.25 per Share cash consideration to be received in the Offer and the Merger by the holders of Shares (other than the Management Investors) was fair to such holders from a financial point of view. The full text of the BGC Opinion is attached to this Offer to Purchase as Exhibit B. The summary of the BGC Opinion set forth in this Offer to Purchase is qualified in its entirety by reference to the full text of the BGC Opinion. Carey International's stockholders are urged to read the BGC Opinion in its entirety for the procedures followed, assumptions made, other matters considered and limits of the review by BGC in connection with its opinion. The BGC Opinion was prepared for the full Board and was directed only to the fairness from a financial point of view, as of the date thereof, of the consideration to be received by the holders of Shares (other than the Management Investors) in the Offer and the Merger. The BGC Opinion does not constitute a recommendation to any of Carey International's stockholders as to whether 12 such stockholder should tender his Shares or how such stockholder should vote on the Merger, should any such vote be required. In light of the number and variety of factors that the Special Committee and the Board considered in connection with their evaluation of the Offer and the Merger, neither the Special Committee nor the Board found it practicable to quantify or otherwise assign relative weights to the foregoing factors, and, accordingly, neither the Special Committee nor the Board did so. In addition, individual members of the Special Committee and the Board may have given different weights to different factors. The Special Committee and the Board viewed their positions and recommendations as being based on the totality of the information presented to and considered by it. The Board believes that the Offer and the Merger are procedurally fair because, among other things: (i) the Special Committee consisted of independent directors appointed by the Board to represent the interests of Carey International's stockholders other than the Management Investors; (ii) the Special Committee retained its own independent financial advisor, FBR, to assist it in evaluating the proposed transaction and provide it with financial advice; (iii) the Management Investors retained independent legal counsel to assist them in the negotiation of certain agreements between the Management Investors and Acquisition Company; and (iv) the $18.25 per Share cash consideration and the other terms and conditions of the Merger Agreement resulted from active arm's-length negotiations among the Special Committee, Acquisition Company and Parent, and their respective advisors. The Board believes that sufficient procedural safeguards to ensure fairness of the Transaction and to permit the Special Committee to represent effectively the interests of the holders of the Shares (other than the Management Investors) were present, and, therefore, there was no need to retain any additional unaffiliated representative to act on behalf of the holders of the Shares in view of (1) the unaffiliated status of the members of the Special Committee and the retention by the Special Committee of its own independent financial advisor and (2) the fact that the Special Committee is a mechanism well recognized under Delaware law to ensure fairness in transactions of this type. Under the DGCL, a plan of merger requires the affirmative vote of at least a majority of all outstanding shares entitled to vote thereon in order to be adopted. The Board and the Special Committee recognize that the Merger is not structured to require the approval of the holders of the outstanding Shares after the closing of the Offer other than Acquisition Company and the Management Investors. In addition, the Board and the Special Committee recognize that if the Offer is consummated, Acquisition Company and the Management Investors will have sufficient voting power to approve the Merger without the affirmative vote of any other stockholders of Carey International. Consummation of the Offer, however, is conditioned upon, among other things, the Minimum Condition, which may not be waived by Carey International and Parent without the consent of the Special Committee. Finally, pursuant to the Merger Agreement, consummation of the Offer is a condition to the Merger. Neither Carey International nor Acquisition Company has made any provisions in connection with the Offer and the Merger to grant unaffiliated stockholders of Carey International access to Carey International's corporate records, or to obtain counsel or appraisal services at the expense of either Carey International or Acquisition Company. The Board of Directors, after receiving the unanimous recommendation of the Special Committee, (1) has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, (2) has determined that the Offer and the Merger are advisable, fair to and in the best interests of Carey International's stockholders (other than the Management Investors) and (3) recommends that Carey International's stockholders accept the Offer and tender their Shares pursuant to the Offer. 13 3. Opinion of the Board's Financial Advisors. Opinion of FBR Pursuant to an engagement letter dated June 21, 2000, the Board, upon the advice of members of the Special Committee, retained FBR to act as financial advisor to the Special Committee in the determination of the fairness of the proposed Transaction. On July 15, 2000, FBR delivered to Carey International's Special Committee its oral opinion, subsequently confirmed in writing as of July 15, 2000, that as of such date and subject to the various assumptions and limitations set forth therein, that the consideration to be received by the non-affiliated stockholders of Carey International and certain members of Carey International's management, pursuant to the Merger Agreement, was fair from a financial point of view. The amount of such consideration was determined by negotiations conducted by the Special Committee and not by recommendations from FBR. No limitations were imposed by the Special Committee on FBR with respect to the investigations made or procedures followed in rendering its opinion. FBR was not requested to, nor did it advise Carey International with respect to alternatives to the Merger or Carey International's underlying decision to proceed with or effect the Offer or the Merger. The full text of FBR's written opinion to the Special Committee is attached to this Offer to Purchase as Exhibit A and is incorporated herein by reference and should be read carefully and in its entirety in connection with this Offer. FBR's opinion is directed to the Special Committee and does not constitute a recommendation to any stockholder as to how such stockholder should vote with respect to the Merger. FBR's opinion addresses only the financial fairness of the consideration to be received by certain holders of Shares pursuant to the Merger Agreement and does not address the relative merits of, or any alternatives to, the Merger Agreement or the Board's decision to proceed with or effect the Offer or the Merger. In furnishing its opinion, FBR did not admit that it is an expert within the meaning of the term "expert" as used in the Securities Act of 1933, as amended (the "Securities Act"), nor did it admit that its opinion constitutes a report or valuation within the meaning of the Securities Act, and statements to such effect are included in the FBR's opinion. In exchange for FBR's services, Carey International agreed to pay to FBR $400,000 plus reasonable out-of-pocket expenses and fees (including attorneys' fees) incurred by FBR for services rendered by it in connection with the Transaction and its delivery of the FBR Opinion, and Carey International agreed to indemnify FBR in connection with the services that it provided. Set forth below is a further summary of the FBR Opinion, which is qualified in its entirety by the full text of the FBR Opinion attached to this Offer to Purchase as Exhibit A. For purposes of its opinion, FBR: . Reviewed Carey International's Annual Report on Form 10-K for the fiscal year ended November 30, 1999; . Reviewed Carey International's Quarterly Report on Form 10-Q for the fiscal quarter ended February, 29, 2000; . Reviewed Carey International's unaudited quarterly results for the fiscal quarter ended May 31, 2000; . Reviewed Carey International's Proxy Statement dated May 26, 1999; . Conducted discussions with certain members of management of Carey International concerning the financial condition, results of operations, financial forecasts, business and prospects of Carey International; . Conducted discussions with PricewaterhouseCoopers LLP, Carey International's auditor, concerning the condition of Carey International's accounting controls and financial statements; . Reviewed market prices and trading activity for the Common Stock for the period December 22, 1997 through July 11, 2000; . Compared the results of operations and financial condition of Carey International with those of certain publicly-traded companies that FBR deemed to be reasonably comparable to Carey International; . Reviewed the financial terms, to the extent publicly available, of certain acquisition transactions that FBR deemed to be reasonably comparable to the Transaction; 14 . Reviewed the Merger Agreement and related documents; and . Performed such other analyses and reviewed and analyzed such other information as FBR deemed appropriate. In rendering its opinion, FBR did not assume responsibility for independently verifying, and did not independently verify, any financial or other information concerning Carey International furnished to it by Carey International, or the publicly-available financial and other information regarding Carey International and other comparable public companies. FBR assumed that all such information is accurate and complete and has no reason to believe otherwise. FBR relied on certain assumptions, conveyed by Carey International's management, pertaining to the Financing to be used to consummate the Transaction. FBR further relied on the assurances of management of Carey International that they are not aware of any facts that would make such financial or other information relating to such entities inaccurate or misleading. With respect to financial forecasts for Carey International provided to FBR by Carey International's management, FBR has assumed, for purposes of its opinion, that the forecasts were prepared on reasonable bases reflecting the best available estimates and judgments of such management at the time of preparation as to the future financial and operating performance of Carey International. FBR assumed that there was no undisclosed material change in Carey International's assets, financial condition, result of operations, business or prospects since February 29, 2000, and has relied upon Carey International's Annual Report on Form 10-K for the fiscal year ended November 30, 1999 as a representation of Carey International's financial position and operating results through that date. FBR was not requested to, and did not, undertake an independent appraisal of the assets or liabilities of Carey International nor was FBR furnished with any such appraisals. FBR's conclusions and opinion are necessarily based upon economic, market and other conditions and the information made available to FBR as of the date of its opinion. FBR expressed no opinion on matters of a legal, regulatory, tax or accounting nature related to the Offer or the Merger. FBR based its opinion on economic, monetary and market and other conditions as in effect on, and the information made available to FBR as of, the date of its opinion. Accordingly, although subsequent developments may affect its opinion, FBR has not assumed any obligation to update, revise or reaffirm its opinion. Set forth below is a brief summary of the report dated July 11, 2000 presented by FBR to the Special Committee on July 15, 2000 in connection with its opinion. Comparable Company Analysis Based on public and other available information, FBR calculated the multiples of enterprise value (defined as equity value plus debt less cash and cash equivalents) to latest twelve months ("LTM") revenue, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and earnings before interest and taxes ("EBIT"), and equity value to LTM net income, for ten companies in the travel services/transportation and consolidator industries. Such analysis for the travel services/transportation industry indicated the following enterprise value to LTM revenue, EBITDA and EBIT, and equity value to net income multiples: an average LTM revenue multiple mean of 0.8x and a median of 0.6x; LTM EBITDA multiple mean of 7.0x and a median of 6.8x; LTM EBIT multiple mean of 10.0x and a median of 9.1x; and LTM net income multiple mean of 10.0x and a median of 10.4x. Such analysis for companies with an enterprise value of $500 million or less for the travel services/transportation industry indicated the following multiples: an average LTM revenue multiple mean of 0.5x and a median of 0.5x; LTM EBITDA multiple mean of 7.7x and a median of 7.7x; LTM EBIT multiple mean of 8.7x and a median of 8.7x; and LTM net income multiple mean of 9.6x and a median of 9.6x. FBR noted that the enterprise value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied LTM multiples of 1.0x LTM revenue, 7.7x LTM EBITDA and 10.3x LTM EBIT. FBR also noted that the equity value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied a LTM multiple of 15.7x net income. 15 Such analysis for the consolidator industry indicated the following enterprise value to LTM revenue, EBITDA, EBIT and equity value to net income multiples: an average LTM revenue multiple mean of 1.0x and a median of 0.7x; LTM EBITDA multiple mean of 7.1x and a median of 7.1x; LTM EBIT multiple mean of 8.6x and a median of 9.3x; and LTM net income multiple mean of 9.8x and a median of 9.0x. Such analysis for companies with an enterprise value of $500 million or less for the consolidator industry indicated the following enterprise value to LTM revenue, EBITDA, EBIT and equity value to net income multiples: an average LTM revenue multiple mean of 0.4x and a median of 0.3x; LTM EBITDA multiple mean of 5.4x and a median of 5.3x; LTM EBIT multiple mean of 5.1x and a median of 4.9x; and LTM net income multiple mean of 4.7x and a median of 3.5x. FBR noted that the enterprise value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied LTM multiples of 1.0x LTM revenue, 7.7x LTM EBITDA and 10.3x LTM EBIT. FBR also noted that the equity value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied a LTM multiple of 15.7x net income. Comparable Transactions Analysis Based on public and other available information, FBR calculated the multiples of enterprise value LTM revenue, EBITDA and EBIT, and equity value to LTM net income, for 18 target companies in the travel services/transportation and consolidator industries in transactions that have been consummated, or that were announced and are pending, since January 1, 1998. Such analysis yielded the following enterprise value to LTM revenue, EBITDA and EBIT and equity value to net income multiples: an average LTM revenue multiple mean of 1.2x and a median of 1.0x; LTM EBITDA multiple mean of 7.4x and a median of 5.8x; LTM EBIT multiple mean of 13.6x and a median of 12.3x; and LTM net income multiple mean of 23.2x and a median of 18.9x. Such analysis for companies with an enterprise value of $500 million or less yielded the following enterprise value to LTM revenue, EBITDA and EBIT and equity value to net income multiples: an average LTM revenue multiple mean of 0.9x and a median of 0.8x; LTM EBITDA multiple mean of 6.7x and a median of 5.8x; LTM EBIT multiple mean of 12.5x and a median of 11.3x; and LTM net income multiple mean of 23.1x and a median of 18.5x. FBR noted that the enterprise value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied LTM multiples of 1.0x LTM revenue, 7.7x LTM EBITDA and 10.3x LTM EBIT. FBR also noted that the equity value of the consideration to be received by Carey International's stockholders in connection with the Transaction implied a LTM multiple of 15.7x net income. Premiums Paid Analysis FBR reviewed the consideration paid per share versus the target's share price on certain dates prior to the transaction in the 18 comparable transactions. FBR calculated the premiums paid in these transactions over the applicable stock price of the target company one day, one week and four weeks prior to the announcement of the acquisition offer. Such analysis indicated average premiums of 34.5%, 39.8% and 42.5%, respectively, and median premiums of 32.6%, 38.5% and 42.5%, respectively. Such analysis for companies with an enterprise value of $500 million or less indicated average premiums of 38.7%, 38.4% and 48.6%, respectively and median premiums of 37.9%, 38.5% and 50.0%, respectively. FBR noted that the premiums implied in connection with the Transaction were 29.8%, 31.5% and 104.2%, respectively, for the period one day, one week and four weeks prior to July 8, 2000. Discounted Cash Flow Analysis FBR applied a discounted cash flow analysis to the financial cash flow forecasts in both a base case and a high case for Carey International for the years 2000 through 2004, as estimated by Carey International's management. In conducting this analysis, FBR first calculated the present values of the forecasted cash flows. Second, FBR estimated the present value of the aggregate value of Carey International at the end of 2004 by applying multiples to Carey International's estimated 2004 EBITDA, which multiples ranged from 5.0x to 8.0x. These cash flows and aggregate values were discounted to present values using discount rates ranging from 15% 16 to 25%. This analysis indicated a range of current equity values of Carey International from $9.66 to $28.22 for the base case and $11.03 to $34.54 for the high case. Discounted cash flow analysis is a widely-used valuation methodology but it relies on numerous assumptions, including assets and earnings growth rates, terminal values and discount rates. The analysis is not necessarily reflective of the actual values of Carey International. Leveraged Buyout Analysis FBR applied a leveraged buyout analysis to the financial cash flow forecasts in both a base case and a high case for Carey International for the years 2000 through 2004, as estimated by management. FBR further analyzed the cases by allowing the sources of funding (debt in scenario 1 and equity in scenario 2) to fluctuate to accommodate purchase prices of $18.25, $19.00 and $20.00 per Share. Such analysis indicated that the projected internal rates of return ("IRRs") to the equity sponsor, assuming an exit in 2003, were 38.2%, 36.6%, and 34.4% at $18.25, $19.00 and $20.00 per share, respectively, in the base case scenario 1. The IRRs were 47.6%, 46.3%, and 44.5% at $18.25, $19.00 and $20.00 per share, respectively, in the high case scenario 1. The IRRs to the equity sponsor, assuming an exit in 2004, were 35.1%, 34.1% and 32.8% at $18.25, $19.00 and $20.00 per share, respectively, in the base case scenario 1. The IRRs were 43.8%, 43.0%, and 41.9% at $18.25, $19.00 and $20.00 per share, respectively, in the high case scenario 1. The IRRs to the equity sponsor, assuming an exit in 2003, were 38.2%, 34.2% and 29.5% at $18.25, $19.00 and $20.00 per share, respectively, in the base case scenario 2. The IRRs were 47.6%, 43.4% and 38.7% at $18.25, $19.00 and $20.00 per share, respectively, in the high case scenario 2. The IRRs to the equity sponsor, assuming an exit in 2004, were 35.1%, 32.1% and 28.5% at $18.25, $19.00 and $20.00 per share, respectively, in the base case scenario 2. The IRRs were 43.8%, 40.6% and 37.0% at $18.25, $19.00 and $20.00 per share, respectively, in the high case scenario 2. In performing its analyses, FBR made numerous assumptions with respect to industry performance, general business and economic conditions, and other matters, many of which are beyond the control of Carey International. The analyses performed by FBR are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those suggested by such analyses. Such analyses were prepared solely as part of FBR's analysis of the fairness, from a financial point of view, of the consideration to be received by the holders of Shares pursuant to the Merger Agreement and were provided to the Special Committee in connection with the delivery of FBR's opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities may trade at any time in the future. As described above, the FBR Opinion and FBR's presentations to the Special Committee were among the many factors taken into consideration by the Special Committee in making its determination to recommend that the Board approve the Merger Agreement. In the ordinary course of its business, FBR actively trades the equity securities of Carey International for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities. Opinion of BGC On July 15, 2000, BGC rendered its oral and written opinion to the Board that, as of such date, and based on assumptions and qualifications set forth in its presentation, the consideration to be received pursuant to the terms of the Merger Agreement by the holders of Shares, other than the Management Investors, was fair, from a financial point of view. The full text of the BGC Opinion, which states the procedures followed, assumptions made, matters considered and limitations on the review undertaken, is attached to this Offer to Purchase as Exhibit B and is incorporated by reference into this Offer to Purchase. The summary of the BGC Opinion below is qualified by reference to its text. Carey International stockholders are urged to read the BGC Opinion carefully in its entirety. The BGC Opinion was directed to the Board for its information regarding their consideration of the transactions contemplated by the Merger Agreement and relates only to the fairness, 17 from a financial point of view, of the cash consideration to be received by the holders of Shares, other than the Management Investors, pursuant to the Merger Agreement. The BGC Opinion does not address any other aspect of the Transaction, does not address Carey International's underlying business decision to effect the Transaction, does not constitute a recommendation to the Board, and does not constitute a recommendation to any stockholder as to any matter relating to the Transaction. Although BGC evaluated the fairness, from a financial point of view, of the cash consideration to be received by the holders of Shares, other than the Management Investors, in the Transaction, the cash consideration itself was determined by Carey International and Chartwell through arm's-length negotiations and was not based on any recommendations by BGC, although BGC provided advice to Carey International from time to time during the course of such negotiations. Carey International's decision to enter into the Merger Agreement was solely the decision of its Board. Carey International did not provide specific instructions to, or place any limitations on, BGC regarding the procedures to be followed or factors to be considered by BGC in performing its analyses or rendering its opinion. In arriving at its opinion, BGC: . Reviewed a draft dated July 14, 2000 of the Merger Agreement in substantially the form to be executed by Carey International; . Reviewed publicly available business and financial information relating to Carey International, including Carey International's Annual Report on Form 10-K for the fiscal year ended November 30, 1999 and Carey International's Quarterly Reports on Form 10-Q for the periods ended February 29, 2000 and May 31, 2000; . Reviewed certain publicly available business and financial information relating to Carey International; . Reviewed certain operating and financial information, including projections, provided to or discussed with BGC by management of Carey International related to Carey International and its prospects; . Met with certain members of Carey International's senior management to discuss its business, operations, historical and projected financial results and future prospects; . Reviewed the historical stock prices, valuation parameters and trading volume of the Common Stock; . Reviewed publicly available financial data, stock market performance data and valuation parameters of companies whose operation BGC considered generally relevant in evaluating Carey International; . Reviewed the terms of recent selected mergers and acquisitions which BGC deemed generally relevant in evaluating the Offer and the Merger; . Performed discounted cash flow analyses based on the projections for Carey International furnished to BGC; and . Considered such other information and conducted other studies, analyses, inquiries and investigations as BGC deemed appropriate. In rendering its opinion, BGC relied upon and assumed the accuracy and completeness of all of the financial and other information that was available to it from public sources that was provided to it by Carey International or that was otherwise reviewed by BGC and assumed that Carey International is not aware of any information prepared by it or its advisors that might be material to the BGC opinion that has not been made available to BGC. With respect to the financial projections supplied to BGC, BGC relied on the representations that such projections had been reasonably prepared on the basis reflecting the best currently available estimates and judgments of the management of Carey International as to the future operating and financial performance of Carey International. BGC did not assume any responsibility for making an independent evaluation of any assets or liabilities or for making any independent verification of the information reviewed by BGC. BGC was advised by representatives of Carey International, and therefore assumed, that the final terms of the Merger Agreement would not vary materially from those stated in the drafts reviewed by BGC, as updated 18 by discussions with representatives of Carey International. BGC assumed, with Carey International's consent, that, in all respects material to BGC's analysis, the representations and warranties contained in the Merger Agreement were true and correct, the conditions to the Offer and the Merger would be met and the Offer and the Merger would be consummated on the terms and conditions contemplated in the Merger Agreement. BGC acted as advisor to the Board in connection with the Offer and the Merger and will receive a fee for such services, including the rendering of its opinion, a significant portion of which is contingent upon consummation of the Offer. BGC's opinion was addressed to the Board. BGC acknowledged that the Special Committee retained FBR to provide an opinion exclusively to the Special Committee. It is currently estimated that the fee payable by Carey International to BGC, upon the consummation of the Transaction, will be approximately $2.4 million. In addition, Carey International has agreed to indemnify BGC and related parties against liabilities, including liabilities under the federal securities laws, relating to or arising out of BGC's engagement. In preparing its opinion to the Board, BGC performed a variety of financial and comparative analyses, including those described below. The summary of BGC's analyses is not a complete description of the analyses underlying its opinion. The preparation of an opinion is a complex process involving various judgments and determinations as to the most appropriate and relevant assumptions and financial analyses and the application of those methods to the particular circumstances. As a result, BGC's opinion is not necessarily susceptible to partial analysis or summary description. In arriving at its opinion, BGC made qualitative judgments as to the significance and relevance of each analysis and factor considered by it and did not attribute particular weight to any one analysis or factor. BGC did not form an opinion as to whether any individual analysis or factor, positive or negative, considered in isolation, supported or failed to support its opinion. BGC believes, however, that taking into account the totality of all of the factors which it considered and its analyses performed in connection with its opinion and ascribing appropriate qualitative significance and relevance to each of those factors and analyses collectively supported its determination as to the fairness of the Offer Price and Merger Consideration from a financial point of view. Accordingly, BGC believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors or of the summary described below or focusing on information presented in BGC's report, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying its analyses and opinion. In arriving at its opinion, BGC did not perform or obtain any independent evaluation or appraisal of the assets or liabilities, contingent or otherwise, of Carey International, nor was BGC furnished with any evaluations or appraisals. During the course of its engagement, BGC was asked by the Board to solicit indications of interest from various third parties regarding a potential transaction with Carey International, and BGC considered the results of those solicitations in rendering its opinion. BGC's opinion was necessarily based on information available to it, and financial, economic, market and other conditions as they existed and could be evaluated on the date of its opinion. Although subsequent developments may affect its opinion, BGC does not have any obligation to update, revise or reaffirm its opinion. The following is a summary of the material analyses underlying BGC's opinion dated July 15, 2000, delivered to the Board in connection with the Transaction contemplated by the Merger Agreement. The financial analyses summarized below include information presented in tabular format. In order to fully understand BGC's financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of BGC's financial analyses. Comparison to Selected Public Companies BGC compared the financial and stock market performance data of Carey International to corresponding data of 11 selected public companies in the transportation services industry. BGC compared enterprise values, calculated as equity value plus debt, preferred stock and minority interests less cash and cash equivalents, of the selected companies and Carey International as multiples of latest 12 months sales, earnings before interest, taxes, 19 depreciation and amortization ("EBITDA"), and earnings before interest and taxes ("EBIT"). BGC also compared stock prices of the selected companies and Carey International as multiples of estimated calendar years 2000 and 2001 earnings per share, commonly referred to as the "P/E ratio". This analysis indicated the following multiples for the selected companies based on their latest 12 months sales, EBITDA and EBIT, and estimated calendar years 2000 and 2001 earnings per share, as compared to corresponding multiples for Carey International and multiples for Carey International implied by the Offer Price and Merger Consideration of $18.25 per Share:
Enterprise Value as a Multiple of Latest Twelve Months P/E Ratios -------------------------------- --------------- Sales EBITDA EBIT CY2000E CY2001E ---------- --------------------- ------- ------- 7/14/00 Median of Public Comparables................. 0.7x 7.1x 9.7x 11.6x 9.6x 7/14/00 Stock Price (Carey International)(1)........... 0.9x 6.5x 8.8x 11.1x 9.0x 7/14/00 Stock Price (Carey International)(2)........... NA NA NA 10.2x 9.5x 6/28/00 Stock Price (Carey International)(1)........... 0.7x 5.1x 6.8x 7.9x 6.3x 6/28/00 Stock Price (Carey International)(2)........... NA NA NA 7.2x 6.7x Offer Price (Carey Interna- tional)(1).................. 1.0x 7.6x 10.2x 13.6x 10.9x Offer Price (Carey Interna- tional)(2).................. NA NA NA 12.5x 11.6x
- - -------- (1) Earnings per share based on publicly available research analysts' estimates. (2) Earnings per share based on Carey International estimated financial data. Multiples were based on the prices for the public comparables as of July 14, 2000, the trading day prior to the delivery of BGC's opinion; the price of Carey International on July 14, 2000, the trading day prior to the delivery of BGC's opinion; the price of Carey International on June 28, 2000, the trading day prior to the announcement by Carey International that it was in negotiations regarding a possible acquisition of Carey International; and the per Share Merger Consideration and Offer Price of $18.25. Estimated financial data for the selected companies and Carey International were based on publicly available information and research analysts' estimates and, in the case of Carey International, Carey International estimated financial data. BGC chose the selected companies because BGC believed they have general business, operating and financial characteristics similar to those of Carey International. However, BGC noted that none of the selected companies described above is directly comparable to Carey International. Accordingly, BGC did not rely solely on the mathematical results of the analysis but also made qualitative judgments concerning differences in financial and operating characteristics of Carey International and the selected companies that could affect the values of each. Hypothetical Future Stock Price Analysis BGC performed a hypothetical future stock price analysis on Carey International based on estimated financial data for calendar years 2000 through 2004 provided to BGC by Carey International. This analysis was based on two sets of assumptions provided by Carey International to BGC, one in which Carey International generated internal revenue growth of 8% and acquired $40 million of revenue annually and another in which Carey International generated internal revenue growth of 12% and acquired $60 million of revenue annually. Using estimates of earnings per share for calendar years 2000 and 2004, based on this estimated financial data and assumed multiple of price to earnings of 12.8x, which BGC believed to be a reasonable estimate of price to earnings for Carey International based upon the trading range of Carey International as of July 14, 2000, and applying appropriate discount rates, this analysis indicated the following: an 8% internal annual revenue growth and the addition of $40 million of acquired revenue annually would imply a present value of hypothetical future stock price of $15.82 to $17.81 per Share; and a 12% internal annual revenue growth and the addition of $40 million of acquired revenue annually would imply a present value of hypothetical future stock price of $14.94 to $17.60 per Share. 20 Discounted Cash Flow Analysis BGC performed a discounted cash flow analysis on Carey International in order to estimate the present value of the unlevered after-tax free cash flows that Carey International could produce on a stand-alone basis. BGC analyzed estimated free cash flows for calendar years 2000 through 2004, based on two sets of assumptions, one in which Carey International generated internal revenue growth of 8% and acquired $40 million of revenue annually and another in which Carey International generated internal revenue growth of 12% and acquired $60 million of revenue annually based on estimates provided by Carey International. Ranges of terminal values for the discounted cash flows were estimated using multiples of terminal year 2004 EBITDA of 5.5x to 7.5x, which were believed to represent a reasonable estimate of the range of multiples of EBITDA based upon Carey International's margins and growth prospects at the end of the projected period. BGC then discounted to present value the free cash flow streams and terminal values at appropriate discount rates. These discount rates were based on Carey International's estimated weighted average cost of capital. This analysis indicated the following per share equity reference ranges after adjustment for net debt and option proceeds: an 8% internal annual revenue growth and the addition of $40 million of acquired revenue annually would imply a present value of discounted cash flows of $14.91 to $15.79 per Share; and a 12% internal annual revenue growth and the addition of $60 million of acquired revenue annually would imply a present value of discounted cash flows of $16.32 to $17.27 per Share. Selected Mergers and Acquisitions Analysis Using publicly available information, BGC analyzed the purchase prices and implied transaction multiples proposed to be paid, at the time of announcement, in seven selected merger and acquisition transactions in the business and transportation services industries. BGC compared transaction values, calculated as the amount proposed to be paid, at the time of announcement, in each transaction for the equity of the target company, plus total debt, preferred stock and minority interests, less cash and cash equivalents, of the selected transactions and as multiples of latest 12 months EBITDA and EBIT, as well as equity values, calculated as the amount proposed to be paid, at the time of announcement, in each transaction for the equity of the target company, of the selected transactions and the merger as multiples of the latest 12 months net income. All multiples for the selected transactions were based on financial information available at the time of the announcement of the relevant transaction and data for the latest 12 months reflected data for the 12 months preceding the date of announcement of the transaction. This analysis indicated the following multiples of transaction values for the selected merger and acquisition transactions based on their latest 12 months EBITDA, EBIT and net income: 5.4x, 8.3x and 14.8x, respectively, as compared to the following corresponding multiples for Carey International implied by the Merger Consideration and Offer Price of $18.25 per share based upon its latest 12 months EBITDA, EBIT and net income: 7.6x, 10.2x and 15.4x, respectively. No company or transaction used in the above analysis is directly comparable to Carey International or the Merger. Accordingly, BGC did not rely solely on the mathematical results of the analysis but also made qualitative judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the acquisition value of the companies and Carey International. Other Analyses BGC conducted other analyses that it deemed appropriate, including, among others, reviewing historical stock performance for Carey International and historical and estimated financial and operating data for Carey International. The analyses performed by BGC, particularly those based on estimates, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than results suggested by those analyses. In addition, analyses relating to the value of businesses or securities do not purport to be 21 appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, BGC's analyses are inherently subject to substantial uncertainty. The analyses were prepared solely as part of BGC's analysis for the Board of the fairness, from a financial point of view, of the cash consideration to be received in the Merger by the holders of the common stock of Carey International, other than the Management Investors. 4. Purpose and Structure of the Transaction. The purpose of the Transaction is to enable Parent to acquire substantially all the equity interest in Carey International in a transaction in which the holders of Shares (other than Acquisition Company and the Management Investors (with respect to certain of their Shares)) are entitled to have their equity interest in Carey International purchased or extinguished in exchange for cash in the amount of $18.25 per Share. The Offer, which is the first step in the Transaction, is structured as a joint tender offer by Acquisition Company and Carey International to purchase, at the Offer Price, all Shares validly tendered and not withdrawn pursuant to the Offer. Pursuant to the Merger Agreement, Acquisition Company has agreed to pay for and purchase all Shares tendered pursuant to the Offer, provided that the Short Form Requirement is met. If the Short Form Requirement is not met, but all of the Offer Conditions have been waived or met, then Acquisition Company will purchase up to 5,232,876 Shares and Carey International will purchase the balance of the Shares tendered pursuant to the Offer. The second step in the Transaction is for Acquisition Company to purchase, if it so elects, Shares pursuant to the Carey Purchase Agreements. All Shares purchased will be at a per Share price equal to the Offer Price (determined on an as exercised basis with respect to the Company Options, less any exercise price thereof). The third step in the Transaction, the Merger, will be consummated as soon as practicable following the consummation of the Offer and the transactions contemplated by the Carey Purchase Agreements and is structured to merge Acquisition Company or Acquisition Company Sub with and into Carey International so that Carey International is the Surviving Corporation. Pursuant to the Merger, each then outstanding Share (other than Shares held by Acquisition Company, certain Shares held by the Management Investors, Shares held in the treasury of Carey International or held by stockholders who perfect any applicable appraisal rights under the DGCL) will be converted into the right to receive the Merger Consideration (without interest), which is equal to the Offer Price. In connection with the Merger, certain Shares and Company Options held by Management Investors will be converted or rolled over into common stock of the Surviving Corporation. Pursuant to the Merger, the Shares purchased by Carey International or Acquisition Company pursuant to the Offer will be cancelled with no consideration paid therefor, and certain Shares held by the Management Investors will be converted into common stock of the Surviving Corporation. The capital stock of Acquisition Company, if the Short Form Requirement is met, or Acquisition Company Sub, if the Short Form Requirement is not met, will be converted into the right to receive common stock and preferred stock (the "Carey Preferred Stock") of the Surviving Corporation. Upon consummation of the Merger, approximately 92.0% of the common stock of the Surviving Corporation will be owned by Parent or a subsidiary thereof and approximately 8.0% will be owned by the Management Investors. The Senior Sub Note Purchasers will receive detachable warrants (the "Warrants"), with an exercise price of $.01 per share, sufficient to provide the Senior Sub Note Purchasers with 5.25% of the common stock of the Surviving Corporation on a fully-diluted basis. As described above, the Board has approved the Merger and the Merger Agreement and the transactions contemplated thereby in accordance with the DGCL. Under the DGCL, the approval of the Board and, if the Short Form Requirement is not met, the affirmative vote of the holders of a majority of the outstanding Shares, is required to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. If the Short Form Requirement is met, Acquisition Company will be able to effect the Merger pursuant to a Short Form Merger under Section 253 of the DGCL without any action by any stockholder of Carey International. In such event, Acquisition Company intends to effect a Short Form Merger as promptly as practicable following the purchase of Shares in the Offer. In the event that the Short Form Requirement is not met, Carey International has agreed to convene a meeting of its stockholders as soon as practicable following the consummation of the Offer for the purpose of 22 adopting the Merger Agreement and has agreed, subject to the terms of the Merger Agreement, to include in any proxy or information statement required for such meeting a recommendation of the Board that Carey International's stockholders vote in favor of the adoption of the Merger Agreement. The consummation of the Merger is subject to certain conditions, including the satisfaction of the Receipt of Funds Condition. If (1) the Minimum Condition is satisfied and (2) the Shares are purchased in the Offer by Acquisition Company and, if necessary, Carey International, a favorable vote to approve the Merger will be assured since Acquisition Company will own more than a majority of the Shares entitled to vote thereon. 5. Plans for Carey International after the Transaction. Pursuant to the terms of the Merger Agreement, Carey International, Acquisition Company, Acquisition Company Sub and Parent intend to effect the Merger in accordance with the Merger Agreement as soon as practicable following completion of the Offer. Following the closing of the Offer, the Board will be reconstituted to consist of Vincent A. Wolfington, Michael J. Rolland, Jeffrey R. Larsen, W. Gray Hudkins, Robert W. Cox, Dennis I. Meyer, James C. Schroer and Elizabeth S. Acton. Except for Don R. Dailey, a director and President of Carey International who is resigning from those positions and becoming a consultant to Carey International, the Board and the officers of the Surviving Corporation following the Effective Time will be the Board and the officers of Carey International immediately prior to the Effective Time. See "SPECIAL FACTORS -- The Merger Agreement and Related Documents." It is currently expected that the business and operations of the Surviving Corporation will be continued substantially as they are currently being conducted by Carey International. Except as otherwise indicated in this Offer to Purchase or as contemplated by the Merger Agreement or the Financing Commitment Letters, none of the Offerors has any present plans or proposals involving Carey International that relate to or would result in an extraordinary corporate transaction such as a merger, reorganization or liquidation, or a sale or transfer of a material amount of Carey International's assets, or any material change in Carey International's present dividend policy, indebtedness or capitalization, or any other material change in Carey International's corporate structure or business. However, after the Merger, the Surviving Corporation's management and board of directors will review proposals or may propose the acquisition or disposition of assets or other changes in the Surviving Corporation's business, corporate structure, capitalization, businesses, management, operations or dividend policy that they consider to be in the best interests of the Surviving Corporation and its stockholders. Upon consummation of the Merger, Parent or a subsidiary thereof will own approximately 92.0% of the outstanding common stock of the Surviving Corporation and the Management Investors will own approximately 8.0%. Parent and the Management Investors will be entitled to all benefits resulting from their ownership of all the shares of Carey International, including all income generated by Carey International's operations and any future increase in Carey International's value. Similarly, Parent and the Management Investors will also bear the risk of losses generated by Carey International's operations and any future decrease in the value of Carey International after the Merger. Subsequent to the Merger, no other stockholder, other than the Senior Sub Note Purchasers upon exercise of the Warrants and employees pursuant to an option plan to be adopted by the Surviving Corporation, will have the opportunity to participate in the earnings and growth of Carey International or will have a right to vote on corporate matters. Similarly, such stockholders will not face the risk of losses generated by Carey International's operations or any decrease in the value of Carey International after the consummation of the Transaction. The Shares are currently traded on the Nasdaq National Market. Following the consummation of the Transaction, the Shares will no longer be quoted on the Nasdaq National Market. In addition, the registration of the Shares under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), will be terminated. Accordingly, following the consummation of the Transaction, there will be no public market for the Shares. Moreover, Carey International will no longer be required to file periodic reports with the Securities and Exchange Commission (the "Commission") under the Exchange Act, and will no longer be required to comply with the proxy rules of Regulation 14A promulgated under Section 14 of the Exchange Act. In addition, Carey 23 International's officers, directors and ten percent stockholders will be relieved of the reporting requirements and restrictions on "short-swing" trading contained in Section 16 of the Exchange Act with respect to the Shares. See "THE TENDER OFFER -- Effect of the Offer on the Market for the Common Stock; Exchange Act Registration." It is expected that, if the Transaction is not consummated, Carey International will continue to be managed under the general direction of the Board, and will continue as an ongoing business. 6. Rights of Stockholders in the Offer and the Merger. No dissenters' or appraisal rights are available to stockholders in connection with the Offer. If the Merger is consummated, however, record stockholders of Carey International who have neither validly tendered their Shares nor voted in favor of the Merger will have certain rights under the DGCL to an appraisal of, and to receive payment in cash of the fair value of, their Shares (the "Appraisal Shares"). Stockholders who perfect appraisal rights by complying with the procedures set forth in Section 262 of the DGCL ("Section 262"), a copy of which is attached to this Offer to Purchase as Exhibit C, will have the fair value of their Appraisal Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) determined by the Delaware Court of Chancery and will be entitled to receive from the Surviving Corporation a cash payment equal to such fair value. Any such judicial determination of the fair value of Shares could be based upon any valuation method or combination of methods the court deems appropriate. The value so determined could be more or less than the Offer Price and Merger Consideration. In addition, stockholders who invoke appraisal rights may be entitled to receive payment of a fair rate of interest from the Effective Time on the amount determined to be the fair value of the Appraisal Shares. The preservation and exercise of appraisal rights require strict adherence to the applicable provisions of the DGCL. Under Section 262, if the Merger is submitted to a vote of Carey International's stockholders at a meeting thereof, then Carey International must, not less than 20 days prior to the meeting held for the purpose of obtaining stockholder approval of the Merger, notify each of Carey International's stockholders entitled to appraisal rights that such rights are available. If the Merger is accomplished by a Short Form Merger, Carey International, either before the Effective Time or within ten days thereafter, must notify each of the stockholders entitled to appraisal rights of the Effective Time and that appraisal rights are available. In either case, the notice must include a copy of Section 262. If the Merger is not a Short Form Merger, a holder of Appraisal Shares wishing to exercise appraisal rights will be required to deliver to Carey International before the taking of the vote on the Merger or within 20 days after the date of mailing the notice described in the preceding paragraph, a written demand for appraisal of such holder's Appraisal Shares. A holder of Appraisal Shares wishing to exercise such holder's appraisal rights must be the record holder of such Appraisal Shares on the date the written demand for appraisal is made and must continue to hold of record such Appraisal Shares through the Effective Time. Accordingly, a holder of Appraisal Shares who is the record holder of Appraisal Shares on the date the written demand for appraisal is made, but who thereafter transfers such Appraisal Shares prior to the Effective Time, will lose any right to appraisal with respect to such Appraisal Shares. If the Merger is a Short Form Merger, a holder of Appraisal Shares wishing to exercise appraisal rights will be required to deliver to Carey International, within 20 days after the date of mailing the notice by Carey International described above, a written demand for appraisal of such holder's Appraisal Shares. A demand for appraisal must be executed by or on behalf of the stockholder of record and must reasonably inform Carey International of the identity of the stockholder of record and that such stockholder intends thereby to demand an appraisal of such Appraisal Shares. A person having a beneficial interest in Appraisal Shares that are held of record in the name of another person, such as a broker, fiduciary, depository or other nominee, will have to act to cause the record holder to 24 follow the requisite steps properly and in a timely manner to perfect appraisal rights. If the Appraisal Shares are owned of record by a person other than the beneficial owner, including a broker, fiduciary (such as a trustee, guardian or custodian), depositary or other nominee, the written demand for appraisal rights must be executed by or for the record owner. If Appraisal Shares are owned of record by more than one person, as in joint tenancy or tenancy in common, the demand will have to be executed by or for all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal for a stockholder of record, provided that the agent identifies the record owner and expressly discloses, when the demand is made, that the agent is acting as agent for the record owner. If a stockholder owns Appraisal Shares through a broker who in turn holds the Appraisal Shares through a central securities depository nominee such as CEDE & Co., a demand for appraisal of such Appraisal Shares will have to be made by or on behalf of the depository nominee and must identify the depository nominee as the record holder of such Appraisal Shares. A record holder, such as a broker, fiduciary, depository or other nominee, who holds Appraisal Shares as a nominee for others, will be able to exercise appraisal rights with respect to the Appraisal Shares held for all or less than all of the beneficial owners of those Appraisal Shares as to which such person is the record owner. In such case, the written demand must set forth the number of Shares covered by the demand. Where the number of Shares is not expressly stated, the demand will be presumed to cover all Appraisal Shares outstanding in the name of such record owner. Within 120 days after the Effective Time, but not thereafter, Carey International or any stockholder who has complied with the statutory requirements summarized above and who is otherwise entitled to appraisal rights may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of such holders' Appraisal Shares. There is no present intention on the part of Acquisition Company to file an appraisal petition on behalf of Carey International, and stockholders who seek to exercise appraisal rights should not assume that Carey International will file such a petition or that Carey International will initiate any negotiations with respect to the fair value of Appraisal Shares. Accordingly, it will be the obligation of the stockholders seeking appraisal rights to initiate all necessary action to perfect any appraisal rights within the time prescribed in Section 262. Within 120 days after the Effective Time, any stockholder who has theretofore complied with the provisions of Section 262 will be entitled, upon written request, to receive from Carey International a statement setting forth the aggregate number of Shares not voting in favor of the Merger (if applicable) and with respect to which demands for appraisal were received as well as the number of holders of such Shares. Such statement must be mailed within ten days after the written request therefor has been received by Carey International, or within ten days after expiration of the period for delivery of demands, whichever is later. If a petition for appraisal is timely filed, after a hearing on such petition the Delaware Court of Chancery will determine the stockholders entitled to appraisal rights and will appraise the fair value of their Appraisal Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value from the Effective Time. The costs of the proceeding may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. However, costs do not include attorneys' fees or expert witness fees. Upon application of a stockholder, the Delaware Court of Chancery may also order all or a portion of the expenses incurred by any stockholder, including reasonable attorneys' fees and the fees and expenses of experts, to be charged pro rata against the value of all of the Appraisal Shares entitled to appraisal. At any time within 60 days after the Effective Time, any stockholder will have the right to withdraw its demand for appraisal and to accept the Merger Consideration. After this period, the stockholder may withdraw such holder's demand for appraisal only with the written consent of the Surviving Corporation. If any stockholder who properly demands appraisal of such holder's Appraisal Shares under Section 262 fails to perfect, or effectively withdraws or loses such holder's right to appraisal as provided in the DGCL, the Appraisal Shares of 25 such stockholder will be converted into the right to receive the Merger Consideration. A stockholder will fail to perfect, or effectively lose or withdraw, such stockholder's right to appraisal if, among other things, no petition for appraisal is filed within 120 days after the Effective Time or if the stockholder delivers to Carey International a written withdrawal of such stockholder's demand for appraisal within 60 days after the Effective Time. Several decisions by Delaware courts have held that in certain circumstances a controlling stockholder of a corporation involved in a merger has a fiduciary duty to other stockholders that requires that the merger be fair to other stockholders. In determining whether a merger is fair to minority stockholders, Delaware courts have considered, among other things, the type and amount of the consideration to be received by the stockholders and whether there was fair dealing among the parties. The Delaware Supreme Court stated in two cases, Weinberger v. UOP, Inc. and Rabkin v. Philip A. Hunt Chemical Corp., that the remedy ordinarily available to minority stockholders in a cash-out merger is the appraisal right described above. However, a damages remedy or injunctive relief may be available if a merger is found to be the product of procedural unfairness, including fraud, misrepresentation or other misconduct. The foregoing summary of the rights of dissenting stockholders under the DGCL does not purport to be a complete statement of the procedures to be followed by stockholders desiring to exercise any appraisal rights available under the DGCL. The preservation and exercise of appraisal rights require strict adherence to the applicable provisions of the DGCL. A copy of Section 262 of the DGCL is attached to this Offer to Purchase as Exhibit C, and the foregoing summary is qualified in its entirety by reference to Exhibit C. 7. The Merger Agreement and Related Documents. The following is a summary of the material terms of the Merger Agreement and related documents. The summary is qualified in its entirety by reference to the Merger Agreement and such related documents, all of which are incorporated herein by reference and have been included as exhibits to the Schedule TO filed with the Commission. The Merger Agreement and such related documents may be inspected at, and copies may be obtained from, the same places and in the manner set forth in "THE TENDER OFFER -- Certain Information Concerning Carey International." The Merger Agreement. The Offer. The Merger Agreement requires the Offerors to commence the Offer on or prior to the tenth business day following public announcement of the Offer; however, the parties to the Merger Agreement agreed to waive this requirement and commence this Offer on the eleventh business day following public announcement of the Offer. The obligation of the Offerors to commence the Offer and to accept for payment, and to pay for, any Shares of Common Stock tendered pursuant to the Offer, is subject to the satisfaction of the Offer Conditions which are set forth below the caption "THE TENDER OFFER -- Conditions of the Offer." Parent may waive certain of the Offer Conditions without the prior consent of Carey International or Acquisition Company. Carey International and Acquisition Company have agreed that, except as provided below, without the prior written consent of Parent, no changes may be made to the Offer that (i) increase or decrease the Offer Price or change the consideration payable pursuant to the Offer, (ii) decrease the number of Shares subject to the Offer, (iii) amend or waive the Offer Conditions, (iv) impose any additional conditions or amend any other term of the Offer or (v) extend the expiration date of the Offer (the "Expiration Date"). Under the terms of the Merger Agreement, Carey International and Acquisition Company shall, upon request of Parent, extend the Offer if, at the then scheduled Expiration Date, any of the Offer Conditions have not been satisfied or waived until the earlier of (i) the later of (A) 20 business days after the initial Expiration Date and (B) such later date that is ten business days after Carey International terminates certain third party discussions permitted under the Merger Agreement or (ii) such time as all such conditions shall have been satisfied or waived; provided, however, if Parent or Acquisition Company has materially breached the Merger Agreement, Carey International is permitted, but not required, to extend the Offer. In addition, each of Carey International and Acquisition Company has the right by mutual agreement to extend the Offer beyond the initial Expiration Date. In addition to the foregoing, provided that 26 Carey International reasonably believes that the Minimum Condition will be satisfied within ten business days, Parent and Acquisition Company shall, if requested by Carey International, extend the Offer until the earlier of (i) the date which is ten business days after the initial Expiration Date and (ii) such time as the Minimum Condition is satisfied and the other Offer Conditions are satisfied or waived. If at the scheduled Expiration Date, or at the end of any extension thereof, all of the Offer Conditions have been satisfied, the Offerors are required to immediately accept and promptly pay for all Shares tendered (assuming the Minimum Condition is met). See "THE TENDER OFFER -- Terms of the Offer." The term "Expiration Date" means 5:00 p.m., New York City time, on August 31, 2000 unless and until the Offerors, in their sole discretion (but subject to the terms of the Merger Agreement), shall extend the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Offerors, shall expire. The Merger Agreement also provides that, subject to the terms and conditions provided therein, Carey International and Acquisition Company will each use their commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties to the Merger Agreement in doing, all necessary, proper or advisable things under applicable laws and regulations to consummate the Offer. Board Representation. The Merger Agreement provides that, immediately upon the purchase of Shares pursuant to the Offer and from time to time thereafter until the Effective Time, Acquisition Company shall be entitled to designate such number of directors equal to the greater of (a) a majority of the Board and (b) the product of (i) the number of directors on the Board and (ii) the percentage that the number of Shares owned by Acquisition Company bears to the number of Shares outstanding less the number of Independent Directors (as defined below). Carey International has agreed, upon request by Acquisition Company, to increase promptly the size of the Board or use its reasonable efforts to secure the resignations, or the removal, of such number of directors as is necessary to enable Acquisition Company's designees to be elected to the Board and to cause Acquisition Company's designees to be so elected. Carey International's obligations to appoint Acquisition Company's designees to the Board are subject to Section 14(f) of the Exchange Act and the rules promulgated thereunder (Schedule IV to this Offer to Purchase contains the information required under Rule 14f-1 promulgated under the Exchange Act). In addition, the Merger Agreement requires Carey International to have at all times prior to the Effective Time at least two members on the Board who were members of the Board on the date of the Merger Agreement and who are not employees of Carey International (the "Independent Directors"). Following the election of the designees of Acquisition Company to the Board, but prior to the Effective Time, any permitted termination of the Merger Agreement by Carey International, any amendment of the Merger Agreement or Carey International's certificate of incorporation or by-laws requiring action by the Board, any extension of time for the performance of any of the obligations or other acts of Parent, and any waiver of compliance with any of the agreements or conditions contained in the Merger Agreement must by authorized by a majority of the Independent Directors as well as a majority of all Board members. The Merger. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement and the applicable provisions of the DGCL, Acquisition Company (or Acquisition Company Sub if the Short Form Requirement is not met) will be merged with and into Carey International at the Effective Time and the separate existence of Acquisition Company, or Acquisition Company Sub, if applicable, will cease, and Carey International will be the Surviving Corporation. All of the properties, rights, privileges, powers and franchises of Carey International and Acquisition Company or Acquisition Company Sub, if applicable, will vest in Carey International as the Surviving Corporation, and all debts, liabilities and duties of Carey International and Acquisition Company, or Acquisition Company Sub, if applicable, will become the debts, liabilities and duties of Carey International as the Surviving Corporation. Subject to the provisions of the Merger Agreement and applicable provisions of the DGCL, the closing of the Merger will occur promptly following the satisfaction or, to the extent permitted under the Merger Agreement, waiver of the conditions to the Merger set forth in the Merger Agreement. 27 Effect on Capital Stock of Carey International. At the Effective Time: (a) each Share that is owned by Acquisition Company or is owned by Carey International as treasury stock shall be automatically cancelled and retired and no consideration shall be delivered in exchange therefor; (b) each Share, other than Shares held by Carey International, Acquisition Company, stockholders who perfect any applicable appraisal rights under the DGCL and certain Shares held by the Management Investors, shall be converted into the right to receive, in cash, the Offer Price per Share without interest; and (c) certain Shares held by the Management Investors shall be converted into the right to receive .1825 fully paid and nonassessable shares of common stock of Surviving Corporation per Share, and, upon such conversion, shall be cancelled. Effect on the Capital Stock of Acquisition Company and Acquisition Company Sub. At the Effective Time, the issued and outstanding capital stock of Acquisition Company, if the Short Form Requirement is met, or Acquisition Company Sub, if the Short Form Requirement is not met, shall be converted into the right to receive (i) 705,000 fully paid and nonassessable shares of common stock of the Surviving Corporation and (ii) 28,000 fully paid and assessable shares of Carey Preferred Stock. The Carey Preferred Stock shall (i) rank senior to the common stock of the Surviving Corporation with respect to dividend distributions and distributions upon the liquidation or winding up of the Surviving Corporation; (ii) be entitled to receive cumulative dividends at the annual rate of 12.7%, payable in kind at the election of the Surviving Corporation; (iii) be subject to mandatory redemption on the date that is six months after the maturity of the Senior Sub Notes; (iv) have no voting rights, except as provided under Delaware law; and (v) be convertible immediately upon the consummation of a qualifying initial public offering at the price per share in such offering. Payment of Offer Price and Merger Consideration. The Merger Agreement requires that prior to the commencement of the Offer, Carey International and Acquisition Company shall appoint a United States bank or trust company to act as payment agent (the "Payment Agent") for the payment of the Offer Price and the Merger Consideration. Prior to the payment time thereof, Carey International and Acquisition Company are required to deposit with the Payment Agent in a separate fund established for the benefit of the holders of Shares, for payment upon surrender of the certificates for exchange in accordance with (i) the Offer to Purchase, in the case of the Offer, and (ii) the Merger Agreement, in the case of the Merger, through the Payment Agent (in the case of the Offer, the "Offer Fund," and in the case of the Merger, the "Merger Fund" and together with the Offer Fund, the "Payment Fund"), immediately available funds in amounts necessary to make the payments to holders of Shares. The Payment Agent shall pay the Offer Price out of the Offer Fund and the Merger Consideration out of the Merger Fund. As soon as reasonably practicable after the Effective Time, the Surviving Corporation or the Payment Agent shall mail to each holder of record of a certificate or certificates (the "Certificates"), which immediately prior to the Effective Time represented outstanding Shares of Common Stock, entitled to receive the Merger Consideration ("Cashed Out Shares") or Shares to be converted into the right to receive shares of the Surviving Corporation ("Exchange Shares"): (i) a form of letter of transmittal which shall (x) specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Payment Agent; (y) contain a representation in a form reasonably satisfactory to Parent as to the good and marketable title of the Shares held by such holder free and clear of liens of any kind; and (z) contain such other customary provisions as Carey International and Parent may reasonably specify; and (ii) instructions for use in surrendering such Certificates and receiving the aggregate Merger Consideration, in respect thereof (or the shares of the Surviving Corporation, in the case of Exchange Shares). Upon the surrender of each Certificate for Cashed Out Shares and subject to applicable withholding, the Payment Agent shall (subject to applicable abandoned property, escheat and similar laws) pay the holder of such Certificate the Merger Consideration multiplied by the number of Shares formerly represented by such Certificate, and such Certificate shall forthwith be cancelled. Upon the surrender of each Certificate for Exchange Shares, the Surviving Corporation shall exchange any Exchange Shares for shares of the Surviving Corporation and such Certificate shall forthwith be cancelled. Until so surrendered, each such Certificate (other than Certificates representing Dissenting Shares) shall represent solely the right to receive the aggregate Merger Consideration or shares of the Surviving Corporation relating thereto. No interest or dividends shall be paid or accrued on the Merger Consideration. If the Merger 28 Consideration or shares of the Surviving Corporation are to be delivered to any person other than the person in whose name the Certificate formerly representing such Shares is registered, it is a condition to receiving the Merger Consideration or shares of the Surviving Corporation that the Certificate so surrendered be properly endorsed or otherwise be in proper form for transfer and that the person surrendering such Certificates pay to the Payment Agent, or Carey International, in the case of Exchange Shares, any transfer or other taxes required by reason of the payment of the Merger Consideration or shares of the Surviving Corporation to a person other than the registered holder of the Certificate surrendered, or establish to the satisfaction of the Payment Agent or Carey International, as applicable, that such tax has been paid or is not applicable. The Payment Agent is entitled to deduct and withhold from the consideration otherwise payable pursuant to the Merger Agreement to any stockholder or option holder of Carey International such amounts as Carey International reasonably and in good faith determines are required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of state, local or foreign tax law. Treatment of Stock Options. The Merger Agreement provides that all options, warrants or other rights to acquire Shares outstanding under any stock option plan or agreement that have not been exercised pursuant to an Option Exercise Agreement (as discussed below), and are outstanding immediately prior to the Effective Time shall be canceled at the Effective Time and in exchange therefor, each holder of a cancelled Plan Option will receive an amount in cash equal to product of (i) the excess, if any, of the Merger Consideration over the per Share exercise price thereof and (ii) the number of Shares subject thereto, in full settlement of Carey International's (and the Surviving Corporation's) obligations under each Plan Option. To the extent that the per Share exercise price of any Plan Option equals or exceeds the Merger Consideration, at the Effective Time, such Plan Option will be cancelled and the holder of such Plan Option will not receive or be entitled to receive any consideration from Acquisition Company or the Surviving Corporation. All amounts payable in respect of Plan Options shall be subject to all applicable withholding of taxes. Stockholder Meeting. The Merger Agreement provides that, in accordance with applicable law and provided that the Short Form Requirement has not been met, Carey International, acting through the Board of Directors and after the closing of the Offer, shall (i) as soon as practicable after the purchase of Shares pursuant to the Offer, call, give notice of, convene and hold a special meeting of its stockholders (the "Stockholder Meeting") for the purpose of considering and voting on the Merger and Merger Agreement, (ii) file with the Commission a proxy statement or information statement relating to the Merger Agreement and the Merger, and (iii) unless taking such action would be inconsistent with the fiduciary duties of the Board, recommend to Carey International's stockholders the approval of the Merger Agreement. Carey International will use its reasonable efforts to solicit from the stockholders of Carey International proxies in favor of the approval and adoption of the Merger Agreement and the transactions contemplated thereby. Parent has agreed to vote or cause to be voted all the Shares then owned by it, Acquisition Company or any other of its subsidiaries in favor of the Merger at the Stockholder Meeting. Notwithstanding the foregoing, if the Short Form Requirement is met, Acquisition Company, Acquisition Company Sub, Carey International and Parent have agreed to take all actions necessary to effect the Merger as a Short Form Merger pursuant to Section 253 of the DGCL, without a meeting of Carey International's stockholders. Representations and Warranties. The Merger Agreement contains various representations and warranties of the parties thereto. These include representations and warranties by Carey International with respect to (i) the due organization, existence and the qualification, good standing, corporate power and authority of Carey International and its subsidiaries; (ii) delivery and accuracy of certain corporate documents and records; (iii) the capitalization of Carey International and its subsidiaries; (iv) the due authorization, execution, and delivery of the Merger Agreement and the Stock Option Agreement and the authorization of the consummation of the transactions contemplated thereby, and the validity and enforceability of the Merger Agreement and the Stock Option Agreement; (v) certain agreements entered into by Carey International relating to its indebtedness and the employment of certain Carey International employees; (vi) subject to certain exceptions and limitations, the absence of consents and approvals necessary for consummation by Carey International of the Offer and Merger and the absence of any violations, breaches or defaults which would result from compliance by Carey 29 International with any provision of the Merger Agreement; (vii) subject to certain exceptions and limitations, the compliance by Carey International and its subsidiaries with all applicable foreign, federal, state or local laws, statutes, ordinances, rules, regulations, orders, judgments, rulings and decrees of any foreign, federal, state or local judicial, legislative, executive, administrative or regulatory body or authority, or any court, arbitration, board or tribunal; (viii) compliance by Carey International with the Securities Act and the Exchange Act and the reports and financial information required to be filed thereunder since June 2, 1997; (ix) certain recent financial information of Carey International and its subsidiaries; (x) subject to certain exceptions and limitations, the absence of certain liabilities of Carey International and its subsidiaries; (xi) subject to certain exceptions and limitations, the absence of pending or (to the knowledge of Carey International) threatened claims, actions, suits or proceedings; (xii) certain tax matters; (xiii) certain employee benefit and ERISA matters; (xiv) certain environmental matters; (xv) the absence of certain changes or effects since November 30, 1999 which could result in a material adverse effect; (xvi) the patents, trademarks and other intellectual property of Carey International and its subsidiaries; (xvii) the real property owned and leased by Carey International and its subsidiaries; (xviii) state takeover statutes; (xix) broker's fees; (xx) the BGC Opinion and the FBR Opinion; (xxi) the stockholder vote required for the Merger; (xxii) title to and condition of tangible assets of Carey International and its subsidiaries; (xxiii) certain material contracts of Carey International and its subsidiaries, including non-compete agreements; (xxiv) year 2000 compliance issues; (xxv) compliance with applicable laws; (xxvi) Carey International's accounts receivable; (xxvii) customers, independent operators and licensees of Carey International and its subsidiaries; (xxviii) certain labor and employment matters; (xxix) certain fees and expenses in connection with the transactions contemplated by the Merger Agreement; (xxx) subject to certain limitations, the possession by Carey International and its subsidiaries of necessary franchises, authorizations, licenses, permits, easements, variances, exemptions, consents, registrations, approvals and orders; (xxxi) certain insurance policy matters; (xxxii) product warranty and liability; and (xxxiii) transactions with affiliates. Parent and Acquisition Company also have made certain representations and warranties in the Merger Agreement, including with respect to (i) the due incorporation, existence, good standing and power and authority of Acquisition Company, Acquisition Company Sub and Parent; (ii) the due authorization, execution and delivery of the Merger Agreement and the authorization of the consummation of the transactions contemplated thereby, and the validity and enforceability of the Merger Agreement; (iii) the absence of consents and approvals necessary for consummation of the transactions contemplated by the Merger Agreement by Parent, Acquisition Company and Acquisition Company Sub and the absence of any violations, breaches or defaults which would result from compliance by Parent, Acquisition Company and Acquisition Company Sub with any provision of the Merger Agreement; (iv) broker fees; (v) the sufficiency of funds available to Parent and Acquisition Company for the consummation of the Offer and the Merger; and (vi) absence of any material misstatements or omissions made by Parent, Acquisition Company and Acquisition Company Sub in this Offer to Purchase, the Schedule TO and the exhibits thereto. Conduct Until the Merger. Carey International has agreed that from the date of the Merger Agreement until the earlier of the date the Shares are purchased in the Offer or the termination of the Merger Agreement, unless Parent has consented in writing thereto, Carey International will, and will cause each of its subsidiaries to: (i) conduct its operations according to its ordinary and usual course of business consistent with past practice and (ii) use its commercially reasonable efforts to preserve in all material respects its business organization and its existing relationships with its customers, suppliers, employees, independent operators, licensees and business associates. Carey International also has agreed that from the date of the Merger Agreement until the earlier of the date the Shares are purchased in the Offer or the termination of the Merger Agreement, unless Parent has consented in writing thereto, Carey International will not, and will not permit any of its subsidiaries to: (a) amend its certificate of incorporation or by-laws; (b) acquire, sell, lease or dispose of any assets in excess of $500,000, other than in the ordinary and usual course of business and consistent with past practice or acquire any chauffeured vehicle service businesses that involve, in the aggregate, total consideration in excess of $5.0 million (provided, that Parent 30 shall be notified not later than ten business days prior to any such acquisition or the execution of any binding agreement to make any such acquisition, without regard to the amount of consideration involved); (c) incur or modify any funded indebtedness, other than in the ordinary and usual course of business and consistent with past practice; (d) issue, reissue or sell or authorize the issuance, reissuance or sale of (i) any shares of capital stock (other than issuances of Shares in respect of any exercise of Company Options outstanding on the date of the Merger Agreement), (ii) any shares convertible into or exchangeable for capital stock, (iii) any rights, calls, commitments, warrants or options to acquire any shares of capital stock, or shares convertible into or exchangeable for capital stock, or (iv) stock appreciation, phantom stock or profit participation rights; (e) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock (other than such payments between Carey International and its wholly-owned subsidiaries and certain other exceptions); (f) split, combine, subdivide, reclassify or, directly or indirectly, redeem, purchase or otherwise acquire, recapitalize or reclassify, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock or liquidate in whole or in part; (g) except as required by law (i) enter into, amend or extend any employment, collective bargaining, severance or termination agreement, (ii) grant any increase in severance or termination pay to, any officers, directors or employees, (iii) increase the compensation of any of its directors or officers, or increase the compensation of any other employees outside the ordinary course of business consistent with past practice, (iv) adopt, amend, modify, or terminate any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or take any such action with respect to any other employee benefit plan agreement or arrangement), or (v) make any other change in employment terms for any of its directors, officers, and employees; (h) (i) except as may be required or contemplated by the Merger Agreement, assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity (other than Carey International's wholly-owned subsidiaries), except in the ordinary and usual course of business and consistent with past practices, (ii) make any loans, advances or capital contributions to, or investments in, any other person or entity (other than to its wholly-owned subsidiaries), other than in the ordinary and usual course of business or (iii) make capital expenditures (either commitments or payments) in excess of an aggregate of $1.0 million with respect to new projects (with certain exceptions); (i) change any accounting methods, principles or practices materially affecting its assets, liabilities or business, except insofar as may be required by a change in generally accepted accounting principles; (j) make any material tax election or settle or compromise any material income tax liability; (k) settle or compromise any claim (including any arbitration) or litigation involving payments by Carey International or its subsidiaries in excess of $100,000 individually, or $250,000 in the aggregate, which is not subject to insurance reimbursement; (l) enter into any contract (or series of related contracts) either involving more than $250,000 or outside the ordinary course of business consistent with past practice; (m) postpone the payment of accounts payable and other liabilities outside the ordinary course of business consistent with past practice; (n) enter into any transaction with any affiliate; (o) authorize or permit any exercise of Company Options pursuant to a cashless exercise or by issuance of a note in payment of the exercise price, except immediately prior to the closing of the Merger or to the extent that the instruments or agreements giving rise to Company Options expressly permit the holder to elect such method of payment without any further consent of Carey International; or (p) authorize or agree in writing or otherwise to take any of the foregoing actions. 31 Access to Information. Under the Merger Agreement, from the date of the Merger Agreement until the earlier of the termination of the Agreement or the Effective Time, Carey International has agreed, and has agreed to cause its subsidiaries and their respective officers, directors, employees, agents and advisors to, (i) provide Parent and Acquisition Company and their representatives access, upon reasonable notice and during normal business hours, to the offices and other facilities and to the books, records, financial statements and other documents and materials relating to the financial condition, assets and liabilities of Carey International and its subsidiaries and permit Parent and Acquisition Company to make such inspections thereof as they may reasonably require, (ii) at Parent's expense, furnish Parent and Acquisition Company, to the extent available, with such information with respect to the business of Carey International and its subsidiaries as Parent and Acquisition Company may from time to time reasonably request and (iii) confer and consult with representatives of Parent and Acquisition Company on operational and financial matters and the general status of ongoing business operations of Carey International as Parent and Acquisition Company may reasonably request, provided, however, that all requests for such access, inspection, information or consultations shall be made through specified officers of Carey International (or such other persons as such specified officers shall designate). Parent and Acquisition Company have agreed to hold all information furnished by or on behalf of Carey International or any of its subsidiaries in confidence. Filings; Further Assurances. Each of the parties to the Merger Agreement has agreed to use its reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Merger Agreement. The parties also have agreed that if at any time after the Effective Time any other action is necessary or desirable to carry out the purposes of the Merger Agreement, each shall take or cause to be taken all such necessary action, including, without limitation, the execution and delivery of such further instruments and documents as may be reasonably requested by the other party for such purposes or otherwise to consummate and make effective the transactions contemplated in the Merger Agreement. The parties have also agreed that, prior to the Effective Time, each shall promptly inform the other party of any event or circumstance relating to either Carey International or Acquisition Company or Parent or any of their respective subsidiaries which should be set forth in an amendment to this Offer to Purchase and promptly take all steps necessary to cause this Offer to Purchase as so corrected to be filed with the Commission and to be disseminated to the shareholders of Carey International, in each case as to the extent required by applicable law. Consents. The Merger Agreement requires each of Parent, Acquisition Company, Acquisition Company Sub and Carey International to use its commercially reasonable best efforts to obtain as promptly as practicable all consents from any person or entity required in connection with the consummation of the Offer and the Merger. If required, Parent, Acquisition Company, Acquisition Company Sub and Carey International will take all actions necessary to file as soon as practicable all notifications, filings, and other documents required to obtain all consents or waivers, including, without limitation, under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and to respond as promptly as practicable to any inquiries received from the Federal Trade Commission, the Antitrust Division of the Department of Justice (the "DOJ") and any other governmental entity for additional information or documentation in connection with the Offer or the Merger. Publicity. The Merger Agreement requires that the initial press releases with respect to the execution of the Merger Agreement shall be acceptable to Parent and Carey International and that so long as the Merger Agreement is in effect, neither Carey International, Parent nor any of their respective affiliates shall issue or cause the publication of any press release with respect to the Offer, the Merger or the Merger Agreement without the prior consultation of the other parties, except as may be required by law. Employee Matters. The Merger Agreement requires that the Surviving Corporation shall honor, in accordance with their terms, and shall make required payments when due under, all employee benefit plans or agreements maintained or contributed to by Carey International or any of its subsidiaries (including, but not limited to, employment, incentive and severance agreements and arrangements), that are applicable with respect to any employee, director or stockholder of Carey International or any of its subsidiaries (whether current, former 32 or retired) or their beneficiaries. After the date of the Merger Agreement, employees of Carey International will not have the opportunity to purchase additional Shares from Carey International except pursuant to the exercise of outstanding Plan Options. No Solicitation. Under the Merger Agreement, Carey International may not, and may not authorize or permit any of its subsidiaries or any of its or its subsidiaries' officers, directors, employees or agents to, directly or indirectly, solicit, participate in or initiate discussions or negotiations with, or provide any non-public information to any person or entity (other than Parent, Acquisition Company or any of their affiliates or representatives) (a "Third Person") concerning any proposal or inquiry relating to any merger, consolidation, tender offer, exchange offer, sale of all or substantially all of Carey International's assets, sale of shares of capital stock or similar business combination transaction involving Carey International or any principal operating or business unit of Carey International or its subsidiaries (an "Acquisition Proposal"). In the event that, after the date of the Merger Agreement and prior to the purchase of the Shares pursuant to the Offer, the Board receives an unsolicited written Acquisition Proposal and the Board determines, in good faith and after consultation with its financial advisors and legal counsel, that the failure to do so would be inconsistent with the Board's fiduciary duties to Carey International's stockholders under applicable law, the Board is permitted to do any or all of the following: (a) withdraw, modify or change the Board's approval or recommendation of the Merger Agreement, the Offer or the Merger, (b) approve or recommend to Carey International's stockholders an Acquisition Proposal, (c) engage in discussions and negotiations with respect to an Acquisition Proposal and (d) terminate the Merger Agreement. The Board may not, however, take any action described in clauses (a)-(d) above until after the Board has given Parent written notice stating the Board's proposed conduct and setting forth certain information with respect to such Acquisition Proposal. The Board also is permitted, after notice to Parent, to furnish information to a Third Person that has made a bona fide Acquisition Proposal that the Board reasonably determines may lead to a Superior Proposal (as defined below) and that was not solicited in violation of the Merger Agreement, provided that, with respect to any person or entity that is not currently party to a confidentiality agreement with Carey International, such person or entity has executed an agreement with confidentiality, standstill and other provisions substantially similar to those then in effect between Carey International and Parent. For purposes of the Merger Agreement, "Superior Proposal" means any proposal made by a Third Person to acquire, directly or indirectly, for consideration consisting of cash and/or securities, all of the equity securities of Carey International entitled to vote generally in the election of directors or all or substantially all of the assets of Carey International, if and only if, the Board reasonably determines (after consultation with its financial advisors and counsel) (i) that the proposed transaction would be more favorable from a financial point of view to its stockholders than the Offer and the Merger and the transactions contemplated by the Merger Agreement, taking into account at the time of determination any changes to the terms of the Merger Agreement which as of that time had been proposed by Parent, and (ii) that the person or entity making such Acquisition Proposal is capable of consummating such Acquisition Proposal in a timely manner (based upon, among other things, the availability of financing and the degree of certainty of obtaining financing, the expectation of obtaining required regulatory approvals and the identity and background of such person or entity). Nothing contained in the Merger Agreement prohibits Carey International or its Board from taking and disclosing to Carey International's stockholders a position with respect to a tender or exchange offer by a Third Person pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making such disclosure to Carey International's stockholders or otherwise which, in the judgment of the Board after consultation with its legal counsel, is necessary under applicable law or the rules of any stock exchange or if failure so to disclose would be inconsistent with its fiduciary duties to Carey International's stockholders under applicable law. The Merger Agreement requires Carey International to promptly, but in any event within three business days, advise Parent in writing of any Acquisition Proposal or any inquiry regarding the making of an Acquisition Proposal, including any request for information, the material terms and conditions of such request, Acquisition 33 Proposal or inquiry and the identity of the person or entity making such request, Acquisition Proposal or inquiry. The Merger Agreement requires Carey International to keep Parent reasonably informed of the status and details, including any amendments or proposed amendments, of any such request, Acquisition Proposal or inquiry. The Merger Agreement provides that if, within ten business days after giving notice to Parent of discussions or negotiations relating to an Acquisition Proposal, Carey International has not terminated such discussions or negotiations, Parent may terminate the Merger Agreement if it has provided Carey International with at least 48 hours prior written notice to terminate the Merger Agreement (a "Failure to Terminate Negotiations"). Indemnification and Insurance. Under the Merger Agreement, Parent and Acquisition Company agree that for a period of six years from the Effective Time, the Surviving Corporation will maintain all rights to indemnification now existing in favor of the current or former directors, officers, employees and fiduciaries of Carey International as provided in Carey International's certificate of incorporation and by-laws or otherwise in effect under any agreement on the date of the Merger Agreement. In addition, under the Merger Agreement, Parent and Acquisition Company agree that the certificate of incorporation and by-laws of the Surviving Corporation and its subsidiaries shall contain the provisions with respect to exculpation and indemnification set forth in Carey International's or its subsidiaries' certificates of incorporation and by-laws on the date of the Merger Agreement and that such provisions shall not be amended, repealed or otherwise modified for a period of six years after the date the Shares are accepted for purchase by Acquisition Company or Carey International in the Offer (the "Acceptance Date") in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of Carey International in respect of actions or omission occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by the Merger Agreement), unless such modification is required by law. The Merger Agreement requires each of the Surviving Corporation and its subsidiaries to at all times exercise the powers granted to it by its certificate of incorporation, its by-laws, and by applicable law to indemnify and hold harmless to the fullest extent permitted by applicable law present or former directors, officers, employees and fiduciaries and agents of Carey International or its subsidiaries against any threatened or actual claim, action, suit, proceeding or investigation made against them arising from their service in such capacities (or service in such capacities for another enterprise at the request of Carey International or any of its subsidiaries) prior to and including the Effective Time, including, without limitation, with respect to matters relating to the Merger Agreement. The Merger Agreement also requires the Surviving Corporation to provide, for not less than six years from the Effective Time, Carey International's current and former directors and officers an insurance and indemnification "tail" policy with respect to matters occurring prior to the Effective Time that is no less favorable than Carey International's existing policy or, if substantially equivalent insurance coverage is not available, the best coverage that is similar thereto, provided that the Surviving Corporation is not required to pay a premium in excess of 150% of the last annual premium paid by Carey International prior to the date of the Merger Agreement and, provided further that, if the Surviving Corporation is unable to obtain such insurance for such premium, it will obtain as much coverage as possible for a premium equal to such maximum amount. Matters Relating to the Financing Agreements. Under the Merger Agreement, Carey International has agreed that Parent is primarily responsible for any negotiations with respect to any definitive financing agreements; provided, however, that (i) Carey International shall have received prior notice of, and shall be kept reasonably informed of the ongoing status of, any such negotiations, (ii) Carey International shall take all such actions as are reasonably requested by Parent in connection with any such negotiations, and (iii) Parent shall conduct any such negotiations reasonably and in good faith. The Merger Agreement requires Parent to use its commercially reasonable efforts to close the Financing on terms consistent with the Financing Commitment Letters. The Merger Agreement requires Carey International and Parent to use commercially reasonable efforts to satisfy on or before the expiration of the Offer all requirements of the Financing Commitment Letters or any definitive financing agreements which are conditions to drawing the cash proceeds thereunder. 34 Upon receipt by either Carey International or Parent, or any of their respective affiliates, of any written or oral communication to the effect that any lender is contemplating not providing the Financing or is terminating or canceling or modifying in any material respect the Financing Commitment Letters or any definitive financing agreements, or that the Financing is unlikely to be obtained, the Merger Agreement requires that Carey International or Parent, as the case may be, to communicate promptly such event to the other party and provide such other party with a true and complete copy of any such written communication. Company Expenses. The Merger Agreement provides that, prior to the Effective Time, Carey International shall not, without the prior written consent of Parent and, after the closing of the Offer but prior to the Effective Time, without the approval of a majority of the Independent Directors (if the effect thereof would be detrimental to the stockholders of Carey International) (i) amend, terminate or otherwise modify or waive any provision of any waiver and debt satisfaction agreement set forth on a schedule to the Merger Agreement, or any agreement relating to any Company Expenses (as defined below) (together, "Expense Agreements") or agreements relating to the Financing, or enter into any new agreements which are the subject thereof, or (ii) incur or pay certain expenses in connection with the Offer and Merger (the "Company Expenses") the result of which would cause the Company Expenses to exceed the aggregate limit of those expenses represented by Carey International (the "Company Expense Cap"). Survival of Representations, Warranties and Agreements. The Merger Agreement provides that the representations, warranties and agreements in the Merger Agreement shall survive the closing of the Offer and the Merger, provided, that, no stockholder of Carey International or any of its subsidiaries, nor any stockholder, partner, officer, director, employee, agent or representative of any of the foregoing, shall have any liability for any breach or inaccuracy of any of the representations and warranties of Carey International. Conditions to the Merger. The respective obligations of each party under the Merger Agreement to effect the Merger are subject to the satisfaction at or prior to the Effective Time of the following conditions: (i) the closing of the Offer shall have occurred; (ii) the approval by Carey International's stockholders of the Merger and Merger Agreement shall have been obtained, if required by applicable law; (iii) all necessary waiting periods applicable to the Merger under the HSR Act shall have expired or been earlier terminated; (iv) no temporary restraining order, preliminary or permanent injunction or other order issued by any governmental entity or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; provided, however, that prior to invoking this condition, the party so invoking this condition has complied with its obligations described in "Consents" above and has used its reasonable best efforts to lift or remove such order, injunction, restraint or prohibition; and (v) the Receipt of Funds Condition shall have been met. Termination. The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the stockholders of Carey International approve the Merger at the Stockholders' Meeting: (a) By mutual written consent of Carey International, Parent and Acquisition Company. (b) By either Carey International, on the one hand, or Parent, on the other hand, if any governmental entity issues an order or takes any other action, in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Merger Agreement and such order becomes final and nonappealable. (c) By Carey International, acting through the Board, prior to the purchase of Shares pursuant to the Offer if it receives an unsolicited written Acquisition Proposal and the Board determines, in good faith and after consultation with its financial advisor and legal counsel, that the failure to terminate would be inconsistent with the Board's fiduciary duties to Carey International's stockholders under applicable law and has complied with all applicable terms of the Merger Agreement, including the payment of the Termination Fee (as defined below) and confirmation of its agreement to pay expenses of Parent and its affiliates. (d) By Carey International (acting through the Board): (i) in the event that the Offer (as it may be extended) expires or is terminated in accordance with its terms without any Shares being purchased thereunder; provided, that, the failure of Carey 35 International to fulfill any obligation under the Merger Agreement has not been the cause of, or resulted in, the failure to purchase Shares pursuant to the Offer; or (ii) if, prior to the closing of the Offer, there is a breach or failure to perform on the part of Acquisition Company, Acquisition Company Sub or Parent of any of their representations, warranties, covenants or agreements contained in the Merger Agreement and such breach or failure to perform has a material adverse effect on the ability of Acquisition Company, Acquisition Company Sub or Parent to consummate the Offer or the Merger, and, with respect to any such breach or failure to perform that is reasonably capable of being remedied within the time periods set forth below, the breach or failure to perform is not remedied prior to the earlier of (x) ten days after Carey International has furnished Parent with written notice of such breach or failure to perform or (y) two business days prior to the date on which the Offer expires (as it may be extended). (e) By Acquisition Company or Parent: (i) if prior to the Acceptance Date the Board (x) shall withdraw, modify or change its approval or favorable recommendation so that it is not in favor of the Merger Agreement, the Offer or the Merger or shall have resolved to do any of the foregoing, (y) shall approve or have recommended to Carey International's stockholders an Acquisition Proposal, or (z) takes any public position or makes any disclosure to Carey International's stockholders which has the effect of doing any of the foregoing; (ii) (x) if Carey International shall have materially breached any of its obligations under the Merger Agreement relating to an Acquisition Proposal or (y) upon a Failure to Terminate Negotiations; (iii) in the event that the Offer (as it may be extended) expires or is terminated in accordance with its terms without any Shares being purchased thereunder; provided, that, the failure of Parent to fulfill any obligation under this Agreement has not been the cause of, or resulted in, the failure to purchase Shares pursuant to the Offer; or (iv) if (A) prior to the closing of the Offer, the representations and warranties of Carey International set forth in the Merger Agreement shall not be true and accurate in all respects, in each instance as of the date of consummation of the Offer as though made on or as of such date and the effect thereof is a Company Material Adverse Effect (as defined below), or (B) prior to the closing of the Offer, Carey International shall have breached or failed to perform or comply in any material respect with any obligation, agreement or covenant required by the Merger Agreement to be performed or complied with by it, and, with respect to any such breach or failure to perform that is reasonably capable of being remedied within the time periods set forth below, the breach or failure to perform is not remedied prior to the earlier of (x) ten days after Parent has furnished Carey International with written notice of such breach or failure to perform or (y) two business days prior to the date on which the Offer expires (as it may be extended), and the effect thereof is a Company Material Adverse Effect; or (C) prior to the closing of the Offer, Carey International shall have incurred or shall have agreed to incur, or in the reasonable judgment of Parent, Carey International is likely to incur, Company Expenses in excess of the Company Expense Cap; or (D) as of the closing of the Offer, there are any (1) shares of capital stock or other voting securities of Carey International, (2) securities of Carey International convertible into or exchangeable for shares of capital stock or voting securities of Carey International, (3) options, warrants, rights, calls, exchange rights, restricted stock, other stock based compensation awards, or other rights to acquire or commitments from Carey International, or obligations of Carey International to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Carey International or (4) stock appreciation, phantom stock, or profit participation rights with respect to Carey International (the items in clauses (1), (2), (3) and (4) being referred to collectively as the "Company Securities") outstanding other than Shares that are issued and outstanding as of the date of the Merger Agreement (and that are disclosed in the Merger Agreement) and Shares that are issued after the date of the Merger Agreement pursuant to Company Options existing as of the date of the Merger Agreement (and that are disclosed in the Merger Agreement) (such other Company Securities, collectively, "Undisclosed Securities"); or (E) as of the closing of the Offer, the actual aggregate strike price of Company Options is less than the 36 aggregate strike price set forth in a schedule attached to the Merger Agreement; provided, however, that with respect to the matters set forth in clauses (C), (D) and (E), Parent and Acquisition Company will not have the right to terminate the Merger Agreement pursuant to such clauses unless the sum of (x) the amount, if any, that Company Expenses exceed the Company Expense Cap, plus (y) the value (based on the Offer Price per share less any purchase price that must be paid with respect to the acquisition of such Undisclosed Securities) of any Undisclosed Securities, plus (z) the amount, if any, by which the actual aggregate strike price of Company Options is less than the aggregate strike price of Company Options set forth in a schedule to the Merger Agreement is greater than $500,000. For purposes of the Merger Agreement, the term "Company Material Adverse Effect" means any event, change, occurrence, effect, fact or circumstance (except for events, changes, occurrences, effects, facts or circumstances resulting (i) from general economic or financial market conditions, (ii) actions taken by any party in accordance with the Merger Agreement or (iii) public announcements relating to the transactions contemplated by the Merger Agreement, or conditions previously disclosed to Parent in the Merger Agreement) having, or which could reasonably be expected to have, a material adverse effect on (a) the ability of Carey International to perform its material obligations under the Merger Agreement or to consummate the transactions contemplated thereby or (b) the business, results of operations, condition (financial or otherwise), assets, liabilities (actual or contingent), properties, or cash flows of Carey International and its subsidiaries, taken as a whole. Fees, Expenses and Other Payments; Effect of Termination. Except as otherwise described in the following paragraphs or as otherwise provided in the Merger Agreement or in any Expense Agreements, the Merger Agreement requires all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants and other out-of- pocket expenses, incurred or to be incurred by the parties to the Merger Agreement in connection with the Offer, the Merger and the Merger Agreement, to be borne solely and entirely by the party which has incurred such costs and expenses. The Merger Agreement provides, however, that each of Carey International and Parent shall pay one-half of (i) any fee payable pursuant to the HSR Act, and (ii) all costs and expenses related to the filing, printing and mailing of this Offer to Purchase, the Schedule TO and the proxy statement or information statement required to be filed with the Commission to consummate the Merger. The Merger Agreement requires Carey International to pay to Parent $7.5 million (the "Termination Fee") plus the Parent Expenses (as defined below) not to exceed $3.0 million in the event that the Merger Agreement is terminated (i) by Carey International if Carey International receives an Acquisition Proposal and the Board determines it would be inconsistent with its fiduciary duties not to terminate the Merger Agreement or (ii) by Parent due to: (a) the Board withdrawing, modifying or changing its approval or favorable recommendation of the Offer (except, in certain circumstances, as a result of the failure to obtain the Financing), (b) the Board recommending an Acquisition Proposal to its stockholders or taking any public position or making any disclosure to Carey International's stockholders which has the effect of doing any of the foregoing or (c) Carey International materially breaching its no solicitation covenant. In addition, the Merger Agreement requires Carey International to pay the Termination Fee and Parent Expenses (as defined below) to Parent upon the consummation of a Third Party Transaction (as defined below), in the event that (1) Carey International enters into a definitive agreement with respect to a Third Party Transaction within one year of termination of the Merger Agreement with a Third Person or any of its affiliates and other persons or entities acting in concert with them and an Acquisition Proposal had been publicly disclosed prior to the termination of the Merger Agreement and (2) the Merger Agreement is terminated either (a) by Carey International pursuant to the Offer expiring or terminating in accordance with its terms without any Shares being purchased thereunder as a result of the Minimum Condition failing to be satisfied by the Expiration Date as it may have been extended (other than as a result of a material or willful breach by Parent or Acquisition Company of their obligations under the Merger Agreement), or (b) by Parent pursuant to the Offer expiring or terminating in accordance with its terms without any Shares being purchased thereunder as a result of the Minimum Condition failing to be satisfied by the Expiration Date of the Offer as it may have been extended (other than as 37 a result of a breach by Carey International of its no solicitation obligations) or if (A) prior to the closing of the Offer, the representations and warranties of Carey International set forth in the Merger Agreement shall not be true and accurate in all respects, and the effect thereof is a Company Material Adverse Effect, or (B) prior to the closing of the Offer, Carey International shall have breached or failed to perform or comply in any material respect with any obligation, agreement or covenant required by the Merger Agreement to be performed or complied with by it, and, with respect to any such breach or failure to perform that is reasonably capable of being remedied within the time periods set forth below, the breach or failure to perform was not remedied prior to the earlier of (x) ten days after Parent furnished Carey International with written notice of such breach or failure to perform or (y) two business days prior to the Expiration Date (as same may be extended in accordance with the Merger Agreement), and the effect thereof is a Company Material Adverse Effect; or (C) prior to the closing of the Offer, Carey International shall have incurred or shall have agreed to incur, or in the reasonable judgment of Parent Carey International is likely to incur, Company Expenses in excess of the Company Expense Cap; or (D) as of the closing of the Offer, there are any Undisclosed Securities; or (E) as of the closing of the Offer, the actual aggregate strike price of Company Options is less than the aggregate strike price set forth in a schedule attached to the Merger Agreement; provided, however, that with respect to the matters set forth in clauses (C), (D) and (E), Parent and Acquisition Company will not have the right to terminate the Merger Agreement pursuant to such clauses unless the sum of (x) the amount, if any, that Company Expenses exceed the Company Expense Cap, plus (y) the value (based on the Offer Price per share less any purchase price that must be paid with respect to the acquisition of such Undisclosed Securities) of any Undisclosed Securities, plus (z) the amount, if any, by which the actual aggregate strike price of Company Options is less than the aggregate strike price of Company Options set forth in a schedule to the Merger Agreement is greater than $500,000. For purposes of the Merger Agreement, the term "Third Party Transaction" means (1) a merger, consolidation or other business combination with a Third Person or any of its affiliates and other persons or entities acting in concert with them (collectively, a "Third Party Acquirer"), (2) the sale or transfer to such Third Party Acquirer of, or the acquisition of beneficial ownership by such Third Party Acquirer of, 40% or more of Company Securities, or (3) the sale or transfer of 40% or more (in market value) of the assets of Carey International and its subsidiaries on a consolidated basis, to any such Third Party Acquirer. The Merger Agreement also requires Carey International to pay the Termination Fee to Parent or if the Merger Agreement is terminated by Parent or Acquisition Company upon a Failure to Terminate Negotiations and, within one year after such a termination, Carey International enters into a Third Party Transaction with any person or entity (or any other person or entity acting in concert with such person or entity) with whom Carey International was holding discussions or negotiations at the time of termination of the Merger Agreement. In addition, the Merger Agreement requires Carey International, upon a Failure to Terminate Negotiations or in the event that the Merger Agreement is terminated (a) by Carey International or Parent because Carey International or Parent has been advised by the Financing sources that they will not provide the Financing contemplated by the Financing Commitment Letters as a result of a material breach of the Merger Agreement by Carey International (in the case of breaches of representations and warranties only if such breaches would individually or in the aggregate have a Company Material Adverse Effect) or (b) by Parent if (A) prior to the closing of the Offer, the representations and warranties of Carey International set forth in the Merger Agreement shall not be true and accurate in all respects, and the effect thereof is a Company Material Adverse Effect, or (B) prior to the closing of the Offer, Carey International shall have breached or failed to perform or comply in any material respect with any obligation, agreement or covenant required by the Merger Agreement to be performed or complied with by it, and, with respect to any such breach or failure to perform that is reasonably capable of being remedied within the time periods set forth below, the breach or failure to perform was not remedied prior to the earlier of (x) ten days after Parent furnished Carey International with written notice of such breach or failure to perform or (y) two business days prior to the Expiration Date (as same may be extended in accordance with the Merger Agreement), and the effect thereof is a Company Material Adverse Effect; or (C) prior to the closing of the Offer, Carey International shall have incurred or shall have agreed to incur, or in the reasonable judgment of Parent Carey International is likely to incur, Company Expenses in excess of the Company Expense 38 Cap; or (D) as of the closing of the Offer, there are any Undisclosed Securities; or (E) as of the closing of the Offer, the actual aggregate strike price of Company Options is less than the aggregate strike price set forth in a schedule attached to the Merger Agreement; provided, however, that with respect to the matters set forth in clauses (C), (D) and (E), Parent and Acquisition Company will not have the right to terminate the Merger Agreement pursuant to such clauses unless the sum of (x) the amount, if any, that Company Expenses exceed the Company Expense Cap, plus (y) the value (based on the Offer Price per share less any purchase price that must be paid with respect to the acquisition of such Undisclosed Securities) of any Undisclosed Securities, plus (z) the amount, if any, by which the actual aggregate strike price of Company Options is less than the aggregate strike price of Company Options set forth in a schedule to the Merger Agreement is greater than $500,000, to pay to Parent all actual and reasonably documented expenses incurred by or on behalf of Parent, its members or Acquisition Company in connection with or in anticipation of the Offer, the Merger, the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement (including all fees and expenses of outside counsel, experts, Financing sources, investment bankers, accountants and consultants incurred by Parent in connection with or related to the due diligence, authorization, preparation, negotiation, execution and performance of the transactions contemplated by the Merger Agreement (the "Parent Expenses") not to exceed $3.0 million. In the Merger Agreement, Carey International acknowledges that, at any time after the Effective Time, Parent may cause Carey International to pay or reimburse or cause to be paid or reimbursed in cash all expenses incurred by or on behalf of Parent relating to the Offer and the Merger, including a transaction fee payable to Chartwell. The Stock Option Agreement. Grant of Stock Option. Pursuant to the Stock Option Agreement and subject to the terms and conditions thereof, Carey International granted to Acquisition Company the Acquisition Company Option to purchase the Acquisition Company Option Shares at the Offer Price. Exercise of Stock Option. The Stock Option Agreement provides that, subject to the conditions set forth in the Stock Option Agreement and any additional requirements of law, the Acquisition Company Option may be exercised by Acquisition Company, in whole but not in part, at any one time after the occurrence of a Top-Up Exercise Event (as defined below) and prior to the Top- Up Termination Date (as defined below) and that Acquisition Company will exercise the Acquisition Company Option if the results thereof would permit the Short Form Requirement to be met (subject to applicable Nasdaq National Market rules). For the purpose of the Stock Option Agreement, a "Top-Up Exercise Event" occurs on the day of the closing of the Offer; provided that Acquisition Company has accepted for payment pursuant to the Offer Shares satisfying the Minimum Condition, and the "Top-Up Termination Date" occurs upon the first to occur of the following: (i) the Effective Time; (ii) the date which is five business days after the occurrence of a Top-Up Exercise Event (or such later date on which the closing of the purchase of the Acquisition Company Option Shares may be consummated pursuant to the Stock Option Agreement); and (iii) the termination of the Merger Agreement. Conditions to Closing. The Stock Option Agreement provides that the obligation of Carey International to deliver Acquisition Company Option Shares upon the exercise of the Acquisition Company Option is subject to the following conditions: (i) all waiting periods, if any, under the HSR Act applicable to the issuance of the Acquisition Company Option Shares have expired or have been terminated; (ii) there being no injunction or other final non-appealable judgment by a court of competent jurisdiction preventing or prohibiting the exercise of the Acquisition Company Option or the delivery of the Acquisition Company Option Shares; and (iii) such exercise not violating the Nasdaq National Market rules then applicable to Carey International. Representations and Warranties. The Stock Option Agreement contains various representations and warranties of the parties thereto, including representations by Carey International as to Carey International's corporate organization, authority relative to the Stock Option Agreement and authority to issue the Acquisition Company Option Shares, the absence of any conflicts and the making or obtaining of all applicable filings and consents. 39 Covenants of Carey International. Pursuant to the Stock Option Agreement, Carey International has agreed (i) that it will not, by charter amendment or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any covenants, stipulations or conditions to be observed or performed by Carey International pursuant to the Stock Option Agreement and (ii) promptly to take all actions as may from time to time be required in order to permit Acquisition Company to exercise the Acquisition Company Option and Carey International to issue the Acquisition Company Option Shares pursuant thereto. Management Agreements. In connection with entering into the Merger Agreement, Carey International plans to enter into an employment agreement with Vincent A. Wolfington, Carey International's Chairman and Chief Executive Officer, and into a consulting agreement with Don R. Dailey. The agreements will replace the prior agreements between Carey International and those executives. Wolfington Employment Agreement. Carey International and Mr. Wolfington plan to enter into a four-year employment agreement providing for Mr. Wolfington's continued employment as Carey International's Chairman and Chief Executive Officer. The agreement will provide that both Mr. Wolfington and one other individual designated by him will be elected to the board of directors of Cary International. The term of the agreement will commence upon the closing of the Merger and will automatically be extended from year to year thereafter, unless terminated by either party by giving notice at least 120 days prior to the end of the initial term or any renewal term. Mr. Wolfington's initial base salary will be set at $500,000 per year. He will also be eligible to participate in Carey International's bonus plan, provided, however, that he will be entitled to a minimum bonus to be agreed upon. Mr. Wolfington will also be entitled to receive the same benefits as he is currently entitled to or as may be added from time to time. Under the terms of the agreement, Mr. Wolfington will receive, at the closing of the Merger, an option to acquire 6% of the common stock of Carey International at an exercise price per share equal to the fair market value of Carey International common stock on the date of the grant. The option will vest as to 33 1/3% of the option shares on the date of the grant and as to an additional 22.22% of the option shares on each of the first, second and third anniversaries of the grant. The option will also vest in full upon the termination of Mr. Wolfington's employment (i) by Carey International without "cause" (as defined in the agreement); (ii) upon his death or disability; (iii) by Mr. Wolfington for "good reason" (as defined in the agreement); or (iv) upon a "liquidity event" (as defined in the agreement). Carey International will maintain adequate life insurance for the benefit of Mr. Wolfington to pay the aggregate exercise price of the option in the event of his death. Mr. Wolfington will rollover his current equity ownership in Carey International into a common equity interest in Carey International, as the Surviving Corporation, in accordance with a letter agreement with Acquisition Company. Carey International will also make a $4.0 million non-recourse loan available to Mr. Wolfington which will be secured by his equity interest in Carey International. The loan will bear interest equal to the cost of funds in the Term Loans (as defined herein), which will accrue annually but will not be paid until the loan matures. The loan will mature on the earlier of (i) the end of the lock-up period following an initial public offering when Mr. Wolfington can freely sell his shares; (ii) the sale of substantially all of the assets or common stock of Carey International; or (iii) the termination of Mr. Wolfington's employment for cause. The loan may be prepaid without penalty at any time. In the event Mr. Wolfington's employment agreement is terminated by Carey International without "cause" or by Mr. Wolfington for "good reason," Mr. Wolfington will be entitled to receive (a) salary continuation at his annual base salary then in effect for the remaining term of the agreement or three years, whichever is longer; and (b) continuation of health benefits available to him under the terms of applicable benefit plans and programs in which he participates for the remaining term of the agreement or three years, whichever is longer. In the event the agreement is terminated upon Mr. Wolfington's disability, Mr. Wolfington will be entitled to salary continuation and continuation of benefits available to him under the terms of the applicable benefit plans and 40 programs in which he participates on the termination until he becomes eligible for disability income under Carey International's long-term disability income plan. In the event the agreement is terminated upon Mr. Wolfington's death, his beneficiary will be entitled to receive a lump sum equal to the remaining base salary to which he would have been entitled had he remained employed through the current term. In the event the agreement is terminated because of Carey International's failure to renew it, Carey International will be required to pay Mr. Wolfington his base salary for two years following his termination. Mr. Wolfington will be deemed to terminate his employment agreement with "good reason" in the event there is: (a) any material adverse change in his job title, status or responsibility including diminution of duties; (b) any reduction in his base salary, unless he agrees to such reduction; (c) a material breach of the employment agreement by Carey International; (d) a relocation of Mr. Wolfington's primary place of employment, without his consent, to a location more than 50 miles away; (e) the failure by Carey International to continue in effect any benefit, retirement or compensation plan in which Mr. Wolfington participates, or the taking by Carey International of any action that would adversely affect his participation in or reduce his benefits under any such plans or deprive him of any fringe benefit or prerequisite; (f) the failure of Carey International to obtain an assumption and agreement to perform the employment agreement by a successor to Carey International; or (g) a "change in control" of Carey International (as defined in the agreement). The agreement will contain standard non-competition and non-solicitation clauses that apply during the period of Mr. Wolfington's employment and for a period of three years thereafter. If, however, Mr. Wolfington is terminated due to Carey International's failure to renew the agreement, the non- competition and non-solicitation clauses will apply for two years following his termination. The agreement will also provide that during the term of the agreement and following the termination of his employment, Mr. Wolfington may not disclose any confidential information or trade secrets without Carey International's written consent (other than information that becomes public knowledge by means other than Mr. Wolfington's breach of the confidentiality provision or as otherwise may be required by legal process). Mr. Wolfington must return all Carey International property upon the termination of his employment. The agreement will provide that any intellectual property developed by Mr. Wolfington during the term of his employment will be sole and exclusive property of Carey International. It will also provide that Carey International will indemnify Mr. Wolfington against damages and expenses in connection with any action or proceeding to which he is made or threatened to be made a party by reason of the fact that he is an employee or director of Carey International (with certain specified exceptions). The new agreement will supersede and replace the existing employment agreement between Mr. Wolfington and Carey International. Dailey Retirement and Consulting Agreement. Carey International and Don R. Dailey plan to enter into a retirement and consulting agreement providing for Mr. Dailey's retirement and provision of consulting services to Carey International. The term of the agreement will commence upon the closing of the Merger and continue until the earlier of (a) the third anniversary of its commencement; (b) Mr. Dailey's termination for cause; or (c) Mr. Dailey's death. Mr. Dailey will be paid consulting fees of $200,000 during the first year, $150,000 during the second year and $100,000 during the third year of the agreement (or a pro rata amount thereof in the event of an earlier termination of the agreement). During the term of the agreement, Mr. Dailey will be reimbursed for all travel and related expenses incurred during the performance of his duties. During the term of the agreement, Mr. Dailey will be provided with health and life insurance benefits on an enhanced basis from those he currently receives. Carey International may satisfy part of this obligation with respect to health insurance by paying Mr. Dailey's COBRA continuation coverage premiums. During the term of the agreement, Mr. Dailey will also be entitled to receive the same automobile allowance, including insurance, and use of Carey International's car service as he currently receives. Mr. Dailey will not, however, be permitted to participate in any of Carey International's employee benefit plans unless their express terms provide eligibility for consultants and Mr. Dailey meets the eligibility criteria. The agreement will provide that in consideration of a payment of $50,000, during the term of the agreement and for one year thereafter, Mr. Dailey will not directly or indirectly compete with Carey International without 41 the prior written consent of Carey International. The agreement will also contain a standard non-solicitation clause that will apply during the term of the agreement and for a period of one year thereafter. The agreement will also provide that during the term of the agreement and following the termination of his services, Mr. Dailey may not disclose any confidential information or trade secrets without Carey International's written consent and that he must return all Carey International property upon the termination of his services. Option Exercise Agreements. In connection with the Merger Agreement and in addition to the employment and severance agreements discussed above, Carey International, Acquisition Company and the following officers and directors of Carey International who own Company Options (the "Option Holders") have agreed to enter into Option Exercise Agreements: Vincent A. Wolfington, Don R. Dailey, Richard A. Anderson Jr., David H. Haedicke, Gary L. Kessler, Devin J. Murphy, Sally A. Snead, Guy C. Thomas, Eugene S. Willard and John C. Wintle. Exercise of Options and Sale of Option Shares. Pursuant to the Option Exercise Agreements, each Option Holder will agree that immediately prior to the Effective Time of the Merger, such Option Holder will exercise all Company Options granted to the Option Holder that have a per Share exercise price (the "Exercise Price") less than the Offer Price (the "In-the-Money Options") and upon consummation of the Offer, if requested by Acquisition Company, sell to Acquisition Company the shares issued upon exercise of the In-the-Money Options. The aggregate Exercise Price the Option Holder will pay for the Shares issued to the Option holder upon exercise of the In-the-Money-Options will be paid in the form of (i) a cash payment in an amount equal to the product of (a) the number of Option Exercise Shares and (b) the par value of such Option Exercise Shares (the "Cash Exercise Price") and (ii) a promissory note in a principal amount equal to the number of Option Exercise Shares multiplied by the Exercise Price minus the Cash Exercise Price. Acquisition Company will pay for the Option Exercise Shares with a promissory note in a principal amount equal to the product of the Offer Price multiplied by the number of Option Exercise Shares purchased. Cancellation of Options. Pursuant to the Option Exercise Agreements, Carey International will, upon consummation of the Merger, cancel all of the Option Holders' Company Options that are not In-the-Money Options (the "Out-of-the- Money Options") and all remaining In-the-Money-Options, if any. In exchange for agreeing to the cancellation of such Company Options, each Option Holder will receive a cash payment equal to the product, for each Company Option, of (a) the Offer Price less the Exercise Price per Share for each Company Option cancelled and (b) the number of Shares subject to such Company Option. Agreement to Tender Shares. Unless otherwise requested to do so by Acquisition Company, each Option Holder will agree not to tender pursuant to the Offer any Shares (other than Option Exercise Shares) owned by such Option Holder. In the event that an Option Holder is so requested by Acquisition Company, each Option Holder will agree to validly tender (and not to withdraw) pursuant to and in accordance with the terms of the Offer (provided that the Offer is commenced and not amended in a manner adverse to such Option Holder), not later than the Expiration Date, the Shares (other than Option Exercise Shares) owned by such Option Holder. Waiver and Release. By executing the Option Exercise Agreements, each Option Holder will acknowledge the effects of and consent to the exercise and/or cancellation of Company Options, and upon exercise and/or cancellation of Company Options waive all rights and benefits associated with Company Options. Each Option Holder will also unconditionally release and discharge Carey International, Acquisition Company, Parent and their respective directors, officers, employees, agents and assigns from all liabilities arising or in any way related to the plans or Company Options. Representations, Warranties and Covenants. The Option Exercise Agreements contain various representations, warranties and covenants of the parties thereto, including representations by each Option Holder as to the Option Holder's ownership of Company Options and the Shares, authority relative to the Option Exercise Agreements, the absence of any conflicts and the absence of any encumbrances on the Option Holder's securities. Each Option Holder will also agree not to transfer any of the Option Holder's securities, not to grant 42 any proxies or enter into any voting agreements with respect to the Option Holder's securities, not to take any action inconsistent with the representations or warranties in the Option Exercise Agreements and not to acquire any of Carey International's securities. In addition, each Option Holder will waive any appraisal rights with respect to the Merger. Management Consulting Agreements. Carey International and Chartwell intend to enter into a ten-year management consulting agreement (the "Carey International/Chartwell Management Consulting Agreement") pursuant to which Chartwell will provide Carey International with management consultant and advisory services. The term of the agreement will commence on the date of the closing of the Merger Agreement and continue through the period ending on the tenth anniversary of such date. The agreement will automatically renew for additional one-year terms unless Carey International gives Chartwell notice that it will not review the agreement at least 60 business days prior to the date on which the agreement would have otherwise renewed. Chartwell will perform all consultant and advisory services as an independent contractor to Carey International and the agreement will in no way prohibit Chartwell from engaging in other activities, whether or not competitive with any business of Carey International. As compensation for the services provided under the agreement, Carey International will pay Chartwell a fee equal to the greater of (i) $650,000 and (ii) 2% of Carey International's consolidated EBITDA for each fiscal year of Carey International during the term of the agreement. In addition, Carey International will be required to reimburse Chartwell for all out-of-pocket costs and expenses reasonably incurred by Chartwell in connection with the provision of services under the agreement. The agreement may be terminated at Carey International's option upon 30 days prior notice to Chartwell. In such event, Carey International will be required, within five business days, to pay Chartwell an amount equal to the amount of compensation Chartwell would have received under the agreement, had the agreement not been terminated until the date on which it would have expired, had it not renewed. Carey International and Ford also will enter into a ten-year management consulting agreement. The material terms of the agreement will be substantially identical to the Carey International/Chartwell Management Consulting Agreement except that (i) Ford will receive a fee of $250,000 for each fiscal year of Carey International during the term of the agreement and (ii) the agreement will terminate on such date that Ford no longer has all of its common stock investment in Parent. 8. Interests of Certain Persons in the Transaction. In considering the recommendations of the Board, the stockholders should be aware that certain directors and officers of Carey International have interests in the Transaction different from those of stockholders generally which may present such persons with certain potential conflicts of interest. These interests are described below. Equity Participation by Directors and Executive Officers of Carey International. As of July 24, 2000, the directors and executive officers of Carey International, as a group, beneficially owned an aggregate of 312,534 outstanding Shares (representing 3.2% of the then outstanding Shares) as more fully described on Schedule I hereto. All such directors and executive officers whose Shares are tendered in the Offer or are purchased pursuant to the Option Exercise Agreements will receive in the Transaction the same per Share consideration for their Shares as the public stockholders will receive for their Shares in the Offer and the Merger. In the aggregate, the directors and executive officers of Carey International (other than, with respect to the Management Investors, the amount of their outstanding Shares that will be converted or rolled over into common stock of the Surviving Corporation), will be entitled to receive approximately $3,872,121 in cash for their outstanding Shares upon consummation of the Transaction. As of July 24, 2000, the directors and executive officers of Carey International, as a group, had Company Options to acquire an aggregate of 1,375,363 Shares. All directors and executive officers of Carey International are entitled to receive in the Transaction the same net consideration for such Company Options as if they exercised such Company Options and tendered them in the Offer. In the aggregate, the directors and executive officers of Carey International (other than, with respect to the Management Investors, the amount from their 43 Company Options that will be rolled over into shares of the Surviving Corporation), will be entitled to receive approximately $4,137,470 (before any withholding taxes) for their Company Options upon consummation of the Transaction. The Management Investors, consisting of Vincent A. Wolfington, Richard A. Anderson, Jr., David H. Haedicke, Gary L. Kessler, Devin J. Murphy, Sally A. Snead, Guy C. Thomas, Eugene S. Willard and John C. Wintle, will have certain of their Shares (including Shares acquired upon the exercise of Company Options) converted pursuant to the Merger Agreement into common stock of the Surviving Corporation or will rollover the consideration to be received in respect of their Company Options to purchase common stock of the Surviving Corporation equaling a total of approximately 8.0% of the Surviving Corporation. Mr. Wolfington will convert 100,363 currently outstanding Shares plus 167,539 Shares acquired (net of exercise price) upon the exercise of Company Options (or rollover the consideration to be received in respect of such Shares) into shares of the Surviving Corporation. The eight other Management Investors will convert an aggregate of 42,967 Shares acquired (net of exercise price) upon the exercise of Company Options (or rollover the consideration to be received in respect of such Shares) into common stock of the Surviving Corporation. The Management Investors have the right prior to the closing of the Offer to elect to increase the number of Shares that will be converted or rolled over into common stock of the Surviving Corporation. If they elect to do so, the number of Shares (including Shares acquired upon the exercise of Company Options) presented above as being converted or rolled over would increase. The Management Investors will receive certain stockholder rights with regard to common stock of the Surviving Corporation and will be subject to standard obligations customarily provided for in similar transactions including calls, puts upon termination for cause or without good reason, rights of first refusal and registration rights. Change of Control Payments. Messrs. Wolfington and Dailey each will be entitled to receive $1.25 million within ten days after the closing of the Offer pursuant to change of control provisions in their respective employment agreements with Carey International dated as of May 12, 2000. In the event that the payment of this amount to either officer would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax, Messrs. Wolfington and Dailey will be entitled to receive an additional "gross-up" payment in an amount such that, after payment by the officer of all taxes (including any interest or penalties imposed with respect to such taxes), including any excise tax imposed by the gross-up payment, the officer will retain a net amount equal to the excise tax imposed (and any interest and penalties) upon the payment. Messrs. Haedicke, Murphy, Thomas, Willard and Wintle and Ms. Snead are entitled to receive an aggregate of $1.2 million within ten days following the closing of the Offer pursuant to change of control agreements with Carey International dated May 12, 2000. If by reason of Section 280G of the Code, the change of control payment to any of these executive officers exceeds the amount which can be deducted by Carey International, such payment shall be reduced to the maximum which can be deducted by Carey International. Additional Option-Related Compensation. Messrs. Anderson, Haedicke, Kessler, Murphy, Thomas, Willard and Wintle and Ms. Snead will receive an aggregate of $1.5 million following the Effective Time of the Merger as compensation for Plan Options that the Compensation Committee of the Board intended to grant on May 3, 2000, but was unable to do so without stockholder approval increasing the number of Shares available for grant under plans in which officers are eligible to participate. Fee to Special Committee Members. The Board appointed the Special Committee, composed of its independent directors, Messrs. Cox, Meyer, St. George and Vittoria, to negotiate the terms of the Merger Agreement and the Transaction and determine if the Merger Agreement and the Transaction are in the best interests of Carey International and its stockholders. As compensation for their services on the Special Committee, each of the four members thereof will receive a fee of $50,000 following the Effective Time of the Merger. Directors' Deferred Compensation Plan. As of July 24, 2000, an aggregate of 13,344 phantom Shares had accumulated under Carey International's deferred compensation plan for directors for the benefit of Messrs. Cox, Meyer, St. George and Vittoria. Unless the directors request to be paid the value of their phantom Shares account in cash prior to the Effective Time and Carey International approves that request, the phantom Shares accumulated 44 in the accounts of Messrs. Cox, Meyer, St. George and Vittoria will be converted into the right to receive an aggregate of $243,528 at the Effective Time. See Schedule IV--"Compensation of Directors." Option Repricing and Acceleration. In order to satisfy a condition to Acquisition Company's execution of the Merger Agreement, on July 15, 2000 the Board accelerated, effective immediately before the execution of the Merger Agreement, the vesting of all previously unvested Company Options held by the executive officers (including the Management Investors) and all other holders of unvested Company Options (which did not include any members of the Special Committee) with the effect that all Company Options that were not previously fully exercisable became so. In all, Company Options to purchase Shares held by executive officers that were not previously exercisable became fully exercisable immediately before the execution of the Merger Agreement. On May 3, 2000, the Compensation Committee of the Board repriced Company Options to purchase 346,147 Shares, at exercise prices ranging from $10.50 to $19.25 per Share, to $8.25, the market price at the date of repricing. With the exception of one executive officer's Company Option to purchase 10,000 Shares and one non-executive officer Management Investor's Company Option to purchase 10,000 Shares, no Company Options held by executive officers or Management Investors were repriced in May 2000. Legal Services Provided by Director. Certain legal services are provided to Carey International from time to time by the law firm of Baker & McKenzie, of which Mr. Meyer is currently a partner. Since December 1, 1999, Carey International has paid or accrued the payment to Baker & McKenzie of approximately $345,000 for legal services. Post-Effective Time Compensation. Following the Effective Time, select members of the management group of Carey International, as determined by the Board and a representative selected by Parent, will participate in an annual bonus pool plan maintained by Carey International. Participants will be allocated a certain percentage of the bonus pool on an annual basis. Such bonus pool shall consist of 2% of Carey International's of stock options to management annual EBITDA. In addition, following the Effective Time, Carey International will establish a stock option plan, pursuant to which Carey International will reserve 10% of its outstanding stock for grant of stock options to management (in addition to two options to be granted to Mr. Wolfington to purchase 6% of its outstanding stock). It is anticipated that 50% of the options granted to the management group (other than Mr. Wolfington) shall vest ratably over a four year period. The remaining 50% of such options will vest only if Chartwell achieves at least a 28% net internal rate of return ("IRR") on its total investment in Carey International ("Performance Options"). However, if the IRR is at least 25%, but less than 26%, 25% of the Performance Options shall vest; if the IRR is at least 26%, but less than 27%, 50% of the Performance Options shall vest; and if the IRR is at least 27%, but less than 28%, 75% of the Performance Options shall vest. In connection with entering into the Merger Agreement, Carey International plans to enter into an employment agreement with Mr. Wolfington and into a consulting agreement with Mr. Dailey. The agreements will replace the prior agreements between Carey International and those executives. See "SPECIAL FACTORS -- The Merger and Related Documents -- Management Agreements." Intent to Tender. To Carey International's knowledge, after reasonable inquiry, all of the directors and executive officers of Carey International who own Shares intend to tender their Shares in the Offer, except that those executive officers who are parties to the Option Exercise Agreements will tender their shares pursuant to the terms of those agreements. Indemnification. Under the Merger Agreement, Parent and Acquisition Company agree that for a period of six years from the Effective Time, the Surviving Corporation will maintain all rights to indemnification now existing in favor of the current or former directors, officers, employees and fiduciaries of Carey International as provided in Carey International's certificate of incorporation and by-laws or otherwise in effect under any agreement on the date of the Merger Agreement. In addition, under the Merger Agreement, Parent and Acquisition Company agree that the certificate of incorporation and by- laws of the Surviving Corporation and its 45 subsidiaries shall contain the provisions with respect to exculpation and indemnification set forth in Carey International's or its subsidiaries' certificates of incorporation and by-laws on the date of the Merger Agreement and that such provisions shall not be amended, repealed or otherwise modified for a period of six years after the Acceptance Date in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of Carey International in respect of actions or omission occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by the Merger Agreement), unless such modification is required by law. The Merger Agreement requires each of the Surviving Corporation and its subsidiaries to at all times exercise the powers granted to it by its certificate of incorporation, its by-laws, and by applicable law to indemnify and hold harmless to the fullest extent permitted by applicable law present or former directors, officers, employees and fiduciaries and agents of Carey International or its subsidiaries against any threatened or actual claim, action, suit, proceeding or investigation made against them arising from their service in such capacities (or service in such capacities for another enterprise at the request of Carey International or any of its subsidiaries) prior to and including the Effective Time, including, without limitation, with respect to matters relating to the Merger Agreement. The Merger Agreement also requires the Surviving Corporation to provide, for not less than six years from the Effective Time, Carey International's current and former directors and officers with an insurance and indemnification "tail" policy with respect to matters occurring prior to the Effective Time that is no less favorable than Carey International's existing policy or, if substantially equivalent insurance coverage is not available, the best coverage that is similar thereto, provided that the Surviving Corporation is not required to pay a premium in excess of 150% of the last annual premium paid by Carey International prior to the date of the Merger Agreement and provided further that, if the Surviving Corporation is unable to obtain such insurance for such premium, it will obtain as much coverage as possible for a premium equal to such maximum amount. Board's Awareness of Potential Conflicts of Interest. The Board was aware of the actual and potential conflicts of interest described above and considered them along with the other matters described under "SPECIAL FACTORS -- Recommendation of the Board of Directors of Carey International; Fairness of the Offer and the Merger" and "SPECIAL FACTORS -- The Merger Agreement and Related Documents." 9. Financing of the Transaction. The Offerors estimate that the total amount of funds required to purchase all Shares validly tendered pursuant to the Offer, to consummate the Merger, to acquire all securities of Carey International pursuant to the Carey Purchase Agreements, to refinance approximately $35.2 million of existing indebtedness of Carey International and its subsidiaries, and to pay all related costs and expenses will be approximately $255.0 million. The Offerors expect to obtain these funds from borrowings by Carey International under the Senior Credit Facility, the issuance by Carey International of the Senior Sub Notes and the capitalization of Acquisition Company through the Capital Contribution of $98.5 million by Parent. Parent will obtain $53.5 million of the funds for the Capital Contribution from Holdings and $45.0 million from Ford. Senior Credit Facility. It is expected that a definitive agreement for the Senior Credit Facility will be entered into with the Lenders based on the following terms set forth in the Senior Credit Facility Commitment Letter. The Senior Credit Facility will be composed of (i) a 5 1/2 year $25.0 million revolving credit facility (the "Revolving Credit Facility"); (ii) a $40.0 million 5 1/2 year amortizing term loan facility (the "A Term Loan"); (iii) a $60.0 million 6 1/2 year amortizing term loan facility (the "B Term Loan" and, together with the A Term Loan, the "Term Loans"); and (iv) a $35.0 million 5 1/2 year acquisition facility (the "Acquisition Facility," and, together with the Term Loans and the Revolving Credit Facility, the "Facilities"). Except in the event that the Short Form Requirement is not met, the Term Loans must be drawn in full in a single draw on the date of the initial funding of the Facilities and may only be used to refinance directly or 46 indirectly existing debt and finance the Offer and the costs, fees and expenses associated therewith. The aggregate principal of the Term Loans may, at the option of the Lenders, be increased by an amount of up to $10.0 million in order to provide additional funding to refinance indebtedness incurred under Carey International's existing credit facility for acquisitions. The Term Loans are to be repaid on a quarterly basis with annual principal reductions as described below. To the extent repaid, Term Loans may not be reborrowed. Borrowings under the Revolving Credit Facility after the closing of the Offer may be used to fund the Merger, to refinance existing debt, for working capital and other general corporate needs of Carey International and its subsidiaries, including the funding of acquisitions. Under certain conditions, borrowings under the Revolving Credit Facility may be used to fund payments to dissenting stockholders in the Merger. The Revolving Credit Facility will be made available to Carey International in the form of revolving credit loans (the "Revolving Loans") with sublimits available thereunder for letters of credit and swingline loans. Borrowings under the Acquisition Facility may be used to fund acquisitions by Carey International and its subsidiaries and will be available on a delayed-draw basis. Amounts repaid under the Acquisition Facility may not be reborrowed. Interest Rate and Fees. Until ten days after Carey International delivers to the administrative agent its financial statements for the fiscal quarter ending after the closing of the Senior Credit Facility (the "Senior Credit Facility Closing Date"), the Revolving Credit Facility, the Acquisition Facility and the A Term Loan will bear interest at a rate per annum equal to, at Carey International's election, (i) the applicable LIBOR rate, plus a margin equal to 3.50%, or (ii) the higher of (a) First Union's prime commercial lending rate as announced from time to time or (b) the federal funds rate plus 0.50% (such higher rate, the "Base Rate"), plus a margin equal to 2.0%. The B Term Loan will bear interest at a rate per annum equal to, a floating rate equal to, at Carey International's election, (i) the applicable LIBOR rate, plus a margin equal to 4.0%, or (ii) the Base Rate plus a margin equal to 2.5%. Upon Carey International's delivery to the administrative agent of its financial statements for the fiscal quarter ending after the Senior Credit Facility Closing Date, the applicable margins for each of the Facilities will be adjusted based on Carey International's consolidated financial performance for the trailing four quarters most recently ended. From and after ten days after the delivery of Carey International's financial statements for the fiscal quarter following the Senior Credit Facility Closing Date, the Revolving Credit Facility, the Acquisition Facility and the A Term Loan will bear interest at a rate per annum equal to, at Carey International's election, (i) the applicable LIBOR rate, plus a margin ranging from 2.75% to 3.75%, based on Carey International's consolidated financial performance for the trailing four quarters most recently ended, or (ii) the Base Rate, plus a margin ranging from 1.25% to 2.25%, based on Carey International's consolidated financial performance for the trailing four quarters most recently ended. The B Term Loan will bear interest at a rate per annum equal to, at Carey International's election, (i) the applicable LIBOR rate, plus a margin ranging from 3.75% to 4.25%, based on Carey International's consolidated financial performance for the trailing four quarters most recently ended, or (ii) the Base Rate, plus a margin ranging from 2.25% to 2.75%, based on Carey International's consolidated financial performance for the trailing four quarters most recently ended. If there is a continuing event of default under the Senior Credit Facility, the applicable interest rates and letter of credit fees shall be increased by two percent per annum above the rates of interest or the rate of the letter of credit fees otherwise applicable, and all outstanding obligations shall bear interest at this default rate, as applicable. Carey International will pay certain fees in connection with the Senior Credit Facility, including, without limitation, (i) arrangement fees, (ii) agency fees, (iii) letter of credit fees and (iv) commitment fees. The commitment fees will accrue on the unutilized total commitments under the Senior Credit Facility at a per annum rate of 0.50% and 0.75% for the Revolving Credit Facility and the Acquisition Facility, respectively. 47 Commitment fees will accrue on the unutilized total commitments under the Term Loans at a per annum rate of 0.50% until the earlier to occur of (i) the Effective Date or (ii) September 30, 2000. After such date, the per annum rate shall be 1.0% Scheduled Amortization. The A Term Loans will amortize quarterly over 5 1/2 years with 30.0% of the total amortization occurring over the first three years, and increasing pursuant to a schedule with 70.0% of the total amortization occurring over the last 2 1/2 years of the A Term Loan. The B Term Loan will amortize quarterly over 6 1/2 years with 5.5% of the total amortization occurring over the first 5 1/2 five years and 94.5% of the total amortization occurring in the last year of the B Term Loan. The Acquisition Facility will amortize quarterly over 5 1/2 years with no annual amortization in the first two years, 30.0% of the total amortization occurring over the third and fourth years and 70.0% of the total amortization occurring in the last 1 1/2 years of the Acquisition Facility. Mandatory Prepayments. Subject to certain standard exceptions, mandatory prepayments of the Facilities will be required to be made (i) with 75% of all excess cash flow, which percentage will be reduced to 50% whenever the leverage ratio of Carey International is less than a level to be agreed upon, (ii) with 100% of certain permitted new debt or equity issuances (net of commissions, expenses and other costs), (iii) with 100% of permitted asset sales (net of commissions, expenses and other costs) (other than the sale of inventory in the ordinary course and certain other exceptions), and (iv) subject to exceptions for repairs and replacements, all net insurance proceeds or other awards payable in connection with the loss, destruction or condemnation of any assets of Carey International or any of its subsidiaries. Conditions Precedent to Closing of Senior Credit Facility. The availability of the Senior Credit Facility will be subject to the satisfaction of conditions precedent typical for this type of facility, including, but not limited to, the following: (i) the administrative agent shall be satisfied that all of the obligations to prior lenders (other than miscellaneous indebtedness acceptable to the administrative agent) will be repaid in full from the proceeds of the Term Loans and the initial Revolving Loan and all liens in favor of prior lenders will be terminated immediately upon such payment (with certain agreed exceptions for existing indebtedness), (ii) all necessary material governmental and third party waivers, consents and approvals in connection with the Senior Credit Facility and the Offer shall have been obtained and remain in effect, (iii) there shall not have occurred since November 30, 1999, (a) any material adverse change in the condition (financial or otherwise), operations, properties, prospects or business of Carey International and its subsidiaries, or (b) any event, condition or state of facts that could reasonably be expected to have such a material adverse change, (iv) each of the loans under the Senior Credit Facility shall have been rated by a nationally recognized rating agency, (v) the Offer and each of the other transactions contemplated thereby (other than the Merger unless the Short Form Requirement has been met) shall have been consummated or will be contemporaneously consummated on the closing date, (vi) Acquisition Company shall have received at least $105.5 million of equity on terms acceptable to the administrative agent and Carey International shall have issued the Senior Sub Notes, (vii) there shall have been no material change in loan syndication, financial or capital market conditions that, in the judgment of the administrative agent, would impair the syndication of the loans, (viii) the administrative agents shall be satisfied that the aggregate purchase price for all of the issued and outstanding Shares of Carey International acquired pursuant to the Offer and the Merger will not exceed $220.0 million (before giving effect to proceeds to Carey International from the exercise of options and warrants), and the purchase price for any Share shall not exceed $18.25, (ix) the administrative agent shall be satisfied that the aggregate fees and expenses of Parent and Acquisition Company payable in connection with the Transaction will not exceed an amount reasonably acceptable to the administrative agreement, and (x) in the event the Short Form Requirement is not met, Acquisition Company shall have accepted for payment and acquired tendered Shares representing not less than 50.1% of the aggregate voting power of all outstanding shares of Carey International entitled to vote in connection with the approval of the Merger. Guaranty. All obligations of Carey International under the Senior Credit Facility will be unconditionally guaranteed by Parent and each of Carey International's direct and indirect current and future domestic subsidiaries (collectively, the "Guarantors"). 48 Security. The obligations of Carey International and the Guarantors under the Senior Credit Facility will be secured by a first priority perfected security interest (subject to certain permitted liens agreed upon) in (i) 100% of the capital stock of Carey International owned by Parent and each direct and indirect current and future subsidiary (65% of such subsidiary's capital stock in the case of foreign subsidiaries) of Carey International and (ii) all other available assets of Carey International and each Guarantor, other than exceptions customary for transactions of this type. Representations and Warranties. The Senior Credit Facility will contain representations and warranties customary for this type of facility, including without limitation representations and warranties regarding organization and power, absence of violation of organizational documents, other agreements and applicable laws, absence of material litigation, obtaining of government approvals, subsidiaries, payment of taxes, authorization and enforceability of the credit documents, full disclosure, margin securities, ERISA matters, solvency, accuracy of financial statements, absence of material adverse change, title to and sufficiency of assets, real estate, intellectual property, governmental permits and licenses, insurance, compliance with laws, environmental matters, validity and perfection of security interests, and material contracts. Financial Covenants. The Senior Credit Facility will contain financial covenants customary for transactions of this type including, but not limited to, the following: (i) a maximum total leverage ratio, (ii) a maximum senior leverage ratio, (iii) a maximum fixed charge coverage ratio, (iv) a maximum interest coverage ratio, and (v) a minimum annual capital expenditures. Other Covenants. The Senior Credit Facility will contain covenants typical for this type of facility. Such covenants include, but are not limited to, the following: (i) restrictions on indebtedness and liens (including negative pledges), (ii) restrictions on consolidations, mergers, acquisitions and dispositions of assets and sale-leaseback transactions, (iii) restrictions on joint ventures, acquisitions and other investments, (iv) restrictions on dividends, redemptions and distributions with respect to capital stock and redemptions and prepayments of subordinated debt, (v) restrictions on transactions with affiliates, (vi) restrictions on changes in lines of business (including any change in the passive status of Parent), (vii) restrictions on amendments to subordinated debt and equity documents, and (viii) restrictions on other negative pledges, changes in accounting policies and changes in fiscal year. Events of Default. The Senior Credit Facility will contain events of default typical for these types of facilities. Such events of default include, but are not limited to, the following: (i) non-payment of amounts under the Senior Credit Facility, (ii) any material misrepresentation in any of the agreements related to the Senior Credit Facility, (iii) covenant defaults, (iv) cross- defaults to other material indebtedness, (v) judgment liens or ERISA events, (vi) insolvency or bankruptcy proceedings, and (vii) a change of control of Carey International, in each case, subject to specified grace periods, exceptions and/or thresholds. Subordinated Note Agreement. It is expected that a definitive agreement for the purchase of the Senior Sub Notes (the "Subordinated Note Agreement") will be entered into based on the following terms set forth in the Senior Sub Note Commitment Letter. Under the terms of the Subordinated Note Agreement, the Senior Sub Note Purchasers will agree to purchase $40.0 million in original principal amount of Carey International's 17% Senior Sub Notes which will mature seven years from the Senior Sub Note Closing (as defined below). The proceeds from the Senior Sub Notes may only be used to finance the Offer and the Merger, to refinance existing debt, to provide general working capital, to provide capital for general corporate purposes and to pay any fees and expenses incurred in connection with these matters. Upon the purchase of the Senior Sub Notes, the Warrants will be issued to the Senior Sub Note Purchasers, which Warrants shall be sufficient to provide the Senior Sub Note Purchasers with 5.25% of the common stock of Carey International on a fully-diluted basis. The Senior Sub Notes will be subordinated in right of payment to the indebtedness under the Senior Credit Facility and will be senior in right of payment to all other subordinated debt of Carey International and its 49 domestic subsidiaries. The Senior Sub Notes will be guaranteed by any direct parent or holding company of Carey International and by all current and future domestic subsidiaries of Carey International. Interest. Interest on the Senior Sub Notes will accrue at a rate of 17% per annum payable quarterly, in arrears, up to 3.5% of which may be paid in kind at the option of Carey International, and the remainder of which shall be paid in cash. Mandatory Redemption. Carey International will redeem the full principal amount of the Senior Sub Notes, plus any accrued interest and the appropriate redemption premium amount, upon the earlier to occur of any of the following: (i) the maturity of the Senior Sub Notes, (ii) a sale of all or substantially all of Carey International's assets or (iii) an acceleration following an event of default under the Subordinated Note Agreement. Mandatory redemptions will be subject to the premiums set forth in the "Optional Redemption" section set forth below. Offer to Purchase. Carey International will make an offer to redeem (i) the full principal amount of the Senior Sub Notes, plus any accrued interest and the appropriate redemption premium amount, upon the occurrence of a change of control (to be defined), or (ii) subject to exceptions to be agreed upon, in the event of the sale of any equity or equity-linked securities of Carey International or an asset sale, the principal amount of the Senior Sub Notes, plus any accrued interest, and the appropriate redemption premium amount, to the extent that the net proceeds in either of such events set forth in this clause (ii) are not used to permanently repay indebtedness under the Facilities. Such redemptions will be subject to the premiums set forth in the Optional Redemption section set forth below, provided, however, that if such redemptions occur after the second anniversary of the closing date of the Sub Note purchase (the "Senior Senior Sub Note Closing"), the redemption price shall be equal to 101% of the principal amount of the Senior Sub Notes being redeemed, plus accrued and unpaid interest to the date of redemption. Optional Redemption. The Senior Sub Notes may be redeemed at the option of Carey International, in whole and not in part, upon not less than 30 days and not more than 60 days' notice, at a redemption price equal to (i) 100% of the principal amount of the Senior Sub Notes being redeemed plus two years interest, less interest paid as of the date of redemption, if the redemption date occurs prior to the second anniversary of the Senior Sub Note Closing; (ii) 104% of the principal amount of the Senior Sub Notes being redeemed if the redemption date occurs from the second anniversary of the Senior Sub Note Closing to the third anniversary of the Senior Sub Note Closing; (iii) 102% of the principal amount of the Senior Sub Notes being redeemed if the redemption date occurs from the third anniversary of the Senior Sub Note Closing to the fourth anniversary of the Senior Sub Note Closing; and (iv) 100% of the principal amount of the Senior Sub Notes being redeemed at any time thereafter, plus in each case accrued and unpaid interest to the redemption date. Conditions Precedent to Purchase of the Senior Sub Notes. The Senior Sub Note Purchasers' obligations to purchase the Senior Sub Notes in connection with the closing of the Offer are subject to satisfaction of conditions precedent typical for this type of facility, including the following: (i) all of the conditions precedent to the consummation of the Offer being satisfied in all material respects, (ii) the Offer being consummated concurrently with the sale of the Senior Sub Notes, (iii) the outstanding indebtedness of Carey International and its subsidiaries being refinanced concurrently with the sale of the Senior Sub Notes, (iv) Acquisition Company having purchased shares of Carey International's common stock for an aggregate purchase price not to exceed $220.0 million, (v) Parent having made an equity contribution to Acquisition Company of not less than $97.0 million, (vi) Acquisition Company owning not less than 50.1% of Carey International's outstanding common stock after giving effect to the Offer and the other transactions contemplated by the Merger Agreement (other than the Merger), (vii) the Senior Credit Facility being in full force and effect, and (viii) there not having occurred, since November 30, 1999, (a) any material adverse change in the condition (financial or otherwise), operations, properties or business of Carey International and its subsidiaries, or (b) any event, condition or state of facts that could reasonably be expected to have such a material adverse change, (ix) the Senior Sub Note Purchasers being satisfied that the aggregate purchase price for all of the issued and outstanding Shares of Carey International acquired pursuant to the Offer and the Merger will not exceed $220.0 million (before giving effect 50 to proceeds to Carey International from the exercise of options and warrants), and the purchase price for any Share not exceeding $18.25, (x) the Senior Sub Notes Purchasers being satisfied that the aggregate fees and expenses of Parent and Acquisition Company, payable in connection with the Transaction will not exceed an amount reasonably acceptable to the Senior Sub Note Purchasers, and in the event the Short Form Requirement is not met, Acquisition Company having accepted for payment and acquired tendered Shares representing not less than 50.1% of the aggregate voting power of all outstanding Shares of Carey International entitled to vote in connection with the approval of the Merger, and (xi) certain other conditions customary for financings of this type. Representations and Warranties. The Subordinated Note Agreement will contain representations and warranties customary for financing of this type. These representations and warranties address subjects including, but not limited to, the following: (i) taxes, (ii) environmental matters, (iii) financial condition, (iv) solvency, (v) litigation, and (vi) employee benefit plans. Covenants. The Senior Sub Notes will contain customary covenants for financings of this type, that, among other things, will limit the ability of Carey International and its subsidiaries to incur debt, create liens, pay cash dividends on or repurchase capital stock, enter into agreements prohibiting the creation of liens or restricting the ability of a subsidiary to pay money or transfer assets to Carey International, enter into certain transactions with affiliates, dispose of certain assets and engage in mergers and consolidations. Financial Covenants. The Senior Sub Notes will contain financial covenants customary for transactions of this type including, but not limited to: (i) a maximum total leverage ratio, (ii) a minimum fixed change coverage ratio, (iii) a minimum interest coverage ratio, and (iv) a maximum annual capital expenditures. Events of Default. The Senior Sub Notes will contain events of default typical for these types of financings. Such events of default include without limitation: (i) failure to pay any principal, interest or fees when due (subject to grace periods to be agreed upon); (ii) breach of covenants with customary grace periods for certain affirmative covenants; (iii) material incorrectness when made of any representation or warranty; (iv) default under material indebtedness (other than the Senior Credit Facility); (v) acceleration of any amounts due under the Senior Credit Facility as a result of a default thereunder; (vi) breaches of material contracts; (vii) bankruptcy or insolvency; (viii) judgments or uninsured losses in excess of agreed upon amounts; (ix) certain ERISA events; and actual or asserted invalidity of guarantee documents. Warrants. The Warrants will be exercisable at an exercise price of $.01 per share at any time, in whole or in part, after the issuance and will have a term of ten years. The Warrants will also provide for: (i) customary weighted average anti-dilution protection for issuances of equity securities below fair market value (subject to agreed upon exceptions) and other customary equity rights satisfactory to the Senior Sub Note Purchasers; (ii) pre-emptive rights for the Senior Sub Note Purchasers and their respective affiliates on any sale of equity or equity linked securities by Carey International (subject to customary exceptions); (iii) co-sale rights on any private sale of equity securities of Carey International (subject to customary exceptions); (iv) put rights exercisable at the conclusion of year seven and call rights exercisable at the conclusion of year eight, in each case for fair market value (subject to customary exceptions); (v) cashless exercise; (vi) piggy-back registration rights; and (vii) board observation rights for two observers for the Warrant holders plus a monitoring fee of $50,000 per annum to be allocated pro rata among the Senior Sub Note Purchasers. 51 Capital Contribution. Ninety-eight million five hundred thousand dollars of the funds necessary for Acquisition Company to fund the transactions contemplated by the Merger Agreement and the Carey Purchase Agreements will be in the form of the Capital Contribution from Parent. Parent will receive the funds necessary for the Capital Contribution from a capital contribution from Holdings of $53.5 million and from Ford of $45.0 million. Holdings will be capitalized with $53.5 million of equity provided by investment funds sponsored by affiliates of Chartwell and certain other institutions. The commitments of Ford and the investment funds affiliated with Chartwell to make the capital contribution to Parent are subject to conditions customary to this type of transaction, including the negotiation and execution of definitive agreements, obtaining all necessary consents and regulatory approvals, the availability of all other funds necessary to complete the Transaction and no material adverse change having occurred in the business, condition or prospects of Carey International. After the Transaction, Holdings will own approximately 75.9% of the common stock of Parent and Ford will own approximately 24.1%. Ford also will own all of the outstanding shares of a class of preferred stock with terms substantially similar to the Carey Preferred Stock. Company/Acquisition Company Loan Agreement. A portion of the proceeds contemplated by the Financing Commitment Letters will be loaned by Carey International to Acquisition Company (if the Short Form Requirement is met) pursuant to the terms of the Carey International/Acquisition Company Loan Agreement. Interest shall accrue on the principal amount of the Carey International/Acquisition Company Loan Agreement at 10% per annum. The entire unpaid principal balance and all interest thereon is due and payable in the event the Merger Agreement is terminated. The entire principal balance and all interest thereon will be deemed paid in full immediately following consummation of the Merger. The Offer is conditioned upon, among other things, the Receipt of Funds Condition. See "THE TENDER OFFER -- Conditions to the Offer." The Offerors believe that the proceeds, if obtained, from the Senior Credit Facility, the Senior Sub Notes and the Capital Contribution will be sufficient to satisfy the Receipt of Funds Condition. The Offerors, however, do not have any alternative financing arrangements or plans to obtain sufficient funds to purchase the Shares tendered in the Offer and to consummate the Merger if they are unable to obtain funds from the Senior Credit Facility, the Senior Sub Notes and the Capital Contribution. 10. Certain United States Federal Income Tax Consequences. The following is a general summary of certain U.S. federal income tax consequences of the Offer and the Merger relevant to beneficial holders whose Shares are purchased pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger. This discussion is for general information only and does not purport to consider all aspects of U.S. federal income taxation that may be relevant to holders of Shares. The summary is based on the provisions of the Code, applicable current and proposed United States Treasury Regulations issued thereunder, judicial authority and administrative rulings and practice, all of which are subject to change, possibly with retroactive effect, at any time and, therefore, the following statements and conclusions could be altered or modified. The discussion does not address holders of Shares in whose hands Shares are not capital assets, nor does it address holders who hold Shares as part of a hedging, "straddle," conversion or other integrated transaction, or who received Shares upon conversion of securities or exercise of warrants or other rights to acquire Shares or pursuant to the exercise of employee stock options or otherwise as compensation, or to holders of Shares who are in special tax situations (such as insurance companies, tax-exempt organizations, financial institutions, qualified plans, individual retirement accounts, United States expatriates or non-U.S. persons). Furthermore, the discussion does not address the tax treatment of holders who perfect appraisal rights in the Merger, nor does it address any aspect of foreign, state or local taxation or estate and gift taxation. 52 Because individual circumstances may differ, each holder of Shares should consult such holder's own tax advisor to determine the applicability of the rules discussed below to such stockholder and the particular tax effects of the Offer and the Merger, including the application and effect of state, local and other income tax laws. The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for federal income tax purposes under the Code (and also may be a taxable transaction under applicable state, local, foreign and other income tax laws). In general, for federal income tax purposes, a holder of Shares will recognize gain or loss in an amount equal to the difference between its adjusted tax basis in the Shares sold pursuant to the Offer or converted into the right to receive cash in the Merger and the amount of cash received therefor. Gain or loss must be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) sold pursuant to the Offer or converted to cash in the Merger. Such gain or loss will be capital gain or loss and will be long-term gain or loss if, on the date of sale (or, if applicable, the Effective Time), the Shares were held for more than one year. Under the United States federal income tax backup withholding rules, payments in connection with the Offer or the Merger may be subject to "backup withholding" at a rate of 31%. To avoid backup withholding, each tendering stockholder, unless an exemption applies, must provide the Depositary with such stockholder's correct taxpayer identification number and certify that such stockholder is not subject to such backup withholding by completing the Substitute Form W-9 included in the Letter of Transmittal. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. Refunds are not available from Carey International. Certain persons generally are entitled to exemption from backup withholding, including corporations, financial institutions and certain foreign individuals. Each stockholder should consult with such holder's own tax advisor as to such holder's qualification for exemption from backup withholding and the procedure for obtaining such exemption. All stockholders surrendering Shares pursuant to the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to Acquisition Company and the Depositary). Noncorporate foreign stockholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See Instruction 12 to the Letter of Transmittal. 11. Fees and Expenses. Except as otherwise provided herein, all fees and expenses incurred in connection with the Transaction, the Merger Agreement and the other transactions contemplated thereby will be paid by the party incurring such fees and expenses, except that each of Carey International and Parent will pay one-half of (i) any fee payable pursuant to the HSR Act, and (ii) all costs and expenses relating to the filing, printing and mailing of this Offer to Purchase, the Schedule TO and any proxy statement or information statement required to be filed with the Commission to consummate the Merger. Carey International has engaged BGC as financial advisor in connection with the Transaction, and will pay to BGC approximately $2.4 million upon consummation of the Transaction plus reasonable out-of-pocket expenses and fees (including attorneys' fees) incurred by BGC for services rendered by it in connection with the consummation of the Transaction. Carey International has agreed to indemnify BGC against certain liabilities in connection with the Transaction, including certain liabilities under the federal securities laws. The fees and expenses of BGC are also described in "SPECIAL FACTORS -- Opinion of the Board's Financial Advisors." The Special Committee also has engaged FBR as financial advisor in connection with the Transaction. In exchange for FBR's services, Carey International agreed to pay to FBR $400,000 plus reasonable out-of-pocket expenses and fees (including attorneys' fees) incurred by FBR for services rendered by it in connection with the 53 Transaction and its delivery of the FBR Opinion, and Carey International agreed to indemnify FBR in connection with the services that it provided. Acquisition Company and Chartwell will enter into a letter agreement (the "Chartwell Fee Agreement") pursuant to which Acquisition Company is, and immediately following the effectiveness of the Merger, Carey International will be, obligated to pay Chartwell an advisory fee equal to 1% of the total capitalization of Acquisition Company and Carey International (including the funded debt under the Senior Credit Facility, the Senior Sub Notes and the Capital Contribution), plus reimbursement for fees and expenses (including attorneys' fees) incurred with respect to the Transaction, in cash upon consummation of the Transaction. The Offerors have retained D.F. King & Co., Inc. to act as the Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, facsimile, telegraph and personal interview and may request brokers, dealers and other nominee stockholders to forward Offer materials to beneficial owners. The Information Agent will receive reasonable and customary compensation for services relating to the Offer and will be reimbursed for certain reasonable out-of-pocket expenses. Carey International also has agreed to indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including certain liabilities under the federal securities laws. United States Trust Company of New York has been retained by the Offerors to act as the Depositary in connection with the Offer. The Depositary has not been retained to make solicitations or recommendations in its role as Depositary. The Depositary will receive reasonable and customary compensation for services relating to the Offer and will be reimbursed for certain reasonable out-of-pocket expenses. Carey International has also agreed to indemnify the Depositary against certain liabilities and expenses in connection with the Offer, including certain liabilities under the federal securities laws. The following table presents the estimated fees and expenses to be incurred by the Offerors in connection with the Offer and the Merger: Financing Fees.................................................. $ 4,800,000 Financial Advisors Fees and Expenses............................ 5,300,000 Legal Fees and Expenses......................................... 2,575,000 Accounting and Other Professional Fees and Expenses............. 800,000 Printing and Mailing............................................ 150,000 Filing Fees..................................................... 43,000 Depositary Fees................................................. 15,000 Information Agent Fees.......................................... 15,000 Miscellaneous................................................... 1,300,000 ----------- Total......................................................... $14,998,000 ===========
Except as set forth above, the Offerors will not pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request only, be reimbursed by the Offerors for customary mailing and handling expenses incurred by them in forwarding material to their customers. Assuming consummation of the Offer and the Merger, Carey International is responsible for all of the foregoing fees and expenses. 54 THE TENDER OFFER 1. Terms of the Offer. Upon the terms and subject to the Offer Conditions (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), either Acquisition Company, or Acquisition Company and Carey International will accept for payment and pay for any and all Shares validly tendered prior to the Expiration Date and not withdrawn in accordance with the procedures set forth in "THE TENDER OFFER -- Withdrawal Rights" as soon as practicable after the Expiration Date. The term "Expiration Date" means 5:00 p.m., New York City time, on August 31, 2000 unless and until the Offerors, in their sole discretion (but subject to the terms of the Merger Agreement), shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Offerors, shall expire. The Offer is subject to the Offer Conditions, which include, among other things, the Minimum Condition and the Receipt of Funds Condition. Such conditions are set forth in "THE TENDER OFFER -- Conditions to the Offer." If the Offer Conditions are not satisfied or waived or any of the events specified in "THE TENDER OFFER -- Conditions to the Offer" have occurred or are determined by the Offerors to have occurred prior to the Expiration Date, the Offerors may either, subject to the terms of the Merger Agreement, extend the Offer or terminate the Offer. If the Offerors terminate the Offer, they shall not accept for payment any Shares and return all tendered Shares to tendering stockholders. Carey International and Acquisition Company have agreed that, without the prior written consent of Parent, no change may be made to the Offer by Carey International or the Acquisition Company that (i) decreases the number of Shares subject to the Offer, (ii) increases or decreases the Offer Price or changes the form of consideration payable pursuant to the Offer, (iii) amends or waives the Offer Conditions in any manner, (iv) imposes any additional conditions or amends any other term of the Offer or (v) extends the expiration date of the Offer beyond the Expiration Date. The Offerors, in their sole discretion, but subject to the terms of the Merger Agreement, may extend, delay, terminate or amend the Offer, in any manner at any time prior to the Expiration Date. Any such extension, delay, termination or amendment will be followed, as promptly as practicable, by public announcement thereof, with such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14e-l of the Exchange Act. Subject to applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Carey International may choose to make any public announcement, Carey International will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service or as otherwise may be required by applicable law. If the Offerors make a material change in the terms of the Offer or the information concerning the Offer, or if they waive a material Offer Condition, the Offerors will extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. Pursuant to these rules, the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in the percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. With respect to a change in price or a change in the percentage of securities sought, a minimum period of ten business days is generally required to allow for adequate dissemination to stockholders and investor response. During any extensions of the Offer by the Offerors, all Shares previously tendered and not withdrawn will remain subject to the Offer. Tendering stockholders will continue to have the right to withdraw any tendered Shares during such extension. See "THE TENDER OFFER -- Withdrawal Rights." Under no circumstances will interest be paid on the purchase price for tendered Shares, whether or not the Offer is extended. 55 This Offer to Purchase, the Letter of Transmittal and other relevant materials will be mailed to record holders of Shares whose names appear on Carey International's list of stockholders and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on Carey International's list of stockholders or, where applicable, who are listed as participants in the security position listing of The Depository Trust Company. 2. Acceptance for Payment and Payment for Shares. Upon the terms and subject to the Offer Conditions (including, if the Offer is extended or amended, the terms and conditions of the Offer as so extended or amended), the Offerors will purchase, by accepting for payment, and will pay for, all Shares validly tendered prior to the Expiration Date (and not properly withdrawn in accordance with "THE TENDER OFFER -- Withdrawal Rights") as soon as practicable after the Expiration Date, with Acquisition Company agreeing to accept for payment and pay for all Shares validly tendered, provided that the Shares validly tendered (and not withdrawn) pursuant to the Offer plus the Shares acquired by Acquisition Company pursuant to the Carey Purchase Agreements meet the Short Form Requirement. If the foregoing requirement is not met, but all Offer Conditions are met, Acquisition Company has agreed to accept for payment and pay for up to 5,232,876 Shares validly tendered and Carey International has agreed to accept for payment and pay for all Shares validly tendered in excess of those Shares purchased by Acquisition Company, in each case as promptly as practicable after the Expiration Date. Subject to applicable rules of the Commission and the terms of the Merger Agreement, the Offerors expressly reserve the right, in their discretion, to delay acceptance for payment of, or payment for, Shares in order to comply, in whole or in part, with any applicable law. See "THE TENDER OFFER -- Terms of the Offer," and "THE TENDER OFFER -- Certain Legal Matters; Regulatory Approvals." The reservation by the Offerors of the right to delay the acceptance or purchase of, or payment for, the Shares is subject to the provisions of Rule 14e-1(c) under the Exchange Act, which requires the Offerors to pay the consideration offered or to return the Shares deposited by, or on behalf of, stockholders, promptly after the termination or withdrawal of the Offer. In all cases, payment for Shares purchased pursuant to the Offer will be made only after such Shares are validly tendered and not properly withdrawn prior to the Expiration Date. See "THE TENDER OFFER -- Procedures for Tendering Shares" for a complete discussion of how Shares can be validly tendered. For purposes of the Offer, the Offerors will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn if, as and when the applicable Offeror gives oral or written notice to the Depositary of its acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Offerors and transmitting payments to such tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the Offer Price for Shares be paid by the Offerors, regardless of any delay in making such payment or extension of the Expiration Date. If any validly tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if the certificates for tendered Shares are submitted evidencing more Shares than are tendered, certificates evidencing Shares not purchased will be returned, without expense, to the tendering stockholder, or such other person or entity as the tendering stockholder shall specify in the Letter of Transmittal, as promptly as practicable following the expiration, withdrawal or termination of the Offer. In the case of Shares tendered by book-entry transfer into the Depositary's account at The Depositary Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "THE TENDER OFFER -- Procedures for Tendering Shares," such Shares will be credited to such account at the Book-Entry Transfer Facility as promptly as practicable following the expiration, withdrawal or termination of the Offer. 56 If, prior to the Expiration Date, the Offerors increase the consideration to be paid per Share pursuant to the Offer, the Offerors will pay such increased consideration for all such Shares purchased pursuant to the Offer, whether or not such Shares were tendered prior to such increase in consideration. Subject to the terms of the Merger Agreement, Parent, Acquisition Company and Acquisition Company Sub each reserve the right to assign to one or more of Parent's directly or indirectly wholly-owned subsidiaries, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such assignment will not relieve Parent, Acquisition Company and Acquisition Company Sub of their obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 3. Procedures for Tendering Shares. Valid Tender of Shares. In order for Shares to be validly tendered pursuant to the Offer, a stockholder must, prior to the Expiration Date, either (i) deliver to the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase (a) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees or an Agent's Message (as defined below) in connection with a book-entry transaction, (b) the certificates representing Shares to be tendered (the "Certificates") or timely confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility and (c) any other documents required to be included with the Letter of Transmittal under the terms and subject to the conditions thereof and of this Offer to Purchase, (ii) cause such stockholder's broker, dealer, commercial bank or trust company to tender applicable Shares pursuant to the procedures for book-entry transfer described below or (iii) comply with the guaranteed delivery procedures described below. The method of delivery of Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Shares by (i) causing such securities to be transferred in accordance with the Book-Entry Transfer Facility's procedures into the Depositary's account and (ii) causing the Letter of Transmittal to be delivered to the Depositary by means of an Agent's Message. Although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be transmitted to and received by the Depositary prior to the Expiration Date at one of its addresses set forth on the back cover of this Offer to Purchase, or the tendering stockholder must comply with the guaranteed delivery procedures described below. Delivery of the Letter of Transmittal and any other documents or instructions to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures does not constitute delivery to the Depositary. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of the confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility, which states that the Book-Entry Transfer Facility has received an express acknowledgment from a participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Offerors may enforce such agreement against such participant. Signature Guarantee. All signatures on a Letter of Transmittal must be guaranteed by a member in good standing of the Securities Transfer Agents Medallion Program, or by any other firm that is a bank, broker, dealer, 57 credit union or savings association (each of the foregoing being referred to as an "Eligible Institution" and collectively as "Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by the registered holder of Shares (which term, for the purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) who has not completed the box labeled "Special Delivery Instructions" or the box labeled "Special Payment Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 1 to the Letter of Transmittal. If a Certificate is registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or a Certificate not accepted for payment or not tendered is to be returned to, a person other than the registered holder(s), then the Certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the Certificate, with the signature(s) on such certificate or stock powers guaranteed as described above. See Instruction 5 to the Letter of Transmittal. Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's Certificates are not immediately available or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date or the procedures for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all the following guaranteed delivery procedures are duly complied with: (i) such tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Carey International, is received by the Depositary as provided below prior to the Expiration Date; and (iii) the certificates for (or a Book-Entry Confirmation with respect to) all tendered Shares in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantee (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by such Letter of Transmittal, are received by the Depositary within three Trading Days after the date of execution of the Notice of Guaranteed Delivery. A "Trading Day" is any day on which the Nasdaq National Market is open for business. Any Notice of Guaranteed Delivery may be delivered by hand, transmitted by facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Tender Constitutes an Agreement. The valid tender of Shares pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and the Offerors on the terms and subject to the conditions of the Offer. Determination of Validity. All questions as to the validity, form, eligibility (including, but not limited to, time of receipt) and acceptance for payment of any tendered Shares pursuant to any of the procedures described above will be determined by the Offerors, in their sole discretion, whose determination will be final and binding on all parties. The Offerors reserve the absolute right to reject any or all tenders of any Shares determined by them not to be in proper form or if the acceptance for payment of, or payment for, such Shares may, in the opinion of Carey International's counsel, be unlawful. The Offerors also reserve the absolute right, in their sole discretion, to waive any of the Offer Conditions (subject to the terms of the Merger Agreement) or any defect or irregularity in any tender with respect to Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of the Offerors or any of their respective affiliates, the Depositary, the Information Agent or any other person or entity will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. 58 The Offerors' interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. Appointment as Proxy. By executing a Letter of Transmittal (or delivering an Agent's Message) as set forth above, a tendering stockholder irrevocably appoints the Offerors' designees as such stockholder's attorney-in-fact and proxy, with full power of substitution, to vote in such manner as such attorney-in-fact and proxy (or any substitute thereof) shall deem proper in its sole discretion, and to otherwise act (including pursuant to written consent) to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Offerors (and any and all dividends, distributions, rights or other securities issued in respect of such Shares on or after July19, 2000). All such proxies shall be considered coupled with an interest in the tendered Shares and shall be irrevocable. This appointment will be effective if, when, and only to the extent that, the Offerors accept such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares and other securities will, without further action, be revoked, and no subsequent proxies may be given (and, if given, will not be deemed effective). The designees of the Offerors will, with respect to the Shares and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual, special, adjourned or postponed meeting of Carey International's stockholders, by written consent in lieu of any such meeting or otherwise. The Offerors reserve the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Offeror's acceptance for payment of such Shares, such Offeror must be able to exercise all rights (including, without limitation, all voting rights) with respect to such Shares and receive all dividends and distributions. Backup Withholding. Under United States federal income tax law, the amount of any payments made by the Depositary to stockholders (other than corporate and certain other exempt stockholders) pursuant to the Offer may be subject to backup withholding tax at a rate of 31%. To avoid such backup withholding tax with respect to payments made pursuant to the Offer, a non-exempt, tendering stockholder must provide the Depositary with such stockholder's correct taxpayer identification number and certify under penalties of perjury that such stockholder is not subject to backup withholding tax by completing the Substitute Form W-9 included as part of the Letter of Transmittal. If backup withholding applies with respect to a stockholder or if a stockholder fails to deliver a completed Substitute Form W-9 to the Depositary or otherwise establish an exemption, the Depositary is required to withhold 31% of any payments made to such stockholder. See "SPECIAL FACTORS -- Certain United States Federal Income Tax Consequences" and the information set forth under the heading "Important Tax Information" contained in the Letter of Transmittal. 4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer are irrevocable except that such Shares may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Offerors pursuant to the Offer, may also be withdrawn at any time after October 1, 2000, or at such later time as may apply if the Offer is extended. If the Offerors extend the Offer, are delayed in their acceptance for payment of Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Offerors' rights under the Offer, the Depositary may, nevertheless, on behalf of the Offerors, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described below. Any such delay will be an extension of the Offer to the extent required by law. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Certificates, the serial numbers shown on 59 such Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. Shares tendered pursuant to the procedure for book-entry transfer as set forth in "THE TENDER OFFER -- Procedures for Tendering Shares" may be withdrawn only by means of the withdrawal procedures made available by the Book-Entry Transfer Facility, must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals of tendered Shares may not be rescinded without the Offerors' consent and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Offerors in their sole discretion, which determination will be final and binding. None of the Offerors or any of their affiliates, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Shares properly withdrawn may be re-tendered at any time prior to the Expiration Date by following any of the procedures described in "THE TENDER OFFER -- Procedures for Tendering Shares." 5. Price Range of Shares. The market for the Shares is the Nasdaq National Market. The ticker symbol for the Shares is "CARY." The following table sets forth, for the periods indicated, the high and low sales prices per share of Common Stock on the Nasdaq National Market:
High Low ------- ------ 1998: First Quarter................................................ $19.000 13.750 Second Quarter............................................... 26.500 18.125 Third Quarter................................................ 29.875 15.500 Fourth Quarter............................................... 18.250 12.250 1999: First Quarter................................................ 22.125 13.813 Second Quarter............................................... 20.000 13.250 Third Quarter................................................ 25.250 17.750 Fourth Quarter............................................... 25.375 19.625 2000: First Quarter................................................ 27.000 15.313 Second Quarter............................................... 19.375 6.500 Third Quarter (through August 1, 2000)....................... 18.00 13.75
On June 27, 2000, the last full trading day before Carey International announced it was in negotiations regarding a possible acquisition of Carey International, the reported closing sale price for one Share of Common Stock was $11.5625. On July 18, 2000, the last full trading day prior to the public announcement of the Offer and the execution of the Merger Agreement, the reported closing sales price of the Common Stock on the Nasdaq National Market was $14.50 per Share. On August 1, 2000, the penultimate trading day prior to the date of this Offer to Purchase, the last reported sales price of the Common Stock on the Nasdaq National Market was $17.9531 per Share. Stockholders are urged to obtain current market quotations for the Common Stock. 6. Dividends and Distributions. Carey International has not paid any dividends with respect to the Shares at any time during the past two years. Pursuant to the Merger Agreement, without Parent's written consent, Carey International will not, and will cause each of its subsidiaries not to, (i) issue, reissue, sell or authorize the issuance, reissuance or sale of any 60 Company Securities other than the issuance of Shares pursuant to the exercise of Company Options outstanding, on the date of the Merger Agreement; (ii) effect any stock split or combine, subdivide, reclassify or, directly or indirectly, redeem, purchase or otherwise acquire, recapitalize or reclassify or propose to redeem or purchase or otherwise acquire, any shares of its capital stock or any of its other shares or liquidate in whole or in part; or (iii) declare, set aside or pay any dividend or make any other distribution with respect to any shares of its capital stock (other than dividends between Carey International and any wholly-owned subsidiaries). 7. Certain Information Concerning Carey International. The information concerning Carey International contained in this Offer to Purchase, including financial information, has been furnished by Carey International or has been taken from or is based upon publicly available documents and records on file with the Commission and other public sources. None of Holdings, Parent, Acquisition Company or the Information Agent or any of their affiliates assumes any responsibility for the accuracy or completeness of the information concerning Carey International contained in such documents and records or for any failure by Carey International to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to them. Carey International is a Delaware corporation. The address of Carey International's principal executive offices is 4530 Wisconsin Avenue, N.W., Fifth Floor, Washington, D.C. 20016. The telephone number of Carey International at such offices is (202) 895-1200. Carey International is one of the world's largest chauffeured vehicle service companies, providing services through a worldwide network of owned and operated companies, licensees and affiliates serving 480 cities in 75 countries. The "Carey" brand name has represented quality chauffeured vehicle services since the 1920's. Carey International owns and operates its service providers in Boston, Chicago, Detroit, Hartford, Indianapolis, Jacksonville, London, Los Angeles, Miami, New York, Paris, Philadelphia, San Francisco, Stamford, Washington, D.C. and West Palm Beach. In addition, Carey International generates revenues from licensing the "Carey" name and providing central reservation, billing and sales and marketing services to its licensees. Carey International's worldwide network also includes affiliates in locations in which Carey International has neither owned and operated companies nor licensees. Historical Financial Information. Certain financial information relating to Carey International is hereby incorporated by reference to (i) the audited financial statements for Carey International's 1999 and 1998 fiscal years set forth in Part II of Carey International's Annual Report on Form 10-K for the fiscal year ended November 30, 1999 filed with the Commission on February 28, 2000 (the "1999 10-K"); and (ii) the three month and six month fiscal periods ended May 31, 2000 set forth in Part I of Carey International's Quarterly Report on Form 10-Q for the quarter ended May 31, 2000 filed with the Commission on July 17, 2000. These reports may be inspected at, and copies may be obtained from, the same places and in the manner set forth below. Set forth below is certain selected consolidated financial information relating to Carey International and its subsidiaries, which has been derived from the financial statements contained in the 1999 10-K. More comprehensive financial information is included in these reports and other documents filed by Carey International with the Commission. The financial information that follows is qualified in its entirety by reference to these reports and other documents, including the financial statements and related notes contained therein. 61 SELECTED CONSOLIDATED FINANCIAL INFORMATION (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
Fiscal Year Fiscal Year Ended Ended November 30, November 30, 1998 1999 ------------ ------------ OPERATING DATA: Net revenue......................................... $123,218 $191,058 Operating income.................................... 13,565 20,952 Net income.......................................... 8,351 11,767 Basic net income per share.......................... 0.97 1.23 Diluted net income per share........................ 0.92 1.17 BALANCE SHEET DATA: (At End of Period) Total assets........................................ 129,212 178,137 Total liabilities................................... 39,073 73,485 Stockholders' equity................................ 90,139 104,652 Book value per share................................ 10.44 10.91 Ratio of earnings to fixed charges.................. 17.11 12.39
Financial Projections. Carey International does not, as a matter of course, make public forecasts or projections as to financial performance. Nevertheless, certain projections were prepared by Carey International's management in connection with Chartwell's due diligence review of Carey International (the "Management Projections"). In addition, Carey International assisted Chartwell in preparing financing projections for possible lenders so as to enable Chartwell to obtain the Financing (the "Financing Projections" and, together with the Management Projections, the "Projections"). The Projections also were made available to the Board, the Special Committee, BGC and FBR. The Projections below do not reflect any of the effects of the Offer, the Merger or other changes that may in the future be deemed appropriate concerning Carey International and its assets, business, operations, properties, policies, corporate structure, capitalization and management in light of the circumstances then existing. Carey International believes that the assumptions upon which the Projections are based were reasonable at the time the Projections were prepared, given the information known by management of Carey International. The Projections below were not prepared with a view to public disclosure or in compliance with published guidelines of the Commission regarding projections or the guidelines established by the American Institute of Certified Public Accountants regarding projections. The Projections, while presented with numerical specificity, are based on myriad estimates and assumptions and involve judgments with respect to, among other things, future economic and competitive conditions, inflation rates and future business conditions. These estimates and assumptions may not be realized and are inherently subject to significant business, economic and competitive uncertainties, many of which are beyond the control of Carey International. Additionally, this information, except as otherwise indicated, does not reflect revised prospects for Carey International's business, changes in general business and economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time such information was prepared. Therefore, there can be no assurance that the projections below will prove to be reliable estimates of probable future performance. It is quite likely that actual results will vary materially from these estimates. In light of the uncertainties inherent in projections of any kind, the inclusion of projections in this Offer should not be regarded as a representation by any party that the estimated results will be realized. There can be no assurances in this regard. The projections were not prepared in accordance with generally accepted accounting principles and were not audited or reviewed by any independent accounting firm, nor did any independent accounting firm perform any other services with respect to these projections. 62 Management Projections
Fiscal Year Ended November 30, ---------------------------------- 2000 2001 2002 2003 2004 ------ ------ ------ ------ ------ Revenue...................................... $261.6 $307.5 $373.3 $444.4 $521.1 Gross profit................................. 92.6 108.9 132.2 157.3 184.5 EBITDA....................................... 38.3 45.1 54.7 65.1 76.4 EBIT......................................... 28.9 32.9 41.1 50.1 60.7 Net income................................... 14.9 16.2 20.6 26.0 32.6
Financing Projections
Fiscal Year Ended November 30, --------------------------------------------------------------------- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Revenue................. $240.5 $301.9 $366.2 $433.0 $496.6 $563.5 $632.1 $694.5 $758.9 $825.5 Gross profit............ 78.2 101.2 122.4 145.4 167.6 190.3 213.5 234.3 255.8 277.7 EBITDA.................. 35.3 45.7 56.7 68.6 81.5 95.3 109.4 121.0 132.7 144.5 EBIT.................... 25.0 31.9 40.9 52.4 64.3 76.7 89.3 100.4 112.7 123.9 Net income.............. NA 2.4 7.6 14.4 21.9 30.3 38.7 49.2 61.4 68.8
Prior Public Offering. On May 7, 1998 Carey International made an underwritten public offering of 1,450,000 Shares (including underwriters' option shares) at a price to the public of $22.00 per Share and received aggregate proceeds from the offering, net of underwriting discount, of $30,145,500. Certain Other Information. Except as set forth in this Offer to Purchase, neither Carey International, any of its affiliates nor, to the best knowledge of Carey International, any of the persons listed on Schedule I, or any associate or majority owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any Shares, and neither Carey International, nor, to the best of knowledge of Carey International, any of the persons or entities referred to above, or any of the respective executive officers, directors or subsidiaries of any of the foregoing, has effected any transaction in the Shares during the past 60 days. Except as set forth in this Offer to Purchase, neither Carey International, any of its affiliates nor, to the best knowledge of Carey International, any of the persons listed on Schedule I, has any contracts, arrangements, understandings or relationships with any other person or entity with respect to any securities of Carey International, including, but not limited to, any contract, arrangement understanding or relationship concerning the transfer or the voting of any securities of Carey International, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, neither Carey International, any of its affiliates, nor, to the best knowledge of Carey International, any of the persons listed on Schedule I, has had, since the second fiscal year preceding the date of this Offer to Purchase, any business relationships or transactions with Carey International or any of its executive officers, directors or affiliates that would be required to be reported under the rules of the Commission. Except as set forth in this Offer to Purchase, since the second fiscal year preceding the date of this Offer to Purchase there have been no contracts, negotiations or transactions between Carey International, any of its affiliates or, to the best knowledge of Carey International, any of the persons listed on Schedule I, and Carey International or its affiliates concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors or a sale or other transfer of a material amount of assets. During the last five years, neither Carey International, any of its affiliates nor, to the best knowledge of Carey International, any of the persons listed on Schedule I hereto, have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or 63 administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Certain information concerning the directors, executive officers and certain stockholders of Carey International is set forth in Schedule I hereto. Available Information. Carey International is subject to the informational filing requirements of the Exchange Act and is required to file reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information as of particular dates concerning Carey International's directors and officers, their remuneration, options granted to them, the principal holders of Carey International's securities and any material interests of such persons in transactions with Carey International is required to be disclosed in certain reports filed with the Commission and proxy statements distributed to Carey International's stockholders and filed with the Commission. These reports, proxy statements and other information should be available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of this material may also be obtained by mail, upon payment of the Commission's customary fees, from the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a website on the internet at http://www.sec.gov that contains reports, proxy statements and other information relating to Carey International which have been filed via the Commission's EDGAR System. 8. Certain Information Concerning Chartwell, Holdings, Parent and Acquisition Company. Acquisition Company is a Delaware corporation and each of Parent, VIP Holdings, LLC, VIP Holdings II, LLC and VIP Holdings III, LLC is a Delaware limited liability company. Each such entity was organized in connection with the Offer and Merger and has not carried on any significant activities other than in connection with the Offer and Merger. Until immediately prior to the time Acquisition Company purchases Shares pursuant to the Offer, it is not anticipated that any of Acquisition Company, Parent or Holdings will have any significant assets or liabilities or engage in any significant activities other those incident to its formation and capitalization and the transactions contemplated by the Offer and the Merger. Chartwell is a Delaware limited liability company that is an advisor to, and manager of, private equity funds which invest in growth financings and buyouts of middle market companies. The principal offices of Chartwell, Acquisition Company, Parent and Holdings are located at 717 Fifth Avenue, 23rd Floor, New York, New York 10022. The telephone number of Chartwell, Acquisition Company, Parent and Holdings at such location is (212) 521-5500. Except as set forth in this Offer to Purchase, neither Chartwell, Acquisition Company, Parent, Holdings nor, to the best knowledge of Chartwell, Acquisition Company, Parent and Holdings, any of the persons listed on Schedule II, or any associate or majority owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any Shares, and neither Chartwell, Acquisition Company, Parent, Holdings nor, to the best of knowledge of Chartwell, Acquisition Company, Parent and Holdings any of the persons or entities referred to above, or any of the respective executive officers, directors or subsidiaries of any of the foregoing, has effected any transaction in the Shares during the past 60 days. Except as set forth in this Offer to Purchase, neither Chartwell, Acquisition Company, Parent nor Holdings has any contracts, arrangements, understandings or relationships with any other person or entity with respect to any securities of Carey International, including, but not limited to, any contract, arrangement understanding or relationship concerning the transfer or the voting of any securities of Carey International, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. 64 Except as set forth in this Offer to Purchase, neither Chartwell, Acquisition Company, Parent, Holdings, any of their affiliates, nor, to the best knowledge of Chartwell, Acquisition Company, Parent and Holdings, any of the persons listed on Schedule II, has had, since the second fiscal year preceding the date of this Offer to Purchase, any business relationships or transactions with Carey International or any of its executive officers, directors or affiliates that would be required to be reported under the rules of the Commission. Except as set forth in this Offer to Purchase, since the second fiscal year preceding the date of this Offer to Purchase there have been no contracts, negotiations or transactions between Chartwell, Acquisition Company, Parent and Holdings, any of their affiliates or, to the best knowledge of Chartwell, Acquisition Company, Parent and Holdings, any of the persons listed on Schedule II, and Carey International or its affiliates concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors or a sale or other transfer of a material amount of assets. During the last five years, neither Chartwell, Acquisition Company, Parent, Holdings nor, to the best knowledge of Chartwell, Acquisition Company, Parent and Holdings, any of the persons listed on Schedule II hereto, have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Certain information concerning the directors and executive officers of Chartwell, Holdings, Parent and Acquisition Company is set forth in Schedule II hereto. Available Information. Each of Chartwell, Acquisition Company, Parent and Holdings is a privately-held company and is generally not the subject of the information filing requirements of the Exchange Act, and is generally not required to file reports, proxy statements and other information with the Commission relating to its businesses, financial condition and other matters. However, pursuant to Rule 14d-3 under the Exchange Act, Chartwell, Acquisition Company, Parent and Holdings filed with the Commission a Schedule TO, together with exhibits, including this Offer to Purchase and the Merger Agreement, which provides certain additional information with respect to the Offer and regarding Chartwell, Acquisition Company, Parent and Holdings. The Schedule TO and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such information should also be obtainable (i) by mail, upon payment of the Commission's customary charges, by writing to the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and (ii) by accessing the Commission's website on the Internet at http://www.sec.gov. 9. Certain Information Concerning Ford. Ford is a Delaware corporation that designs and manufactures cars, trucks and automotive components, and sells them throughout the world. The principal offices of Ford are located at One American Road, Dearborn, Michigan 48126. The telephone number of Ford at such location is (313) 322- 3000. Except as set forth in this Offer to Purchase, neither Ford nor, to the best knowledge of Ford, any of the persons listed on Schedule III, or any associate or majority owned subsidiary of any of the foregoing, beneficially owns or has a right to acquire any Shares, and neither Ford nor, to the best of knowledge of Ford, any of the persons or entities referred to above, or any of the respective executive officers, directors or subsidiaries of any of the foregoing, has effected any transaction in the Shares during the past 60 days. 65 John L. Thorton, a member of the Board of Directors of Ford, is the President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. ("Goldman Sachs"). During the period May 1, 2000 through July 26, 2000, Goldman Sachs' records indicate that in the ordinary course of business, as broker/dealer on behalf of its clients, or for purposes of its own principal activities, it has bought and sold Shares. During this period, as broker/dealer on behalf of its clients, it bought approximately 63,418 Shares at prices ranging from $8.33 per Share to $14.626 per Share, and sold approximately 26,600 Shares at prices ranging from $7.312 per Share to $18.00 per Share. During this period, for purposes of its own principal activities (for example, marketmaking or hedging) it has bought approximately 3,027 Shares at prices ranging from $9.06 per Share to $14.76 per Share, and sold approximately 3,027 Shares at prices ranging from $9.03 per Share to $14.56 per Share. Except as set forth in this Offer to Purchase, Ford has not had any contracts, arrangements, understandings or relationships with any other person or entity with respect to any securities of Carey International, including, but not limited to, any contract, arrangement understanding or relationship concerning the transfer or the voting of any securities of Carey International, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Ford and Carey International have had a multi-faceted business relationship for many years involving joint marketing efforts, vehicle purchases, vehicle financing and leasing, and vehicle customization. Ford and Carey International are parties to a joint marketing and advertising agreement pursuant to which Ford reimburses Carey International for joint marketing and advertising expenses ranging annually between approximately $550,000 and $1.3 million and Carey International places Lincoln products in its advertisements. Ford also provides to Carey International two demonstrator vehicles per year to promote Ford products. Carey International's approximate annual benefit from each vehicle is approximately $15,000. In addition, Ford hosts a dinner during Carey International's annual meeting for its licensees at an annual cost of approximately $20,000. Carey International purchased through the Ford dealer network approximately 400 vehicles in the 1999 model year and approximately 340 vehicles to date in the 2000 model year at an average price per vehicle of approximately $39,000. Carey International's independent operators, licensees and affiliates, which own and operate a majority of the vehicles in the Carey International network, also purchase vehicles through the Ford dealer network. Many of these vehicle purchases are made under Ford incentive programs that are made available to Carey International and other chauffeured vehicle service providers. Many of the vehicles purchased by Carey International and its licensees, affiliates and independent operators are a special edition of the Lincoln Town Car that Ford developed for Carey International as a part of Ford's Mass Customization Program. CLI Fleet, Inc. ("CLI Fleet") is a privately-held finance company formed for the purpose of providing financing to the chauffeured vehicle service industry. Many of Carey International's independent operators obtain vehicle leasing from CLI Fleet. Ford Credit provides financing to CLI Fleet through a $30 million wholesale lease line of credit. CLI Fleet currently has approximately $17 million in outstanding loans to Ford Motor Credit Company, a wholly-owned subsidiary of Ford, under this program. Ford Credit also has approximately $4.1 million in mortgage loans outstanding to CLI Fleet to cover three parcels of real property owned by CLI Fleet, which CLI Fleet leases to Carey International. Carey International holds non-voting shares of CLI Fleet preferred stock. Under the terms of an agreement with CLI Fleet, Carey International has an exclusive option to purchase all the outstanding shares of common stock of CLI Fleet for a purchase price equal to the greater of $187,500 or CLI Fleet's liquidating value as determined by an independent appraisal. Except as set forth in this Offer to Purchase, neither Ford, any of its affiliates, nor, to the best knowledge of Ford, any of the persons listed on Schedule III, has had, since the second fiscal year preceding the date of this Offer to Purchase, any business relationships or transactions with Carey International or any of its executive officers, directors or affiliates that would be required to be reported under the rules of the Commission. Except as set forth in this Offer to Purchase, since the second fiscal year preceding the date of this Offer to Purchase there have been no contracts, negotiations or transactions between Ford, any of its affiliates or, to the best knowledge of Ford, any of its persons listed on Schedule III, and Carey International or its affiliates concerning 66 a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors or a sale or other transfer of a material amount of assets. During the last five years, neither Ford nor, to the best knowledge of Ford, any of the persons listed on Schedule III hereto, have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Certain information concerning the directors and executive officers of Ford is set forth in Schedule III hereto. Available Information. Ford is subject to the information and reporting requirements of the Exchange Act and in accordance therewith is obligated to file reports and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning Ford's directors and officers, their remuneration, stock options granted to them, the principal holders of Ford's securities, any material interests of such persons in transactions with Ford and other matters is required to be disclosed in proxy statements distributed to Ford's stockholders and filed with the Commission. Such reports, proxy statements and other information should be available for inspection at the public reference room at the Commission's offices at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies should also be obtainable (i) by mail, upon payment of the Commission's customary charges, by writing to its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and (ii) by accessing the Commission's website at http://www.sec.gov. 10. Source and Amount of Funds. The Offer is conditioned upon the Offerors receiving the Capital Contribution and the proceeds contemplated by the Financing Commitment Letters necessary to purchase all of the outstanding Shares pursuant to the Offer, to pay the Merger Consideration, to refinance approximately $35.2 million of existing indebtedness of Carey International and its subsidiaries, to purchase the securities to be sold pursuant to the Carey Purchase Agreements and to pay related fees and expenses. The total amount of funds necessary to accomplish the foregoing is expected to be approximately $255.0 million. The Offerors will obtain such funds from borrowings by Carey International under the Senior Credit Facility, the proceeds from the issuance of the Senior Sub Notes by Carey International and the Capital Contribution. See "SPECIAL FACTORS -- Financing of the Transaction" for a more complete discussion of how the Offerors intend to finance the Offer and the Merger. The margin regulations promulgated by the Board of Governors of the Federal Reserve System place restrictions on the amount of credit that may be extended for the purposes of purchasing margin stock, including if such credit is secured directly or indirectly by margin stock. The Offerors believe that the financing of the acquisition of the Shares pursuant to the Merger and the Offer will be in full compliance with the margin regulations. 11. Effect of the Offer on the Market for the Common Stock; Exchange Act Registration. Market for Shares. The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. Stock Quotation. The Shares are traded on the Nasdaq National Market. The Shares might no longer be eligible for quotation on the Nasdaq National Market if, among other things, the number of Shares publicly held were less than 750,000, their number of round lot holders of at least 100 Shares were less than 400 or the 67 aggregate market value of the publicly held Shares was less than $5.0 million. Shares held directly or indirectly by any director or officer of Carey International and by any person who is the beneficial owner of more than 10% of the Shares outstanding are not considered to be publicly held for this purpose. If the Shares were no longer eligible for inclusion in the Nasdaq National Market, they may nevertheless continue to be included in the Nasdaq Stock Market unless, among other things, the public float was less than 500,000 Shares, there were fewer than 300 round lot holders of the Shares or the market value of the public float was less than $1.0 million. According to Carey International, as of July 24, 2000, there were 435 holders of record of Shares (not including beneficial holders of Shares in street name), and there were 9,848,729 Shares outstanding. If the Shares were to cease to be quoted on the Nasdaq National Market, the market for the Shares could be adversely affected. It is possible that the Shares would be traded or quoted on other securities exchanges or in the over- the-counter market, and that price quotations would be reported by such exchanges, or through other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of stockholders of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act, as described below, and other factors. Exchange Act Registration. The Shares are currently registered under the Exchange Act. Such registration under the Exchange Act may be terminated upon application of Carey International to the Commission if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration under the Exchange Act would substantially reduce the information required to be furnished by Carey International to its stockholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to Carey International, such as the short- swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders' meetings, the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of Carey International and persons holding "restricted securities" of Carey International to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act may be impaired. Carey International intends to apply for termination of registration of the Common Stock under the Exchange Act as soon after the consummation of the Offer as the requirements for such termination are met. If registration of the Shares is not terminated prior to the Merger, then the Shares will be delisted from all stock exchanges and the registration of the Shares under the Exchange Act will be terminated following the consummation of the Merger. Margin Regulations. The Shares are currently "margin securities," as such term is defined under the regulations of the Federal Reserve Board, which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, the Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. In any event, the Shares will cease to be "margin securities" if registration of the Shares under the Exchange Act is terminated. 12. Conditions to the Offer. Notwithstanding any other provision of the Offer, and subject to the provisions of the Merger Agreement, the Offerors are not required to accept for payment or, subject to any applicable rules and regulations of the Commission (including those relating to the obligation of the Offerors to pay for, or return tendered Shares promptly after termination or withdrawal of the Offer), pay for any Shares pursuant to the Offer, and the Offerors may delay their acceptance for payment of or, subject to the restriction referred to above, payment for, any tendered Shares, and, subject to the provisions of the Merger Agreement, the Offerors may amend or terminate the Offer and not accept for payment any tendered Shares, if: (a) any applicable waiting period or approval under 68 the HSR Act and any applicable foreign antitrust law, regulation or rule has not expired or been terminated or obtained, (b) the Minimum Condition has not been satisfied, (c) the Offerors have not received or do not have available the proceeds of the financing contemplated by the Financing Commitment Letters or others financing which is on terms substantially similar to those set forth in the Financing Commitment Letters, including but not limited to funds sufficient to: (i) purchase the Shares tendered pursuant to the Offer, (ii) pay the Option Exercise Agreements, (iii) pay the Merger Consideration pursuant to the Merger, (iv) repay Carey International's existing outstanding indebtedness and (v) pay the fees and expenses required to be paid in connection with the transactions contemplated by the Merger Agreement, (d) after consultation with a nationally recognized law firm, either of the Offerors is not reasonably satisfied that the Merger Agreement is and the Option Exercise Agreements are then in full force and effect, or (e) at any time on or after the date of the Merger Agreement and prior to the acceptance of Shares for payment pursuant to the Offer, any of the following events shall occur: (a) there shall be instituted or pending or threatened by any governmental entity any suit, action or proceeding which (i) seeks to impose material limitations on the ability of the Offerors to pay for or purchase some or all of the Shares pursuant to the Offer or the Merger or renders either of the Offerors unable to accept for payment, pay for or purchase some or all of the Shares pursuant to the Offer or the Merger, (ii) seeks to restrain or prohibit the making or consummation of the Offer or the Merger or the performance of any of the transactions contemplated by the Merger Agreement, (iii) seeks to obtain from any Offeror any damages (including damages against any Offeror's directors or officers for which they may seek indemnification from a Offeror that would reasonably be expected to have a Company Material Adverse Effect, or (iv) challenges the acquisition by the Offerors of any Shares pursuant to the Offer; (b) there shall have been any statute, rule, regulation, judgment, order or injunction promulgated, entered, enforced, enacted or issued by any governmental entity applicable to the Offer or the Merger other than the application of the waiting period provision of the HSR Act to the Offer or the Merger which is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (iv) of paragraph (a) above; (c) the Merger Agreement shall have been terminated in accordance with its terms; (d) the representations and warranties of Carey International set forth in the Merger Agreement shall not be true and accurate in all respects, in each instance as of the date of consummation of the Offer as though made on or as of such date (except for those representations and warranties that address matters only as of a particular date or only with respect to a specific period of time which need only be true and accurate as of such date or with respect to such period), and the effect thereof, either individually or in the aggregate, is a Company Material Adverse Effect, or Carey International shall have breached or failed to perform or comply in any material respect with any obligation, agreement or covenant required by the Merger Agreement to be performed or complied with by it, and, with respect to any such breach or failure to perform that is reasonably capable of being remedied within the time periods set forth below, the breach or failure to perform is not remedied prior to the earlier of (x) ten days after Parent has furnished Carey International with written notice of such breach or failure to perform or (y) two business days prior to the date on which the Offer expires (as it may be extended in accordance with the Merger Agreement); (e) the Offerors shall not have received by the Expiration Date such certificates of officers of Carey International and/or opinions of nationally recognized valuation and/or appraisal firms (in form and substance reasonably satisfactory to the Offerors) as their respective Boards may reasonably require, substantially to the effect that the value of Carey International's assets shall exceed its liabilities following the consummation of the Offer and the Merger and that the Offer and the Merger shall not impair Carey International's capital within the meaning of Section 160 of the DGCL or impair the ability of Carey International to pay its obligations as they come due; (f) there shall have occurred (i) any general suspension of trading in securities on the New York Stock Exchange, which suspension or limitation shall continue for at least three consecutive trading days, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States 69 (whether or not mandatory), (iii) a commencement of a war, armed hostilities or other international or national calamity directly involving the United States that would reasonably be expected to have a material adverse impact on the capital markets of the United States, (iv) any limitation (whether or not mandatory) by any United States governmental entity on the extension of credit generally by banks or other lending institutions, which limitation would materially affect the ability of the banks named in the Financing Commitment Letters to provide financing on terms substantially similar to those set forth in the Financing Commitment Letters, and (v) a decline of at least 30% in the Standard & Poor's 500 Index from the close of business on the date of the Merger Agreement; or (g) the failure of Parent to make the Capital Contribution to Acquisition Company. which, in the judgment of either Offeror, subject to the terms of the Merger Agreement and regardless of the circumstances giving rise to any such condition, makes it inadvisable to proceed with the Offer or with such acceptance for payment, purchase of, or payment for Shares. These conditions are for the sole benefit of the Offerors, and, subject to the provisions of the Merger Agreement, may be waived by them at any time. The failure by the Offerors at any time to exercise any of the foregoing rights shall not be deemed a waiver of any right, and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. 13. Certain Legal Matters; Regulatory Approvals. General. Except as otherwise disclosed herein, the Offerors are not aware of (i) any license or regulatory permit that appears to be material to the business of Carey International and its subsidiaries, taken as a whole, that might be adversely affected by the acquisition of Shares by the Offerors pursuant to the Offer or the Merger or otherwise or (ii) any material approval or other action by any governmental, administrative or regulatory agency or authority, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Offerors as contemplated herein. Should any such approval or other action be required, the Offerors currently contemplate that they would seek such approval or action. The Offerors' obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See "THE TENDER OFFER -- Conditions to the Offer." Although, except as described in this Offer to Purchase, the Offerors do not currently intend to delay the acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or action, if needed, would be obtained or would be obtained without substantial conditions, that adverse consequences might not result to the business of Carey International or that certain parts of the businesses of Carey International might not have to be disposed of in the event that such approvals were not obtained or any other actions were not taken such approval or other action. If certain types of adverse action are taken with respect to the matters discussed below, the Offerors could decline to accept for payment, or pay for, any Shares tendered. See "THE TENDER OFFER -- Conditions to the Offer" for certain conditions to the Offer, including conditions with respect to government actions. State Takeover Laws. Carey International is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (generally a person who owns or has the right to acquire 15% or more of a corporation's outstanding voting stock, or an affiliate or associate thereof) from engaging in a "business combination" (defined to include mergers and certain other transactions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder unless, among other things, prior to the date the interested stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction in which the interested stockholder became an interested stockholder. Carey International has represented to Parent and Acquisition Company in the Merger Agreement that the Board has taken all necessary action so that the restrictions contained in Section 203 of the DGCL applicable to a "business combination" will not apply to the execution, delivery or performance of the Merger Agreement, the Offer, the Merger or the transactions contemplated by the Merger Agreement. 70 A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. Mite Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquirer from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of holders in the state and were incorporated there. Carey International, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Offerors do not believe that any state takeover statutes apply to the Offer. Neither Carey International nor the Acquisition Company has currently complied with any state takeover statute or regulation. The Offerors reserve the right to challenge the applicability or validity of any state law purportedly applicable to the Offer or the Merger and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Merger is intended as a waiver of such right. In the event it is asserted that one or more state takeover laws is applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Offerors might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Offerors might be unable to accept for payment any Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer and the Merger. In such case, the Offerors may not be obligated to accept for payment any Shares tendered. See "THE TENDER OFFER -- Conditions of the Offer." Antitrust. Under the HSR Act, and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain transactions may not be consummated unless certain information has been furnished to the DOJ and the FTC and certain waiting period requirements have been satisfied. The Offerors have concluded that a filing under the HSR Act and the rules promulgated thereunder by the FTC is not required for the Transaction. In the event that a filing is required to be made under the HSR Act and the rules promulgated thereunder by the FTC, the Offerors would promptly file Notification and Report Forms under the HSR Act. The waiting period under the HSR Act, with respect to Shares acquired pursuant to the Offer, if applicable, will expire at 11:59 p.m., New York City time, on the fifteenth day after the date on which the forms are filed, unless early termination of the waiting period is granted. The DOJ or the FTC may extend the fifteen day waiting period by requesting additional information or documentary material from the Offerors. If such a request is made, such waiting period will expire at 11:59 p.m., New York City time, on the tenth day after substantial compliance with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Acquisition Company. In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the DOJ or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. If a filing under the HSR Act is required, the Offerors will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. The FTC and the DOJ routinely review the legality under the HSR Act of transactions such as the proposed acquisition of Shares by the Offerors. Even if a filing is not required under the HSR Act, at any time before or after the purchase by the Offerors of Shares, either of the DOJ or the FTC could take such action under the federal antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the 71 purchase of Shares pursuant to the Offer or seeking the divestiture of Shares purchased by the Offerors or the divestiture of substantial assets of Carey International. Private parties and state governments may also bring legal action under certain circumstances. Although the Offerors believe that the acquisition of Shares pursuant to the Offer would not violate the HSR Act or other antitrust statutes, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, what the outcome will be. See "THE TENDER OFFER -- Conditions to the Offer" for certain conditions to the Offer, including conditions with respect to litigation and certain government actions. 14. Fees and Expenses. Except as otherwise provided herein, all fees and expenses incurred in connection with the Offer will be paid by the party incurring such fees and expenses, except that each of Carey International and Parent will pay for one- half of (i) any fee payable pursuant to the HSR Act, and (ii) all costs and expenses related to the filing, printing and mailing of this Offer to Purchase, the Schedule TO and any proxy statement or information statement required to be filed with the Commission to consummate the Merger. See "SPECIAL FACTORS -- Fees and Expenses" for a more complete discussion and listing of the fees and expenses incurred by the Offerors with respect to the Offer and the Merger. 15. Miscellaneous. The Offerors are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If the Offerors become aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Offerors will make a good faith effort to comply with such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Offerors cannot comply with any such state statute, the Offer will not be made to (and tenders will not be accepted from or on behalf of) the stockholders in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Offerors by one or more registered brokers or dealers which are licensed under the laws of such jurisdiction. No person has been authorized to give any information or make any representation on behalf of the Offerors not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. The Offerors filed with the Commission the Schedule TO, together with exhibits, pursuant to Sections 13(e) and 14(d)(1) of the Exchange Act and Rules 13e-3 and 14d-3 promulgated thereunder, furnishing certain additional information with respect to the Offer, and may file amendments thereto. The Schedule TO and any amendments thereto, including exhibits, may be inspected at, and copies may be obtained from, the same places and in the manner set forth in "THE TENDER OFFER -- Certain Information Concerning Carey International" (except that they will not be available at the regional offices of the Commission). 72 SCHEDULE I INFORMATION CONCERNING DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN STOCKHOLDERS OF CAREY INTERNATIONAL, INC. Directors and Executive Officers The name, position with Carey International, Inc. (as used in this Schedule I, the "Company"), present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Company, together with the names, principal businesses and addresses of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Unless otherwise indicated, each individual is a United States citizen and each individual's business address is c/o Carey International, Inc., 4530 Wisconsin Avenue, N.W., Washington, DC 20016. Unless otherwise indicated, to the knowledge of the Company, no director or executive officer of the Company has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of the Company was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Name Present Principal Occupation or Employment; Material Positions Held during the past Five Years Vincent A. Wolfington.... Mr. Wolfington, a co-founder of the Company, has served as its Chairman of the Board of Directors and Chief Executive Officer since 1979. For over 25 years, Mr. Wolfington has been involved in the limousine industry and directly associated with the Carey system of licensees and affiliates. Mr. Wolfington has served as a consultant to the National Academy of Sciences Transportation Research Board, President of the National Para- transit Association and a member of the International Limousine Association. Mr. Wolfington currently is a member of the Executive Committee of the World Travel and Tourism Council, a global organization of the chief executive officers of companies engaged in all sectors of the travel and tourism industry. Don R. Dailey............ Mr. Dailey, a co-founder of the Company, has served as the President and a director of the Company since 1979. Mr. Dailey has been directly involved in the limousine business for over 30 years. Mr. Dailey has served on a number of boards and committees related to the travel industry, including the National Business Travel Association, the International Business Travel Association, the Association of Corporate Travel Executives, the National Limousine Association and the International Limousine Association (as its past President and member of its Executive Committee). Mr. Dailey is currently a member of the Travel Business Round Table, a United States organization of executive officers of companies engaged in all sectors of the travel and tourism industry. Richard A. Anderson, Jr... Mr. Anderson has served as Executive Vice President -- Sales and Marketing of the Company since July 1998. Mr. Anderson previously served as Senior Vice President of the Company from December 1988 to July 1998 and was Chief Operating Officer of Carey Limousine NY, Inc., a subsidiary of the Company, from December 1988 until August 1997. Mr. Anderson is a former Chairman of the New York Taxi and Limousine Commission's Limousine Advisory Board, a former board member of the I-1 Association of Corporate Travel Executives, and a member of the National Business Travel Association and Meeting Planners International. David H. Haedicke........ Mr. Haedicke has served as Executive Vice President and Chief Financial Officer of the Company since October 1996. From August 1996 to October 1996, he was Senior Vice President and Chief Financial Officer of Infotechnology, Inc., Hadron, Inc. and Comtex Scientific Corporation, an affiliated group of companies engaged in systems management and software development. From September 1993 to May 1996, he was Chief Financial Officer of Walcoff & Associates, Inc., a communications and information management firm. From June 1991 to September 1993, he was Chief Financial Officer and Vice President of Xsirius, Inc., a high technology research and development company. Mr. Haedicke was a partner at Ernst & Young L.L.P. from 1985 to 1991 and was an employee at that firm from 1973 to 1985. Guy C. Thomas............ Mr. Thomas has served as Executive Vice President-- Operations of the Company since 1987. Mr. Thomas has served on a number of boards and committees related to the travel industry, including the National Business Travel Association, the Greater Washington Area Passenger Traffic Association, the American Society of Association Executives, Meeting Planners International, the Association of Corporate Travel Executives, the National Limousine Association and the International Taxicab and Livery Association. Devin J. Murphy.......... Mr. Murphy has served as Senior Vice President-- Operations of the Company since May 1998. Previously, from April 1997 to May 1998, Mr. Murphy served as Senior Vice President and Chief Development Officer of the Company, and from May 1996 to April 1997 he served as Vice President -- Corporate Development of the Company. From 1988 to 1994, Mr. Murphy held sales and marketing positions at several high tech companies. Sally A. Snead........... Ms. Snead has served as the Company's Senior Vice President -- Information Systems since June 1996. From June 1993 to June 1996, she was Executive Vice President and General Manager of Carey Limousine L.A., Inc. From January 1987 to June 1993, she was Executive Vice President and General Manager of Carey Limousine DC, Inc. She is a member of Executive Women International, the National Business Travel Association, the Association of Corporate Travel Executives and the National Limousine Association. Eugene S. Willard........ Mr. Willard has served as the Company's Senior Vice President --Technology, Strategy and Planning since February 1999. Mr. Willard has over 19 years experience in systems development and strategic systems planning. From 1985 to February 1999, Mr. Willard held senior level positions in systems development and strategic planning in the areas of reservations, revenue management and loyalty program marketing systems for Marriot International. John C. Wintle........... Mr. Wintle has served as the Company's Senior Vice President--Europe since May 1996 and as Executive Vice President and Managing Director of Carey U.K. Ltd., a subsidiary of the Company, since March 1996. From I-2 1982 to February 1996, Mr. Wintle served Savoy Hotel PLC ("Savoy") and its affiliates, including Camelot Barthropp Ltd. ("Camelot"), in various capacities. From March 1993 to February 1996, Mr. Wintle was Executive Vice Chairman of Camelot, which was acquired by Carey U.K. Ltd. in February 1996. Previously, from 1989 to 1993, Mr. Wintle was General Manager, Restaurant Division, of several entities affiliated with Savoy. From 1982 to 1989, Mr. Wintle had been Group Financial Controller at Savoy. Mr. Wintle is a citizen of the United Kingdom. Mr. Wintle's business address is c/o Carey UK, 11-15 Headfort Place, London, United Kingdom. Robert W. Cox............ Mr. Cox has served as a director of the Company since 1995. From 1969 until his retirement in 1994, Mr. Cox was a partner in the New York and Chicago offices of the law firm Baker & McKenzie. From 1984 to 1992, Mr. Cox was Chairman of the Executive Committee and Managing Partner of the firm, and from 1993 to 1994, Mr. Cox was Chairman of the Policy Committee. Mr. Cox is Chairman Emeritus of Baker & McKenzie. Mr. Cox currently is a director of Hon Industries, Inc. and Homebase, Inc. Dennis I. Meyer.......... Mr. Meyer has served as a director of the Company since June 1998. Mr. Meyer has been a partner in the law firm of Baker & McKenzie since 1965. Mr. Meyer has previously served as Chairman of the Executive Committee and Managing Partner of Baker & McKenzie. Mr. Meyer serves as a director of Oakwood Homes Corporation as well as United Financial Banking Companies, Inc., Jordan Kitt's Music, Inc. and Daily Express, Inc. Mr. Meyer's business address is c/o Baker & McKenzie, 815 Connecticut Avenue, N.W., Suite 900, Washington, DC 20006. Nicholas J. St. George... Mr. St. George has served as a director of the Company since June 1997. Currently, Mr. St. George serves as a consultant to Oakwood Homes Corporation, a manufacturer and retailer of manufactured homes. From February 1979 to September 1999, Mr. St. George served as Chairman and Chief Executive Officer of Oakwood Homes Corporation. Mr. St. George serves as a director of Legg Mason, Inc. Joseph V. Vittoria....... Mr. Vittoria has served as a director of the Company since June 1998. Mr. Vittoria has been the Chairman and Chief Executive Officer of Travel Services International, Inc. ("Travel Services") since Travel Services completed its initial public offering in July 1997. From September 1987 to February 1997, Mr. Vittoria was the Chairman and Chief Executive Officer of Avis, Inc. ("Avis"), a multinational auto rental company where he was employed for over 26 years. Mr. Vittoria was responsible for the purchase of Avis by its employees in 1987 by creating one of the world's largest Employee Stock Ownership Plans. He was a founding member of the World Travel and Tourism Council. Mr. Vittoria serves as a director of Sirius Satellite Radio, Inc., Transmedia Asia, Puradyn Filter Technologies, Inc., ResortQuest International, Inc. and various non-profit associations. Mr. Vittoria's business address is c/o Travel Services International, Inc., 220 Congress Park Drive, Del Ray Beach, Florida 33445. I-3 Beneficial Ownership of Shares. The following table sets forth certain information known to the Company with respect to beneficial ownership of Shares as of July 24, 2000 by (i) each director of the Company and (ii) each executive officer of the Company. Except as otherwise noted, the persons named in this table have sole voting and investment power with respect to all Shares.
Shares Beneficially Owned(1) --------------- Name of Beneficial Owner Number Percent ------------------------ ------- ------- Vincent A. Wolfington (2).................................... 566,069 5.5 Don R. Dailey (3)............................................ 555,176 5.4 Richard A. Anderson, Jr. (4)................................. 41,286 * David H. Haedicke (5)........................................ 169,600 1.7 Guy C. Thomas (6)............................................ 141,782 1.4 Devin J. Murphy (7).......................................... 75,200 * Sally A. Snead (8)........................................... 52,917 * Eugene S. Willard (5)........................................ 15,000 * John C. Wintle (5)........................................... 16,967 * Robert W. Cox (5)............................................ 24,400 * Dennis I. Meyer (9).......................................... 9,000 * Nicholas J. St. George (10).................................. 16,500 * Joseph V. Vittoria (5)....................................... 4,000 *
- - -------- * Less than 1% (1) Percentages in the table are based upon 9,848,729 Shares outstanding as of July 24, 2000. Except as reflected in the footnotes to this table, Shares beneficially owned consist of outstanding Shares owned by the indicated person or by that person for the benefit of minor children and Shares that the indicated person has the right to acquire through the exercise of Company Options. (2) Includes 465,706 Shares that may be acquired upon the exercise of Company Options. Also includes (i) 1,183 Shares currently held by a company controlled by Mr. Wolfington, (ii) 1,560 Shares held by a limited partnership which are attributable to Mr. Wolfington's wife (780 Shares) and one of his children (780 Shares) and (iii) 430 Shares held by one of his children. Excludes Shares held by Yerac Associates, L.P. ("Yerac"), a limited partnership of which Mr. Wolfington is a limited partner, with respect to which Shares Mr. Wolfington has no voting or investment power. (3) Includes 415,707 Shares that may be acquired upon the exercise of Company Options. (4) Includes 30,386 Shares that may be acquired upon the exercise of Company Options. Also includes (i) 600 Shares held by Mr. Anderson's wife as to which Mr. Anderson disclaims beneficial ownership and (ii) and 1,500 Shares held by a trust of which Mr. Anderson is a beneficiary. (5) Represents Shares that may be acquired upon the exercise of Company Options. (6) Includes 99,000 Shares that may be acquired upon the exercise of Company Options. (7) Includes 67,900 Shares that may be acquired upon the exercise of Company Options. (8) Includes 51,197 Shares that may be acquired upon the exercise of Company Options. (9) Includes 4,000 Shares that may be acquired upon the exercise of Company Options. Also includes 5,000 Shares held by Mr. Meyer's wife as to which Mr. Meyer disclaims beneficial ownership. (10) Includes 11,500 Shares that may be acquired upon the exercise of Company Options. Also includes 5,000 Shares held by Mr. St. George's wife as to which Mr. St. George disclaims beneficial ownership. I-4 SCHEDULE II MEMBERS OF THE BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS OF VIP HOLDINGS, LLC, VIP HOLDINGS II, LLC VIP HOLDINGS III, LLC, LIMOUSINE HOLDINGS, LLC, ALUWILL ACQUISITION CORP. AND CHARTWELL INVESTMENTS II LLC Directors and Executive Officers The name, business address, position with each of Holdings, Parent, Acquisition Company and Chartwell, present principal occupation or employment and five-year employment history of each of the directors and executive officers of Holdings, Parent, Acquisition Company and Chartwell, together with the names, principal businesses and addresses of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Each individual is a United States citizen and each individual's business address is 717 Fifth Avenue, 23rd Floor, New York, New York 10022. To the knowledge of Holdings, Parent, Acquisition Company and Chartwell, no director or executive officer of Holdings, Parent, Acquisition Company or Chartwell has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of Holdings, Parent, Acquisition Company or Chartwell was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Name Present Principal Occupation or Employment; Material Positions Held during the past Five Years Todd R. Berman........... Director and President of Acquisition Company and a Manager of each of Holdings and Parent. Mr. Berman is a co-founder and President of Chartwell, an advisor to, and manager of, private equity funds which invest in growth financings and buyouts of middle market companies. Mr. Berman has been with Chartwell, Chartwell Investments Inc. or its predecessor since 1992. He received his A.B. from Brown University and an M.B.A. from Columbia University Graduate School of Business. Michael S. Shein......... Director and Vice President, Secretary and Treasurer of Acquisition Company and a Manager of each of Holdings and Parent. Mr. Shein is a Managing Director and co-founder of Chartwell. Mr. Shein has been with Chartwell, Chartwell Investments Inc. or its predecessor since 1992. Mr. Shein received a B.S. summa cum laude from The Wharton School at the University of Pennsylvania. Jeffrey R. Larsen........ Vice President and Assistant Secretary of Acquisition Company. Mr. Larsen has been an Associate with Chartwell since September 1999. From July 1997 to July 1999, Mr. Larsen was an Analyst in the Leveraged Finance Group of the Investment Banking Division of Goldman, Sachs & Co., which has a business address of 85 Broad Street, New York, New York 10004. Mr. Larsen received an A.B. magna cum laude in Economics from Princeton University. Beneficial Ownership of Shares Each of Mr. Berman and Mr. Shein, as managers of Holdings and Parent and directors of Acquisition Company may be deemed the beneficial owners of the securities of Carey International which Acquisition Company has the right to purchase pursuant to the terms of the Carey Purchase Agreements. Acquisition II-1 Company has the right and obligation to acquire, subject to certain conditions, 90% of the outstanding shares of common stock of Carey International after giving effect to the exercise and conversion of certain derivative securities of Carey International in accordance with the terms of the Carey Purchase Agreements. The address of each of Mr. Berman, Mr. Shein, Mr. Larsen, Chartwell, Holdings, Parent and Acquisition Company is c/o Chartwell Investments II LLC, 717 Fifth Avenue, 23rd Floor, New York, New York 10022. II-2 SCHEDULE III INFORMATION CONCERNING DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN STOCKHOLDERS OF FORD MOTOR COMPANY Directors and Executive Officers The name, position with Ford Motor Company (as used in this Schedule III, the "Company"), present principal occupation or employment and five-year employment history of each of the directors and executive officers of the Company, together with the names of any corporations or other organizations in which such principal occupations are conducted, are set forth below. Unless otherwise indicated, each individual is a United States citizen and each individual's business address is c/o Ford Motor Company, One American Road, Dearborn, Michigan. Unless otherwise indicated, to the knowledge of the Company, no director or executive officer of the Company has been convicted in a criminal proceeding during the last five years (excluding traffic violations or similar misdemeanors) and no director or executive officer of the Company was a party to any judicial or administrative proceeding during the last five years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Directors: Name Present Principal Occupation or Employment; Material Positions Held during the past Five Years Jacques A. Nasser........ Mr. Nasser serves as the President and Chief Executive Officer of Ford Motor Company. Prior to his election as President and CEO of the Company effective January 1, 1999, Mr. Nasser was Executive Vice President, President -- Ford Automotive Operations. Before heading Ford Automotive Operations, Mr. Nasser was Group Vice President -- Product Development from 1994 to 1996. He was elected a Company Vice President in 1993 as the Chairman of Ford of Europe. From 1990 to 1993, Mr. Nasser served as President of Ford of Australia. He has held a number of other global positions in Asia-Pacific and South America since joining the Company in 1968. John R. H. Bond.......... Mr. Bond has served as a Director of Ford Motor Company since July 12, 2000. Mr. Bond is currently Group Chairman of HSBC Holdings plc. Mr. Bond joined HSBC in 1961 and served as Executive Director of The Hongkong and Shanghai Banking Corp. from 1988 to 1992. He was President and Chief Executive Officer of Marine Midland Bank Inc., now known as HSBC USA Inc., from 1991 to 1993. He also served as Group Chief Executive at HSBC from 1993 to 1998, and has been Group Chairman since 1998. Mr. Bond is also Chairman of the Institute of International Finance, a member of the Banking Advisory Group of the International Finance Corporation, and a fellow of the Chartered Institute of Bankers. In 1999, Mr. Bond was knighted for his services to the banking industry. Mr. Bond is a citizen of Great Britain. Michael D. Dingman....... Mr. Dingman has been a Director of Ford Motor Company since 1981. Mr. Dingman currently is the President and CEO of Shipston Group Ltd., a diversified international holding company. In addition, he is the former Chairman of the Board and a current director of Fisher Scientific III-1 International, a leader in serving science and providing products and services to research, health care, industry, education, and governments worldwide. Mr. Dingman is also a Director of Teekay Shipping Corporation. Mr. Dingman is a citizen of Ireland. Edsel B. Ford II......... Mr. Ford has been a Director of Ford Motor Company since 1988. Mr. Ford is the Former Vice President of Ford Motor Company and Former Chief Operating Officer of Ford Motor Credit Company. Mr. Ford retired as President and Chief Operating Officer of Ford Motor Credit Company in 1998 having served in that capacity since May 1991. Mr. Ford was also a Vice President of the Company from 1993 through the end of 1998. Prior to 1991, he held numerous senior executive positions at Ford and Lincoln-Mercury, both domestic and abroad. Mr. Ford is also a Director of the Federal Reserve Bank of Chicago, Detroit Branch and The Skillman Foundation. William Clay Ford........ Mr. Ford has been a Director of Ford Motor Company since 1948. Mr. Ford is the Retired Chairman of the Finance Committee of Ford Motor Company. Mr. Ford served as Chairman of the Finance Committee of Ford's Board of Directors from November 1987 to January 1995. He was elected a Vice Chairman of Ford in 1980, retiring from that position in 1989. He also owns and is President of The Detroit Lions, Inc. William Clay Ford, Jr.... Mr. Ford serves as the Chairman of the Board of Directors, Chairman of the Environmental and Public Policy Committee, Chairman of the Finance Committee and Chairman of the Organization Review and Nominating Committee of Ford Motor Company. Mr. Ford has held a number of management positions within Ford, including Vice President -- Commercial Truck Vehicle Center. Effective January 1, 1995, Mr. Ford became Chairman of the Finance Committee, and effective January 1, 1999, he was elected Chairman of the Board of Directors of the Company. Mr. Ford also is Vice Chairman of The Detroit Lions, Inc., and Chairman of the Board of Trustees of the Henry Ford Museum and Greenfield Village. He also is a Vice Chairman of Detroit Renaissance Foundation and a Trustee of Conservation International Foundation. Irvine O. Hockaday, Jr... Mr. Hockaday has been a Director of Ford Motor Company since 1987. Mr. Hockaday has been President and Chief Executive Officer of Hallmark Cards, Inc. in Kansas City, Missouri since January 1, 1986, and a Director since 1978. Mr. Hockaday also serves as a Director with Dow Jones, Inc.; Sprint Corporation; and UtiliCorp United, Inc. Marie-Josee Kravis....... Mrs. Kravis has been a Director of Ford Motor Company since 1995. Mrs. Kravis was appointed a Senior Fellow, Hudson Institute Inc., Indianapolis, Indiana, in 1994. Prior to that time, and since 1978, she served as Executive Director of the Hudson Institute of Canada. She also serves as a Director of the Canadian Imperial Bank of Commerce; Hasbro Inc.; Hollinger International Inc.; StarMedia Network, Inc.; The Seagram Co. Ltd.; and Compagnie UniMedia. Mrs. Kravis is a citizen of Switzerland and Canada. Ellen R. Marram.......... Ms. Marram has been a Director of Ford Motor Company since 1988. She previously served as President and CEO of Tropicana Beverage Group III-2 from September 1997 until November 1998 and had previously served as President of the Group since joining Seagram in 1993. She also served as Executive Vice President of The Seagram Company Ltd. and Joseph E. Seagram & Sons, Inc. She served as President and CEO of Nabisco Biscuit Company and Senior Vice President of the Nabisco Foods Group from June 1988 until April 1993. She is also a Director of The New York Times Company. Homer A. Neal............ Dr. Neal has served as a Director of Ford Motor Company since 1997. Dr. Neal is the Director of the ATLAS Project, Professor of Physics, and Interim President Emeritus at the University of Michigan. He served as Interim President of the University of Michigan from July 1, 1996 to February 1, 1997. From 1987 to 1993, Dr. Neal was Chair of the University of Michigan's Physics Department and from 1993 to 1997 he served as Vice President of Research for the University of Michigan. He is also a Director of Ogden Corporation; Center for Strategic and International Studies; and Smithsonian Institution. Jorma J. Ollila.......... Mr. Ollila has served as a Director of Ford Motor Company since January 12, 2000. Mr. Ollila has been the Chairman of the Board and Chief Executive Officer of the Nokia Corporation in Finland since 1999. He also has been Chairman of its Group Executive Board since 1992. He was President and Chief Executive Officer from 1992 to 1999, a member of its Board of Directors since 1995 and a member of its Group Executive Board since 1986. He also held various other positions since joining Nokia in 1985. From 1978 to 1985, Mr. Ollila held various positions with Citibank Oy and Citibank N.A. Mr. Ollila also serves as a Director of Otava Books and Magazines Group, Ltd.; and UPM-Kymmene Corporation. Mr. Ollila is a citizen of Finland. Carl E. Reichardt........ Mr. Reichardt has served as a Director of Ford Motor Company since 1986. Mr. Reichardt served as the Chairman and Chief Executive Officer of Wells Fargo & Company in San Francisco, California from 1983 until his retirement on December 31, 1994. Mr. Reichardt also serves as a Director of Columbia/ HCA Healthcare Corporation; ConAgra, Inc.; McKesson HBOC, Inc.; Newhall Management Corporation; Pacific Gas and Electric Company; PG&E Corporation; and HSBC Holdings plc. Robert E. Rubin.......... Mr. Rubin has served as a Director of Ford Motor Company since November 11, 1999. He also serves as a Director, Chairman of the Executive Committee and Member of the Office of the Chairman of Citigroup, Inc., New York, New York. Before joining Citigroup in 1999, Mr. Rubin served as U.S. Secretary of the Treasury from 1995 to 1999. He previously served from 1993 to 1995 in the White House as Assistant to the President for Economic Policy and, in that capacity, directed the activities of the National Economic Council. Prior to that time, Mr. Rubin spent 26 years at Goldman, Sachs & Co., where he served as Co-Senior Partner and Co-Chairman from 1990 to 1992, and Vice Chairman and Co-Chief Operating Officer from 1987 to 1990. John L. Thornton......... Mr. Thornton has served as a Director of Ford Motor Company since 1996. Currently, Mr. Thornton serves as the President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. Mr. Thornton III-3 formerly served as Chairman of Goldman Sachs -- Asia. He was previously co-chief executive of Goldman Sachs International, the firm's business in Europe, the Middle East and Africa. Mr. Thornton joined Goldman Sachs in 1980 and was named a partner in 1988. He is also a Director for British Sky Broadcasting Group PLC; The Goldman Sachs Group, Inc.; Laura Ashley PLC; and Pacific Century Group, Inc. Executive Officers: W. Wayne Booker.......... Mr. Booker serves as the Vice Chairman of Ford Motor Company. James D. Donaldson....... Mr. Donaldson serves as Group Vice President -- Global Business Development of Ford Motor Company. Carlos E. Mazzorin....... Mr. Mazzorin serves as Group Vice President -- Global Purchasing and South America of Ford Motor Company. James J. Padilla......... Mr. Padilla serves as Group Vice President -- Global Manufacturing of Ford Motor Company. Richard Parry-Jones...... Mr. Parry-Jones serves as Group Vice President -- Global Product Development and Quality of Ford Motor Company. Mr. Parry-Jones is a citizen of Great Britain. Wolfgang Reitzle......... Dr. Reitzle serves as Group Vice President -- Premier Automotive Group of Ford Motor Company. Dr. Reitzle is a citizen of Germany. Robert L. Rewey.......... Mr. Rewey serves as Group Vice President -- Global Consumer Services and North America of Ford Motor Company. John M. Rintamaki........ Mr. Rintamaki serves as Group Vice President, Chief of Staff, General Counsel and Secretary of Ford Motor Company. Henry D. G. Wallace...... Mr. Wallace serves as Group Vice President and Chief Financial Officer of Ford Motor Company. Mr. Wallace is a citizen of Great Britain. Gurminder S. Bedi........ Mr. Bedi serves as Vice President -- North American Truck of Ford Motor Company. William W. Boddie........ Mr. Boddie serves as Vice President -- Global Core Engineering of Ford Motor Company. Mei Wei Cheng............ Mr. Cheng serves as Vice President of Ford Motor Company. Mr. Cheng also serves as President of Ford Motor (China) Ltd. William J. Cosgrove...... Mr. Cosgrove serves as Vice President of Ford Motor Company. Mr. Cosgrove also serves as the Chief of Staff and Chief Financial Officer of Premier Automotive Group. Terrall M. de Mr. de Jonckheere serves as Vice President -- Ford Jonckheere............... South America Operations. Wayne S. Doran........... Mr. Doran serves as Vice President of Ford Motor Company. Mr. Doran also serves as Chairman of Ford Motor Land Development Corporation. III-4 Mark Fields.............. Mr. Fields serves as Vice President of Ford Motor Company. Bobbie A. Gaunt.......... Ms. Gaunt serves as Vice President of Ford Motor Company. Ms. Gaunt also serves as President and Chief Executive Officer of Ford Motor Company of Canada, Ltd. Louise K. Goeser......... Ms. Goeser serves as Vice President -- Quality of Ford Motor Company. Janet Mullins Grissom.... Ms. Grissom serves as Vice President -- Washington Affairs of Ford Motor Company. Elliott S. Hall.......... Mr. Hall serves as Vice President -- Dealer Development of Ford Motor Company. Earl J. Hesterberg....... Mr. Hesterberg serves as Vice President of Ford Motor Company. Mr. Hesterberg also serves as Vice President of Marketing, Sales and Service for Ford of Europe, Inc. Mark W. Hutchins......... Mr. Hutchins serves as Vice President of Ford Motor Company. Mr. Hutchins also serves as President of Lincoln and Mercury. I. Martin Inglis......... Mr. Inglis serves as Vice President -- Ford North America. Michael D. Jordan........ Mr. Jordan serves as Vice President of Ford Motor Company. Mr. Jordan also serves as President of Automotive Consumer Services Group. Brian P. Kelley.......... Mr. Kelley serves as Vice President -- Consumer Connect of Ford Motor Company. Mr. Kelley also serves as Chief Operating Officer of Ford Investment Enterprises Corporation. Vaughn A. Koshkarian..... Mr. Koshkarian serves as Vice President -- Ford Asia Pacific Operations. Roman J. Krygier......... Mr. Krygier serves as Vice President -- Powertrain Operations of Ford Motor Company. Martin Leach............. Mr. Leach serves as Vice President of Ford Motor Company. Mr. Leach also serves as Vice President of Product Development for Ford of Europe, Inc. Mr. Leach is a citizen of Great Britain. Malcolm S. Macdonald..... Mr. Macdonald serves as Vice President and Treasurer of Ford Motor Company. J.C. Mays................ Mr. Mays serves as Vice President -- Design of Ford Motor Company. David L. Murphy.......... Mr. Murphy serves as Vice President -- Human Resources of Ford Motor Company. Mr. Murphy is a citizen of Great Britain. James G. O'Connor........ Mr. O'Connor serves as Vice President of Ford Motor Company. Mr. O'Connor also serves as President of Ford Division. Helen O. Petrauskas...... Ms. Petrauskas serves as Vice President -- Environmental and Safety Engineering of Ford Motor Company. William F. Powers........ Mr. Powers serves as Vice President--Research of Ford Motor Company. III-5 Neil W. Ressler.......... Mr. Ressler serves as Vice President and Chief Technical Officer, Research and Vehicle Technology of Ford Motor Company. Dennis E. Ross........... Mr. Ross serves as Vice President and Chief Tax Officer of Ford Motor Company. Shamel T. Rushwin........ Mr. Rushwin serves as Vice President -- Vehicle Operations of Ford Motor Company. Nicholas V. Scheele...... Mr. Scheele serves as Vice President of Ford Motor Company. Mr. Scheele also serves as Chairman of Ford of Europe, Inc. James C. Schroer......... Mr. Schroer serves as Vice President -- Global Marketing of Ford Motor Company. William A. Swift......... Mr. Swift serves as Vice President and Controller of Ford Motor Company. Frank M. Taylor.......... Mr. Taylor serves as Vice President -- Material Planning and Logistics of Ford Motor Company. Chris P. Theodore........ Mr. Theodore serves as Vice President -- North America Car of Ford Motor Company. David W. Thursfield...... Mr. Thursfield serves as Vice President of Ford Motor Company. Mr. Thursfield also serves as President of Ford of Europe. Mr. Thursfield is a citizen of Great Britain. Alex P. Ver.............. Mr. Ver serves as Vice President -- Advanced Manufacturing Engineering of Ford Motor Company. Jason H. Vines........... Mr. Vines serves as Vice President -- Communications of Ford Motor Company. Donald A. Winkler........ Mr. Winkler serves as Vice President of Ford Motor Company. Mr. Winkler also serves as Chairman and Chief Executive Officer of Ford Motor Credit Company. James A. Yost............ Mr. Yost serves as Vice President and Chief Information Officer of Ford Motor Company. Martin B. Zimmerman...... Mr. Zimmerman serves as Vice President -- Governmental Affairs of Ford Motor Company. Rolf Zimmermann.......... Mr. Zimmermann serves as Vice President of Ford Motor Company. Mr. Zimmermann also serves as Chairman of Ford Werke AG. Mr. Zimmermann is a citizen of Germany. All of the above officers, except those noted below, have been employed by Ford or its subsidiaries in one or more capacities during the past five years. Described below are the positions (other than those with Ford or its subsidiaries) held by those officers who have not been with Ford or its subsidiaries for five years: . Mr. Cheng was President and Regional Executive of GE Appliances Ltd. in Hong Kong from October 1996 until January 1998. From September 1994 until September 1996 he was President of General Electric China. General Electric Company's address is 3135 Easton Turnpike, Fairfield, Connecticut 06431. III-6 . Ms. Goeser served as General Manager, Refrigeration Product Team Whirlpool Corporation, Whirlpool North American Appliance Group, from September 1996 until March 1999. From January 1994 until September 1996, she served as Vice President, Corporate Quality, Whirlpool Corporation. Whirlpool Corporation's address is Whirlpool Center, 2000 M63, Benton Harbor, Michigan 49022. . Mr. Kelley served as Vice President and General Manager for Sales and Distribution with General Electric's Appliance Division from January 1997 until June 1999. From January 1995 until January 1997 he served as General Manager, Laundry Products, General Electric's Appliance Division and as Marketing Director, GE Brands Worldwide, General Electric Appliance Division from January 1994 until January 1995. General Electric Company's address is 3135 Easton Turnpike, Fairfield, Connecticut 06431. . Mr. Mays was Vice President of Design Development at SHR Perceptual Management in Scottsdale, Arizona from 1995 to 1997. Prior to that he was design director responsible for worldwide design strategy, development and execution for Audi AG. SHR Perceptual Management's address is 703 Rancho Conejo Boulevard, Newbury Park, California 91320. Audi AG's address is Auto-Union Strasse 2, 85045 Ingolstadt, Germany. . Dr. Reitzle was a member of the Board of Management of BMW AG, Research and Development from July 1987 to October 1995. He served as Chairman of Rover Group Board from October 1995 to March 1997 and as a member of the Board of Management of BMW AG, Market and Product from March 1998 to February 1999. BMW AG's address is Research and Engineering Centre, Knorrstr, 147 80788, Munich, Germany. . Mr. Ross was a partner in the New York law firm of Davis, Polk & Wardwell from May 1989 to May 1995. Davis, Polk & Wardwell's address is 450 Lexington Avenue, New York, New York 10017. . Mr. Rushwin served as Vice President -- International Manufacturing and Minivan Assembly Operations at DaimlerChrysler AG and its predecessors from October 1994 until March 1999. Daimler Chrysler AG's address is Epplestrasse 225, Stuttgart, Germany 011-4971117. . Mr. Taylor was Executive Director, Production Control and Logistics -- General Motors Corporation Powertrain Group from March 1994 to July 1999. General Motors Corporation's address is 300 Renaissance Center, Detroit, Michigan 48265. . Mr. Theodore most recently was Senior Vice President -- Platform Engineering at DaimlerChrysler AG and its predecessors from January 1998 until March 1999. His prior positions at DaimlerChrysler AG were General Manager -- Small Car Platform Engineering from 1996 through December 1997 and General Manager -- Minivan Platform Engineering from 1992 through 1996. Daimler Chrysler AG's address is Epplestrasse 225, Stuttgart, Germany 011-4971117. . Mr. Vines served as Vice President -- External Affairs, Nissan North America from April 1998 until February 2000. From 1983 until 1998, he served in a variety of media relations, internal communications and labor relations positions at Chrysler Corporation. Nissan North America's address is 990 West 190th Street, Torrance, California 90502. Chrysler Corporation's address is 1 Chrysler Drive, Auburn Hills, Michigan 48326. . Mr. Winkler was Chairman and CEO of Finance One, a finance subsidiary of Bank One Corporation and served as Executive Vice President of Bank One Corporation from 1993 to October 1999. Bank One's address is One First National Plaza, Chicago, Illinois 60670. III-7 SCHEDULE IV CAREY INTERNATIONAL, INC. 4530 WISCONSIN AVENUE, N.W. WASHINGTON, D.C. 20016 ---------------- INFORMATION STATEMENT PURSUANT TO SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 14f-1 PROMULGATED THEREUNDER This Information Statement (the "Information Statement") is being mailed on or about August 3, 2000 as part of the Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), to the holders of the common stock (the "Common Stock") of Carey International, Inc. (the "Company"). Capitalized terms used and not otherwise defined herein shall have the meaning set forth in the Offer to Purchase. You are receiving this Information Statement in connection with the possible election of persons designated by Acquisition Company to a majority of the seats on the Board of Directors of the Company (the "Board"). The Merger Agreement requires the Company to cause Acquisition Company's designees to be elected to the Board under the circumstances described therein. This Information Statement is required by Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder. You are urged to read this Information Statement carefully. You are not, however, required to take any action. Pursuant to the Merger Agreement, the Offerors commenced the Offer on August 3, 2000. The Offer is scheduled to expire at 5:00 p.m., New York City time, on Thursday, August 31, 2000, unless the Offer is extended. The information contained in this Information Statement (including information incorporated by reference) concerning Parent, Acquisition Company, and the Acquisition Company Designees (as defined below) has been furnished to the Company by either Parent or Acquisition Company, and the Company assumes no responsibility for the accuracy or completeness of such information. IV-1 GENERAL INFORMATION REGARDING THE COMPANY General The Shares are the only class of voting securities of the Company outstanding. Each Share has one vote. As of the close of business on July 24, 2000, there were 9,848,729 Shares issued and outstanding and 1,918,427 Shares issuable upon the exercise of outstanding options granted under the Company's stock option plans. The Company's Board of Directors currently consists of six members. The Board is divided into three classes with staggered three-year terms. Successors to the directors whose terms expire at each annual meeting are elected for three-year terms. A director holds office until the annual meeting for the year in which his term expires and until his successor is elected and qualified or until such director's earlier resignation or removal. Right to Designate Directors; the Acquisition Company Designees Pursuant to the Merger Agreement, promptly upon the Offer Closing and from time to time thereafter until the Effective Time, Acquisition Company will be entitled to designate such number of directors (the "Acquisition Company Designees") equal to the greater of (a) a majority of the Board and (b) the product of (i) the number of directors on the Board and (ii) the percentage that such number of Shares owned by Acquisition Company bears to the number of Shares outstanding and not owned by the Company less the number of Independent Directors (as defined below). In furtherance thereof, the Company has agreed, upon request by Acquisition Company, either to increase the size of the Board or use reasonable efforts to secure the resignations of, or failing that, to remove such number of directors as is necessary to enable the Acquisition Company Designees to be elected or appointed to the Board and shall cause the Acquisition Company Designees to be so elected or appointed. The Company's obligation to appoint the Acquisition Company Designees is subject to Rule 14(f) of the Exchange Act. The Company is required to take all action necessary to effect any such election and to include in this Information Statement the information required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The foregoing notwithstanding, the Merger Agreement further provides that at least two directors who are not employees of the Company or any of its subsidiaries (the "Independent Directors") shall continue to serve on the Board until the effectiveness of the Merger. Following the election or appointment of the Acquisition Company Designees to the Board, but prior to the Effective Time, any permitted termination of the Merger Agreement by the Company, any amendment of the Merger Agreement or the Company's certificate of incorporation or by-laws requiring action by the Board, any extension of time for the performance of any of the obligations or other acts of Parent and any waiver of compliance with any of the agreements or conditions contained in the Merger Agreement must be authorized by a majority of the Independent Directors as well as a majority of all Board members. Acquisition Company has informed the Company that it has chosen the persons listed below as the Acquisition Company Designees and that each of the Acquisition Company Designees has consented to act as a director. The names of the Acquisition Company Designees, their ages as of July 24, 2000 and certain other information about them are set forth below. Jeffrey R. Larsen, age 25, has been an Associate with Chartwell since September 1999. From July 1997 to July 1999, Mr. Larsen was an Analyst in the Leveraged Finance Group of the Investment Banking Division of Goldman, Sachs & Co. Mr. Larsen received an A.B. magna cum laude in Economics from Princeton University. Michael J. Rolland, age 56, has been an advisor to Chartwell since April 2000 when he retired as a Managing Director of Merrill Lynch & Co. He joined Merrill Lynch & Co. in 1984 following its acquisition of A.G. Becker. At Merrill Lynch, he founded and managed the Private Sales & Divestitures Group, which focuses on advising sellers of middle market businesses. During his career at Merrill, he supervised the sale of over 250 businesses. At A.G. Becker, where he joined its Warburg Paribas Becker operation in 1977, he had specialized in international mergers and acquisitions. Prior to 1977, he was associated with the investment management firm IV-2 of Ivory & Sime in Edinburgh, Scotland. Mr. Rolland received his M.B.A. from Stanford University and his M.A. from the University of St. Andrews, Scotland. W. Gray Hudkins, age 25, is an Associate at Chartwell. Mr. Hudkins previously worked as an Associate at the private equity investment firm of Saunders Karp & Megrue in Stamford, Connecticut. Prior to his work at Saunders Karp & Megrue, Mr. Hudkins worked as an Analyst at Montgomery Securities in San Francisco, where he focused on underwriting as well as merger and acquisition advisory services for the lodging, travel and leisure sectors. Mr. Hudkins received an A.B., cum laude, in Economics and a Certificate in Germanic Language and Literature from Princeton University. James C. Schroer, age 48, is Vice President -- Global Marketing for Ford, a position he was appointed to in June 1999. In this capacity, he is responsible for the development of Ford's Brands, excellence in world-class marketing, and global services to Ford's businesses, including marketing research, media buying and placement, dealer education and training and the Ford presence on the Internet. From October 1996 to June 1999, Mr. Schroer served as Executive Director -- Marketing Strategy and Brand Management of Ford. From 1995 to September 1996, Mr. Schroer was Vice President and lead partner of the consumer industries group at Booz, Allen & Hamilton. Previously, Mr. Schroer was Executive Vice President of Sales and Marketing at RJR Nabisco and Vice President, Marketing at the STP and Wagner divisions of Studebaker- Worthington, Inc. Mr. Schroer earned a bachelor's degree in economics from Carleton College and a M.B.A. from Harvard University. Elizabeth S. Acton, age 49, is Executive Vice President and Chief Financial Officer of Ford Motor Credit Company, a wholly owned subsidiary of Ford. Ms. Acton joined Ford Credit in January of 1998. From February 1995 to January 1998, Ms. Acton was Assistant Treasurer of Ford. Ms. Acton held a variety of positions during her 14 year tenure with Ford, including positions with the Treasurer's Office that involved international financing, portfolio and foreign exchange management, cash flow forecasting, corporate finance and pension asset management. Prior to joining Ford in 1983, Ms. Acton was Vice President and Relationship Manager in the multinational banking group at Continental Bank in Chicago. Ms. Acton holds a bachelor's degree in psychology from the University of Minnesota and a M.B.A. in Finance from Indiana University. Acquisition Company has advised the Company that to the best knowledge of Acquisition Company, none of the potential Acquisition Company Designees currently is a director of, or holds any position with the Company, and except as disclosed in the Offer to Purchase (including Schedule I thereto), none of the potential Acquisition Company Designees beneficially owns any securities (or rights to acquire any securities) of the Company or has been involved in any transactions with the Company or any of its directors, executive officers or affiliates that are required to be disclosed pursuant to the rules of the Commission, except as may be disclosed in the Offer to Purchase. None of the Acquisition Company Designees has any family relationship with any director or executive officer of the Company. Acquisition Company has advised the Company that none of the persons listed above has during the last five years been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was, or is, subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws or is involved in any other legal proceeding which is required to be disclosed under Item 401(f) of Regulation S-K promulgated by the Commission. DIRECTORS OF THE COMPANY Current Members of the Board of Directors The names of the Company's current directors, their ages as of July 24, 2000 and certain other information about them are set forth below. As indicated below, some of the directors have resigned effective upon the consummation of the Offer. IV-3 Vincent A. Wolfington, age 60, a co-founder of the Company, has served as its Chairman of the Board of Directors and Chief Executive Officer since 1979. For over 25 years, Mr. Wolfington has been involved in the limousine industry and directly associated with the Carey system of licensees and affiliates. Mr. Wolfington has served as a consultant to the National Academy of Sciences Transportation Research Board, President of the National Para-transit Association and a member of the International Limousine Association. Mr. Wolfington currently is a member of the Executive Committee of the World Travel and Tourism Council, a global organization of the chief executive officers of companies engaged in all sectors of the travel and tourism industry. Don R. Dailey, age 63, a co-founder of the Company, has served as the President and a director of the Company since 1979. Mr. Dailey has been directly involved in the limousine business for over 30 years. Mr. Dailey has served on a number of boards and committees related to the travel industry, including the National Business Travel Association, the International Business Travel Association, the Association of Corporate Travel Executives, the National Limousine Association and the International Limousine Association (as its past President and member of its Executive Committee). Mr. Dailey is currently a member of the Travel Business Round Table, a United States organization of executive officers of companies engaged in all sectors of the travel and tourism industry. Mr. Dailey has resigned as a director of Carey International effective upon the consummation of the Offer. Robert W. Cox, age 62, has served as a director of the Company since 1995. From 1969 until his retirement in 1994, Mr. Cox was a partner in the New York and Chicago offices of the law firm Baker & McKenzie. From 1984 to 1992, Mr. Cox was Chairman of the Executive Committee and Managing Partner of the firm, and from 1993 to 1994, Mr. Cox was Chairman of the Policy Committee. Mr. Cox is Chairman Emeritus of Baker & McKenzie. Mr. Cox currently is a director of Hon Industries, Inc. and Homebase, Inc. Dennis I. Meyer, age 64, has served as a director of the Company since June 1998. Mr. Meyer has been a partner in the law firm of Baker & McKenzie since 1965. Mr. Meyer has previously served as Chairman of the Executive Committee and Managing Partner of Baker & McKenzie. Mr. Meyer serves as a director of Oakwood Homes Corporation as well as United Financial Banking Companies, Inc., Jordan Kitt's Music, Inc. and Daily Express, Inc. Nicholas J. St. George, age 61, has served as a director of the Company since June 1997. Currently, Mr. St. George serves as a consultant to Oakwood Homes Corporation, a manufacturer and retailer of manufactured homes. From February 1979 to September 1999, Mr. St. George served as Chairman and Chief Executive Officer of Oakwood Homes Corporation. Mr. St. George serves as a director of Legg Mason, Inc. Mr. St. George has resigned as a director of Carey International effective upon the consummation of the Offer. Joseph V. Vittoria, age 65, has served as a director of the Company since June 1998. Mr. Vittoria has been the Chairman and Chief Executive Officer of Travel Services International, Inc. ("Travel Services") since Travel Services completed its initial public offering in July 1997. From September 1987 to February 1997, Mr. Vittoria was the Chairman and Chief Executive Officer of Avis, Inc. ("Avis"), a multinational auto rental company where he was employed for over 26 years. Mr. Vittoria was responsible for the purchase of Avis by its employees in 1987 by creating one of the world's largest Employee Stock Ownership Plans. He was a founding member of the World Travel and Tourism Council. Mr. Vittoria serves as a director of Sirius Satellite Radio, Inc., Transmedia Asia, Puradyn Filter Technologies, Inc., ResortQuest International, Inc. and various non-profit associations. Mr. Vittoria has resigned as a director of Carey International effective upon the consummation of the Offer. INFORMATION CONCERNING THE BOARD OF DIRECTORS The Board currently has three standing committees: the Audit Committee, the Compensation Committee and the Executive Committee. The Board does not currently have a standing Nominating Committee. The members and functions of the standing committees are described briefly below. IV-4 Executive Committee The members of the Executive Committee of the Company's Board of Directors are Messrs. Wolfington, Cox and Dailey. The Executive Committee exercises all the powers of the Board of Directors between meetings of the Board of Directors, except such powers that are reserved to the Board of Directors by applicable law. Audit Committee The members of the Audit Committee of the Company's Board of Directors are Messrs. Meyer and Vittoria. The Audit Committee makes recommendations concerning the engagement of independent public accountants, reviews with the independent public accountants the plans for and results of the audit, approves professional services provided by the independent public accountants, reviews the independence of the independent public accountants, considers the range of audit and non-audit fees, and reviews the adequacy of the Company's internal accounting controls. Compensation Committee The members of the Compensation Committee of the Company's Board of Directors are Messrs. Cox and St. George. The Compensation Committee establishes a general compensation policy for the Company and approves increases in directors' fees and salaries paid to officers and senior employees of the Company. The Compensation Committee administers the Company's equity incentive plans and determines, subject to the provisions of the Company's plans, the directors, officers and employees of the Company eligible to participate in any of the plans, the extent of such participation and terms and conditions under which benefits may be vested, received or exercised. During the fiscal year ended November 30, 1999, the Board of Directors met five times, the Audit Committee met twice, the Compensation Committee met three times and the Executive Committee did not meet. There are no family relationships among any of the directors or executive officers of the Company. Director Compensation Members of the Board of Directors who also serve as officers of the Company do not receive compensation for serving on the Board. Each other member of the Board receives an annual retainer of $20,000 for serving on the Board, plus a fee of $1,000 for each Board meeting attended and $500 for each committee meeting attended, except that only one $500 fee is paid in the event that more than one committee meeting is held on a single day. All directors receive reimbursement of reasonable expenses incurred in attending Board and committee meetings and otherwise carrying out their duties. At his or her election, a director may defer all or a portion of the fees paid to him or her by the Company. If such an election is made, the deferred fees are credited to the director's account at the end of each fiscal quarter in the form of phantom shares of Common Stock. Each phantom share is equal to one share of Common Stock, and the total number of phantom shares credited to the account during any fiscal quarter is determined based on the average closing price of the Common Stock on the Nasdaq National Market during the last 20 trading days of such fiscal quarter. The account reaches maturity on the earlier of (i) the last day of the Company's fiscal year in which the director ceases to be a member of the Board of Directors or (ii) the date on which the director, with the consent of the Company, elects to receive payment of his or her deferred fees. Upon maturity, payment will be paid in cash an amount equal to the number of phantom shares in the director's account. The value of the phantom shares at maturity is determined based on the average closing price of the Common Stock on the Nasdaq National Market during the 20 trading days preceding the date of maturity. To date, elections to defer all or a portion of their fees have been made by Messrs. Cox, Meyer, St. George and Vittoria. The Company maintains the Stock Plan for Non-Employee Directors (the "Directors' Plan"). A maximum of 100,000 shares of Common Stock may be delivered upon the exercise of options granted under the Directors' Plan and elections to receive shares in lieu of cash compensation. Only directors of the Company who are not IV-5 employees of the Company or any of its subsidiaries (the "Non-Employee Directors") are eligible to participate in the Directors' Plan. While grants of stock options under the Directors' Plan are automatic and non- discretionary, all questions of interpretation of the Directors' Plan are determined by the Board of Directors. On the date of each annual meeting of stockholders, each Non-Employee Director continuing in office will be granted an option pursuant to the Directors' Plan covering 5,000 shares. Any newly elected Non-Employee Director will be granted an option pursuant to the Directors' Plan covering 5,000 shares on the date of his or her election (whether such election occurs at an annual meeting or otherwise). The option exercise price for all options granted under the Directors' Plan is the closing price of a share of the Common Stock as reported on the Nasdaq National Market on the date the option is granted. All options granted under the Directors' Plan become fully exercisable six months after the date of grant. Unless sooner terminated following the death, disability or termination of service of a director, options granted under the Directors' Plan will remain exercisable until the fifth anniversary of the date of grant. In addition, upon certain transactions involving a change of control or the dissolution or liquidation of the Company, all options outstanding under the Directors' Plan will terminate; provided however, that 20 days prior to the effective date of any such transaction, dissolution or liquidation, all options outstanding under the Directors' Plan that are not otherwise exercisable will become immediately exercisable. Under the Directors' Plan, a Non-Employee Director may elect to be paid all or a portion of his or her annual retainer in shares of Common Stock. Any such election must be made in writing at least 30 days prior to the date the annual retainer would be paid by the Company. The number of shares to be delivered to a Non-Employee Director upon such election is determined by dividing the amount of the annual retainer to be received in shares of Common Stock by the closing price of a share of Common Stock as reported on the Nasdaq National Market on the date the annual retainer is to be paid. The Board of Directors may at any time or times amend the Directors' Plan for any purpose which at the time may be permitted by law. Messrs. Cox, Meyer, St. George and Vittoria have agreed to cancel the options granted to each of them pursuant to the Directors' Plan on June 25, 1999 to purchase 5,000 shares of Common Stock at an exercise price of $24.625. EXECUTIVE OFFICERS OF THE COMPANY The following paragraphs set forth certain information, as of July 24, 2000, about the other current executive officers of the Company who are not directors. Such officers serve at the pleasure of the Board. Richard A. Anderson, Jr., age 54, has served as Executive Vice President -- Sales and Marketing of the Company since July 1998. Mr. Anderson previously served as Senior Vice President of the Company from December 1988 to July 1998 and was Chief Operating Officer of Carey Limousine NY, Inc., a subsidiary of the Company, from December 1988 until August 1997. Mr. Anderson is a former Chairman of the New York Taxi and Limousine Commission's Limousine Advisory Board, a former board member of the Association of Corporate Travel Executives, and a member of the National Business Travel Association and Meeting Planners International. David H. Haedicke, age 53, has served as Executive Vice President and Chief Financial Officer of the Company since October 1996. From August 1996 to October 1996, he was Senior Vice President and Chief Financial Officer of Infotechnology, Inc., Hadron, Inc. and Comtex Scientific Corporation, an affiliated group of companies engaged in systems management and software development. From September 1993 to May 1996, he was Chief Financial Officer of Walcoff & Associates, Inc., a communications and information management firm. From June 1991 to September 1993, he was Chief Financial Officer and Vice President of Xsirius, Inc., a high technology research and development company. Mr. Haedicke was a partner at Ernst & Young L.L.P. from 1985 to 1991 and was an employee at that firm from 1973 to 1985. IV-6 Guy C. Thomas, age 62, has served as Executive Vice President -- Operations of the Company since 1987. Mr. Thomas has served on a number of boards and committees related to the travel industry, including the National Business Travel Association, the Greater Washington Area Passenger Traffic Association, the American Society of Association Executives, Meeting Planners International, the Association of Corporate Travel Executives, the National Limousine Association and the International Taxicab and Livery Association. Devin J. Murphy, age 34, has served as Senior Vice President -- Operations of the Company since May 1998. Previously, from April 1997 to May 1998, Mr. Murphy served as Senior Vice President and Chief Development Officer of the Company, and from May 1996 to April 1997 he served as Vice President -- Corporate Development of the Company. From 1988 to 1994, Mr. Murphy held sales and marketing positions at several high tech companies. Sally A. Snead, age 40, has served as the Company's Senior Vice President -- Information Systems since June 1996. From June 1993 to June 1996, she was Executive Vice President and General Manager of Carey Limousine L.A., Inc. From January 1987 to June 1993, she was Executive Vice President and General Manager of Carey Limousine DC, Inc. She is a member of Executive Women International, the National Business Travel Association, the Association of Corporate Travel Executives and the National Limousine Association. Eugene S. Willard, age 50, has served as the Company's Senior Vice President -- Technology, Strategy and Planning since February 1999. Mr. Willard has over 19 years experience in systems development and strategic systems planning. From 1985 to February 1999, Mr. Willard held senior level positions in systems development and strategic planning in the areas of reservations, revenue management and loyalty program marketing systems for Marriot International. John C. Wintle, age 53, has served as the Company's Senior Vice President -- Europe since May 1996 and as Executive Vice President and Managing Director of Carey U.K. Ltd., a subsidiary of the Company, since March 1996. From 1982 to February 1996, Mr. Wintle served Savoy Hotel PLC ("Savoy") and its affiliates, including Camelot Barthropp Ltd. ("Camelot"), in various capacities. From March 1993 to February 1996, Mr. Wintle was Executive Vice Chairman of Camelot, which was acquired by Carey U.K. Ltd. in February 1996. Previously, from 1989 to 1993, Mr. Wintle was General Manager, Restaurant Division, of several entities affiliated with Savoy. From 1982 to 1989, Mr. Wintle had been Group Financial Controller at Savoy. Mr. Wintle is a citizen of the United Kingdom. Mr. Wintle's business address is c/o Carey UK, 11-15 Headfort Place, London, United Kingdom. IV-7 EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth certain information with respect to Company compensation earned in the last three completed fiscal years by the Chief Executive Officer and the four other most highly compensated executive officers (the "Named Executive Officers"). SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Compensation Awards ----------------------- ------------ Other Awards Annual Shares All Other Name and Principal Salary Bonus Comp. Underlying Compensation Position Year ($) ($) ($) Options ($) - - ------------------ ---- -------- ------- ------ ------------ ------------ Vincent A. Wolfington.. 1999 $256,950 $50,000 $ -- 80,000 $71,509(1) Chairman and Chief 1998 231,620 -- -- 180,000(2) 71,774 Executive Officer 1997 231,620 85,000 -- 100,000 12,000 Don R. Dailey.......... 1999 226,667 50,000 -- 80,000 64,337(1) President and Director 1998 205,000 -- -- 180,000(2) 35,150 1997 205,001 70,000 -- 100,000 12,000 David H. Haedicke...... 1999 151,250 30,000 -- -- -- Executive Vice President 1998 135,000 -- -- 120,000 --- and Chief Financial Officer 1997 135,000 45,000 -- 30,000 -- Guy C. Thomas.......... 1999 115,000 12,000 13,020(3) 24,000 19,456(1) Executive Vice 1998 115,000 -- 13,020(3) 60,000(2) 10,995 President-Operations 1997 115,000 25,000 13,020(3) 15,000 9,900 John C. Wintle(4)...... 1999 101,767 47,933 -- -- -- Senior Vice President 1998 87,599 63,019 -- 6,000 -- 1997 89,668 44,817 -- 10,000 --
- - -------- (1) Represents the premium payment on life insurance policies for beneficiaries designated by the Named Executive Officers. (2) Excludes options granted in April 1998 to Messrs. Wolfington, Dailey and Thomas to purchase 100,000, 100,000 and 30,000 shares, respectively, which April 1998 options were replaced by the options shown for 1999. (3) Represents a car allowance. (4) Amounts reported for Mr. Wintle reflect the application of British Pound to U.S. Dollar exchange ratios as of November 30, 1999, 1998 and 1997 of 1.5985, 1.6510 and 1.6900, respectively. IV-8 Options Granted in Last Fiscal Year The following table sets forth certain information regarding options granted during the fiscal year ended November 30, 1999 by the Company to each of the Named Executive Officers who received options (the options shown are repriced options originally granted in April 1998):
Potential Realizable Value at Assumed Rates of Stock Price Appreciation Individual Grants For Option Term -------------------------------------------- -------------------- Number of % of Total Shares Options Underlying Granted to Exercise Options Employees in Price Expiration Name Granted Fiscal Year ($/Share) Date 5% 10% ---- ---------- ------------ --------- ---------- --------- ---------- Vincent A. Wolfington... 80,000 32.8% $15.00 4/29/08 $ 754,674 1,912,491 Don R. Dailey........... 80,000 32.8 15.00 4/29/08 754,674 1,912,491 Guy C. Thomas........... 24,000 9.8 15.00 4/29/08 226,402 573,747
Aggregate Options Exercised in the Last Fiscal Year an Year-End Stock Option Values The following table sets forth certain information regarding the aggregate number and dollar value of all options exercised by each of the Named Executive Officers during the fiscal year ended November 30, 1999 and the aggregate number and value of all unexercised options held by each of the Named Executive Officers at November 30, 1999.
Number of Shares Underlying Unexercised Value of Unexercised Otions at In-the-Money Options at November 30, 1999 November 30, 1999(2) ------------------------- ------------------------- Shares Acquired Number of Number of On Value Exercisable Unexercisable Exercisable Unexercisable Name Exercise Realized(1) Shares Shares Value Value ---- -------- ----------- ----------- ------------- ----------- ------------- Vincent A. Wolfington... -- $ -- 285,706 180,000 $3,365,433 $1,147,500 Don R. Dailey........... -- -- 235,707 180,000 2,529,200 1,147,500 David H. Haedicke....... 6,200 75,995 39,600 130,000 574,560 873,750 Guy C. Thomas........... 32,018 582,060 34,000 65,000 261,750 436,875 John C. Wintle.......... 7,933 106,240 7,633 9,334 108,164 74,507
- - -------- (1) Value is calculated based upon the difference between the option exercise price and the closing market price of the Company's Common Stock on the Nasdaq National Market on the date of exercise. (2) Value of unexercised in-the-money options based upon $21.375, the closing price of the Company's Common Stock on the Nasdaq National Market on November 30, 1999. Equity Incentive Plans The Company currently maintains the 1987 Stock Option Plan (the "1987 Plan") and the 1992 Stock Option Plan (the "1992 Plan"), under which the Company has awarded incentive and non-statutory stock options. The Company also maintains the 1997 Equity Incentive Plan (the "1997 Plan"), which currently provides for the award of up to 1,550,000 shares of Common Stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, performance stock units and other stock units that are valued by reference to the value of the Common Stock. In addition, the Company maintains the 1998 Non-Qualified Stock Option Plan (the "1998 Plan"), which provides for the award of up to 500,000 shares of Common Stock in the form of non-statutory stock options. The 1987 Plan, the 1992 Plan, the 1997 Plan and the 1998 Plan are hereinafter referred to collectively as the "Equity Plans". IV-9 As of November 30, 1999, options were outstanding to purchase an aggregate of 1,846,217 shares of Common Stock under the Equity Plans, and approximately 170,500 shares of Common Stock are authorized but had not been granted under options pursuant to the Equity Plans. Officers, key employees, non-employee directors of and consultants to the Company are eligible to participate in the Equity Plans, except officers and directors are not eligible to participate in the 1998 Plan. The Equity Plans are administered by the Compensation Committee of the Board of Directors. Among other things, the Compensation Committee determines, subject to the provisions of the Equity Plans, who shall receive awards, the types of awards to be made, and the terms and conditions of each award. Options that are intended to qualify as incentive stock options under the Equity Plans may be exercisable for not more than 10 years after the date the option is awarded and may not be granted at an exercise price less than the fair market value of the shares of Common Stock at the time the option is granted (and, in the case of stock options granted to holders of more than 10% of the Common Stock, may not be granted at an exercise price less than 110% of the fair market value of the shares of Common Stock at the time the options are granted). The 1997 Plan and the 1998 Plan provide that in the event of a merger or other transaction that results or will result in the Company's Common Stock not being registered under Section 12 of the Securities Exchange Act of 1934, as amended, any unexercisable options or awards will become fully exercisable 20 days prior to the effective date of the merger or other transaction. The Compensation Committee may amend, modify or terminate any outstanding award under the Equity Plans with the participant's consent, except consent shall not be required if the Compensation Committee determines that such action will not materially and adversely affect the participant. The Board may amend, suspend or terminate any of the Equity Plans, or any part of such plans, at any time, except that no amendment may be made without stockholder approval if such approval is necessary to comply with any applicable tax or regulatory requirement. Agreements With Executive Officers New Management Agreements. Acquisition Company plans to enter into an employment agreement with Mr. Wolfington and a retirement and consulting agreement with Mr. Dailey. Each of the these agreements is described in the section captioned "SPECIAL FACTORS -- The Merger Agreement and Related Documents" of the Offer to Purchase accompanying this Information Statement and is incorporated herein by reference. Existing Employment and Severance Agreements. Set forth below is a description of the employment and/or severance agreements currently existing between the Company and its Named Executive Officers. On May 12, 2000, the Company entered into employment agreements with each of Messrs. Wolfington and Dailey. The employment agreements each have a term expiring on the earlier to occur of the executive's Normal Retirement Date under the Company's qualified retirement plan and the termination of the executive's employment pursuant to the terms of the employment agreement. The base salaries to be paid to Messrs. Wolfington and Dailey under the terms of the employment agreements are $325,000 and $275,000, respectively. In addition, Messrs. Wolfington and Dailey are each entitled to yearly incentive compensation in an amount determined by the Board of Directors and fringe benefits not less favorable than the fringe benefits to which they were entitled on May 12, 2000. In the event that Mr. Wolfington or Mr. Dailey dies during the term of his employment agreement, the Company will pay an amount equal to his base salary for a period of three months to the designated beneficiary. In the event that either Mr. Wolfington or Mr. Dailey becomes disabled during the term of his employment agreement, the Company will pay an amount equal to his base salary and any benefits to which he is entitled until he becomes eligible for disability income under the Company's long-term disability income plan. If either Mr. Wolfington or Mr. Dailey is terminated without cause (as defined in the employment agreements) or terminates his employment for good reason (as defined in the employment agreements), the Company will pay him an amount equal to three times his total compensation during his last full year of employment with the Company, and he will become fully vested in all benefits accrued. In the event of a change of control of the Company (as defined in the employment agreements) during the term of the employment agreements, the Company will pay to each of Messrs. Wolfington and Dailey, within ten days following the change of control, the sum of $1,250,000. If this payment is subject to an excise tax imposed by the Internal IV-10 Revenue Code, Messrs. Wolfington and Dailey will be entitled to receive an additional payment in an amount equal to the excise tax imposed upon the payment. On May 12, 2000, the Company also entered into severance and change of control agreements with each of Messrs. Haedicke, Thomas and Wintle. The severance agreements provide that in the event of a change of control of the Company (as defined in the severance agreements), the Company will pay to each of Messrs. Haedicke Thomas and Wintle the sums of $400,000, $300,000 and $100,000, respectively, within ten days following the change of control. If any of Messrs. Haedicke, Thomas or Wintle dies while any amount is still payable, all such amounts will be paid in accordance with the terms of the severance agreements to their divesee, legatee or estate. Nothing in the severance agreements prevents or limits Messrs. Haedicke, Thomas or Wintle from participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which they qualify. Interests of Certain Directors and Executive Officers in the Transactions Certain directors and executive officers of the Company have interests in the Transaction different from those of stockholders generally, which may present such persons with certain potential conflicts of interests. These interests are described in the section captioned "SPECIAL FACTORS -- Interests of Certain Persons in the Transaction" of the Offer to Purchase accompanying this Information Statement and is incorporated herein by reference. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The current members of the Compensation Committee are Messrs. Cox and St. George. No present or former executive officer of the Company serves as a member of the Compensation Committee. Furthermore, there are no interlocking relationships between any executive officer of the Company and any entity whose directors or executive officers serve on the Compensation Committee. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The Company has been party to certain other related party transactions which are described below. During 1993, for an aggregate purchase price of $850,000, the Company acquired 85 shares of non-voting redeemable preferred stock of CLI Fleet, Inc. ("CLI Fleet"), a privately-held finance company formed for the purpose of financing the chauffeured vehicle service industry. During 1999, the Company acquired, for an aggregate purchase price of approximately $657,000, paid for through the conversion of outstanding loans and deposits with CLI Fleet, a further 65.634 shares of CLI Fleet's non-voting redeemable preferred stock. As a holder of CLI Fleet preferred stock, the Company is currently entitled to receive an annual dividend of $500 per share. The Company waived the right to receive any dividends accrued in respect of its preferred stock through April 30, 1996. During 1998, CLI Fleet redeemed 10 shares of preferred stock held by the Company for an aggregate redemption price of $100,000. The remaining shares of preferred stock are subject to mandatory redemption by payments of $100,000 annually on May 30, 2001 through 2009 with a final payment of $406,340 on May 30, 2010. Under the terms of an agreement with CLI Fleet, commencing April 1997, the Company has an exclusive option to purchase all of the outstanding shares of common stock of CLI Fleet at a purchase price equal to the greater of $187,500 or CLI Fleet's liquidating value as determined by an independent appraisal. The Company is a party to three ten-year leases of administrative offices from CLI Fleet. During 1999, the aggregate rent expense paid to CLI Fleet pursuant to the leases was approximately $139,000. To date, CLI Fleet has provided financing to the Company's independent operators, without recourse to the Company, for both initial fees due under the Company's independent operator agreements and with respect to vehicles purchased by independent operators. Each of the Company's owned and operated chauffeured vehicle service companies has entered into a Finance and Service Agreement with CLI Fleet, which provides that the Company will recommend and refer independent operators to CLI Fleet for financing of vehicles. From 1993 to 1996, CLI Fleet purchased from the Company notes receivable due from independent operators in exchange for cash or demand notes on a non-recourse basis. IV-11 SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS The following table sets forth certain information as of July 24, 2000 with respect to the beneficial ownership of Common Stock by (i) each director of the Company, (ii) each the Named Executive Officer, (iii) each beneficial owner of more than five percent of the Company's Common Stock and (iv) all directors and executive officers of the Company as a group. As of July 24, 2000, there were 9,848,729 shares of the Company's Common Stock outstanding. Except as indicated in the footnotes below, the persons named in this table have sole investment and voting power with respect to the shares beneficially owned by them.
Shares Beneficially Owned ------------------------- Name of Beneficial Owner Number Percent ------------------------ --------------- ------------- Vincent A. Wolfington (1).......................... 566,069 5.5 Don R. Dailey (2).................................. 555,176 5.4 David H. Haedicke (3).............................. 169,600 1.7 Guy C. Thomas (4).................................. 141,782 1.4 John C. Wintle (3)................................. 16,967 * Robert W. Cox (3).................................. 24,400 * Dennis I. Meyer (5)................................ 9,000 * Nicholas J. St. George (6)......................... 16,500 * Joseph V. Vittoria (3)............................. 4,000 * Gilder Gagnon Howe & Co. LLC (7)...................... 1,568,448 15.9 1775 Broadway, 26th Floor New York, New York 10019 J. & W. Seligman & Co. Incorporated (8)............ 861,279 8.7 100 Park Avenue New York, New York 10017 All directors and executive officers as a group (12 persons) (9).................................. 1,687,897 15.0
- - -------- * Less than 1%. (1) Includes options to purchase 465,706 shares of Common Stock. Also includes (i) 1,183 shares of Common Stock currently held by a company controlled by Mr. Wolfington, (ii) 1,560 shares held by a limited partnership which are attributable to Mr. Wolfington's wife (780 shares) and one of his children (780 shares) and (iii) 430 shares held by one of his children. Excludes shares held by Yerac Associates, L.P. ("Yerac"), a limited partnership of which Mr. Wolfington is a limited partner, with respect to which shares Mr. Wolfington has no voting or investment power. (2) Includes options to purchase 415,707 shares of Common Stock. (3) Represents options to purchase shares of Common Stock. (4) Includes options to purchase 99,000 shares of Common Stock. (5) Includes options to purchase 4,000 shares of Common Stock. Also includes 5,000 shares held by Mr. Meyer's wife as to which Mr. Meyer disclaims beneficial ownership. (6) Includes options to purchase 11,500 shares of Common Stock. Also includes 5,000 shares held by Mr. St. George's wife as to which Mr. St. George disclaims beneficial ownership. (7) Includes 5,025 shares of Common Stock over which Gilder Gagnon Howe & Co. LLC has sole voting and 1,568,448 shares of Common Stock over which Gilder Gagnon Howe & Co. LLC has shared dispositive IV-12 power. This information is based upon the Schedule 13G filed by Gilder Gagnon Howe & Co. LLC with the Securities and Exchange Commission on February 14, 2000. (8) Includes 663,400 shares of Common Stock over which J. & W. Seligman & Co. Incorporated has shared voting power and 861,279 shares of Common Stock over which J. & W. Seligman & Co. Incorporated has shared dispositive power. William C. Morris, as the owner of a majority of the outstanding voting securities of J. & W. Seligman & Co. Incorporated, may be deemed to beneficially own the shares held by J. & W. Seligman & Co. Incorporated. This information is based upon the Schedule 13G filed by J. & W. Seligman & Co. Incorporated and William C. Morris, as a group, with the Securities and Exchange Commission on July 17, 2000. (9) See Notes 2 through 6. Also includes options to purchase 164,483 shares of Common Stock and 19,920 shares of Common Stock beneficially owned by executive officers not listed in the table above. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company's executive officers, directors, and more than ten percent stockholders to file with the SEC reports on prescribed forms of their ownership and changes in ownership of Common Stock and furnish copies of such forms to the Company. Except for the following, the Company believes that during and with respect to the fiscal year ended November 30, 1999, all reports required by Section 16(a) to be filed by the Company's officers, directors and more than ten percent stockholders were filed on a timely basis. Devin Murphy filed a Form 4 with the Commission on May 13, 1999 for shares purchased on the open market on February 4, 1999. Paul Sandt filed a Form 4 with the Commission on October 26, 1999 for shares purchased pursuant to the exercise of a stock option and the sale of those shares on July 21, 1999. David Haedicke filed a Form 4 with the Commission on January 13, 2000 for shares purchased pursuant to the exercise of a stock option and the sale of those shares on November 12, 1999. IV-13 EXHIBIT A [LOGO OF FRIEDMAN, BILLINGS, RAMSEY & CO. INC.] July 15, 2000 Independent Committee of the Board of Directors Carey International, Inc. 4530 Wisconsin Avenue, NW Washington, DC 20016 Board of Directors: You have requested that Friedman, Billings, Ramsey & Co., Inc. ("FBR") provide you with its opinion as to the fairness, from a financial point of view, to the public holders of common stock ("Non-Affiliated Shareholders") of Carey International Inc. (the "Company") of consideration to be received by them pursuant to a draft Agreement and Plan of Merger dated July 14, 2000 (the "Merger Agreement") among the Company, a newly formed Delaware Corporation ("NewCo") and Chartwell Investments, Inc. Pursuant to the Merger Agreement, a wholly owned subsidiary of NewCo will be merged with and into the Company (the "Merger"). The Merger Agreement provides, among other things, that for each outstanding share of common stock of the Company (a "Share") (other than those shares subject to dissenters' rights), shareholders, including Shares held by the Non-Affiliated Shareholders and certain members of the Company's management, will receive $18.25 cash per Share. The terms of the Merger are more fully set forth in the Merger Agreement. FBR has acted as financial advisor to the Independent Committee in connection with the Merger. In delivering this opinion, FBR has among other things: 1. Reviewed the Company's Form 10-K for the fiscal year ended November 30, 1999; 2. Reviewed the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February, 29, 2000; 3. Reviewed the Company's un-audited quarterly results for the fiscal quarter ended May 31, 2000; 4. Reviewed the Company's Annual Proxy Statement dated May 26, 1999; 5. Conducted discussions with certain members of management of the Company concerning the financial condition, results of operations, financial forecasts, business and prospects of the Company; 6. Conducted discussions with PriceWaterhouse Coopers, the Company's auditor, concerning the condition of the Company's accounting controls and financial statements; 7. Reviewed market prices and trading activity for the Shares for the period December 22, 1997 through July 11, 2000. 8. Compared the results of operations and financial condition of the Company with those of certain publicly-traded companies that FBR deemed to be reasonably comparable to the Company; 9. Reviewed the financial terms, to the extent publicly available, of certain acquisition transactions that FBR deemed to be reasonably comparable to the Merger; 10. Reviewed the Merger Agreement and related documents; and 11. Performed such other analyses and reviewed and analyzed such other information as FBR deemed appropriate. In rendering this opinion, FBR did not assume responsibility for independently verifying, and did not independently verify, any financial or other information concerning the Company furnished to it by the Company, or the publicly- available financial and other information regarding the Company and other comparable public companies. FBR has assumed that all such information is accurate and complete and has no reason to believe A-1 otherwise. FBR has relied on certain assumptions, conveyed by the Company's management, pertaining to the financing used to consummate the merger. FBR has further relied on the assurances of management of the Company that they are not aware of any facts that would make such financial or other information relating to such entities inaccurate or misleading. With respect to financial forecasts for the Company provided to FBR by the Company's management, FBR has assumed, for purposes of this opinion, that the forecasts have been reasonably prepared on bases reflecting the best available estimates and judgments of such management at the time of preparation as to the future financial and operating performance of the Company. FBR has assumed that there has been no undisclosed material change in the Company's assets, financial condition, result of operations, business or prospects since February 29, 2000, and has relied upon the 10-K for November 30, 1999 as representation of the Company's financial position and operating results through that date. FBR was not requested to, and did not, undertake an independent appraisal of the assets or liabilities of the Company nor was FBR furnished with any such appraisals. FBR's conclusions and opinion are necessarily based upon economic, market and other conditions and the information made available to FBR as of the date of this opinion. FBR expresses no opinion on matters of a legal, regulatory, tax or accounting nature related to the Merger. In connection with FBR's role as financial advisor to the Company regarding the Merger, FBR will receive a fee of $400,000.00 upon rendering this opinion. Based upon and subject to the foregoing, as well as any such other matters as we consider relevant, it is FBR's opinion, as of the date hereof, that consideration to be received by the Non-Affiliated Shareholders in the Merger is fair, from a financial point of view. This letter does not constitute a recommendation to any Shareholder as to how such Shareholder should vote on the proposed Merger or as to what election Management should make pursuant to the Merger Agreement. This letter is for the information of the Board of Directors and of the Special Committee of the Board of Directors and may be referred to and reproduced in its entirety in proxy materials sent to the Shareholders in connection with the solicitation of approval for the Merger. The letter may not be otherwise reproduced, disseminated, quoted from or referred to by the Company without FBR's prior written consent. Very truly yours, /s/ Joseph R. Nardini FRIEDMAN, BILLINGS, RAMSEY & CO., INC. A-2 EXHIBIT B [LOGO OF BENEDETTO GARTLAND COMPANY] July 15, 2000 Board of Directors Carey International, Inc. 4530 Wisconsin Avenue, NW, Suite 500 Washington, DC 20016 Dear Sirs: You have requested our opinion as to the fairness from a financial point of view to the holders of common stock, par value $0.01 per share ("Company Common Stock"), of Carey International, Inc. (the "Company") of the consideration to be received by such holders pursuant to the terms of the Agreement and Plan of Merger (the "Agreement"), by and among 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 Sub Company") pursuant to which Acquisition Company or Acquisition Sub Company will be merged (the "Merger") with and into the Company. Pursuant to the Agreement, Acquisition Company and the Company will commence a tender offer (the "Tender Offer") for all the outstanding shares of Company Common Stock at a price of $18.25 per share. The Tender Offer is to be followed by the Merger in which the shares of all holders who did not tender will be converted into the right to receive $18.25 per share in cash. We understand that Vincent A. Wolfington and other members of the Company's management team (collectively, "Management") will continue to have an interest in the Company after the closing of the Merger. This opinion does not address the fairness from a financial point of view of the Tender Offer and/or Merger to Management. In the course of performing our review and analyses for rendering this opinion, we have: (i) reviewed a draft of the Agreement; (ii) reviewed certain publicly available business and financial information relating to the Company; (iii) reviewed certain operating and financial information, including projections, provided to or discussed with us by management of the Company related to the Company and its prospects; (iv) met with certain member's of the Company's senior management to discuss its business, operations, historical and projected financial results and future prospects; (v) reviewed the historical stock prices, valuation parameters and trading volume of the Company Common Stock; (vi) reviewed publicly available financial data, stock market performance data and valuation parameters of companies whose operation we considered generally relevant in evaluating the Company; (vii) reviewed the terms of recent selected mergers and acquisitions which we deemed generally relevant in evaluating the Merger; (viii) performed discounted cash flow analyses based on the projections for the Company furnished to us; and (ix) considered such other information and conducted other studies, analyses, inquiries and investigations as we deemed appropriate. In rendering our opinion, we have relied upon and assumed the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by the Company, or B-1 that was otherwise reviewed by us and have assumed that the Company is not aware of any information prepared by it or its advisors that might be material to our opinion that has not been made available to us. With respect to the financial projections supplied to us, we have relied on the representations that they have been reasonably prepared on the basis reflecting the best currently available estimates and judgments of the management of the Company as to the future operating and financial performance of the Company. We have not assumed any responsibility for making an independent evaluation of any assets or liabilities or for making any independent verification of the information reviewed by us. Our opinion is necessarily based on economic, market, financial and other condition as they exist on, and on the information made available to us as of, the date of this letter. It should be understood that, although subsequent developments may affect this opinion, we do not have any obligation to update, revise or reaffirm this opinion. Our opinion does not address the relative merits of the Tender Offer and Merger or any other business strategies being considered by the Company's Board of Directors, nor does it address the Board's decision to proceed with the Tender Offer and Merger. Our opinion does not constitute a recommendation to any stockholder as to whether such stockholder should tender into the Tender Offer or how such stockholder should vote on any proposed Merger. We have acted as advisor to the Company's Board of Directors in connection with the Merger and will receive a fee for such services, including the rendering of this opinion, a significant portion of which is contingent upon consummation of the Merger. This opinion is addressed to the Board of Directors. We understand that the Company's Special Committee of the Board of Directors (the "Special Committee") has retained Friedman, Billings, Ramsey Group, Inc. to provide an opinion exclusively to the Special Committee. This opinion may be included in its entirety, and only its entirety, in any proxy statement or tender offer document distributed to the Company's shareholders in connection with the Merger or the Tender Offer. However, no version or excerpt may be used, and no public reference (except as provided for in the preceding sentence) to this opinion may be made with out our prior written consent. Based upon and subject to the foregoing and such other factors as we deem relevant, we are of the opinion that, as of the date hereof, the consideration to be received by the holders of the Company Common Stock (other than Management) pursuant to the Tender Offer and/or Merger is fair to such shareholders from a financial point of view. Very truly yours, BENEDETTO, GARTLAND & COMPANY, INC. /s/ M. William Benedetto By: _________________________________ M. William Benedetto Chairman B-2 EXHIBIT C SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW (a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to sec. 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a holder of record of stock in a stock corporation and also a member of record of a nonstock corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words and also membership or membership interest of a member of a nonstock corporation; and the words "depository receipt" mean a receipt or other instrument issued by a depository representing an interest in one or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository. (b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to sec. 251 (other than a merger effected pursuant to sec. 251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec. 264 of this title: (1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of sec. 251 of this title. (2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except: a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders; c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph. (3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under sec. 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. (c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of C-1 incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable. (d) Appraisal rights shall be perfected as follows: (1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder's shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder's shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or (2) If the merger or consolidation was approved pursuant to sec. 228 or sec. 253 of this title, each constituent corporation, either before the effective date of the merger or consolidation or within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section; provided that, if the notice is given on or after the effective date of the merger or consolidation, such notice shall be given by the surviving or resulting corporation to all such holders of any class or series of stock of a constituent corporation that are entitled to appraisal rights. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder's shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. C-2 (e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) hereof and who is otherwise entitled to appraisal rights, may file a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder shall have the right to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) hereof, whichever is later. (f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation. (g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. (h) After determining the stockholders entitled to an appraisal, the Court shall appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. In determining the fair rate of interest, the Court may consider all relevant factors, including the rate of interest which the surviving or resulting corporation would have had to pay to borrow money during the pendency of the proceeding. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, permit discovery or other pretrial proceedings and may proceed to trial upon the appraisal prior to the final determination of the stockholder entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder's certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section. (i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Interest may be simple or compound, as the Court may direct. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation C-3 of the certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state. (j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal. (k) From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just. (l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation. C-4 Fascimile copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of Carey International or his broker, dealer, commercial bank, trust company or other nominee to the Depositary, at one of the address set forth below: The Depositary for the Offer is: United States Trust Company of New York By Overnight Courier and by By Hand Delivery By Registered or Hand to 4:30 p.m. Certified Mail: after 4:30 p.m. on Expiration Date: United States Trust United States Trust Company of New York Company of New York United States Trust Company 30 Broad Street, B-Level P.O. Box 112 of New York New York, NY 10004-2304 Bowling Green Station 30 Broad Street, 14th Floor New York, NY 10274-0012 New York, NY 10004-2304 Facsimile Transmission: (212) 422-0183 or (646) 458- 8104 For additional information, please call United States Trust Company of New York (800) 548-6565 Questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent at its location and telephone numbers set forth below. Stockholders may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: D.F. King & Co., Inc. 77 Water Street 20th Floor New York, NY 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others Please Call Toll-Free: (800) 628-8510 EX-99.A.1.I 3 0003.txt EXHIBIT 99(A)(1)(II) EXHIBIT (a)(1)(ii) LETTER OF TRANSMITTAL to Tender Shares of Common Stock of CAREY INTERNATIONAL, INC. Pursuant to the Offer to Purchase Dated August 3, 2000 by ALUWILL ACQUISITION CORP. and by CAREY INTERNATIONAL, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 31, 2000, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: United States Trust Company of New York By Overnight Courier and By Hand Delivery to 4:30 By Registered or by Hand p.m.: Certified Mail: Delivery after 4:30 p.m. on Expiration Date: United States Trust United States Trust United States Trust Company Company Company of New York of New York of New York 30 Broad Street, 14th 30 Broad Street, B-Level P.O. Box 112 Floor New York, NY 10004-2304 Bowling Green Station New York, NY 10004-2304 New York, NY 10274-0112 For additional information, please call United States Trust Company of New York at (800) 548-6565 DESCRIPTION OF SHARES TENDERED - - --------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank, exactly as name(s) appear(s) on Share Share Certificate(s) and Shares Tendered Certificate(s) tendered) (Attach additional list, if necessary) - - -------------------------------------------------------------------------------- Total Number of Shares Represented by Share Certificate Share Number of Shares Number(s)* Certificate(s)** Tendered ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- Total Shares:
- - -------------------------------------------------------------------------------- * Need not be completed by stockholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. [_]I HAVE LOST MY CERTIFICATE(S) FOR SHARES OF COMMON STOCK AND REQUIRE ASSISTANCE WITH RESPECT TO REPLACING SUCH CERTIFICATE(S). (SEE INSTRUCTION 10.) DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders either if certificates evidencing Shares (as defined below) are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to the Depositary's account at the Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the book-entry transfer procedure described in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase (as defined below). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Stockholders whose certificates evidencing Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in "The Tender Offer-Section 1 (Terms of the Offer)" of the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. See Instruction 2. [_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _________________________________________ Account Number: _____________________ Transaction Code Number: _______ [_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): _______________________________________ Window Ticket Number (if any): _________________________________________ Date of Execution of Notice of Guaranteed Delivery: ____________________ Name of Institution which Guaranteed Delivery: _________________________ NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY. 2 Ladies and Gentlemen: The undersigned hereby tenders to Aluwill Acquisition Corp. ("Acquisition Company"), a Delaware corporation, and/or to Carey International, Inc., a Delaware corporation ("Carey International"), (Carey International or Acquisition Company, individually, is, and Carey International together with Acquisition Company are, sometimes referred to herein as the "Purchasers") the above-described shares of common stock, $0.01 par value per share (the "Shares"), of Carey International, pursuant to the Purchasers' offer to purchase all outstanding Shares, at $18.25 per Share (the "Offer Price"), net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Subject to, and effective upon, acceptance for payment of the Shares tendered herewith, in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchasers all right, title and interest in and to all the Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after July 19, 2000 (collectively, "Distributions"), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchasers, (ii) present such Shares and all Distributions for transfer on the books of Carey International and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned irrevocably appoints designees of Purchasers as the attorneys and proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights with respect to the Shares tendered by the undersigned and accepted for payment by the Purchasers (and any and all Distributions). All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment will be effective if, when, and only to the extent that, the Purchasers accept such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by the undersigned with respect to such Shares (and such other Shares and securities) will, without further action, be revoked, and no subsequent proxies may be given nor any subsequent written consent executed by the undersigned (and, if given or executed, will not be deemed to be effective) with respect thereto. The designees of the Purchasers will, with respect to the Shares and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual or special meeting of the stockholders of Carey International or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise, and the Purchasers reserve the right to require that, in order for Shares or other securities to be deemed validly tendered, immediately upon the Purchasers' acceptance for payment of such Shares, the Purchasers must be able to exercise full voting rights with respect to such Shares. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, and that when such Shares are accepted for payment by the Purchasers, the Purchasers will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or the Purchasers to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchasers all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending 3 such remittance and transfer or appropriate assurance thereof, the Purchasers shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price, the amount or value of such Distribution as determined by the Purchasers in their sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. The Purchasers' acceptance of such Shares for payment will constitute a binding agreement between the undersigned and the Purchasers upon the terms and subject to the conditions of the Offer, including, without limitation, the undersigned's representation and warranty that the undersigned owns the Shares being tendered. The undersigned acknowledges that no interest will be paid on the Offer Price for tendered Shares regardless of an extension of the Offer or any delay in making such payment. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please issue the check for the purchase price of all Shares purchased, and return all Share Certificates evidencing Shares not purchased or not tendered, in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered." Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail the check for the purchase price of all Shares purchased and all Share Certificates evidencing Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of, and mail such check and Share Certificates to, the person(s) so indicated. The undersigned recognizes that the Purchasers do not have an obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if the Purchasers do not purchase any of the Shares tendered hereby. 4 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned or if Shares tendered hereby and delivered by book-entry transfer which are not purchased are to be returned by credit to an account at the Book-Entry Transfer Facility other than that designated above. Issue: [_] Check [_] Share Certificate(s) to: Name ______________________________________________________________________ (Print) Address ___________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (ZIP Code) ___________________________________________________________________________ (Taxpayer Identification or Social Security Number) (See Substitute Form W-9 on reverse side) Credit unpurchased Shares delivered by book-entry transfer to the following account: ________________________________________________________ (Account Number) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be mailed to someone other than the undersigned, or to the undersigned at an address other than that shown under "Description of Shares Tendered." Mail: [_] Check [_] Share Certificate(s) to: Name ______________________________________________________________________ (Print) Address ___________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (ZIP Code) 5 IMPORTANT STOCKHOLDERS: SIGN HERE (ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN) X _________________________________________________________________________ X _________________________________________________________________________ Signature(s) of Stockholder(s) Dated: ________________, 2000 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5 hereof.) Name(s): __________________________________________________________________ (Please Print) Capacity (full title): ____________________________________________________ Address: __________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (Zip Code) Area Code and Telephone No.: ______________________________________________ Tax Identification or Social Security No.: ________________________________ (See substitute Form W-9 included herein) GUARANTEE OF SIGNATURE(S) (IF REQUIRED--SEE INSTRUCTIONS 1 AND 5 HEREOF) SPACE BELOW FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN THE SPACE BELOW. 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. All signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or by any other bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad- 15 under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document includes any participant in the Book-Entry Transfer Facility system whose name appears on a security position listing as the owner of the Shares) tendered hereby and such registered holder(s) has (have) not completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Share Certificates. This Letter of Transmittal is to be used if either Share Certificates are to be forwarded herewith or Shares are to be delivered by book-entry transfer pursuant to the procedure set forth in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. Share Certificates evidencing all physically tendered Shares, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, together in each case with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date (as defined in the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book- entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchasers, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates representing all tendered Shares in proper form for transfer or the Book-Entry Confirmation with respect to all such Shares, together with a properly completed and duly executed Letter of Transmittal for (or a manually signed facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents, must be received by the Depositary within three American Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in "The Tender Offer-Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a manually signed facsimile hereof), all tendering stockholders waive any right to receive any notice of the acceptance of their Shares for payment. 7 3. Inadequate Space. If the space provided herein under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate schedule and attached hereto. 4. Partial Tenders (not applicable to stockholders who tender by Book-Entry Transfer). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the expiration or termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Share tendered hereby is owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Share. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing the Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity for the registered holder, such person should so indicate when signing, and proper evidence satisfactory to the Purchasers of such person's authority so to act must be submitted. 6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, the Purchasers will pay all stock transfer taxes with respect to the sale and transfer of any Shares to them or their order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to the Purchasers of the payment of such taxes, or exemption therefrom is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates evidencing the Shares tendered hereby. 8 7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" set forth herein, the appropriate boxes set forth in this Letter of Transmittal must be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account at the Book-Entry Transfer Facility as such stockholder may designate in the box entitled "Special Payment Instructions." If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated herein as the account from which such Shares were delivered. 8. Waiver of Conditions. The conditions to the Offer may be waived by the Purchasers and Parent in whole or in part at any time and from time to time in their discretion. 9. Improper Surrender. The Depositary reserves the right to reject any surrenders of Share Certificate(s) that are defective or irregular in any respect and may request from persons making such surrenders such additional documents as the Depositary deems appropriate to cure any such surrender. No surrender will be deemed to have been effected until all such defects or irregularities, which have not been waived, have been cured. 10. Lost Certificates. In the event that any stockholder is unable to deliver to the Depositary the Share Certificate(s) representing his, her or its Shares due to the loss or destruction of such Share Certificate(s), such fact should be indicated on the face of this Letter of Transmittal. The Depositary will forward additional documentation which such stockholder must complete in order to effectively surrender such lost or destroyed Share Certificate(s) (including affidavits of loss and indemnity bonds in lieu thereof). There may be a fee in respect of lost or destroyed Share Certificates, but surrenders hereunder regarding such lost certificates will be processed only after such documentation has been submitted to and approved by the Depositary. 11. Questions and Requests for Assistance or Additional Copies. Questions and requests for assistance may be directed to the Information Agent at the address or telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 12. Substitute Form W-9. Each tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax. If a tendering stockholder has been notified by the Internal Revenue Service that such stockholder is subject to back-up withholding, such stockholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such stockholder has since been notified by the Internal Revenue Service that such stockholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering stockholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such stockholder. If the tendering stockholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such stockholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. IMPORTANT: THIS LETTER OF TRANSMITTAL PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). 9 IMPORTANT TAX INFORMATION Under the federal income tax law, a stockholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payor) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder's social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. Certain stockholders (including, among others, corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. A stockholder should consult his or her tax advisor as to such stockholder's qualification for exemption from backup withholding and the procedure for obtaining such exemption. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. Refunds are not available from the Depositary. Purpose of Substitute Form W-9 To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder's correct TIN by completing the form below certifying (i) that the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and (ii) that (y) such stockholder has not been notified by the Internal Revenue Service that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified such stockholder that such stockholder is no longer subject to backup withholding. What Number to give the Depositary The stockholder is required to give the Depositary the social security number or employer identification number of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should write "Applied For" in the space provided for the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. 10 ALL TENDERING STOCKHOLDERS MUST COMPLETE THE FOLLOWING: PAYOR'S NAME: SUBSTITUTE PART I - Taxpayer ------------------- Identification Number - For Social Security all accounts, enter your Number taxpayer identification number on the appropriate line to the right. (For most individuals, this is your social security number. If you do not have a number, see Obtaining a Number in the enclosed Guidelines and complete as instructed.) Certify by signing and dating below. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payor. Form W-9 or Department of the ------------------- Treasury Employer Internal Revenue Identification Service Number (If awaiting TIN write "Applied For") Payer's Request for Taxpayer Identification Number ("TIN") - - ------------------------------------------------------------------------------- PART II - For Payees exempt from backup withholding, see the enclosed Guidelines and complete as instructed therein. - - ------------------------------------------------------------------------------- PART III - CERTIFICATION - Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding either because I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATE INSTRUCTIONS - You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). (Also see instructions in the enclosed Guidelines.) - - ------------------------------------------------------------------------------- Signature ________________________________________ Date _____________________ NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that, notwithstanding the information I provided in Part I of the Substitute Form W-9 (and the fact that I have completed this Certificate of Awaiting Taxpayer Identification Number), if I do not provide a correct taxpayer identification number to the Depositary within sixty (60) days, 31% of all reportable payments made to me thereafter may be withheld. _________________________________________ _________________________________ Signature Date 11 THE INFORMATION AGENT FOR THE OFFER IS: D.F. KING & CO., INC. 77 Water Street 20th Floor New York, New York 10005-4495 Banks and Brokers Call Collect: (212) 269-5550 All Others call Toll Free: (800) 628-8510 12 EX-99.A.5.I 4 0004.txt EXHIBIT (A)(5)(I) EXHIBIT (a)(5)(i) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF CAREY INTERNATIONAL, INC. TO ALUWILL ACQUISITION CORP. AND TO CAREY INTERNATIONAL, INC. (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates (the "Share Certificates") evidencing shares of common stock, $0.01 par value per share (the "Shares"), of Carey International, Inc., a Delaware corporation, are not immediately available, (ii) time will not permit all required documents to reach United States Trust Company of New York, as Depositary (the "Depositary"), prior to the Expiration Date (as defined in the Offer to Purchase (as defined below)) or (iii) the procedure for book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, by overnight delivery or mailed to the Depositary. See "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. The Depositary for the Offer is: United States Trust Company of New York By Overnight Courier By Hand Delivery to 4:30 By Registered or and by Hand Delivery p.m.: Certified Mail: after 4:30 p.m. on Expiration Date: United States Trust United States Trust Company United States Trust Company of New York Company of New York 30 Broad Street, B-Level of New York 30 Broad Street, 14th New York, NY 10004-2304 P.O. Box 112 Floor Bowling Green Station New York, NY 10004-2304 New York, NY 10274-0112 Facsimile Transmission: (212) 422-0183 or (646) 458-8104 Confirm Receipt of Facsimile by Telephone: (800) 548-6565 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. Ladies and Gentlemen: The undersigned hereby tenders to Aluwill Acquisition Corp., a Delaware corporation, and/or to Carey International Inc., a Delaware corporation, upon terms and subject to the conditions set forth in the Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal, receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures described in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. Number of shares: Name(s) of Record Holder(s): ____________________________________ ____________________________________ Certificate Nos. (if available): ____________________________________ ____________________________________ Please Print If Shares will be delivered by Address: book-entry Transfer, provide the following information: ____________________________________ Account Number: ____________________ ____________________________________ Zip Code Area code and Tel. No.: ____________ Signature(s): ______________________ Dated: _________________, 2000 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEES) The undersigned, a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or by any other bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an "Eligible Institution"), guarantees the delivery to the Depositary of the Shares tendered hereby, in proper form of transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents within three American Stock Exchange trading days of the date hereof. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates representing Shares to the Depositary within the time period set forth herein. Failure to do so could result in financial loss to such Eligible Institution. Name of Firm Authorized Signature ____________________________________ ____________________________________ Title Address Name: ______________________________ ____________________________________ Please Type or Print Zip Code Date: __________________, 2000 Area Code and Tel. No.: ____________ DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A.5.II 5 0005.txt EXHIBIT (A)(5)(II) EXHIBIT (a)(5)(ii) Offer to Purchase for Cash All Outstanding Shares of Common Stock of CAREY INTERNATIONAL, INC. at $18.25 Net Per Share by ALUWILL ACQUISITION CORP. and by CAREY INTERNATIONAL, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 31, 2000, UNLESS THE OFFER IS EXTENDED. August 3, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), and Carey International, Inc., a Delaware corporation ("Carey International"), to act as Information Agent in connection with Acquisition Company's and Carey International's joint offer to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Carey International, at a price of $18.25 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as each may be amended and supplemented from time to time, together constitute the "Offer") enclosed herewith. Acquisition Company and Carey International are collectively referred to herein as the "Purchasers." THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF JULY 19, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG CAREY INTERNATIONAL, LIMOUSINE HOLDINGS, LLC ("PARENT"), ACQUISITION COMPANY and ERANJA ACQUISITION SUB, INC. ("ACQUISITION COMPANY SUB"). THE BOARD OF DIRECTORS OF CAREY INTERNATIONAL HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND HAS DETERMINED THAT THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF THE STOCKHOLDERS OF CAREY INTERNATIONAL. THE BOARD OF DIRECTORS OF CAREY INTERNATIONAL UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT THERETO. Also enclosed is the letter to stockholders of Carey International from the Chairman of the Board of Carey International. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST 5,216,072 SHARES, WHICH NUMBER OF SHARES CONSTITUTES A MAJORITY OF THE SHARES OUTSTANDING (INCLUDING FOR THESE PURPOSES SHARES ISSUABLE UPON THE EXERCISE OF COMPANY OPTIONS (AS DEFINED IN THE OFFER TO PURCHASE) BY PERSONS WHO HAVE NOT AGREED TO ENTER INTO OPTION EXERCISE AGREEMENTS (AS DEFINED IN THE OFFER TO PURCHASE) AFTER GIVING EFFECT TO THE CANCELLATION OF ANY SHARES PURCHASED BY CAREY INTERNATIONAL AND (2) CAREY INTERNATIONAL AND/OR ACQUISITION COMPANY HAVING RECEIVED OR HAVING AVAILABLE THE PROCEEDS OF THE FINANCING CONTEMPLATED BY THE FINANCING COMMITMENT LETTERS (AS DEFINED IN THE OFFER TO PURCHASE) AND THE PROCEEDS FROM THE CAPITAL CONTRIBUTION (AS DEFINED IN THE OFFER TO PURCHASE), INCLUDING BUT, NOT LIMITED TO, PROCEEDS SUFFICIENT TO (A) FINANCE THE PURCHASE OF THE SHARES THAT THE PURCHASERS ARE AGREEING TO PURCHASE PURSUANT TO THE OFFER, (B) PAY THE MERGER CONSIDERATION (AS DEFINED IN THE OFFER TO PURCHASE) PURSUANT TO THE MERGER, (C) PURCHASE CERTAIN SECURITIES OF CAREY INTERNATIONAL PURSUANT TO THE CAREY PURCHASE AGREEMENTS (AS DEFINED IN THE OFFER TO PURCHASE), (D) REPAY OUTSTANDING INDEBTEDNESS OF CAREY INTERNATIONAL AND ITS SUBSIDIARIES AND (E) PAY THE FEES AND EXPENSES REQUIRED TO BE PAID IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN THE OFFER TO PURCHASE AND IN THE RELATED LETTER OF TRANSMITTAL. Pursuant to the Merger Agreement, following the consummation of the Offer and the satisfaction or waiver of certain conditions, either Acquisition Company or Acquisition Company Sub will be merged with and into Carey International (the "Merger"), with Carey International continuing as the surviving corporation (the "Surviving Corporation"). Following consummation of the Merger, the Surviving Corporation will be a wholly-owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held by Acquisition Company, Shares in the treasury of Carey International, Shares held by holders who perfect their appraisal rights in accordance with the Delaware General Corporation Law, and certain Shares held by certain members of management of Carey International) , will, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and converted into the right to receive $18.25 in cash per share, without interest, as set forth in the Merger Agreement and described in the Offer to Purchase. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, or who hold Shares registered in their own names, we are enclosing the following documents: 1. The Offer to Purchase dated August 3, 2000. 2. The Letter of Transmittal to be used by holders of Shares in accepting the Offer and tendering Shares. Facsimile copies of the Letter of Transmittal (with manual signatures) may be used to tender Shares. 3. The Notice of Guaranteed Delivery to be used to accept the Offer if the certificates evidencing such Shares (the "Share Certificates") are not immediately available or time will not permit all required documents to reach the Depositary (as defined in the Offer to Purchase) prior to the Expiration Date (as defined in the Offer to Purchase) or the procedure for book-entry transfer cannot be completed by the Expiration Date. 4. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withheld. 6. A return envelope addressed to the Depositary. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchasers will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn promptly after the latest to occur of (i) the Expiration Date and (ii) the satisfaction or waiver of the conditions to the Offer set forth in "THE TENDER OFFER--Section 11 (Conditions to the Offer)" of the Offer to Purchase. For purposes of the Offer, the Purchasers will be deemed to have accepted for payment, and thereby purchased, Shares validly 2 tendered and not properly withdrawn as, if and when the Purchasers give oral or written notice to the Depositary of their acceptance for payment of such Shares pursuant to the Offer. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) Share Certificates or a timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase) pursuant to the procedures set forth in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase, (ii) the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase), and (iii) all other documents required by the Letter of Transmittal. Under no circumstances will interest on the purchase price for Shares be paid by the Purchasers, regardless of any delay in making such payment. The Purchasers will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent as set forth in "SPECIAL FACTORS--Section 11 (Fees and Expenses)" of the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. The Purchasers will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients. The Purchasers will pay any stock transfer taxes with respect to the transfer and sale to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal, as well as any charges and expenses of the Depositary and the Information Agent. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 31, 2000 UNLESS THE OFFER IS EXTENDED. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal, with any required signature guarantees and any other required documents, should be sent to the Depositary, and Share Certificates should be delivered or such Shares should be tendered by book- entry transfer, all in accordance with the Instructions set forth in the Letter of Transmittal and the Offer to Purchase. If holders of Shares wish to tender Shares, but it is impracticable for them to forward their Share Certificates or other required documents to the Depositary prior to the Expiration Date or to comply with the procedures for book-entry transfer on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified under "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from the undersigned at the address and telephone number set forth on the back cover of the Offer to Purchase. Very truly yours, D.F. King & Co., Inc. NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE OFFERORS, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.A.5.III 6 0006.txt EXHIBIT (A)(5)(III) EXHIBIT (a)(5)(iii) Offer to Purchase for Cash All Outstanding Shares of Common Stock of CAREY INTERNATIONAL, INC. at $18.25 Net Per Share by ALUWILL ACQUISITION CORP. and by CAREY INTERNATIONAL, INC. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 31, 2000, UNLESS THE OFFER IS EXTENDED. August 3, 2000 To Our Clients: Enclosed for your consideration are an Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as each may be amended from time to time, together constitute the "Offer") in connection with the Offer by Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), and Carey International, Inc., a Delaware corporation ("Carey International"), to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Carey International, at a price of $18.25 per share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase. Unless the context indicates otherwise, "Stockholders" shall mean holders of Shares. Acquisition Company and Carey International are collectively referred to herein as the "Purchasers." Also enclosed is the letter to stockholders of the Company from the Chairman of the Board of Carey International. Stockholders whose certificates evidencing Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required by the Letter of Transmittal to the Depositary prior to the Expiration Date (as such terms are defined in the Offer to Purchase) or who cannot complete the procedure for delivery by book- entry transfer to the Depositary's account at the Book-Entry Transfer Facility (as defined in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase) on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book- Entry Transfer Facility's procedures does not constitute delivery to the Depositary. THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS BEING FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. Please note the following: 1. The tender price is $18.25 per Share (the "Offer Price"), net to you in cash, without interest thereon, upon the terms and subject to the conditions of the Offer. 2. The Offer and withdrawal rights will expire at 5:00 p.m., New York City time, on August 31, 2000, unless the Offer is extended. 3. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of July 19, 2000 (the "Merger Agreement"), by and among Carey International, Limousine Holdings, LLC ("Parent"), Acquisition Company and Eranja Acquisition Sub, Inc., a wholly-owned subsidiary of Acquisition Company ("Acquisition Company Sub"), which provides, among other things, for the commencement of the Offer by the Purchasers and further provides that after the purchase of the Shares pursuant to the Offer, subject to the satisfaction or waiver of certain conditions contained in the Merger Agreement, either Acquisition Company or Acquisition Company Sub will be merged with and into Carey International (the "Merger"), with Carey International continuing as the surviving corporation (the "Surviving Corporation"). Following consummation of the Merger, the Surviving Corporation will be a wholly-owned subsidiary of Parent. At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held by Acquisition Company, Shares in the treasury of Carey International, Shares held by holders who perfect their appraisal rights in accordance with the Delaware General Corporation Law and certain Shares held by certain members of management of Carey International), will, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and converted into the right to receive $18.25 in cash per share, without interest. 4. The Board of Directors of Carey International (the "Board") has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and has determined that the Offer and the Merger are advisable, fair to and in the best interests of the stockholders of Carey International, and unanimously recommends that stockholders accept the Offer and tender their Shares pursuant thereto. 5. The Offer is being made for all outstanding Shares. 6. The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer at least 5,216,072 Shares, which number of Shares constitutes a majority of the Shares outstanding (including for these purposes Shares issuable upon the exercise of Company Options (as defined in the Offer to Purchase) by persons who have not agreed to enter into Option Exercise Agreements (as defined in the Offer to Purchase) after giving effect to the cancellation of any Shares purchased by Carey International and (2) Carey International and/or Acquisition Company having received or having available the proceeds of the financing contemplated by the Financing Commitment Letters (as defined in the Offer to Purchase) and the proceeds from the Capital Contribution (as defined in the Offer to Purchase), including, but not limited to, proceeds sufficient to (a) finance the purchase of the Shares that the Purchasers are agreeing to purchase pursuant to the Offer, (b) pay the Merger Consideration (as defined in the Offer to Purchase) pursuant to the Merger, (c) purchase certain securities of Carey International pursuant to the Carey Purchase Agreements (as defined in the Offer to Purchase), (d) repay outstanding indebtedness of Carey International and its subsidiaries and (e) pay the fees and expenses required to be paid in connection with the transactions contemplated by the Merger Agreement. The Offer is also subject to other terms and conditions described in the Offer to Purchase and in the related Letter of Transmittal. 7. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. 2 The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal (and any amendments or supplements thereto), and is being made to all holders of all Shares. The Purchasers are not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchasers become aware of any valid state statute prohibiting the making of the Offer, the Purchasers will make a good faith effort to comply with such statute. If, after such good faith effort, the Purchasers cannot comply with such state statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the holders of Shares in any such state. In any jurisdiction where the securities, "blue sky" or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchasers by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form contained in this letter. An envelope in which to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form contained in this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. If holders of Shares wish to tender Shares, but it is impracticable for them to forward their Share Certificates or other required documents to the Depositary prior to the Expiration Date or to comply with the procedures for book-entry transfer on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified under "THE TENDER OFFER--Section 3 (Procedures for Tendering Shares)" of the Offer to Purchase. 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF CAREY INTERNATIONAL, INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated August 3, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as each may be amended from time to time, together constitute the "Offer"), in connection with the offer by Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), and Carey International, Inc., a Delaware corporation ("Carey International") to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Carey International, at a price of $18.25 per share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer. This will instruct you to tender to Acquisition Company and/or Carey International the number of Shares indicated below (or, if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to be Tendered: Shares* SIGN HERE Account Number: ____________________ Signature(s): ______________________ Dated: _________________, 2000 _____________________________________________________________________________ Please type or print name(s) _____________________________________________________________________________ Please type or print address(es) here _____________________________________________________________________________ Area Code and Telephone Number _____________________________________________________________________________ Taxpayer Identification or Social Security Number(s) * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 4 EX-99.A.5.IV 7 0007.txt EXHIBIT (A)(5)(IV) EXHIBIT (a)(5)(iv) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer.--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - - --------------------------------------- ---------------------------------------
Give the For this type of account: SOCIAL SECURITY number of-- - - ------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals The actual owner (joint account) of the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint The actual owner account) of the account or, if joint funds, either person(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if account) the minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, guardian or committee for a or incompetent designated ward, minor, or person(3) incompetent person 7. a. A revocable savings The grantor- trust account (in which trustee(1) grantor is also trustee) b. Any "trust" account that The actual is not a legal or valid owner(1) trust under State law 8. Sole proprietorship The owner(4) account
Give the EMPLOYER For this type of account: IDENTIFICATION number of -- -------- 9. A valid trust, estate, or The legal entity pension (do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title) (5) 10. Corporate account The corporation 11. Religious, charitable or The organization educational organization account 12. Partnership account held The partnership in the name of the business 13. Association, club, or The organization other tax-exempt organization 14. A broker or registered The broker or nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
--------------------------------------- - - --------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's Social Security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. If the owner does not have an employer identification number, furnish the owner's social security number. (5) List first and circle the name of the legal trust, estate, or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Page 2 Obtaining a Number If you do not have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card (for resident individuals), Form SS-4, Application for Employer Identification Number (for businesses and all other entities), or Form W-7 for International Taxpayer Identification Number (for alien individuals required to file U.S. tax returns), at an office of the Social Security Administration or the Internal Revenue Service. To complete Substitute Form W-9, if you do not have a taxpayer identification number, write "Applied For" in the space for the taxpayer identification number in Part 1, sign and date the Form, and give it to the requester. Generally, you will then have 60 days to obtain a taxpayer identification number and furnish it to the requester. If the requester does not receive your taxpayer identification number within 60 days, backup withholding, if applicable, will begin and will continue until you furnish your taxpayer identification number to the requester. Payees Exempt from Backup Withholding Payees specifically exempted from backup withholding on ALL payments include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a), or an individual re- tirement plan, or a custodial account under section 403(b)(7). . The United States or any agency or instrumentality thereof. . A state, the District of Columbia, a possession of the United States, or any political subdivision or instrumentality thereof. . A foreign government or a political subdivision, agency or instrumentality thereof. . An international organization or any agency or instrumentality thereof. . A registered dealer in securities or commodities registered in the United States or a possession of the United States. . A real estate investment trust. . A common trust fund operated by a bank under section 584(a). . An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). . An entity registered at all times during the tax year under the Investment Company Act of 1940. . A foreign central bank of issue. . Unless otherwise noted herein, all references below to section numbers or to regulations are references to the Internal Revenue Code and the regula- tions promulgated thereunder. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the United States and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if (i) this interest is $600 or more, and (ii) the interest is paid in the course of the payer's trade or business and (iii) you have not provided your correct taxpayer identification num- ber to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under section 852). . Payments described in section 6049(b)(5) to non-resident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Payments made to a nominee. Exempt payees described above should file a Substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup with- holding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. Privacy Act Notices. Section 6109 requires most recipients of dividends, in- terest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identi- fication purposes and to help verify the accuracy of your tax return. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identi- fication number to a payer. Certain penalties may also apply. Penalties (1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail to furnish your taxpayer identification number to a payer, you are sub- ject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) Failure to Report Certain Dividend and Interest Payments.--If you fail to include any portion of an includible payment for interest, dividends, or pat- ronage dividends in gross income and such failure is due to negligence, a pen- alty of 20% is imposed on any portion of an underpayment attributable to the failure. (3) Civil Penalty for False Statements With Respect to Withholding.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) Criminal Penalty for Falsifying Information.--If you falsify certifica- tions or affirmations, you are subject to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.A.5.VII 8 0008.txt EXHIBIT (A)(5)(VII) EXHIBIT (a)(5)(vii) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined herein). The Offer (as defined herein) is made solely by the Offer to Purchase, dated August 3, 2000, and the related Letter of Transmittal (and any amendments or supplements thereto), and is being made to all holders of Shares. The Offerors (as defined herein) are not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Offerors become aware of any valid state statute prohibiting the making of the Offer, the Offerors will make a good faith effort to comply with such statute. If, after such good faith effort, the Offerors cannot comply with such state statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the holders of Shares in such state. In any jurisdiction where the securities, "blue sky" or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Offerors by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock of CAREY INTERNATIONAL, INC. at $18.25 Net Per Share by ALUWILL ACQUISITION CORP. and by CAREY INTERNATIONAL, INC. Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company"), and Carey International, Inc., a Delaware corporation ("Carey International"), are offering to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Carey International (the "Shares"), and the associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of June 20, 2000, between Carey International and Computershare Trust Company, Inc., as Rights Agent, as amended on July 19, 2000, at a price of $18.25 per Share, net to the seller in cash (such amount or any greater amount per Share paid in the offer being referred to as the "Offer Price"), without interest thereon, on the terms and subject to the conditions set forth in the Offer to Purchase and in the related letter of transmittal (the "Letter of Transmittal") (which, as each may be amended and supplemented from time to time, together constitute the "Offer"). For the purposes of the Offer, Acquisition Company and Carey International are together referred to as the "Offerors." VIP Holdings, LLC, a Delaware limited liability company, VIP Holdings II, LLC, a Delaware limited liability company, VIP Holdings III, LLC, a Delaware limited liability company, Limousine Holdings, LLC, a Delaware limited liability company ("Parent"), and Acquisition Company, a wholly-owned subsidiary of Parent, are all newly formed entities which were created by Chartwell Investments II LLC to effect the transactions referred to herein. Chartwell is an advisor to, and manager of, private equity funds that invest in growth financings and buy-outs of middle market companies. Ford Motor Company, an investor in and affiliate of Parent, designs and manufactures cars, trucks and automotive components, and sells them throughout the world. Unless the context otherwise requires, all references to Shares or Common Stock shall include the associated Rights. 1 - - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 31, 2000, UNLESS THE OFFER IS EXTENDED. - - -------------------------------------------------------------------------------- The Offer is conditioned upon, among other things, (1) there being validly tendered and not withdrawn prior to the expiration of the Offer at least 5,216,072 Shares, which number of Shares constitutes a majority of the Shares outstanding (including for these purposes Shares issuable upon the exercise of Company Options (as defined in the Offer to Purchase) by persons who have not agreed to enter into Option Exercise Agreements (as defined herein) after giving effect to the cancellation of any Shares to be purchased by Carey International) and (2) Carey International and/or Acquisition Company having received or having available the proceeds from the financing contemplated by the Financing Commitment Letters (as defined in the Offer to Purchase) and the proceeds from the Capital Contribution (as defined in the Offer to Purchase), including, but not limited to, proceeds sufficient to (a) finance the purchase of the Shares that Carey International and Acquisition Company are agreeing to purchase pursuant to the Offer, (b) pay the Merger Consideration (as defined herein) pursuant to the Merger (as defined herein), (c) purchase certain securities of Carey International pursuant to the Carey Purchase Agreements (as defined herein), (d) repay outstanding indebtedness of Carey International and its subsidiaries and (e) pay the fees and expenses required to be paid in connection with the transactions contemplated by the Merger Agreement (as defined herein). The Offer is also subject to other terms and conditions described in the Offer to Purchase and in the related Letter of Transmittal. The purpose of the Offer, the Carey Purchase Agreements and the Merger is to enable Parent to acquire substantially all the equity interest in Carey International. As promptly as practicable following consummation of the Offer and the transactions contemplated by the Carey Purchase Agreements, and after satisfaction or waiver of all conditions to the Merger set forth in the Merger Agreement, Parent intends to acquire the remaining equity interest in Carey International not acquired by the Offerors in the Offer or through the Carey Purchase Agreements by consummating the Merger. As a result, Parent will own approximately 92.0% of the shares of common stock of the Surviving Corporation (as defined herein) and the Management Investors (as defined herein) will own approximately 8.0%. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 19, 2000 (the "Merger Agreement"), by and among Carey International, Parent, Acquisition Company and Eranja Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Acquisition Company ("Acquisition Company Sub"). The Merger Agreement provides that, among other things, as promptly as practicable after consummation of the Offer and the satisfaction or waiver of the other conditions contained in the Merger Agreement, Acquisition Company or Acquisition Company Sub will be merged with and into Carey International (the "Merger"), with Carey International continuing as the surviving corporation (the "Surviving Corporation"). At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares held by Acquisition Company, Shares in the treasury of Carey International, Shares held by holders who perfect their appraisal rights in accordance with Section 262 of the Delaware General 2 Corporation Law, and certain Shares held by certain members of management of Carey International (the "Management Investors") will, by virtue of the Merger and without any action on the part of the holder thereof, be canceled and be converted into the right to receive an amount per share (the "Merger Consideration") equal to the Offer Price, without interest. The Merger Agreement is more fully described in "Special Factors - Section 7" of the Offer to Purchase. Concurrently with the execution of the Merger Agreement, and as an inducement to Acquisition Company and Parent to enter into the Merger Agreement, (i) certain holders (the "Option Holders") of Plan Options (as defined in the Offer to Purchase) have agreed to enter into Option Exercise/Cancellation Agreements with Acquisition Company (the "Option Exercise Agreements"), pursuant to which, among other matters, the Option Holders will agree (1) to exercise all of their Plan Options immediately prior to the Effective Time and, upon the request of Acquisition Company, to sell to Acquisition Company all of the Shares issued upon such exercise (collectively, the "Option Exercise Shares") for consideration equal to the Offer Price per Share, or (2) if Acquisition Company does not so request, to exercise their Plan Options immediately prior to the Effective Time and to hold the Option Exercise Shares for conversion in the Merger into the right to receive cash and shares of the Surviving Corporation as provided in the Merger Agreement, and (ii) Carey International has granted to Acquisition Company an option pursuant to a Stock Option Agreement (the "Stock Option Agreement") to acquire from Carey International in certain circumstances a sufficient number of Shares that, when taken together with all other outstanding Shares to be acquired by Acquisition Company pursuant to the Offer and the Option Exercise Agreements (such agreements, collectively with the Stock Option Agreement, the "Carey Purchase Agreements"), constitute greater than 90% of the outstanding Shares. The Carey Purchase Agreements are more fully described in "Special Factors - Section 7" of the Offer to Purchase. The Board of Directors of Carey International has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, has determined that the offer and the Merger are advisable, fair to and in the best interests of Carey International's stockholders, and unanimously recommends that Carey International's stockholders accept the Offer and tender their Shares pursuant thereto. For purposes of the Offer, the Offerors will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when the applicable Offeror gives oral or written notice to United States Trust Company of New York (the "Depositary") of its acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Offerors and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. Under no circumstances will interest on the Offer Price for Shares be paid by the Offerors, regardless of any extension of the Offer or any delay in making such payment. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) certificates evidencing such Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in "The Tender Offer - Section 3" of the Offer to Purchase, (2) the Letter of 3 Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) and (3) all other documents required by the Letter of Transmittal. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"), the Offerors, and in certain circumstances Parent, have the right in their sole mutual discretion to waive any or all conditions to the Offer and to make any other changes in the terms and conditions of the Offer. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, if, by the Expiration Date (as defined herein), any or all of the conditions to the Offer have not been satisfied, the Offerors, and in certain circumstances Parent, have the right (but not the obligation) to (1) terminate the Offer and return all tendered Shares to tendering stockholders, (2) waive such unsatisfied conditions and purchase all Shares validly tendered or (3) extend the Offer, and, subject to the terms of the Offer (including the rights of stockholders to withdraw their Shares), retain the Shares which have been tendered, until the termination of the Offer, as extended. Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the SEC, the Offerors, and in certain circumstances Parent, have the right in their sole mutual discretion, at any time and from time to time, to (1) extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary and (2) amend the Offer in any respect permitted by the Merger Agreement by giving oral or written notice of such amendment to the Depositary. Any extension will be followed as promptly as practicable by public announcement thereof to be made no later than 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Offerors may choose to make any public announcement, the Offerors will have no obligation to publish, advertise or otherwise communicate any such announcement other than issuing a release to the Dow Jones News Service or as otherwise may be required by law. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering stockholder to withdraw such stockholder's Shares. "Expiration Date" means 5:00 P.M., New York City time, on August 31, 2000, unless and until the Offerors, in their sole discretion (but subject to the terms and conditions of the Merger Agreement) have extended the period during which the Offer is open, in which event the term "Expiration Date" means the latest time and date at which the Offer, as extended by the Offerors, will expire. Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date, and, unless theretofore accepted for payment by the Offerors pursuant to the Offer, may also be withdrawn at any time after October 1, 2000 or at such later time as may apply if the Offer is extended. For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from that of the person who tendered such 4 Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn must be submitted to the Depositary and the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfers as set forth in "The Tender Offer - Section 3" of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with such Book-Entry Transfer Facility's procedures, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the second sentence of this paragraph. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Offerors, in their sole discretion, whose determination will be final and binding on all parties. None of the Offerors, any of their affiliates or assigns, the Depositary, D.F. King & Co., Inc., which is acting as the Information Agent for the Offer, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tendered Shares may not be rescinded without the Offerors' consent. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, properly withdrawn Shares may be retendered at any time prior to the Expiration Date by following one of the procedures described in "The Tender Offer - Section 3" of the Offer to Purchase. The information required to be disclosed by Rules 13e-4(d)(1) and 14d-6(d)(1) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. Carey International has provided Acquisition Company with Carey International's stockholder list and security position listing for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and, if required, other relevant materials will be mailed to record holders of Shares whose names appear on the stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and all other tender offer materials may be directed to the Information Agent, and copies will be furnished promptly at the Offerors' expense. The Offerors will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street, 20th Floor New York, New York 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others call Toll Free: (800) 628-8510 August 3, 2000 5 EX-99.B.I 9 0009.txt EXHIBIT (B)(I) Exhibit (b)(i) FIRST UNION NATIONAL BANK FLEET NATIONAL BANK FIRST UNION SECURITIES, INC. FLEETBOSTON ROBERTSON STEPHENS INC. One First Union Center 100 Federal Street 301 South College Street Boston, Massachusetts 02110 Charlotte, North Carolina 28288 July 12, 2000 Chartwell Investments II LLC 717 Fifth Avenue New York, New York 10022 Attention: Todd R. Berman, President Ladies and Gentlemen: Chartwell Investments II LLC (the "Sponsor") has informed First Union National Bank ("First Union"), Fleet National Bank ("Fleet," and together with First Union, the "Agents"), First Union Securities, Inc. ("FUSI") and FleetBoston Robertson Stephens Inc. ("FRS," and together with FUSI, the "Co-Arrangers") that it intends to engage in a series of transactions whereby (a) the Sponsor or one or more of its affiliates will form, together with Ford Motor Company or one or more of its affiliates (collectively, "FMC"), a holding company ("Parent"), which will in turn form a wholly owned subsidiary ("MergerCo"), and Parent and MergerCo will enter into an Agreement and Plan of Merger (the "Merger Agreement") with Carey International, Inc., a Delaware corporation (the "Borrower"), pursuant to which MergerCo and the Borrower will commence a joint tender offer (the "Tender Offer") to acquire, for cash, all of the issued and outstanding shares of common stock of the Borrower. Pursuant to the Merger Agreement, upon completion of the Tender Offer, either MergerCo or a wholly owned subsidiary of MergerCo created for such purpose will merge (the "Merger") with and into the Borrower. The Tender Offer and Merger will be completed either in a Short-Form Merger Structure or a Long-Form Merger Structure, as described in the Term Sheet referred to below, depending on the number of shares of common stock of the Borrower that are tendered in the Tender Offer. Capitalized terms used in this Commitment Letter without definition shall have the meanings given to them in the Term Sheet referred to below. You have advised us that, in order to finance the Merger, (a) Parent will capitalize MergerCo and the Borrower with not less than $97 million in cash equity contributed to Parent by the Sponsor and FMC (and thereafter to MergerCo by Parent) and (at the effective time of the Merger) approximately $9.0 million (and in any event not less than $6.0 million) in equity of the Chartwell Investments II LLC July 12, 2000 Page 2 - - ---------------------------- Borrower retained by members of the Borrower's management, (b) the Borrower will obtain senior secured credit facilities in the aggregate principal amount of $160 million, with such principal amount subject to increase by an amount of up to $10 million as provided in the Term Sheet (the "Facilities"), and (c) the Borrower will issue $40 million in aggregate principal amount of its unsecured subordinated notes in a private placement (the "Subordinated Notes") You have further advised us that the proceeds of the Facilities will be used to finance a portion of the consideration to be paid to stockholders of the Borrower in connection with the Tender Offer and the Merger, to refinance certain existing indebtedness of the Borrower, to pay fees and expenses in connection with the Facilities and the other transactions described herein, and to provide for the working capital and general corporate requirements (including the funding of acquisitions) of the Borrower and its subsidiaries (the Facilities, together with the Tender Offer, the Merger, the Subordinated Notes and the other transactions described herein and in the Term Sheet, collectively, the "Transactions"), and that no external debt financing will be required to effectuate the Transactions other than the financing described herein and the Subordinated Notes. The Sponsor has requested that First Union and Fleet commit to provide the entire principal amount of the Facilities and that FUSI and FRS agree to structure, arrange and syndicate the Facilities. First Union and Fleet are pleased to confirm their several commitments to provide the entire principal amount of the Facilities to the Borrower, and the Co-Arrangers are pleased to confirm their agreement to serve as co-arrangers for the Facilities and to arrange a syndicate of financial institutions (the "Lenders") mutually acceptable to the Co-Arrangers, the Agents and the Sponsor, in each case based upon and subject to the foregoing and subject to the terms and conditions set forth below and in the summary of terms and conditions (the "Term Sheet") attached hereto. The commitments of the Agents hereunder are several and not joint. Under the terms and conditions set forth hereinbelow and in the Term Sheet, First Union will provide 50% of the aggregate principal amount of the Facilities, and Fleet will provide 50% of the aggregate principal amount of the Facilities. It is a condition to each Agent's commitment hereunder that the portion of the Facilities not being committed to hereunder by such Agent shall be committed to by the other Agent and/or other Lenders (on the terms and subject to the conditions set forth herein and in the Term Sheet) at the initial closing of the Facilities. The Sponsor understands that the pricing of the Facilities has been determined independently, and neither the pricing nor the availability of the Facilities is conditioned upon the Sponsor, the Borrower or any of their respective subsidiaries or affiliates purchasing any additional product or services from either Agent or any of its affiliates, including the Co-Arrangers. Each Agent's commitment hereunder and each Co-Arranger's agreement to provide the services described herein are subject to (i) the Sponsor's written acceptance of a letter from the Agents and the Co-Arrangers to the Sponsor of even date herewith (the "Fee Letter") pursuant to which the Sponsor agrees to pay to the Agents and the Co-Arrangers certain fees in connection with the Facilities as more particularly set forth therein, (ii) the completion of a definitive credit agreement and related documentation for the Facilities and definitive documentation for the other Transactions in form and substance satisfactory to the Agents, (iii) compliance with all Chartwell Investments II LLC July 12, 2000 Page 3 - - ---------------------------- applicable laws and regulations, (iv) the absence of any condition in the financial or capital markets prior to the execution of such definitive credit documentation that could reasonably be expected to have a material adverse effect on the primary syndication of the Facilities, (v) the Agents' satisfaction that, prior to and during the syndication of the Facilities, there shall be no competing issues of debt securities or commercial bank or other credit facilities of Holdings, the Borrower or any of their respective subsidiaries being offered, placed or arranged (other than the Subordinated Notes), and (vi) the satisfaction of all other conditions described herein, in the Term Sheet, and in such definitive credit documentation. The terms and conditions of the Agents' commitments hereunder and of the Facilities are not limited to those set forth herein and in the Term Sheet, and any matters that are not covered by the provisions hereof and thereof shall be subject to the mutual agreement of the Agents, the Sponsor and the Borrower. In addition, it is understood and agreed that First Union, Fleet, FUSI and FRS shall be entitled, after consultation with the Sponsor and the Borrower, to change the pricing (including interest and upfront fees), terms and structure of the Facilities, and the timing of syndication and closing thereof, at any time if the syndication of the Facilities has not been completed and First Union, Fleet, FUSI and FRS determine in good faith that such changes are advisable to ensure a successful syndication of the Facilities, provided that (i) the total principal amount of the Facilities remains unchanged and (ii) once each of the Agents has reached a hold level of $45 million in commitments, (A) any increase in the Applicable Margins shall not exceed 75 basis points and (B) the commitments may be reallocated only between the Term A Facility and the Term B Facility and the amounts of the Revolving Credit Facility and the Acquisition Facility shall not be changed. The commitments of the Agents hereunder are subject to the agreements of the Sponsor set forth in this paragraph. The provisions of this paragraph shall survive the execution of definitive credit documentation for the Facilities and the closing thereof. It is agreed that First Union will act as the administrative agent for the Facilities, Fleet will act as the syndication agent for the Facilities, and the Co-Arrangers will act as the co-arrangers for the Facilities. It is further agreed that no additional agents, co-agents or arrangers will be appointed and no Lender will receive compensation outside the terms contained herein (including the Term Sheet) and in the Fee Letter in order to obtain its commitment to participate in the Facilities, in each case unless the Sponsor and the Co-Arrangers so agree. Notwithstanding the foregoing, each of the Agents and the Co-Arrangers reserves the right to allocate (in whole or in part) to any of its affiliates any fees payable to it in such manner as it and its affiliates may agree in their sole discretion. The Sponsor understands that the Co-Arrangers intend to commence their syndication efforts promptly and agree actively to assist, and to use commercially reasonable efforts to cause the Borrower to assist, the Agents and the Co-Arrangers in achieving a timely syndication (which is expected to be completed after the closing of the Facilities) that is mutually satisfactory to the Agents, the Co-Arrangers and the Sponsor. The syndication will be accomplished by a variety of means, including direct contact during the syndication between senior management of the Borrower, the Sponsor, the Agents, the Co-Arrangers and their respective affiliates and advisors. Chartwell Investments II LLC July 12, 2000 Page 4 - - ---------------------------- The Sponsor agrees that the Agents and the Co-Arrangers may share with any of their respective affiliates and advisors any information related to the Borrower and the Sponsor, their respective subsidiaries and affiliates, and the Transactions or any other matter contemplated hereby, on a confidential basis. It is understood and agreed that the Co-Arrangers will manage, in consultation with the Sponsor, all aspects of the syndication, including but not limited to decisions as to the selection of institutions to be approached, when they will be approached, when their commitments will be accepted, which institutions will participate, the allocations of the commitments among the Lenders and the amount and distribution of fees among the Lenders. To assist the Co-Arrangers in their syndication efforts, the Sponsor agrees (i) promptly to prepare and provide, and to use commercially reasonable efforts to cause the Borrower to prepare and provide, to the Co-Arrangers and the Agents all information reasonably requested by them with respect to the Sponsor, the Borrower and its subsidiaries, and the Transactions, including all financial information and projections (the "Projections"), as the Co-Arrangers and the Agents may reasonably request in connection with the arrangement and syndication of the Facilities, (ii) to assist, to cause its affiliates and advisors to assist, and to use commercially reasonable efforts to cause the Borrower to assist, the Co-Arrangers in the preparation of a Confidential Information Memorandum and other marketing materials to be used in connection with the syndication, and (iii) to make appropriate officers and representatives of the Sponsor and, to the extent reasonably practicable, the Borrower available to participate in information meetings for the potential Lenders at such times and places as the Co-Arrangers may reasonably request. The Agents' commitments as set forth herein and the Co-Arrangers' agreements to provide the services described herein are subject to the condition that (a) all written information (other than the Projections) concerning the Sponsor, the Borrower and its subsidiaries and the Transactions (the "Information") that has been or will be made available to the Co-Arrangers or the Agents by the Sponsor or the Borrower or any of their respective representatives is, or will be when furnished, taken as a whole, complete and correct in all material respects and does not, or will not when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made, and (b) the Projections that have been or will be made available to the Co-Arrangers or the Agents by the Sponsor or the Borrower or any of their respective representatives have been or will be prepared in good faith based upon reasonable assumptions. The Sponsor agrees to reimburse the Agents and the Co-Arrangers for all of their reasonable fees and out-of-pocket expenses (including reasonable attorneys' fees and expenses) incurred in connection with the preparation, execution and delivery of this Commitment Letter, the Term Sheet, the Fee Letter, the definitive credit documentation for the Facilities, the syndication of the Facilities, and all of the other transactions described herein, whether or not the Facilities are closed or any credit is extended thereunder, unless and except to the extent a court of competent jurisdiction has determined by a final and nonappealable judgment that the Agents Chartwell Investments II LLC July 12, 2000 Page 5 - - ---------------------------- are in breach of their commitments hereunder to provide the Facilities. The Sponsor also agrees to indemnify and hold harmless each Agent, each Co-Arranger and their respective affiliates, directors, officers, employees and agents (collectively, the "Indemnified Parties") from and against any and all actions, suits, losses, claims, damages and liabilities of any kind or nature, joint or several, to which such Indemnified Parties may become subject, related to or arising out of any of the transactions contemplated herein, including, without limitation, the execution and delivery of this Commitment Letter, the execution and delivery of definitive credit documentation for the Facilities, the syndication and closing of the Facilities and the use of proceeds thereunder, and the closing of the other Transactions, and to reimburse the Indemnified Parties for all out-of-pocket expenses (including reasonable attorneys' fees and expenses of counsel to First Union and FUSI and counsel to Fleet and FRS) on demand as they are incurred in connection with the investigation of, preparation for, or defense of any pending or threatened claim or any action or proceeding arising therefrom; provided, however, that no Indemnified Party shall have any right to indemnification for any of the foregoing to the extent determined by a final and nonappealable judgment of a court of competent jurisdiction to have resulted from its own gross negligence or willful misconduct. This Commitment Letter is addressed solely to the Sponsor, and neither the Agents or the Co-Arrangers, on the one hand, nor the Sponsors or the Company, on the other hand, shall be liable to the other or any other person for any indirect or consequential damages that may be alleged as a result of this Commitment Letter or any of the transactions referred to herein. The provisions of this paragraph shall survive any termination of this Commitment Letter or the commitments of the Agents set forth herein; provided that the Sponsor shall be released from all of its obligations under this Commitment Letter so long as the Borrower, by execution of the definitive credit documentation for the Facilities, shall have assumed all of the Sponsor's obligations hereunder that are intended to survive the termination of this Commitment Letter; and provided further that the obligations of the Sponsor arising under the fifth, sixth, seventh and eighth paragraphs hereof shall remain in full force and effect until the primary syndication of the Facilities has been completed. Until acceptance of this Commitment Letter in writing, the Sponsor is not authorized to show or circulate this Commitment Letter or the Term Sheet to any other person or entity (other than to (i) its attorneys, financial advisors and accountants and (ii) Ford Motor Company, the Borrower and the lenders under the proposed Subordinated Notes and their respective attorneys, financial advisors and accountants, in each case in connection with their evaluation of the Transactions, provided that each of such persons shall also be bound by the confidentiality provisions hereof), except as may be required by law or applicable judicial process or except as otherwise agreed by the Agents and the Co-Arrangers. The Co-Arrangers shall have the right to review and approve any public announcement or public filing made after the date hereof relating to the Facilities or to the Co-Arrangers or their affiliates before any such announcement or filing is made (such approval not to be unreasonably withheld or delayed). The Sponsor shall have the right to review and approve the Agents' disclosure of information relating to this transaction to Gold Sheets and other ----------- similar bank trade publications before any such disclosure is made (such approval not to be unreasonably withheld Chartwell Investments II LLC July 12, 2000 Page 6 - - ---------------------------- or delayed). Such information will consist of deal terms and other information customarily found in such publications. This Commitment Letter, the commitments of the Agents set forth herein and the agreements of the Co-Arrangers to provide the services set forth herein shall, in the event this Commitment Letter is accepted by the Sponsor as provided in the last paragraph hereof, automatically expire at the earliest to occur of the following: (i) the occurrence of any event that has, or could reasonably be expected to have, a material adverse change in the business, properties, operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries, taken as a whole, (ii) the termination of the definitive Agreement and Plan of Merger with regard to the Merger or the termination or expiration of the Tender Offer without acceptance by MergerCo of at least a majority of shares of the Borrower's common stock entitled to vote in the Merger (after giving effect to the exercise of the Topping Option or the Self-Tender, if applicable), and (iii) 5:00 p.m., Charlotte time, on September 15, 2000, if the initial borrowing under the Facilities shall not have occurred by such time. This Commitment Letter and the Fee Letter shall be governed by and construed in accordance with the internal laws of the State of North Carolina, and together constitute the entire agreement between the parties relating to the subject matter hereof and thereof and supersede any previous agreement, written or oral, between the parties with respect to the subject matter hereof and thereof. This Commitment Letter shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto, but shall not be assigned in whole or in part by the Sponsor without the prior written consent of the Agents and the Co-Arrangers. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto. This Commitment Letter is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits on, or create any rights in favor of, any other person or entity. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Chartwell Investments II LLC July 12, 2000 Page 7 - - ---------------------------- If the Sponsor is in agreement with the foregoing, please indicate acceptance of the terms hereof by signing the enclosed counterpart of this Commitment Letter and returning it to the Agents, together with an executed counterpart of the Fee Letter, by no later than 5:00 p.m., Charlotte time, on July 13, 2000. This Commitment Letter, the commitment of the Agents set forth herein and the agreements of the Co-Arrangers to provide the services set forth herein shall automatically terminate at such time unless signed counterparts of this letter and the Fee Letter shall have been delivered to the Agents in accordance with the terms of the immediately preceding sentence. Sincerely, FIRST UNION NATIONAL BANK By: ____________________________ Title: ____________________________ FLEET NATIONAL BANK By: ____________________________ Title: ____________________________ FIRST UNION SECURITIES, INC. By: ____________________________ Title: ____________________________ FLEETBOSTON ROBERTSON STEPHENS INC. By: ____________________________ Title: ____________________________ (signatures continued) Chartwell Investments II LLC July 12, 2000 Page 8 - - ---------------------------- Agreed to and accepted as of the date first above written: CHARTWELL INVESTMENTS II LLC By: __________________________________ Title: __________________________________ CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- SUMMARY OF TERMS AND CONDITIONS Senior Secured Credit Facilities Carey International, Inc. Transactions: Chartwell Investments II LLC or one or more of its affiliates (collectively, "Chartwell") will form, together with Ford Motor Company or one or more of its affiliates (collectively, "FMC"), a holding company ("Parent"), which will in turn form a wholly owned subsidiary ("MergerCo"), and Parent and MergerCo will enter into an Agreement and Plan of Merger (the "Merger Agreement") with Carey International, Inc., a Delaware corporation (the "Borrower"), pursuant to which MergerCo and the Borrower will commence a joint tender offer (the "Tender Offer") to acquire, for cash, all of the issued and outstanding shares of common stock of the Borrower. Pursuant to the Merger Agreement, upon completion of the Tender Offer, either MergerCo or a wholly owned subsidiary of MergerCo created for such purpose will merge (the "Merger") with and into the Borrower. The Tender Offer and Merger will be completed either in a Short-Form Merger Structure or a Long-Form Merger Structure, as hereinafter described, depending on the number of shares of common stock of the Borrower that are tendered in the Tender Offer. Short-Form Merger Structure: The Merger Agreement will --------------------------- provide that the Tender Offer will be made jointly by MergerCo and the Borrower. In addition, the Merger Agreement will provide for the grant by the Borrower to MergerCo of an option (the "Topping Option") to acquire up to a specified number of shares of newly issued common stock of the Borrower, for cash, at a price of not more than $18.25 per share. In the event that holders of outstanding common stock of the Borrower tender shares representing less than 90% of the outstanding common stock of the Borrower, MergerCo may exercise the Topping Option to acquire such number of shares of common stock as will be necessary so that, upon completion of the Tender Offer and exercise of the Topping Option, MergerCo will own at least that percentage of the then outstanding shares of common stock of the Borrower entitled to vote in connection with the approval of the Merger which is necessary to effect a "short-form" merger under applicable law, giving effect to the issuance of such shares. The exercise of the Topping Option and the issuance of shares of common stock to MergerCo thereunder will be completed simultaneously with acceptance of shares in the Tender Offer. Upon completion of the Tender Offer and acquisition of shares pursuant to the Topping [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 1 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- Option, and prior to or simultaneously with the initial funding of the Facilities as described hereinafter, MergerCo will merge with and into the Borrower, with the Borrower being the surviving corporation (the "Short-Form Merger"). In the Short-Form Merger, outstanding shares of common stock of the Borrower (other than shares held by MergerCo, management rollover shares and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Borrower will utilize draws under the Facilities to fund the payment of cash to the holders of such shares as further described under "Use of Proceeds" set forth below. In order to finance the Tender Offer and the Short-Form Merger, (a) Parent will capitalize MergerCo and the Borrower (the "Equity Capitalization") with approximately (and in any event not less than) $97 million in cash equity contributed to Parent by Chartwell and FMC (and thereafter by Parent to MergerCo) and approximately $9.0 million (and in any event not less than $6.0 million) (based on the Tender Offer Price) in rollover equity retained by members of the Borrower's management (the "Management Investors"), (b) the Borrower will obtain the Facilities (as hereinafter defined), and (c) the Borrower will issue $40 million in aggregate principal amount of its unsecured subordinated notes in a private placement (the "Subordinated Notes"). Long-Form Merger Structure: In the event that holders of outstanding -------------------------- common stock of the Borrower tender shares representing more than 50.1% of the outstanding common stock of the Borrower but the Short-Form Merger Structure cannot be utilized, then upon completion of the Tender Offer, (a) MergerCo will acquire shares tendered in the Tender Offer representing at least 50.1% of the outstanding common stock of the Borrower entitled to vote in connection with the approval of the Merger, after giving effect to completion of the Self-Tender (as hereinafter defined), utilizing only the proceeds of the Equity Capitalization to effect such purchase, and (b) the Borrower will acquire and immediately cancel the remainder of the shares tendered in the Tender Offer (the "Self-Tender") and will repay in full its existing senior bank credit facilities, utilizing (i) first, the proceeds of the issuance of the Subordinated Notes, and (ii) second, to the extent necessary, draws under the Facilities on the terms and conditions set forth herein to pay for any remaining tendered shares as further described under "Use of Proceeds" set forth below. As soon as possible after completion of the Tender Offer in accordance with applicable law, MergerCo or a wholly owned subsidiary thereof created solely for such purpose will merge with and into the Borrower, with the Borrower being the surviving corporation (the "Long-Form [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 2 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- Merger"). In the Long-Form Merger, outstanding shares of common stock of the Borrower (other than shares held by MergerCo, management rollover shares and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Borrower will utilize draws under the Facilities (and, to the extent not required to fund the Self-Tender or refinance the Borrower's existing senior bank credit facilities, the proceeds of the Subordinated Notes) to fund the payment of cash to the holders of such shares. In order to finance the Tender Offer and the Long-Form Merger, (a) Parent will effect the Equity Capitalization and (b) the Borrower will obtain the Facilities and issue the Subordinated Notes. The Tender Offer, the Short-Form Merger, the Long-Form Merger (the Short-Form Merger and the Long-Form Merger each sometimes being referred to as the "Merger"), the Topping Option and the exercise thereof, the Equity Capitalization, the Facilities, the Subordinated Notes, the Self-Tender and the other transactions described herein are referred to collectively as the "Transactions." The direct parent company of the Borrower after giving effect to the transactions described above, whether Parent or MergerCo, is referred to herein as "Holdings." Borrower: Carey International, Inc., a Delaware corporation. Administrative Agent: First Union National Bank ("First Union" or the "Administrative Agent"). Syndication Agent: Fleet National Bank ("Fleet" or the "Syndication Agent," and together with the Administrative Agent, the "Agents"). Co-Arrangers: First Union Securities, Inc. ("FUSI") and FleetBoston Robertson Stephens Inc. ("FRS," and together with FUSI, the "Co-Arrangers"). Lenders: First Union, Fleet and a syndicate of financial institutions (the "Lenders") reasonably acceptable to the Agents, the Co-Arrangers and the Borrower. Facilities: (1) $40 million 5 1/2- year Term Loans (the "Term A Facility"). (2) $60 million 6 1/2-year Term Loans (the "Term B Facility"). (3) $25 million 5 1/2-year Revolving Credit Facility (the "Revolving Credit Facility"). (4) $35 million 5 1/2-year Acquisition Facility (the "Acquisition Facility"). [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 3 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- A portion of the Revolving Credit Facility, in an amount to be determined, will be available for use by the Borrower for the issuance of letters of credit. Letters of credit may be issued with maturities of up to one year, renewable annually thereafter, and in any event shall not extend beyond the Revolving Credit Facility maturity date. First Union will be the issuing bank for all letters of credit. The Revolving Credit Facility will also contain a sublimit for swingline loans to be made available by First Union, in an amount to be determined. The aggregate principal amount of the Term A Facility and the Term B Facility (collectively, the "Term Facilities") may, at the option of the Lenders, exercised prior to closing in their sole discretion, be increased by an amount of up to $10 million (to be allocated between the Term A Facility and the Term B Facility in a manner to be agreed upon) in order to provide additional funding to refinance indebtedness incurred under the Borrower's existing credit facility for acquisitions (the "Term Facilities Increase"). Availability: The Term Facilities (together with the Revolving Credit Facility and the Acquisition Facility, the "Facilities") must be drawn in full in a single draw on the date of the initial funding of the Facilities (the "Closing Date"), subject (in the case of the Long-Form Merger Structure) to funding of the remaining portion of the Term Facilities on a subsequent date as provided hereinbelow. Amounts repaid under the Term Facilities may not be reborrowed. Loans under the Revolving Credit Facility will be available on a revolving basis at any time after the Closing Date and prior to maturity, subject to reduction by the aggregate amount of outstanding or unreimbursed letters of credit and outstanding swingline loans. Loans under the Acquisition Facility will be available on a delayed-draw basis (i) if the Short-Form Merger Structure is utilized, for a period from the Closing Date to and including the date 18 months after the Closing Date (the "Acquisition Facility Amortization Date"), and (ii) if the Long-Form Merger Structure is utilized, for a period from the Subsequent Closing Date (as hereinafter defined) to and including the Acquisition Facility Amortization Date, provided that the Borrower may extend availability for an additional six-month period if, on a pro forma basis as of the time of extension, the Total Leverage Ratio (as hereinafter defined) is less than 4.25 to 1.0 and the Senior Leverage Ratio (as hereinafter defined) is less than 3.25 to 1.0, and provided further that, notwithstanding anything contained elsewhere in this Term Sheet, no borrowings under the Acquisition Facility shall be available to the Borrower until each of the Agents has reached a hold [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 4 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- level of $35 million in commitments (excluding the Acquisition Facility commitments) in the syndication of the Facilities; and thereafter, the commitments under the Acquisition Facility shall become available to the Borrower as the Facilities are further syndicated and commitments assigned (whether by the Agents or any other Lenders), on a dollar-for-dollar basis with such assignments up to the maximum availability of $35 million. Amounts repaid under the Acquisition Facility may not be reborrowed. If the Long-Form Merger Structure is utilized, the Closing Date shall be the date of completion of the Tender Offer and Self-Tender, and the Borrower will draw under the Facilities on the Closing Date (after using the proceeds from the Equity Capitalization and the Subordinated Notes) in an amount (the "Interim Funding") necessary to fund the Self-Tender, refinance its existing indebtedness, and pay fees and expenses in connection with the Transactions incurred through such date. The Interim Funding shall be made first under the Term A Facility, then (if the Term A Facility has been fully drawn) under the Term B Facility, and then (if the Term Facilities have been fully drawn) under the Revolving Credit Facility. The remaining amount of the Term Facilities must be drawn in full on the date of consummation of the Long-Form Merger and satisfaction of the other conditions set forth herein and applicable thereto (the "Subsequent Closing Date"). The Borrower shall escrow with the Administrative Agent proceeds from the Term Facilities (and, to the extent necessary, from the Revolving Credit Facility) funded on the Subsequent Closing Date in an amount equal to the product of (i) $18.25 times (ii) the number of shares held by dissenting stockholders, if any. Notwithstanding the foregoing or anything else herein, in the event the Long-Form Merger Structure is utilized and the Long-Form Merger has not been completed on or before November 30, 2000, then the remaining undrawn commitments under the Term Facilities and under the Acquisition Facility, if any, will be terminated, no acquisitions will be permitted after such date without bank approval, and the Agents and the Borrower will discuss in good faith amending the financial covenants in the definitive credit agreement in light of the revised terms of the Facilities. Maturity Date: Term A Facility, Revolving Credit Facility and Acquisition Facility: 5 1/2years after the Closing Date. Term B Facility: 6 1/2years after the Closing Date. Use of Proceeds: The proceeds of the Facilities shall be used (i) to finance a portion of the consideration to be paid in connection with the Tender Offer and [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 5 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- the Merger, (ii) to refinance existing indebtedness of the Borrower, (iii) to pay fees and expenses in connection with the Transactions, and (iv) as to the Acquisition Facility, to fund acquisitions by the Borrower and its subsidiaries, and as to the Revolving Credit Facility, to provide for the working capital and general corporate requirements (including the funding of acquisitions) of the Borrower and its subsidiaries. If the Long-Form Merger Structure is utilized, the proceeds of the Interim Funding shall be used as described under "Availability" above, and the remaining proceeds of the Facilities shall be used (i) to finance the remaining consideration to be paid in connection with the Long-Form Merger, (ii) to pay remaining fees and expenses in connection with the Transactions, and (iii) as to the Acquisition Facility, to fund acquisitions by the Borrower and its subsidiaries, and as to the Revolving Credit Facility, to provide for the working capital and general corporate requirements (including the funding of acquisitions) of the Borrower and its subsidiaries, in each case subject to the terms and conditions set forth herein; provided that proceeds from the Term Facilities funded on the Subsequent Closing Date (regardless of whether such proceeds are funded into escrow) may only be used to finance the consideration to be paid in connection with the Long-Form Merger in an amount not exceeding $18.25 for any share. In addition to the proceeds of the Facilities funded into escrow as described above under "Availability," borrowings under the Revolving Credit Facility may be used to fund payments to dissenting stockholders in the Merger, so long as (i) on a pro forma basis after giving effect to any such borrowing, the Total Leverage Ratio would be at least 25 basis points below the maximum level then applicable (as set forth in a certificate of the Borrower to the Agents) and (ii) after giving effect to any such borrowing, the Borrower would have undrawn and available commitments under the Revolving Credit Facility in an amount sufficient to fund the payments of interest then next due on the Facilities and the Subordinated Notes. Amortization: Outstanding principal of the Term A Facility, the Term B Facility and the Acquisition Facility will be payable in quarterly installments, with annual principal reductions as set forth in the following schedule: [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 6 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- - - ------------------------ --------------- --------------- ---------------- Term A Term B Acquisition Year Facility Facility Facility ---- -------- -------- -------- - - ------------------------ --------------- --------------- ---------------- Year 1 5% 1% - - ------------------------ --------------- --------------- ---------------- Year 2 10% 1% - - ------------------------ --------------- --------------- ---------------- Year 3 15% 1% 10% - - ------------------------ --------------- --------------- ---------------- Year 4 25% 1% 20% - - ------------------------ --------------- --------------- ---------------- Year 5 30% 1% 35% - - ------------------------ --------------- --------------- ---------------- First 1/2 of Year 6 15% 0.5% 35% - - ------------------------ --------------- --------------- ---------------- Second 1/2 of Year 6 47.25% - - ------------------------ --------------- --------------- ---------------- First 1/2 of Year 7 47.25% Amortization of the Acquisition Facility will begin in Year 3. All outstanding principal of the Revolving Credit Facility will be due and payable on the maturity date for the Revolving Credit Facility set forth above. Guaranties: The Facilities and any interest rate protection agreements entered into with any Lender (or any affiliate of any Lender) will be unconditionally guaranteed by Holdings and by all direct and indirect subsidiaries of the Borrower, whether existing at closing or thereafter organized or acquired, provided that no foreign subsidiary shall be required to provide a guarantee to the extent doing so would cause any materially adverse tax consequences to the Borrower. Collateral: The Facilities and any interest rate protection agreements entered into with any Lender (or any affiliate of any Lender) will be secured by a first priority perfected lien on and security interest in (a) 100% of the capital stock of the Borrower owned by Holdings (except to the extent the pledge thereof would cause the Lenders to be in violation of Regulation U of the Federal Reserve Board) (b) 100% of the capital stock of, or other equity ownership interests in, each direct and indirect subsidiary of the Borrower, whether existing at closing or thereafter organized or acquired (which pledge, in the case of foreign subsidiaries, shall be limited to 65% of the capital stock of the foreign subsidiaries whose direct parents are U.S. entities, to the extent the pledge of any greater amount would cause any materially adverse tax consequences to the Borrower), and (c) all of the assets (including, without limitation, accounts receivable, inventory, equipment (including motor vehicles), intellectual property, contracts, license rights, and other general intangibles, cash, and material real property interests) of Holdings, the Borrower and its direct and indirect U.S. subsidiaries, whether existing at closing or thereafter organized or acquired, except for assets as to which the Administrative Agent shall [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 7 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- have determined in its reasonable discretion that the costs of obtaining such a lien and security interest are excessive in relation to the value of the security to be afforded thereby; provided that the Administrative Agent may, in its reasonable discretion, elect to require liens upon such assets (including assets of foreign subsidiaries) and provided further that the scope of real property collateral and real estate-related agreements, including landlord consents, will be discussed by the parties in good faith. Borrowing Options: At the Borrower's option, loans under the Facilities shall bear interest at (i) the Administrative Agent's Base Rate ("Base Rate") from time to time in effect plus the applicable Base Rate Margin in effect at such time with respect to the relevant Facility or (ii) the applicable LIBOR plus the applicable LIBOR Margin in effect at such time with respect to the relevant Facility, each such Margin to be determined from time to time in accordance with the pricing grids set forth in Exhibit A. Swingline loans shall be Base Rate loans. The Base Rate is the higher of (i) the Administrative Agent's prime commercial lending rate as announced from time to time or (ii) the federal funds rate plus 0.5% per annum. LIBOR is the London Interbank Offered Rate (as quoted on Telerate Page 3750) for corresponding deposits of U.S. Dollars for interest periods of one, two, three or six months, subject to availability, as selected by the Borrower and as quoted to the Administrative Agent. Interest on Base Rate loans shall be payable quarterly in arrears. Interest on LIBOR loans shall be payable at the end of each applicable interest period or at three-month intervals, if earlier. Interest shall be calculated on an actual/360-day basis for LIBOR loans and an actual/365/366-day basis for Base Rate loans. During an event of default under the Facilities, all outstanding principal, accrued interest and other amounts shall accrue interest at a rate per annum of 2% in excess of the rate otherwise applicable, and such interest shall be payable on demand. The definitive credit documents shall include the Administrative Agent's standard protective provisions for such matters as increased costs, funding losses, illegality and withholding taxes. Commitment Fees: Payable quarterly in arrears to the Administrative Agent for the ratable benefit of the Lenders, calculated on an actual/360-day basis, (i) with respect to the Revolving Credit Facility, at a per annum rate as determined in accordance with the pricing grids set forth in Exhibit A on the aggregate unutilized portion of the Revolving Credit Facility, [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 8 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- from the execution date of the definitive credit agreement for the Facilities until termination of the commitments under the Revolving Credit Facility, (ii) with respect to the Acquisition Facility, at a per annum rate as determined in accordance with the pricing grids set forth in Exhibit A on the average unutilized portion of the Acquisition Facility, from the execution date of the definitive credit agreement for the Facilities until termination of the commitments under the Acquisition Facility, and (iii) in the event the Long-Form Merger Structure is utilized, with respect to the Term Facilities, (a) at a per annum rate of 0.50% on the average undrawn portion of the Term Facilities from the Closing Date until the earliest to occur of (1) the Subsequent Closing Date, (2) September 30, 2000, and (3) termination of the Term Facilities, and (b) if the Term Facilities remain undrawn in whole or in part after September 30, 2000, at a per annum rate of 1.0% on the aggregate undrawn portion of the Term Facilities from September 30, 2000 until November 30, 2000 or any earlier termination of the Term Facilities. Letter of Credit Fee: Payable quarterly in arrears to the Administrative Agent for the ratable benefit of the Lenders and calculated on an actual/360-day basis, at a per annum rate equal to the applicable LIBOR Margin in effect from time to time for the Revolving Credit Facility (as determined in accordance with the pricing grids set forth in Exhibit A) on the average daily stated amount of all letters of credit. In addition, the Borrower will pay a facing fee with respect to each letter of credit in an amount equal to 0.25% of the average daily stated amount thereof, payable quarterly in arrears to First Union for its own account as issuer of letters of credit and calculated on an actual/360-day basis. Mandatory Prepay- ments/Commitment Reductions: The Borrower will be required to prepay amounts outstanding under the Facilities, without premium or penalty (subject to payment of any funding losses resulting from prepayment of LIBOR loans other than on the last day of the applicable interest period) as follows: (i) 100% of the net cash proceeds from the sale or disposition by Holdings, the Borrower or any subsidiary of assets outside the ordinary course of business (including insurance proceeds), subject to reinvestment provisions and limited exceptions to be agreed upon, (ii) 100% of the net cash proceeds of any issuance or sale by Holdings, the Borrower or any subsidiary of debt securities (excluding debt issued in connection with the Transactions), subject to limited exceptions to be agreed upon, (iii) 100% of the net cash proceeds of any issuance or sale by Holdings, the Borrower or any subsidiary of equity securities (excluding equity issued in connection with the Transactions), subject [LOGO] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 9 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- to limited exceptions to be agreed upon, and (iv) 75% of Excess Cash Flow (to be defined), with such percentage to be reduced to 50% in the event the Total Leverage Ratio is reduced to or below a level to be agreed upon. Such proceeds shall be applied first to the Term Facilities, pro rata among the Term A Facility, the Term B Facility and, if the Acquisition Facility commitments have terminated, the Acquisition Facility (subject to a right of refusal in favor of holders of the Term B Facility so long as Term A Facility loans or Acquisition loans are outstanding) and, within each such Facility, to the remaining amortization payments on a pro rata basis, then (if the Acquisition Facility commitments are in effect) to the Acquisition Facility (with a corresponding permanent pro rata reduction of the Acquisition Facility commitments), and then to the Revolving Credit Facility (with a corresponding permanent pro rata reduction of the Revolving Credit Facility commitments). Voluntary Prepay- ments/Commitment Reductions: The Borrower may prepay amounts outstanding under the Facilities at any time, without premium or penalty (subject to advance notice provisions and minimum repayment amounts to be agreed upon, and subject to payment of any funding losses resulting from prepayment of LIBOR loans other than on the last day of the applicable interest period). Each voluntary prepayment of the Term Facilities shall be applied pro rata between the Term A Facility and the Term B Facility and, within each such Facility, to the remaining amortization payments on a pro rata basis. Each voluntary prepayment of the Acquisition Facility after termination of the Acquisition Facility commitments shall be applied to the remaining amortization payments on a pro rata basis. Additionally, the Borrower may, at its option upon five business days' notice to the Administrative Agent, reduce the aggregate unutilized commitments under the Revolving Credit Facility or the Acquisition Facility in part (in minimum amounts to be agreed upon) or in whole. Any such reductions shall be applied to the commitments under the applicable Facility pro rata. Conditions Precedent to Borrowing: The initial funding of the Facilities will be subject to the satisfaction of conditions precedent consistent with those customarily found in similar financings and such additional conditions deemed appropriate by the Agents in the context of the Facilities, including without limitation the conditions set forth in the Commitment Letter to which this Summary of Terms and Conditions is attached, and the following: [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 10 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- (1) The definitive credit agreement and all other documentation for the Facilities shall be satisfactory in form and substance to the Agents and the Lenders; (2) Parent, MergerCo and the Borrower shall have entered into the Merger Agreement, and the Merger Agreement, the Tender Offer and the Merger shall have been approved by the Borrower's board of directors and such approval shall not have been withdrawn or modified in a manner adverse to the Lenders; (3) The Agents shall be satisfied with the corporate and capital structure of Holdings, the Borrower and their respective subsidiaries and the management of the Borrower and its subsidiaries after giving effect to the Transactions, with all legal, tax and accounting matters relating to the Transactions or to Holdings, the Borrower and their respective subsidiaries after giving effect thereto, and with all documentation relating to the Tender Offer, the Merger, the Equity Capitalization and the other Transactions (including the Merger Agreement and all schedules and exhibits thereto, the offer to purchase (the "Offer to Purchase") and related documentation in connection with the Tender Offer, all employment contracts and securityholder agreements, and the terms and conditions of all earnouts or other deferred purchase price payments in connection with acquisitions by the Borrower and its subsidiaries); and without limitation of the foregoing, the Agents shall be satisfied that (i) the aggregate purchase price for all of the issued and outstanding shares of the Borrower acquired pursuant to the Tender Offer and the Merger will not exceed $220 million (before giving effect to proceeds to the Borrower from the exercise of options and warrants), and the purchase price for any share shall not exceed $18.25, (ii) aggregate fees and expenses of Parent and MergerCo payable in connection with the Transactions will not exceed an amount reasonably acceptable to the Agents, and (iii) in the event the Long-Form Merger Structure is utilized, the Borrower will be prepared to file its preliminary proxy or information statement relating to the Merger with the Securities and Exchange Commission promptly after completion of the Tender Offer; (4) In the event the Short-Form Merger Structure is utilized, the Agents shall be satisfied that the exercise of the Topping Option shall permit the utilization of the Short-Form Merger Structure and that, prior to or substantially concurrently with the initial funding of the Facilities, (i) the Tender Offer, the exercise of the Topping Option (if exercised) and the Short-Form Merger shall [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 11 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- have been consummated in accordance with the terms of the Merger Agreement, the Offer to Purchase and all other applicable documentation and in compliance with all applicable law and regulatory approvals, without any amendment or waiver of any material condition or other provision thereof except as approved by the Agents, and (ii) MergerCo shall have accepted for payment and acquired tendered shares which, together with other shares then owned by MergerCo (including shares acquired directly from the Borrower pursuant to exercise of the Topping Option), represent not less than that percentage of the aggregate voting power (after giving effect to exercise of the Topping Option) of all outstanding shares of the Borrower entitled to vote in connection with the approval of the Merger which is necessary to effect a "short-form" merger under applicable law; (5) In the event the Long-Form Merger Structure is utilized, the Agents shall be satisfied that, prior to or substantially concurrently with the Interim Funding, (i) the Tender Offer and the Self-Tender shall have been consummated in accordance with the terms of the Merger Agreement, the Offer to Purchase and all other applicable documentation and in compliance with all applicable law and regulatory approvals, without any amendment or waiver of any material condition or other provision thereof except as approved by the Agents, and (ii) MergerCo shall have accepted for payment and acquired tendered shares representing not less than 50.1% of the aggregate voting power (determined after giving pro forma effect to the consummation of the Self-Tender and the cancellation of shares acquired by the Borrower in the Self-Tender) of all outstanding shares of the Borrower entitled to vote in connection with the approval of the Merger; (6) The Agents shall be satisfied that, prior to or substantially concurrently with the initial funding of the Facilities, the existing senior indebtedness of the Borrower (other than miscellaneous items of senior indebtedness in amounts reasonably acceptable to the Agents) shall have been terminated and satisfied in full and all liens and guarantees in connection therewith shall have been released, and Parent, the Borrower and their respective subsidiaries shall have no funded debt other than the Facilities, the Subordinated Notes and such miscellaneous indebtedness; (7) All governmental and third-party consents and approvals necessary in connection with the consummation of the Facilities, the Tender Offer and (unless the Long-Form Merger Structure is utilized) the Merger, and the other Transactions (including Hart- [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 12 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- Scott-Rodino clearance), shall have been obtained and remain in effect and shall be satisfactory to the Agents (including, without limitation, any necessary consents to the collateral assignment of franchise and license agreements); all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority; and no law or regulation shall be applicable, or event shall have occurred, that seeks to enjoin, restrain, restrict, set aside or prohibit, or impose materially adverse conditions upon, the consummation of the Tender Offer, the Merger, the Facilities or any of the other Transactions; (8) All filings, recordations and other actions necessary or, in the Administrative Agent's reasonable judgment, desirable to perfect the Administrative Agent's liens and security interests in the collateral securing the Facilities shall have been made or taken, or arrangements satisfactory to the Administrative Agent for the completion thereof shall have been made; in connection with any real estate collateral, the Administrative Agent shall have received such items (including landlord waivers) as it shall have reasonably requested; and the Administrative Agent shall have received the results of lien, judgment and pending litigation searches with respect to Parent, the Borrower and their respective subsidiaries in jurisdictions selected by it and shall be satisfied with the results thereof; (9) The Agents shall be satisfied that the initial funding under the Facilities will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System; (10) The Equity Capitalization shall have been consummated on terms and conditions satisfactory to the Agents; and in connection therewith the Agents shall be satisfied that after giving effect thereto (i) Parent shall have received from Ford Motor Company net cash proceeds of not less than $43 million, and from Chartwell net cash proceeds of not less than $54 million (and in each case Parent shall have contributed such proceeds to MergerCo), from the issuance of equity on terms and conditions (including, in the case of any preferred equity, dividend and redemption terms and all other terms) satisfactory to the Agents (and the aggregate amount of net proceeds from the Equity Capitalization, including any management rollover equity, shall not be less than $105.5 million), and (ii) the Management Investors shall have contributed not less than $6.0 million to the equity of the Borrower pursuant to the retention or rollover of existing common stock; and in addition, the Agents shall be [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 13 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- satisfied that the $1.5 million earnout payment due from the Borrower on August 31, 2000 in connection with the "Allied" acquisition shall have been paid (or if payable after the Closing Date, shall be paid) entirely with the proceeds of additional cash equity contributed to the Borrower (directly or indirectly) by Chartwell and FMC on the Closing Date; (11) The Borrower shall have received net cash proceeds of not less than $40 million from the issuance of the Subordinated Notes on terms and conditions (including, without limitation, interest, maturity, covenants, default and acceleration, and terms of subordination), and pursuant to documentation, satisfactory to the Agents; (12) The Agents shall have received an opening pro forma balance sheet and income statement of the Borrower and its subsidiaries, as of the last day of the month most recently ended prior to the Closing Date (or, if the Closing Date occurs on or prior to the 20th day of a month, as of the last day of the next prior month) and for the twelve-month period then ended (provided that such balance sheet shall be as of the most recent date as of which a balance sheet of the Borrower has been prepared and is available, if prior to the date required above, except that debt balances shall be as of the date required above), giving effect to the consummation of the Tender Offer, the Merger, the initial funding of the Facilities and the consummation of the other Transactions, together with projected financial statements of the Borrower and its subsidiaries (consisting of balance sheets and statements of income and cash flows) prepared on an annual basis through November 30, 2009, all of which shall be in form and substance satisfactory to the Agents; (13) The Agents shall be satisfied that, on a pro forma basis as of a recent date after giving effect to the Tender Offer, the Merger, the initial funding of the Facilities and the consummation of the other Transactions, (i) the Borrower is in compliance with all financial covenants in the definitive credit documentation, (ii) pro forma adjusted EBITDA of the Borrower and its subsidiaries (to be defined in a manner satisfactory to the Agents) for the most recently completed twelve-month period is not less than $33.3 million (or, in the event the Borrower utilizes the Term Facilities Increase, an amount acceptable to the Agents), and (iii) aggregate total funded debt of the Borrower and its subsidiaries is not greater than $148.25 million and aggregate total funded senior debt of the Borrower and its subsidiaries is not greater than [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 14 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- $108.25 million (in each case, plus (a) miscellaneous items of indebtedness (excluding capital leases) reasonably acceptable to the Agents and (b) the aggregate amount of the Term Facilities Increase (if applicable)), it being understood that any increases in funding under the Facilities that would result in greater pro forma debt outstanding on the Closing Date than the amounts set forth above shall require the prior approval of the Agents; (14) There shall not have occurred, since November 30, 1999, (i) any material adverse change in the condition (financial or otherwise), operations, properties, prospects or business of the Borrower and its subsidiaries, or (ii) any event, condition or state of facts that could reasonably be expected to have such a material adverse change; (15) No action, suit, proceeding or investigation shall have been instituted or threatened before, and no order, injunction or decree shall have been entered by, any court, arbitrator or governmental authority, in each case seeking to enjoin, restrain, restrict, set aside or prohibit, to impose material conditions upon, or to obtain substantial damages in respect of, the consummation of the Tender Offer, the Merger, the Facilities or any of the other Transactions or that, in the opinion of the Agents, could reasonably be expected to have a material adverse effect upon the condition (financial or otherwise), operations, properties, prospects or business of the Borrower and its subsidiaries or on the ability of Holdings, the Borrower and their respective subsidiaries to perform their respective obligations under the definitive documentation for the Facilities; (16) There shall not have occurred any material disruption or material adverse change in, or other condition with respect to, the United States financial and capital markets that could reasonably be expected to have a material adverse effect on the syndication of the Facilities; (17) The Agents shall have received a solvency opinion with respect to the Borrower and its subsidiaries after giving effect to the Transactions, from an independent valuation firm acceptable to the Agents and in form and substance satisfactory to the Agents; (18) The Agents shall have received copies of (i) due diligence reports on the Borrower and its subsidiaries from PricewaterhouseCoopers and Bain, (ii) business and financial due diligence reports for County Limousine, (iii) a review of the [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 15 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- insurance coverages of the Borrower and its subsidiaries from Marsh & McLennan, and (iv) environmental reports with respect to selected properties of the Borrower and its subsidiaries, and, in each case, shall be satisfied in their sole discretion with the results thereof; (19) The Agents shall have received a copy of the executed fairness opinion of the Borrower's financial advisors in connection with the Tender Offer and the Merger; (20) The representations and warranties contained in the definitive credit documentation shall be true and correct as of the Closing Date as if made on such date, and no default or event of default thereunder shall have occurred and be continuing; (21) All fees and expenses of the Co-Arrangers, the Agents and the Lenders required to have been paid as a condition to the initial funding of the Facilities shall have been paid; and (22) The Agents and the Lenders shall have received such other documents, agreements and opinions in connection with the Facilities (including but not limited to legal opinions of counsel to Holdings, the Borrower and their respective subsidiaries (including local counsel in such jurisdictions as shall be requested by the Agents), and reliance letters with respect to opinions delivered in connection with the Merger, including an opinion of Delaware counsel to the Borrower as to the validity of the Merger), all satisfactory in form and substance, as the Agents or any Lender may reasonably request. In addition, in the event the Long-Form Merger Structure is utilized, the funding of the undrawn portion of the Term Facilities (and any funding under the other Facilities) on the Subsequent Closing Date will be subject to the satisfaction of the following conditions: (1) The Agents shall be satisfied that, prior to or substantially concurrently with the funding of the Facilities on the Subsequent Closing Date, the Long-Form Merger shall have been consummated in accordance with the terms of the Merger Agreement and all other applicable documentation and in compliance with all applicable law and regulatory approvals, without any amendment or waiver of any material condition or other provision thereof except as approved by the Agents; [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 16 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- (2) All governmental and third-party consents and approvals necessary or desirable in connection with the consummation of the Long-Form Merger shall have been obtained and remain in effect and shall be satisfactory to the Agents; all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority; and no law or regulation shall be applicable that seeks to enjoin, restrain, restrict, set aside or prohibit, or impose materially adverse conditions upon, the consummation of the Long-Form Merger; (3) No action, suit, proceeding or investigation shall have been instituted or threatened before, and no order, injunction or decree shall have been entered by, any court, arbitrator or governmental authority, in each case that, in the opinion of the Agents, could reasonably be expected (i) to enjoin, restrain, restrict, set aside or prohibit or (ii) to impose material conditions upon, or to obtain substantial damages in respect of, the consummation of the Long-Form Merger; (4) The Agents shall be satisfied that, on a pro forma basis as of a recent date after giving effect to the Merger and the funding of the Facilities on the Subsequent Closing Date, aggregate total funded debt of the Borrower and its subsidiaries is not greater than $148.25 million and aggregate total funded senior debt of the Borrower and its subsidiaries is not greater than $108.25 million (in each case, plus (a) the amounts referred to in paragraph 13 of "Conditions Precedent to Borrowing" above, and (b) without duplication, borrowings under the Facilities since the Closing Date); (5) The material representations and warranties identified in the definitive credit documentation shall be true and correct in all material respects as of the Subsequent Closing Date as if made on such date, and no default or event of default thereunder shall have occurred and be continuing. Representations and Warranties: The definitive credit documentation will contain representations and warranties consistent with those customarily found in similar financings and such additional representations and warranties deemed appropriate by the Agents in the context of the Facilities, including without limitation representations and warranties regarding corporate organization and power, absence of violation of organizational documents, other agreements and applicable laws, absence of material litigation, obtaining of government approvals, subsidiaries, payment of [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 17 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- taxes, authorization and enforceability of the credit documents, full disclosure, margin securities, ERISA matters, solvency, accuracy of financial statements, absence of material adverse change, title to and sufficiency of assets, real estate, intellectual property, governmental permits and licenses, insurance, compliance with laws, environmental matters, validity and perfection of security interests, and material contracts. Affirmative Covenants: The definitive credit documentation will contain affirmative covenants consistent with those customarily found in similar financings and such additional covenants deemed appropriate by the Agents in the context of the Facilities, including without limitation (i) delivery of quarterly and annual financial statements, together with financial covenant compliance certificates, (ii) annual delivery of operating budget and cash flow projections, prepared on a quarterly basis, (iii) delivery of regulatory reports, management letters, public filings and other specified business information, (iv) delivery of notice of material litigation, proceedings, events of default, ERISA events and other significant matters, and (v) maintenance of corporate existence, franchises and properties, compliance with laws, payment of taxes and other obligations, inspection rights, and maintenance of insurance, books and records. Negative Covenants: The definitive credit documentation will contain negative covenants consistent with those customarily found in similar financings and such additional covenants deemed appropriate by the Agents in the context of the Facilities, including without limitation (i) restrictions on consolidation, merger, sale or disposition of assets and sale-leaseback transactions, (ii) restrictions on indebtedness, including guaranties, (iii) restrictions on liens (negative pledge), (iv) restrictions on joint ventures, acquisitions and other investments, (v) restrictions on dividends, redemptions and distributions with respect to capital stock and redemptions and prepayments of subordinated debt, (vi) restrictions on transactions with affiliates (with the Chartwell management fee not to exceed $650,000 during fiscal year 2000 and, for any subsequent fiscal year, not to exceed the greater of (x) $650,000 or (y) the lesser of (i) 2% of EBITDA for such fiscal year or (ii) $1,625,000), (vii) restrictions on changes in lines of business (including any change in the passive status of Holdings), (viii) restrictions on amendments to subordinated debt and equity documents, and (ix) restrictions on other negative pledges, changes in accounting policies and changes in fiscal year. Acquisitions not exceeding $7.5 million individually or $25 million during any fiscal [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 18 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- year will be permitted without bank approval, subject to delivery of specified business and financial information relating to the acquisition, absence of default, and pro forma financial covenant compliance (including, for any acquisition during the period ending 18 months after closing, pro forma Total Leverage Ratio of 4.5 to 1.0 and pro forma Senior Leverage Ratio of 3.5 to 1.0 as of the date of the acquisition). In addition, the Borrower shall deliver to the Lenders a review prepared by PricewaterhouseCoopers, or another independent certified public accounting firm of recognized national standing reasonably acceptable to the Administrative Agent, with respect to any acquisition creating pro forma EBITDA of $1 million or more at least 10 days prior to closing such acquisition. Financial Covenants: The definitive credit documentation will contain financial covenants (with definitions, levels and other terms as set forth below or to be agreed upon by the Borrower and the Agents) based on the financial information provided to the Agents, determined for the Borrower and its subsidiaries on a consolidated basis, reported quarterly on a rolling four-quarter basis and to include without limitation the following: (a) Maximum Total Leverage Ratio (total funded debt, including letters of credit and guaranties/EBITDA): 4.75 to 1.0, with stepdown 18 months after closing to 4.5 to 1.0 and stepdowns thereafter to be agreed upon; (b) Maximum Senior Leverage Ratio (total funded senior debt, including letters of credit and guaranties/EBITDA): 3.75 to 1.0, with stepdown 18 months after closing to 3.5 to 1.0 and stepdowns thereafter to be agreed upon; (c) Minimum Fixed Charge Coverage Ratio (EBITDA less maintenance capital expenditures less cash taxes/cash interest plus scheduled principal payments on indebtedness): levels to be agreed upon; (d) Minimum Interest Coverage Ratio (EBITDA/cash interest expense): levels to be agreed upon; and (e) Maximum Annual Capital Expenditures (with sublimit for expenditures related to the Enterprise System MIS project): levels to be agreed upon. Events of Default: The definitive credit documentation will contain events of default consistent with those customarily found in similar financings and such [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 19 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- additional events of default deemed appropriate by the Agents in the context of the Facilities, including without limitation (i) failure to pay any principal, interest or fees when due, (ii) breach of covenants (with customary grace periods for certain affirmative covenants), (iii) material incorrectness when made of any representation or warranty, (iv) payment or other default under other material indebtedness, (v) bankruptcy or insolvency, (vi) judgment liens or ERISA events, (vii) actual or asserted invalidity of guaranty or security documents, and (viii) change of control. Interest Rate Protection: Within 45 days after the Term Facilities are fully drawn, the Borrower will be required to have fixed or hedged at least 50% of the Term Facilities on terms reasonably acceptable to the Agents. Assignments and Participations: Customary participation rights will be provided, subject to voting restrictions on significant matters. Assignments by Lenders to banks and other financial institutions meeting certain size thresholds will be permitted with the approval (not to be unreasonably withheld) of the Administrative Agent and the Borrower (provided that the Borrower's approval shall not be required during an Event of Default under the Facilities), subject to minimum amounts to be agreed upon and payment by the assignor or assignee of a $3,000 assignment fee to the Administrative Agent. Amendments and Waivers: Amendments and waivers of the provisions of the definitive credit documentation will require the approval of Lenders holding outstanding loans and commitments representing at least a majority of the aggregate outstanding loans and commitments under the Facilities (the "Required Lenders"), except that the consent of all affected Lenders shall be required with respect to reductions, or extension of time for payment, of principal, interest or fees and the consent of all Lenders shall be required with respect to increases in commitment amounts, releases of all or substantially all collateral, releases of guarantors, and changes to voting requirements. Expenses and Indemnification: The Borrower will pay (a) all reasonable out-of-pocket costs and expenses of the Agents and the Co-Arrangers (including the reasonable fees and disbursements of counsel) in connection with the preparation, execution and delivery of the definitive documentation for the Facilities and any amendment or waiver with respect thereto and the syndication of the Facilities, and (b) all reasonable out-of-pocket [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 20 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- costs and expenses of the Agents and the Lenders (including the reasonable fees and disbursements of counsel) in connection with the enforcement of the Facilities. The Borrower will indemnify the Co-Arrangers, the Agents and the Lenders and hold them harmless against all claims, losses, liabilities and expenses (including reasonable fees and disbursements of counsel) arising from or relating to the proposed financing contemplated hereby and the other transactions connected therewith, except to the extent finally determined to have resulted from such indemnified party's gross negligence or willful misconduct. Governing Law: North Carolina. Counsel to the Administrative Agent: Robinson, Bradshaw & Hinson, P.A. Miscellaneous: Customary provisions regarding consent to jurisdiction, waiver of jury trial, service of process, and other miscellaneous matters. All parties will agree to mandatory arbitration of disputes. [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 21 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - -------------------------------------------------------------------------------- EXHIBIT A Pricing Grids The applicable LIBOR Margins, Base Rate Margins and commitment fee percentages under the Revolving Credit Facility and the Acquisition Facility will be determined according to the following grids by reference to the Total Leverage Ratio, with each change in the applicable LIBOR Margins, Base Rate Margins and commitment fee percentages to be effective 10 days after delivery to the Agent of quarterly or annual financial statements and a compliance certificate showing the Total Leverage Ratio as of the last day of the fiscal quarter most recently ended. Term A Facility, Revolving Credit Facility, Acquisition Facility and Commitment - - ------------------------------------------------------------------------------- Fees - - ----
- - ------------------------------------------------------------------------------------------------------------- Applicable Applicable Commitment Fee Commitment Fee Tier Leverage Ratio LIBOR Base Percentage Percentage ---- -------------- Margin Rate Margin (Revolving Credit) (Acquisition) ------ ----------- ------------------ ------------- - - ------------------------------------------------------------------------------------------------------------- I Greater than or equal to 4.5 3.75% 2.25% 0.50% 0.75% to 1.0 - - ------------------------------------------------------------------------------------------------------------- II Less than 4.5 to 1.0 but 3.50% 2.00% 0.50% 0.75% greater than or equal to 4.0 to 1.0 - - ------------------------------------------------------------------------------------------------------------- III Less than 4.0 to 1.0 but 3.25% 1.75% 0.50% 0.75% greater than or equal to 3.5 to 1.0 - - ------------------------------------------------------------------------------------------------------------- IV Less than 3.5 to 1.0 but 3.00% 1.50% 0.50% 0.75% greater than or equal to 3.0 to 1.0 - - ------------------------------------------------------------------------------------------------------------- V Less than 3.0 to 1.0 2.75% 1.25% 0.50% 0.75% - - -------------------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, the initial applicable LIBOR Margin and applicable Base Rate Margin for the Term A Facility, the Revolving Credit Facility and the Acquisition Facility and the initial commitment fee percentages (from the date of closing until 10 days after the first delivery of financial statements and a compliance certificate) will be set at Tier II. [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 22 CAREY INTERNATIONAL, INC. CONFIDENTIAL - - --------------------------------------------------------------------------------
Term B Facility --------------- -------------------------------------------------------------------------------------------------- Applicable Applicable LIBOR Base Rate Tier Leverage Ratio Margin Margin ---- -------------- ------ ------ -------------------------------------------------------------------------------------------------- I Greater than or equal to 4.5 to 1.0 4.25% 2.75% -------------------------------------------------------------------------------------------------- II Less than 4.5 to 1.0 but greater than or equal to 4.0 to 1.0 4.00% 2.50% -------------------------------------------------------------------------------------------------- III Less than 4.0 to 1.0 but greater than or equal to 3.5 to 1.0 3.75% 2.25% -------------------------------------------------------------------------------------------------- IV Less than 3.5 to 1.0 but greater than or equal to 3.0 to 1.0 3.75% 2.25% -------------------------------------------------------------------------------------------------- V Less than 3.0 to 1.0 3.75% 2.25% --------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, the initial applicable LIBOR Margin and applicable Base Rate Margin for the Term B Facility and (from the date of closing until 10 days after the first delivery of financial statements and a compliance certificate) will be set at Tier II. [LOGO OF FIRST UNION] - - -------------------------------------------------------------------------------- FIRST UNION SECURITIES, INC. PAGE 23 EX-99.B.II 10 0010.txt EXHIBIT (B)(II) Exhibit (b)(ii) GarMark Advisors L.L.C. First Union Investors, Inc. 1325 Avenue of the Americas 301 S. College Street 26th Floor Charlotte, NC 28288 New York, NY 10019 July 12, 2000 Mr. Todd R. Berman, President Chartwell Investments II LLC 717 Fifth Avenue New York, NY 10022 Re: Carey International, Inc. ------------------------- Gentlemen: Chartwell Investments II LLC (the "Sponsor") has informed GarMark Advisors L.L.C., as advisor to GarMark Partners, L.P. ("GarMark"), and First Union Investors, Inc. (together with GarMark, the "Purchasers") that the Sponsor and Ford Motor Company or one or more of its affiliates (collectively, "FMC") are seeking $40.0 million of subordinated debt financing together with detachable common stock purchase warrants (the "Financing") to support the proposed leveraged acquisition (as more fully described below) of Carey International, Inc., a Delaware corporation (the "Borrower"). We understand that the Sponsor and FMC intend to form a holding company ("Parent") which will in turn form a wholly-owned subsidiary ("MergerCo"), and Parent and MergerCo will enter into an Agreement and Plan of Merger (the "Merger Agreement") with the Borrower, pursuant to which MergerCo and the Borrower will commence a joint tender offer (the "Tender Offer") to acquire, for cash, all of the issued and outstanding shares of common stock of the Borrower (the "Company Common Stock"). Pursuant to the Merger Agreement, upon completion of the Tender Offer, either MergerCo or a wholly-owned subsidiary of MergerCo created for such purpose will merge (the "Merger") with and into the Borrower. The Tender Offer and Merger will be completed either in a Short Form Merger Structure (as defined herein) or a Long Form Merger Structure (as defined herein), depending on the number of shares of Company Common Stock that are tendered in the Tender Offer. We understand that the Merger Agreement will provide that the Tender Offer will be made jointly by MergerCo and the Borrower and will provide for the grant by the Borrower to MergerCo of an option (the "Topping Option") to acquire a specified number of shares of newly issued Company Common Stock, for cash, at a price of not more than $18.25 per share. In the event that holders of outstanding shares of Company Common Stock tender shares representing less than 90% of the outstanding Company Common Stock, MergerCo may exercise the Topping Option to acquire such number of shares of Company Common Stock as will be necessary so that, upon completion of the Tender Offer and exercise of the Topping Option, MergerCo will own at least 90% of the then outstanding shares of Company Common Stock entitled to vote in connection with the Merger, giving effect to the issuance of such shares. The exercise of the Topping Option and the issuance of the shares of Company Common Stock to MergerCo thereunder will be completed simultaneously upon acceptance of shares in the Tender Offer. Upon completion of the Tender Offer and acquisition of shares of Company Common Stock pursuant to the Topping Option, and prior to or simultaneously with the funding of the Financing and the initial funding of senior secured credit facilities (the "Facilities"), MergerCo will merge with and into the Borrower, with the Borrower being the surviving corporation (the "Short Form Merger"). In the Short Form Merger, outstanding shares of Company Common Stock (other than shares held by MergerCo and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Borrower will utilize draws under the Facilities to fund the payment of cash to the holders of such shares. In order to finance the Tender Offer and the Short Form Merger, (a) equity contributions will be made to Parent and/or Borrower of approximately, and in any event not less than, $105.5 million which shall be comprised of (x) not less than $97.0 million in cash contributed as equity to Parent by Sponsor, FMC and certain other investors and (y) up to $9.0 million, but not less than $6.0 million, of equity (including roll-over equity) contributed by current members of management of the Borrower (such equity to be valued at the Tender Offer Price) and such cash equity shall be contributed by Parent to MergerCo (collectively, the "Equity Capitalization"), (b) the Borrower will obtain the Facilities, and (c) the Borrower will issue $40 million in aggregate principal amount of unsecured senior subordinated notes (the "Notes") together with detachable common stock purchase warrants (the "Warrants", and together with the Warrants, the "Securities") in a private placement. We understand that the roll-over equity will be contractually committed to as of the date of the Tender Offer and shall be contributed to the Borrower concurrently with the Merger. The structure described in this paragraph is defined as the "Short Form Merger Structure." We understand that in the event that holders of shares of outstanding Company Common Stock tender shares representing more than 50.1% of the outstanding common stock of the Borrower but the Short-Form Merger Structure cannot be utilized, then upon completion of the Tender Offer, (a) MergerCo will acquire shares tendered in the Tender Offer representing at least 50.1% of the outstanding Company Common Stock entitled to vote in connection with the approval of the Merger, after giving effect to such purchase and the Self-Tender (as defined below), and (b) the Borrower will acquire and immediately cancel the remainder of the shares tendered in the Tender Offer (the "Self-Tender"), utilizing (i) first, proceeds of the issuance of the Securities and (ii) second, to the extent necessary, draws under the Facilities to pay for any remaining tendered shares. As soon as possible after completion of the Tender Offer in accordance with applicable 2 law, MergerCo or a wholly-owned subsidiary thereof created solely for such purpose will merge with and into the Borrower, with the Borrower being the surviving corporation (the "Long Form Merger"). In the Long Form Merger, outstanding shares of Company Common Stock (other than shares held by MergerCo and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Borrower will utilize the draws under the Facilities (and, to the extent not required to fund the Self-Tender or refinance the Borrower's existing senior bank credit facilities, the remaining proceeds of the Notes) to fund the payment of cash to the holders of such shares. In order to finance the Tender Offer utilizing the Long Form Merger Structure, (a) Parent will effect the Equity Capitalization and (b) the Borrower will obtain the Facilities and issue the Securities. The structure described in this paragraph is defined as the "Long Form Merger Structure." The Sponsor has requested that the Purchasers commit to purchase, or cause their respective affiliates to purchase, the entire principal amount of the Notes and the Warrants. Based on our understanding of the transaction as described above and the information you have provided to the Purchasers, the Purchasers are pleased to severally confirm their respective commitment (the "Commitment") to purchase the principal amount of the Securities set forth opposite their names on the signature page hereto, subject to the terms and conditions contained herein and in the attached Summary of Proposed Terms and Conditions (the "Term Sheet"). We understand that all proceeds received by the Borrower from the issuance of the Notes and Warrants would be used in the Tender Offer as described above. (This letter and the Term Sheet are sometimes collectively referred to herein as the "Letter"). Any capitalized term used and not otherwise defined herein shall have the meaning ascribed to such term in the Term Sheet. The Commitment of the Purchasers hereunder is based upon the financial and other information regarding the Borrower and its subsidiaries previously provided to the Purchasers and is subject to the various conditions described in the Term Sheet and to the usual reservations, among others, that there shall not have occurred after the date of such information, in the sole opinion of the Purchasers, any material adverse change in the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries taken as a whole. If the continuing review by the Purchasers of the Borrower discloses information relating to conditions or events not previously disclosed to the Purchasers or relating to new information or additional developments concerning conditions or events previously disclosed to the Purchasers that the Purchasers in their sole discretion believe may have a material adverse effect on the condition (financial or otherwise), assets, properties, business operations or prospects of the Borrower and its subsidiaries taken as a whole, the Purchasers, may, in their sole discretion, decline to provide the Financing. This Commitment is also subject to (i) the Sponsor's written acceptance of a letter from the Purchasers to the Sponsor of even date herewith (the "Fee Letter") pursuant to which the Sponsor agrees to pay, or cause to be paid, to the Purchasers certain 3 fees in connection with this Commitment as more particularly set forth therein, (ii) the completion by the Purchasers of their legal due diligence review of the Borrower and its subsidiaries which shall be satisfactory to the Purchasers in their sole discretion, (iii) the completion of a definitive note purchase agreement, the Notes, the Warrants and other related documentation (collectively, the "Note Purchase Documents") on terms consistent with the Term Sheet and definitive documentation for the Facilities, the Tender Offer and the Merger, in each case in form and substance satisfactory to the Purchasers, (iv) compliance with all applicable laws and regulations (including compliance of this Letter and the transactions described herein with all applicable federal banking and securities laws, rules and regulations), (v) the tendering of at least 50.1% of the outstanding shares of Company Common Stock in the Tender Offer and (vi) the satisfaction of all other conditions described herein, in the Term Sheet and in the Note Purchase Documents. It is a condition to each Purchaser's Commitment hereunder that the Commitment of the other shall be committed to on the Closing Date (as defined herein) (on the terms and subject to the conditions set forth herein and in the Term Sheet). Those matters which are not covered by or made clear in this Letter are subject to the mutual agreement of the parties. The Purchasers reserve the right, prior to or after the execution of the Note Purchase Documents, to assign part of the foregoing Commitment to purchase the Securities to one or more of their respective affiliates. The Sponsor agrees that the Purchasers may share with any of their affiliates and advisors any information related to the transactions described herein or any other matter contemplated hereby, on a confidential basis. The Sponsor hereby represents, warrants and covenants to the Purchasers that (i) all information, other than the Projections (as defined below), which has been, or is hereafter, made available to the Purchasers by the Sponsor or any of its representatives in connection with the transactions contemplated hereby ("Information"), is, and will be, complete and correct in all material respects and does not, and will not, contain any untrue statement of a material fact or omit to state a fact necessary to make the statements contained therein not misleading and (ii) all financial projections concerning the Borrower that have been, or are hereafter, made available to the Purchasers by the Sponsor or the Borrower or any of their respective representatives (the "Projections") have been, or will be, prepared in good faith based upon reasonable assumptions. The Sponsor also agrees to furnish the Purchasers with such information and Projections as they may reasonably request and to supplement the Information and the Projections from time to time, through and including the closing date of the Financing (the "Closing Date"), so that the representations and warranties set forth in the preceding sentence are correct on the Closing Date. The Sponsor acknowledges that the Purchasers, in committing to make funds available to the Borrower, subject to the terms of this Letter, in connection with the Financing, have been, and will be, using and relying on the Information and the Projections without any independent verification thereof. Regardless of whether the Commitment herein expires or is terminated or the Financing closes, Sponsor agrees to pay upon demand to the Purchasers all out-of-pocket expenses which may be incurred by the Purchasers in connection with the 4 Financing or the other transactions described herein (including all reasonable legal, environmental and other consulting costs and fees incurred in connection with the preparation of this Letter, the Fee Letter, the Note Purchase Documents and evaluation of and documenting the Financing and the other transactions described herein). Sponsor shall provide the Purchasers with at least eleven business days prior written notification of the Closing Date to comply with the funding requirements of the Purchasers and shall indemnify the Purchasers for any losses, liabilities or expenses incurred by the Purchasers resulting from the failure of the Company to issue the Notes and the Warrants on the Closing Date. The Sponsor agrees to cause the Borrower to indemnify and hold harmless the Purchasers and their respective affiliates and each of their respective directors, officers, partners, attorneys and advisors (each such person or entity referred to hereafter in this paragraph as an "Indemnified Person") from any and all losses, claims, costs, damages, expenses or liabilities (or actions, suits or proceedings, including any inquiry or investigation with respect thereto) ("Damages") to which any Indemnified Person may become subject, insofar as such Damages arise out of, in any way relate to, or result from, this Letter, the Fee Letter, the Financing, or the other transactions contemplated hereby and thereby and to reimburse upon demand each Indemnified Person for any and all legal and other expenses incurred in connection with investigating, preparing to defend, or defending against, any such Damages; provided, however, that the Borrower shall not have any obligation under this indemnity provision for liabilities determined in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of any Indemnified Person. The foregoing provisions of this paragraph shall be in addition to any right that an Indemnified Person shall have at common law or otherwise. No Indemnified Person shall (x) have any liability (whether direct or indirect, in contract or tort or otherwise) to the Borrower or the Sponsor or their respective security holders or creditors arising out of, related to, or resulting from, the transactions contemplated herein, except to the extent that such liability is found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from such Indemnified Person's gross negligence or willful misconduct or (y) be responsible or liable for any indirect or consequential damages that may be alleged as a result of this Letter. The provisions of the immediately preceding two paragraphs shall remain in full force and effect regardless of whether definitive documentation for the Financing shall be completed, executed and delivered, and notwithstanding the termination or expiration of this Letter or the Commitment of the Purchasers hereunder. Upon execution of the Note Purchase Documents, the Borrower shall assume all obligations of the Sponsor hereunder and the Sponsor shall be released therefrom in a manner mutually satisfactory to the Borrower and the Purchasers. This Letter is delivered to the Sponsor with the understanding that neither this Letter nor the substance of the Financing proposed herein shall be disclosed by the Sponsor to any person, entity or group outside the Sponsor, the Borrower or FMC, except to those professional advisors who are in a confidential relationship with the Sponsor or 5 the Borrower and require knowledge thereof to perform their respective duties (such as the Sponsor's and the Borrower's legal counsel, independent auditors and financial advisers and legal counsel to the agents of the Facilities), or where disclosure is required by applicable law; provided, however, that once -------- ------- this Letter is accepted by the Sponsor, the Sponsor will consult with the Purchasers as to any public filings or document distribution in which reference is made to either this Letter or the substance of the Financing proposed herein. This Letter (i) shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any choice-of-law principles thereof, (ii) may be executed in counterparts, which, taken together, shall constitute an original, (iii) shall be amended or modified only in a writing executed by the Purchasers and the Sponsor, (iv) shall not be assigned or transferred by the Sponsor (whether by operation of law or otherwise) without the prior written consent of the Purchasers, and (v) supersedes and replaces any and all proposals or commitment letters previously delivered by either of the Purchasers to the Sponsor relating to the Financing. In addition, no party has been authorized by the Purchasers to make any oral or written statements inconsistent with this Letter. The Commitment proposed herein will be available for acceptance until 5:00 p.m. (New York, NY time) on July 13, 2000, unless further extended in writing by the Purchasers. Notwithstanding the Sponsor's acceptance of the Commitment, it shall expire if the Financing described herein has not closed on or before September 15, 2000, unless the Commitment is extended by the Purchasers in their sole discretion. 6 We are delighted to have this opportunity to work with you. If the terms of the Letter meet with your approval, please indicate your acceptance by signing and dating the enclosed copy of this Letter, and then returning the same to the undersigned. Very truly yours, Commitment Amount GARMARK ADVISORS L.L.C. $30,000,000 By: ------------------------- Name: Title: By: ------------------------- Name: Title: FIRST UNION INVESTORS, INC. $10,000,000 By: ------------------------- Name: Title: AGREED TO AND ACCEPTED THIS ____ DAY OF JULY, 2000: CHARTWELL INVESTMENTS II LLC By: ------------------------- Name: Title: 7 SUMMARY OF PROPOSED TERMS AND CONDITIONS OF INVESTMENT IN CAREY INTERNATIONAL, INC. SENIOR SUBORDINATED NOTES AND WARRANTS ISSUER: Carey International, Inc. (the "Company"). ------- BACKGROUND: Chartwell Investments II LLC ("Chartwell"), together with Ford --------- Motor Company or one or more of its affiliates (collectively, "FMC") and certain other investors, intends to form a holding --- company ("Parent") which will in turn form a wholly-owned ------ subsidiary ("MergerCo"), and Parent and MergerCo will enter into -------- an Agreement and Plan of Merger (the "Merger Agreement") with the ---------------- Company, pursuant to which MergerCo and the Company will commence a joint tender offer (the "Tender Offer") to acquire, for cash, ------------ all of the issued and outstanding shares of common stock of the Company. Pursuant to the Merger Agreement, upon completion of the Tender Offer, either MergerCo or a wholly-owned subsidiary of MergerCo created for such purpose will merge (the "Merger") with ------ and into the Company. The Tender Offer and Merger will be completed either in a Short Form Merger Structure (as defined herein) or a Long Form Merger Structure (as defined herein), depending on the number of shares of common stock of the Company that are tendered in the Tender Offer. The Tender Offer will be made jointly by MergerCo and the Company and provide for the grant by the Company to MergerCo of an option (the "Topping Option") to acquire a specified number of shares of -------------- newly issued common stock of the Company, for cash, at a price of not more than $18.25 per share. In the event that holders of outstanding shares of common stock tender shares representing less than 90% of the outstanding common stock of the Company, MergerCo may exercise the Topping Option to acquire such number of shares of common stock of the Company as will be necessary so that, upon completion of the Tender Offer and exercise of the Topping Option, MergerCo will own at least 90% of the then outstanding shares of common stock of the Company entitled to vote in connection with the Merger, giving effect to the issuance of such shares. The exercise of the Topping Option and the issuance of the shares of common stock to MergerCo thereunder will be completed simultaneously upon acceptance of shares in the Tender Offer. Upon completion of the Tender Offer and acquisition of shares pursuant to the Topping Option, and prior to or simultaneously with the Closing and the initial funding of senior secured credit facilities of the Company (the "Facilities"), ---------- MergerCo will merge with and into the Company, with the Company being the surviving corporation (the "Short Form Merger"). In the ----------------- Short Form Merger, outstanding shares of common stock of the Exhibit (b)(ii) Part 2 Company (other than shares held by MergerCo and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Company will utilize draws under the Facilities to fund the payment of cash to the holders of such shares. In order to finance the Tender Offer and the Short Form Merger, (a) equity contributions will be made to Parent and/or the Company of approximately, and in any event not less than, $105.5 million which shall be comprised of (x) not less than $97.0 million in cash contributed as equity to Parent by Sponsor, FMC and certain other investors and (y) up to $9.0 million, but not less than $6.0 million, of equity (including roll-over equity) contributed by current members of management of the Company (such equity to be valued at the Tender Offer Price) and such cash equity shall be contributed by Parent to MergerCo (collectively, the "Equity Capitalization"), (b) the Company will --------------------- obtain the Facilities, and (c) the Company will issue $40 million in aggregate principal amount of Notes (as defined herein), together with Warrants (as defined herein, and together with the Notes, the "Securities") in a private placement. The roll-over ---------- equity will be contractually committed to as of the date of the Tender Offer and shall be contributed to the Company concurrently with the Merger. The structure described in this paragraph is defined as the "Short Form Merger Structure." --------------------------- In the event that holders of shares of outstanding common stock of the Company tender shares representing more than 50.1% of the outstanding common stock of the Company but the Short Form Merger Structure cannot be utilized, then upon completion of the Tender Offer, (a) MergerCo will acquire shares tendered in the Tender Offer representing at least 50.1% of the outstanding common stock of the Company entitled to vote in connection with the approval of the Merger, after giving effect to such purchase and the Self-Tender (as defined below), and (b) the Company will acquire and immediately cancel the remainder of the shares tendered in the Tender Offer (the "Self-Tender"), utilizing (i) first, the ----------- proceeds of the issuance of the Notes, and (ii) second, to the extent necessary, draws under the Facilities to pay for any remaining tendered shares. As soon as possible after completion of the Tender Offer in accordance with applicable law, MergerCo or a wholly-owned subsidiary thereof created solely for such purpose will merge with and into the Company, with the Company being the surviving corporation (the "Long Form Merger"). In the ---------------- Long Form Merger, outstanding shares of common stock of the Company (other than shares held by MergerCo and dissenting shares) will be converted into the right to receive cash in the amount of not more than $18.25 per share, and the Company will utilize the draws under the Facilities (and, to the extent not required to fund the Self-Tender or refinance the Company's existing senior bank credit facilities, the remaining proceeds of the Notes) to fund the payment of cash to the holders of such shares. In order to finance the Tender Offer, 2 (a) Parent will effect the Equity Capitalization, and (b) the Company will obtain the Facilities and issue the Securities. The structure described in this paragraph is defined as the "Long ---- Form Merger Structure." --------------------- The Tender Offer, the Short Form Merger, the Long Form Merger, the Topping Option and the exercise thereof, the Equity Capitalization, the Facilities, the Securities and the other transactions described herein are referred to collectively as the "Transactions." The direct parent company of the Company after ------------ giving effect to the Transactions, whether Parent or MergerCo, is referred to herein as "Holdings." -------- ISSUE: Senior Subordinated Notes (the "Notes") together with the ----- Warrants issued by the same entity as the borrower under the Facilities. PURCHASERS: GarMark Partners, L.P. ("GarMark") and First Union Investors, ------- Inc. ("First Union" and together with GarMark, the "Purchasers"); ----------- ---------- provided that the Purchasers shall have the right at any time after the Closing Date to sell or transfer the Notes, in whole or in part, to any of their respective affiliates or any third parties (subject to the restrictions set forth under Assignments). PRINCIPAL AMOUNT: $40,000,000 aggregate principal amount (comprised of commitments by GarMark in the amount of $30,000,000 and First Union in the amount of $10,000,000). CLOSING: Closing of the purchase of the Notes is expected to occur on or before September 15, 2000 (the "Closing Date"). ------------ MATURITY: Seven years from the Closing Date. INTEREST: The Notes will bear interest at a fixed rate of 17.0% per annum payable quarterly, in arrears, up to 3.5% of which may be paid in kind at the option of the Company, and the remainder of which shall be paid in cash. SECURITY: The Notes will be unsecured. SUBORDINATION: The Notes will be subordinate (on terms acceptable to the Purchasers) to agreed upon amounts of permitted senior debt arising under the Facilities (the "Senior Debt") and senior to ----------- all other subordinated indebtedness. GUARANTEES: The Notes will be irrevocably and unconditionally guaranteed on a joint and several basis by any direct parent or holding company of the Company and each existing and subsequently acquired or organized direct and indirect domestic subsidiary of the Company, on a basis 3 subordinate in right and interest to the guaranties of the Senior Debt in a manner consistent with the subordination of the Notes. USE OF PROCEEDS: The proceeds of the Notes shall be used solely to (a) refinance certain existing debt, (b) finance the Tender Offer and the Merger, (c) provide general working capital, (d) provide capital for general corporate purposes, (e) pay certain acquisition costs, fees and expenses in connection with the Transactions and (f) pay any fees and expenses in connection with the issuance and sale of the Notes, all in amounts acceptable to the Purchasers. MANDATORY REDEMPTION: The Company will redeem the full principal amount of the Notes, plus any accrued interest and the appropriate redemption premium amount, upon the earlier to occur of any of the following: the Maturity, a sale of all or substantially all of the Company's assets or an acceleration following an event of default under the note purchase agreement. Mandatory redemptions will be subject to the premiums set forth in the Optional Redemption section set forth below. OFFER TO PURCHASE: The Company will make an offer to redeem (i) the full principal amount of the Notes, plus any accrued interest and the appropriate redemption premium amount, upon the occurrence of a change of control (to be defined), or (ii) subject to exceptions to be agreed upon, in the event of the sale of any equity or equity-linked securities of the Company or an asset sale, the principal amount of the Notes, plus any accrued interest, and the appropriate redemption premium amount, to the extent that the net proceeds in either of such events set forth in this clause (ii) are not used to permanently repay indebtedness under the Facilities. Such redemptions will be subject to the premiums set forth in the Optional Redemption section below; provided, however, that if such redemptions occur after the second anniversary of the Closing Date, the redemption price shall be equal to 101% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest to the date of redemption. 4 OPTIONAL REDEMPTION: The Notes may be redeemed at the option of the Company, in whole and not in part, upon not less than 30 days and not more than 60 days notice, at the redemption price (the "Redemption Price") set ---------------- forth below, in each case plus accrued and unpaid interest thereon ("Unpaid Interest"), if any, to the redemption date. --------------- ---------------------------------------------------------------------- Redemption Date Redemption Price Percentage ---------------------------------------------------------------------- Prior to second anniversary of 100% plus two years interest the Closing Date less interest paid as of the date of redemption ---------------------------------------------------------------------- Second anniversary of the Closing Date through the third 104% ---------------------------------------------------------------------- Third anniversary of the Closing Date through the fourth 102% ---------------------------------------------------------------------- Thereafter 100% ---------------------------------------------------------------------- CONDITIONS PRECEDENT: The closing of the purchase of the Notes will be subject to the satisfaction of conditions consistent with those customarily found in similar financings and such additional conditions deemed appropriate by the Purchasers in the context of the Notes, including without limitation, the conditions set forth in the Commitment Letter to which this Summary of Terms and Conditions is attached and the following: (1) The definitive note purchase agreement, Notes, Warrant (as defined herein) and other documentation for the Notes and the Warrant shall be satisfactory in form and substance to the Purchasers; (2) Parent, MergerCo and the Company shall have entered into the Merger Agreement, and the Merger Agreement, the Tender Offer and the Merger shall have been approved by the Company's board of directors and such approval shall not have been withdrawn or modified in a manner adverse to the Purchasers; (3) The Purchasers shall be satisfied with the corporate and capital structure of Holdings, the Company and their respective subsidiaries and the management of the Company and its subsidiaries after giving effect to the Transactions, with all legal, 5 tax and accounting matters relating to the Transactions or to Holdings, the Company and their respective subsidiaries after giving effect thereto, and with all documentation relating to the Tender Offer, the Merger, the Equity Capitalization and the other Transactions (including the Merger Agreement and all schedules and exhibits thereto, the offer to purchase (the "Offer to Purchase") and related ----------------- documentation in connection with the Tender Offer, and all employment contracts and security holder agreements (including all agreements with FMC); and without limitation of the foregoing, the Purchasers shall be satisfied that (i) the aggregate purchase price for all of the issued and outstanding shares of the Company acquired pursuant to the Tender Offer and the Merger will not exceed $220 million (before giving effect to proceeds to the Company from the exercise of options and warrants), and the purchase price for any share shall not exceed $18.25, (ii) aggregate fees and expenses of Parent and MergerCo, payable in connection with the Transactions will not exceed an amount reasonably acceptable to the Purchasers and (iii) in the event the Long Form Merger Structure is utilized, the Company will be prepared to file its preliminary proxy or information statement relating to the Merger with the Securities and Exchange Commission (the "Commission") promptly after ---------- completion of the Tender Offer; (4) The Purchasers shall be satisfied to the extent that the Short Form Merger is utilized that the exercise of the Topping Option shall permit the utilization of the Short Form Merger Structure. In the event the Short Form Merger Structure is utilized, the Purchasers shall be satisfied that, prior to or substantially concurrently with the Closing, (i) the Tender Offer, the exercise of the Topping Option and the Short Form Merger shall have been consummated in accordance with the terms of the Merger Agreement, the Offer to Purchase and all other applicable documentation and in compliance with all applicable laws and regulatory approvals, without any amendment or waiver of any material condition or other provision thereof except as approved by the Purchasers, and (ii) MergerCo shall have accepted for payment and acquired tendered shares which, together with other shares then owned by MergerCo (including shares acquired directly from the Company pursuant to exercise of the Topping Option), represent not less than 90% of the aggregate voting power (after giving effect to the exercise of the Topping Option) of all outstanding shares of the Company entitled to vote in connection with the approval of the Merger; 6 (5) In the event the Long Form Merger Structure is utilized, the Purchasers shall be satisfied that, prior to or substantially concurrently with the Closing, (i) the Tender Offer and the Self-Tender shall have been consummated in accordance with the terms of the Merger Agreement, the Offer to Purchase and all other applicable documentation and in compliance with all applicable laws and regulatory approvals, without any amendment or waiver of any material condition or other provision thereof except as approved by the Purchasers, and (ii) MergerCo shall have accepted for payment and acquired tendered shares representing not less than 50.1 % of the aggregate voting power (determined after giving pro forma effect to the consummation of the Self-Tender and the cancellation of shares acquired by the Company in the Self-Tender) of all outstanding shares of the Company entitled to vote in connection with the approval of the Merger; (6) All governmental and third-party consents and approvals necessary in connection with the offer, sale and issuance of the Notes, the consummation of the Tender Offer and (unless the Long Form Merger Structure is utilized) the Merger, and the other Transactions (including Hart-Scott-Rodino clearance), shall have been obtained and remain in effect and shall be satisfactory to the Purchasers; all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority) and no law or regulation shall be applicable, or event shall have occurred, that seeks to enjoin, restrain, restrict, set aside or prohibit, or impose materially adverse conditions upon, the consummation of the Tender Offer, the Merger, the Notes or any of the other Transactions; (7) The Equity Capitalization shall have been consummated on terms and conditions satisfactory to the Purchasers; and in connection therewith the Purchasers shall be satisfied that after giving effect thereto (i) Parent shall have received from (A) FMC net cash proceeds of not less than $43 million, $28 million of which will be proceeds from the issuance of preferred stock, on terms and conditions consistent with the June 29, 2000 Term Sheet for the preferred stock and common stock (the "Preferred Stock"), and $15 million of which will --------------- be proceeds from the issuance of common stock, plus an additional $7.0 million that can be called by Chartwell at any time after the consummation of the Merger in the same proportion as the Preferred Stock and the common stock, provided that Chartwell contributes a pro rata amount (collectively, the "Additional Equity"), and (B) from ----------------- Chartwell net cash proceeds of not less than $54 million (and in each case 7 Parent shall have contributed such proceeds to MergerCo) from the issuance of equity on terms and conditions satisfactory to the Purchasers, (ii) management investors shall have committed to contribute not less than $6.0 million in equity to the Company, including pursuant to the retention or roll-over of existing common stock; and (iii) and the aggregate amount of net proceeds from the Equity Capitalization, including any management equity or roll-over equity, shall not be less than $105.5 million (of which not less than $97.0 million shall be cash). In addition, under certain circumstances to be agreed upon, the Purchasers may require that the Additional Equity be contributed by FMC and Chartwell in connection with certain earn-out provisions on previous acquisitions by the Company. (8) The Company shall have binding commitments to receive not less than $160 million from the Facilities as follows: (i) $100 million term loans, (ii) $25 million revolving credit facility and (iii) $35 million acquisition facility, all on terms and conditions (including, without limitation, interest, maturity, covenants, default, permitted indebtedness and acceleration), and pursuant to documentation, satisfactory to the Purchasers and consistent with the July 11, 2000 Term Sheet for the Facilities previously provided to Purchasers; (9) The Purchasers shall have received an opening pro forma balance sheet and income statement of the Company and its subsidiaries, as of the last day of the month most recently ended prior to the Closing Date (or, if the Closing Date occurs on or prior to the 20th day of a month, as of the last day of the next prior month) and for the twelve-month period then ended (provided that such balance sheet shall be as of the most recent date as of which a balance sheet of the Company has been prepared and is available, if prior to the date required above, except that debt balances shall be as of the date required above), giving effect to the consummation of the Tender Offer, the Merger, the funding of the Notes, the initial funding of the Facilities and the consummation of the other Transactions, together with projected financial statements of the Company and its subsidiaries (consisting of balance sheets and statements of income and cash flows) prepared on an annual basis through November 30, 2009, all of which shall be in form and substance satisfactory to the Purchasers; (10) The Purchasers shall be satisfied that, on a pro forma basis as of a recent date after giving effect to the Tender Offer, the Merger, the funding of the Notes, the initial funding of the Facilities and the consummation of the other Transactions, (i) the Company is in 8 compliance with all financial covenants in the definitive credit documentation, (ii) EBITDA of the Company and its subsidiaries for the most recently completed twelve-month period is not less than $33.25 million, and (iii) aggregate total funded debt of the Company and its subsidiaries is not greater than $148.5 million and aggregate total funded senior debt of the Company and its subsidiaries is not greater than $108.5 million (in each case, (i) plus miscellaneous items of indebtedness reasonably acceptable to the Purchasers and (ii) subject to adjustment in a manner acceptable to the Purchasers based upon changes in working capital); (11) There shall not have occurred, since November 30, 1999, (i) any material adverse change in the condition (financial or otherwise), operations, properties, prospects or business of the Company and its subsidiaries, or (ii) any event, condition or state of facts that could reasonably be expected to have such a material adverse change; (12) No action, suit, proceeding or investigation shall have been instituted or threatened before, and no order, injunction or decree shall have been entered by, any court, arbitrator or governmental authority, in each case seeking to enjoin, restrain, restrict, set aside or prohibit, to impose material conditions upon, or to obtain substantial damages in respect of, the consummation of the Tender Offer, the Merger, the Notes, the Facilities or any of the other Transactions or that, in the opinion of the Purchasers, could reasonably be expected to have a material adverse effect upon the condition (financial or otherwise), operations, properties, prospects or business of the Company and its subsidiaries or on the ability of Holdings, the Company and their respective subsidiaries to perform their respective obligations under the definitive documentation for the Notes; (13) The Purchasers shall have received a solvency opinion with respect to the Company and its subsidiaries after giving effect to the Transactions, from an independent valuation firm acceptable to the Purchasers and in form and substance satisfactory to the Purchasers; (14) The Purchasers shall have received final copies of (i) due diligence reports on the Company and its subsidiaries from PricewaterhouseCoopers and Bain, (ii) business and financial due diligence reports for County Limousine, (iii) a review of the insurance coverages of the Company and its subsidiaries from Marsh & McLennan and (iv) environmental reports with respect 9 to selected properties of the Company and its Subsidiaries, and shall be satisfied in their sole discretion with the results thereof; (15) The Purchasers shall have completed all legal due diligence with respect to the Company and its subsidiaries in scope and determination satisfactory to the Purchasers in their sole discretion; (16) The Purchasers shall have received a copy of the executed fairness opinion of the Company's financial advisors in connection with the Tender Offer and the Merger; (17) The representations and warranties contained in the definitive subordinated debt documentation shall be true and correct as of the Closing Date as if made on such date, and no default or event of default thereunder shall have occurred and be continuing; (18) All fees and expenses of the Purchasers required to have been paid as a condition to the Notes shall have been paid; and (19) The Purchasers shall have received such other documents, agreements and opinions in connection with the Notes (including but not limited to legal opinions of counsel to Holdings, the Company and their respective subsidiaries (including local counsel in such jurisdiction as shall be requested by the Purchasers) and reliance letters with respect to opinions delivered in connection with the Merger, including an opinion of Delaware counsel to the Company as to the validity of the Merger), all satisfactory in form and substance, as the Purchasers may reasonably request. REPRESENTATIONS AND WARRANTIES: The definitive note purchase agreement (as well as any other investment documentation as the Purchasers determine to be appropriate to effect the transactions contemplated hereby) will contain representations and warranties customarily found in note agreements for similar financings and any additional representations and warranties deemed appropriate by the Purchasers in the context of the proposed transaction, including, without limitation, representations and warranties regarding corporate organization and power, absence of violation of organizational documents, other agreements and applicable laws, absence of material litigation, obtaining of government and other approvals, subsidiaries, payment of taxes, authorization and enforceability of the note purchase documents, compliance with other instruments, full disclosure, margin securities, ERISA matters, accuracy of financial statements, absence of 10 material adverse change, title to and sufficiency of assets, solvency, real estate, governmental permits and licenses, compliance with laws, environmental matters, insurance, consummation of, and receipt of proceeds from, the Tender Offer and Merger, and the other Transactions, and material contracts. FINANCIAL COVENANTS: Financial covenants, with definitions of financial terms, levels and other terms to be agreed upon by the Company and the Purchasers determined on a consolidated basis for the Company and its subsidiaries, and to include, at a minimum, the following: (a) Maximum Total Leverage Ratio; (b) Minimum Fixed Charge Coverage Ratio; (c) Minimum Interest Coverage Ratio; and (d) Maximum Annual Capital Expenditures. To the extent acceptable to the Purchasers, the financial covenants will track the corresponding covenants set forth in the Senior Debt documents, but be less restrictive as appropriate. AFFIRMATIVE AND NEGATIVE COVENANTS: The definitive note purchase agreement (as well as any other investment documentation as the Purchasers determine to be appropriate to effect the transactions contemplated hereby) will contain affirmative and negative covenants customary for financings of this type and any additional covenants deemed appropriate by the Purchasers and the context of the proposed transactions. To the extent acceptable to the Purchasers, the affirmative and negative covenants will track the corresponding covenants set forth in the Senior Debt documents, but be less restrictive as appropriate. EVENTS OF DEFAULT: Those customarily found in note agreements for similar financings and any additional events of default deemed appropriate by the Purchasers in the context of the proposed transaction including without limitation: failure to pay any principal, interest or fees when due (subject to grace periods to be agreed upon); breach of covenants with customary grace periods for certain affirmative covenants; material incorrectness when made of any representation or warranty; default under material indebtedness (other than the Senior Debt); acceleration of any amounts due under the Senior Debt as a result of a default thereunder; breaches of material contracts; bankruptcy or insolvency; judgments or uninsured losses in excess of agreed upon amounts; certain ERISA events; and 11 actual or asserted invalidity of guaranty documents. In the event of a default and acceleration of the Notes, the Optional Redemption premium provisions shall apply. Upon the occurrence and during the continuance of any event of default, the applicable coupon shall be set at 2% per annum above the otherwise applicable rate and such additional interest shall be payable in cash. WARRANTS: Upon the purchase of the Notes, detachable Warrants (the "Warrants") will be issued sufficient to provide the -------- Purchasers with 5.25% of the common stock of the Company on a fully-diluted basis (such fully-diluted basis shall include any shares of common stock or other equity- based awards issuable under any current employee option plans and other employee plans or awards on terms and conditions to be agreed upon). WARRANT EXERCISABILITY: At any time, in whole or in part, after issuance. WARRANT TERM: Ten years after the Closing. WARRANT EXERCISE PRICE: $.01 per share in cash or, at the option of the Purchasers, in an equivalent amount of Notes or Warrants. OTHER RIGHTS: In addition to the above rights, the Warrants will provide for: (i) Customary weighted average anti-dilution protection for issuances below fair market value (subject to agreed upon exceptions) and other customary equity rights satisfactory to the Purchasers; (ii) Pre-emptive rights for the Purchasers and their respective affiliates on any sale of equity or equity linked securities by the Company (subject to customary exceptions); (iii) Co-sale rights on any private sale of equity securities of the Company (subject to customary exceptions); (iv) Put right exercisable at the conclusion of year seven and call right exercisable at the conclusion of year eight, in each case for fair market value (subject to agreed upon deferral conditions); (v) Cashless exercise; (vi) Piggy-back registration rights; and 12 (vii) Board observation rights for 2 observers for the Warrant holders plus a monitoring fee of $50,000 per annum to be allocated pro rata among the Purchasers. VOTING: Majority, subject to certain customary 100% voting issues. ASSIGNMENTS: Any Note holder may assign its interest in the Notes in no less than $5,000,000 principal aggregate increments. NOTE PURCHASE DOCUMENTS: The transactions described herein will be evidenced by a note purchase agreement and other ancillary agreements, documents, opinions, certificates, schedules and exhibits deemed necessary by the Purchasers. INFORMATION PERTAINING TO THE PURCHASERS: The Company shall not release any information relating to the Purchasers, or any of their respective affiliates, without their prior written consent, unless otherwise required by applicable law. In addition, the Company shall, within a reasonable time before the issuance of any press release or the making of any public announcement relating to the Purchasers or their respective affiliates, consult in good faith with the Purchasers regarding the contents thereof. PUBLICLY AVAILABLE INFORMATION: The Company will file the reports required to be filed by it under the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act (or, if the Company -------------- is not required to file such reports, it will, upon the request of any holder, make available other information so long as necessary to permit sales under Rule 144A under the Securities Act), and it will take such further action as any holder may request, all to the extent required from time to time to enable such holder to sell registrable securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144A under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any holder, the Company will deliver to such holder a written statement as to whether it has complied with such requirements. 13 PUBLIC DOCUMENTS: For so long as the Company has any securities registered under the Securities Exchange Act of 1934, as amended, upon the filing with the Commission of any financial statements, proxy or information statements, notices, reports or registration statements (other than any registration statements relating to employee benefit or dividend reinvestment plans), or the issuance of any press release or other public announcement (each a "Public Document"), the --------------- Company shall promptly provide to each holder a copy of such Public Document. EXPENSES: The Company will pay (i) all of the Purchasers' reasonable out-of-pocket expenses associated with the Transaction, including the reasonable fees and disbursements of one counsel to GarMark and one counsel to the other Purchasers and Note holders in connection with the preparation, execution, delivery and administration of the note purchase documents and any amendment or waiver thereto, plus any outside consultants to be mutually agreed upon and (ii) all reasonable out-of-pocket expenses of GarMark, the other Purchasers and other Note holders (including the reasonable fees and disbursements of one counsel to GarMark and one counsel to the other Purchasers and Note holders) in connection with the enforcement of any of the note purchase documents. INDEMNIFICATION: The Company will indemnify the Purchasers and the other Note and Warrant holders and hold them harmless against all claims, losses, liabilities and expenses (including reasonable fees and disbursements of counsel) arising from or relating to the proposed financing contemplated hereby and the other transactions connected therewith, except to the extent of such indemnified party's gross negligence or willful misconduct. GOVERNING LAW: The note purchase documents, including the Warrants, and all other documents related to the transactions contemplated hereby (to the extent determined to be appropriate by the Purchasers) shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any conflicts of law principles thereof. PURCHASER'S COUNSEL: Swidler Berlin Shereff Friedman, LLP MISCELLANEOUS: Customary provisions regarding amendments and waivers, consent to forum in New York and service of process and other miscellaneous matters. 14 This Term Sheet is intended as a summary only and does not reference all of the terms, conditions, representations, warranties, covenants and other provisions which will be contained in the definitive documentation for the Notes and the transactions contemplated thereby. 15 EX-99.B.III 11 0011.txt EXHIBIT (B)(III) Exhibit (b)(iii) LOAN AGREEMENT between ALUWILL ACQUISITION CORP. as Borrower, and CAREY INTERNATIONAL, INC. as Lender Dated as of July 19, 2000 LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement") is made as of this 19th day of July, --------- 2000, by and between Aluwill Acquisition Corp., a Delaware corporation ("Acquisition Company" and "Borrower"), and Carey International, Inc., a ------------------- -------- Delaware corporation (the "Company"). ------- RECITALS WHEREAS, the Company, Acquisition Company and Limousine Holdings, LLC ("Parent"), a Delaware corporation and Eranja Acquisition Sub, Inc. ("Merger ------ ------ Sub"), are parties to a certain Agreement and Plan of Merger dated as of July - - --- 19, 2000 (the "Merger Agreement"), pursuant to which Acquisition Company or ---------------- Merger Sub will be merged with and into the Company with the Company being the surviving corporation by way of a two step merger consisting of (i) a joint tender offer (the "Tender Offer") by Acquisition Company and the Company with ------------ respect to the Company's common stock, par value $.01 per share (the "Common ------ Stock") and (ii) a subsequent merger of Acquisition Company or Merger Sub with - - ----- and into the Company, with the Company being the surviving corporation (the "Merger"); ------ WHEREAS, the Company intends to enter into a Credit Agreement to be dated on or about August 31, 2000 (the "Credit Agreement") by and among Parent, the ---------------- Company, its subsidiaries listed on the signature pages thereto, the lenders party thereto and First Union National Bank and Fleet National Bank, as Agents, pursuant to which approximately $ __,000,000 will be disbursed to Lender at the closing of the Tender Offer; WHEREAS, under the terms of a certain Note Purchase Agreement, to be dated on or about August 31, 2000 by and among Parent, the Company, its subsidiaries listed on the signature pages thereto, GarMark Partners, L.P. and First Union Investors, Inc., the Company will sell $40,000,000 aggregate principal amount of its 17% Senior Subordinated Notes dues 2008 (the "Senior Subordinated Notes"); ------------------------- and WHEREAS, in order to satisfy the funding requirements of Acquisition Company in conjunction with the closing of the Tender Offer under certain circumstances, the Company is willing to lend certain amounts of money to Acquisition Company as herein provided. NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: ARTICLE I GENERAL TERMS ------------- Section 1.1 Loan to Acquisition Company. If immediately after the closing --------------------------- of the Tender Offer and the other transactions contemplated in Section 1.1 of the Merger Agreement, Acquisition Company would be able to immediately effect the Merger pursuant to Section 253, the Company agrees, subject to the terms and conditions of this Agreement, to borrow funds under the Credit Agreement and the Senior Subordinated Notes and to lend to Acquisition Company, and Acquisition Company may borrow from the Company (or request that the Company advance funds on behalf of Acquisition Company), in connection with the closing of the Tender Offer, such amount in excess of $92,000,000, which amount shall not exceed $130,000,000, as is necessary for Acquisition Company to (i) purchase all shares of Common Stock tendered in the Tender Offer, (ii) purchase all outstanding shares of Common Stock (or options exercisable into Common Stock) held by officers, directors and employees of the Company or any of its subsidiaries, and (iii) to pay expenses in connection with the transactions contemplated in the Merger Agreement. Section 1.2 Promissory Note. The amount borrowed by Acquisition Company --------------- under Section 1.1. (such amount, the "Loan"), shall be evidenced by a promissory ---- note (the "Note") to be executed by Acquisition Company. ---- Section 1.3 Principal. To the extent not previously paid, the entire --------- unpaid principal balance of the Loan, plus all accrued but unpaid interest thereon shall be due and payable on the termination date of the Merger Agreement. On the effective date of the Merger, all outstanding principal and interest shall be deemed paid in full. The date on which the principal balance of the Loan, plus all accrued but unpaid interest thereon, is due and payable or deemed paid in full in accordance with this Section 1.3 is referred to herein as the "Maturity Date." ------------- Section 1.4 Interest. The Borrower agrees to pay interest in respect of -------- the unpaid principal amount of the Loan from the date of the borrowing thereof to the Maturity Date at a rate per annum equal to ten percent (10%). Interest under this Agreement shall be due and payable upon the Maturity Date, when the outstanding principal balance of the Loan and all accrued interest shall be due and payable in full. Should any principal remain unpaid after the Maturity Date, interest shall accrue from the Maturity Date at a rate of twelve percent (12%), compounded daily. Section 1.5 Payments. -------- (a) General. All payments under this Agreement shall be ------- made on the date when due and shall be made in lawful money of the United States of America in immediately available funds. Whenever any payment to be made under this Agreement shall be stated to be due on a day that is not a business day, the due date thereof shall be extended to the next succeeding Business Day. For the purposes of this Agreement, "Business Day" shall mean any day other than a Saturday, Sunday or other day on which banks in the State of New York are authorized or required to close. (b) Interest Payments / Additional Notes. To the extent ------------------------------------ permitted and agreed to by the Company, whenever any interest payment is due hereunder, the Borrower may issue an additional promissory note or notes in lieu of payment of such interest in the manner set forth in Section 1.5(a). Such additional notes shall have the same terms as set forth in this Agreement and under the original Note (except for the date of making and amount), including without limitation the same Maturity Date, rate of interest and payment terms. -2- (c) Prepayment and Prepayment Premium. The Borrower may pay --------------------------------- the unpaid principal amount under this Agreement, together with all unpaid interest thereon, at any time prior to the Maturity Date. (d) Payments After an Event of Default. Upon the occurrence ---------------------------------- of any Event of Default (as defined in Section 4.1 herein), the Borrower shall be considered to be in default, and the Company shall have the remedies set forth in Section 4.2. After such occurrence of an Event of Default which remains uncured as set forth in Section 4.1, the principal amount outstanding under this Agreement shall accrue interest at the rate of twelve percent (12%) per annum compounded daily and shall continue to accrue interest until such amounts are repaid in full. ARTICLE II REPRESENTATIONS AND WARRANTIES ------------------------------ To induce the Company to enter into this Agreement and to make the Loan, the Borrower hereby represents and warrants to the Company that: Section 2.1 Organization. The Borrower (a) is duly organized, validly ------------ existing and in good standing under the laws of the State of Delaware, (b) is duly qualified to transact business in every jurisdiction where, because of the nature of its business or property, such qualification is required, (c) has full power and authority to own its property and assets and to carry on its business as now conducted, and (d) has full power to execute, deliver and perform its obligations under this Agreement and the Note. Section 2.2 Authorization; Compliance. The execution and delivery of, ------------------------- and the performance by Borrower of its obligations under this Agreement and the Note (a) are within its corporate powers, (b) have been duly authorized by all requisite corporate action, (c) do not violate any provision of law, any order of any court or other agency of government, or the Certificate of Incorporation or other charter documents of the Borrower, and (d) do not violate any indenture, agreement or other instrument to which the Borrower is a party, or by which it is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or except as may be provided by this Agreement, result in the creation or imposition of any lien upon any of the property or assets of the Borrower pursuant to, any such indenture, agreement or instrument. Section 2.3 Enforceability. This Agreement and the Note are the legal, -------------- valid and binding obligations of the Borrower and are enforceable against the Borrower, in accordance with their terms except as such enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and (b) general principles of equity. -3- ARTICLE III CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY -------------------------------------------------- The obligation of the Company to make the Loan hereunder is subject to the satisfaction of the following conditions precedent: (a) The representations and warranties set forth in Article II hereof shall be true and correct. (b) The Borrower shall have executed and delivered to the Company, or caused to be executed and delivered to the Company, on or prior to the date of execution of this Agreement, the Note, and all other documents reasonably necessary to consummate the lending transactions contemplated hereby. (c) No default or Event of Default (as defined in Section 4.1 herein) shall have occurred and be continuing or would result from the making of the Loan. ARTICLE IV DEFAULTS/REMEDIES UPON DEFAULT ------------------------------ Section 4.1 Default. ------- (a) Events of Default. The occurrence of any of the ----------------- following events shall constitute an "Event of Default" under this Agreement: (i) Borrower fails to pay when due any principal of or interest under this Agreement with respect to moneys borrowed by the Borrower when and as the same shall become due and payable under this Agreement; (ii) there is a default in the performance of any covenant, condition, or agreement contained in, or any breach or threatened breach by Borrower under this Agreement; (iii) Borrower becomes insolvent or otherwise cannot pay its debts as they become due; (iv) Borrower takes any voluntary action with respect to or is the subject of any involuntary action seeking bankruptcy, insolvency administration, receivership, reorganization, arrangement among creditors, composition or other similar action and such action is not stayed or dismissed within a period of sixty (60) days after the date thereof; or (v) Borrower's existence is terminated or it is dissolved (other than by Merger into the Company). -4- (b) Waiver. Except as set forth herein, Borrower hereby ------ waives presentment, demand and presentation for payment, notice of nonpayment and dishonor, protest and notice of protest and expressly agrees that this Agreement or any payment hereunder may be extended from time to time by the Company without in any way affecting the liability of Borrower. Section 4.2 Remedies. Upon the occurrence of an Event of Default which -------- remains uncured as set forth in Section 4.1, the Company may, at its option: (a) declare the principal and accrued interest outstanding under this Agreement and the Note, in whole or in part, immediately due and payable; or (b) exercise any other rights and remedies available to the Company under this Agreement, the Note, or applicable laws. Notwithstanding the foregoing, upon the occurrence of an Event of Default under Section 4.1(a)(iii) or Section 4.1(a)(iv), the entire unpaid principal balance under this Agreement, together with all accrued but unpaid interest thereon, shall automatically and immediately become due and payable, and thereafter the Company may proceed to enforce payment of the same and to exercise any and all of the rights and remedies afforded herein as well as all other rights and remedies possessed by the Company by law or otherwise. ARTICLE V MISCELLANEOUS Section 5.1 Survival. This Agreement and all covenants, agreements, -------- representations and warranties herein and in the certificates delivered pursuant hereto, shall survive the making by the Company of the Loan and the execution and delivery to the Company of the Note and shall continue in full force and effect so long as the Note and any other indebtedness of Borrower to the Company is outstanding and unpaid. Section 5.2 Indemnification. Borrower shall and hereby agrees to --------------- indemnify, defend and hold harmless the Company and its officers, directors, agents, employees and counsel from and against any and all losses, claims, damages, liabilities, deficiencies, duties, levies, imposts, fees, charges, judgments or expenses incurred by any of them (except to the extent that it is finally judicially determined to have resulted from their own gross negligence or willful misconduct) arising out of or by reason of any litigation, investigations, claims or proceedings which arise out of or are in any way related to (a) this Agreement or the transactions contemplated hereby, (b) any actual or proposed use by Borrower of the proceeds of the Loan, (c) any breach by Borrower of any of the provisions of this Agreement or (d) the Company's entering into this Agreement, the Note or any other agreements and documents relating hereto, including, without limitation, amounts paid in settlement, court costs and fees and disbursements of counsel incurred in connection with any such litigation, investigation, claim or proceeding or any advice rendered in connection with any of the foregoing. Borrower's obligations set forth in this Section 5.2 shall survive any termination of this Agreement and the Note and the payment in full of the obligations hereunder and thereunder, and are in addition to, and not in substitution of, any other of its obligations set forth in this Agreement or otherwise. In addition, Borrower shall, upon demand, pay to the Company all costs and expenses (including the reasonable fees and disbursements of counsel) paid or incurred by the Company in (i) enforcing or defending its rights under or in respect of this Agreement, the Note or any other document or instrument now -5- or hereafter executed and delivered in connection herewith, (ii) collecting any amounts due under this Agreement or the Note, and (iii) obtaining any legal, accounting or other advice in connection with any of the foregoing, provided that such claims were found by the applicable court or arbitrator to be properly brought under and consistent with the terms and conditions of this Agreement or the Note, as the case may be. Section 5.3 Governing Law. This agreement shall be governed by and ------------- construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Section 5.4 Amendments. No amendment or waiver of any provision of this ---------- Agreement, nor consent to any departure by Borrower from a provision, shall be effective unless the same shall be in writing and signed by the Company. A written amendment, consent or waiver shall be effective only in the specific instance, and for the purpose, for which given. No notice to, or demand, on Borrower, in any one case, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances. Section 5.5 Waiver. Neither any failure nor any delay on the part of the ------ Company in exercising any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or future exercise, or the exercise of any other right, power or privilege. Section 5.6 Notices. All notices and correspondence hereunder shall be ------- in writing and sent by certified or registered mail, return receipt requested, or by overnight delivery service, with all charges prepaid, to the applicable party at the addresses set forth below, or by facsimile transmission (including, without limitation, computer generated facsimile), promptly confirmed in writing sent by first class mail, to the fax numbers and addresses set forth below: If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Attn: Vincent A. Wolfington Facsimile: (202) 895-1201 with a copy to: Nutter, McLennen & Fish, LLP One International Place Boston, Massachusetts 02030 Attn: John P. Driscoll, Jr. James E. Dawson Facsimile: (617) 973-9748 -6- If to Acquisition Company: Aluwill Acquisition Company c/o Chartwell Investments II LLC 717 Fifth Avenue 23rd Floor New York, New York 10022 Attn: Todd R. Berman Facsimile: (212) 521-5533 with a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P. 1333 New Hampshire Avenue, N.W. Suite 400 Washington, DC 20036 Attn: Russell W. Parks, Jr. Facsimile: (202) 887-4288 or, as to each party, at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section. All such notices and correspondence shall be deemed given upon the earliest to occur of (a) actual receipt, (b) if sent by certified or registered mail, three (3) Business Days after being postmarked, (c) if sent by overnight delivery service, when received at the above stated addresses or when delivery is refused or (d) if sent by facsimile transmission, when receipt of such transmission is acknowledged. Section 5.7 Successors and Assigns. This Agreement shall be binding ---------------------- upon and inure to the benefit of Acquisition Company and the Company and their respective successors and assigns, except that no party hereto shall have the right to assign this Agreement or any of its rights, obligations or interests herein without the prior written consent of the other parties hereto. Section 5.8 Severability. In case any provision in or obligation ------------ under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. Section 5.9 Headings. The Article and Section headings in this -------- Agreement are inserted for convenience of reference only and shall not in any way affect the meaning or construction of any provision of this Agreement. Section 5.10 Counterparts. This Agreement may be executed in any ------------ number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but both of which shall together constitute one and the same instrument. [SIGNATURE PAGE FOLLOWS] -7- IN WITNESS WHEREOF, each of Acquisition Company and the Company have caused this Agreement to be executed by their duly authorized officers, as of the date first set out above. ALUWILL ACQUISITION CORP. By: ------------------------------ Name: ---------------------------- Title: --------------------------- CAREY INTERNATIONAL, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- Loan Agreement EX-99.C.2 12 0012.txt EXHIBIT (C)(2) Carey International, Inc. Exhibit (c)(2) - - -------------------------------------------------------------------------------- Presentation to: Carey International, Inc. Board of Directors CAREY July 15, 2000 Benedetto, Gartland & Company, Inc. - - -------------------------------------------------------------------------------- Carey International, Inc. - - -------------------------------------------------------------------------------- Valuation Summary Offer Price Value Per Share Premium/(Discount)/(a)/ ------------------ ----------------------- Public Market Valuation $15.00 - $17.00 21.7% - 7.4% Discounted Cash Flow Analysis $15.00 - $16.00 21.7% - 14.1% M&A Transaction Comparables $14.00 - $15.00 30.4% - 21.7% Hypothetical Stock Price $14.00 - $16.00 30.4% - 14.1% _______________ (a) Assumes offer price of $18.25. _______________________________________________________________________________ -1- Benedetto, Garland & Company, Inc. Carey International, Inc. - - -------------------------------------------------------------------------------- Potential Transaction Analysis (Dollars in millions, except per share data)
Enterprise Value to ------------------------------------------- Share Premium to Market Price Market Enterprise P/E Multiple EBITDA EBIT ----------------------- ------------------- --------------------- ------------------ Price Current 6/29/2000 Value (a) Value (b) LTM (c) 2000P (d) LTM (e) 2000P (f) LTM (g) 2000P (h) ----- ------- --------- --------- --------- ------- --------- --------- --------- ------- --------- $17.25 15.5% 63.6% $169.4 $218.4 14.6x 11.8x 7.2x 5.7x 9.8x 7.6x 17.50 17.2% 65.9% 171.9 220.9 14.8x 12.0x 7.3x 5.8x 9.9x 7.6x 17.75 18.8% 68.3% 174.3 223.3 15.0x 12.1x 7.4x 5.8x 10.0x 7.7x 18.00 20.5% 70.7% 176.8 225.8 15.2x 12.3x 7.5x 5.9x 10.1x 7.8x - - ------------------------------------------------------------------------------------------------------------------------------- 18.25 22.2% 73.0% 179.2 228.2 15.4x 12.5x 7.6x 6.0x 10.2x 7.9x - - ------------------------------------------------------------------------------------------------------------------------------- 18.50 23.8% 75.4% 181.7 230.7 15.6x 12.6x 7.6x 6.0x 10.3x 8.0x 18.75 25.5% 77.8% 184.1 233.1 15.8x 12.8x 7.7x 6.1x 10.5x 8.1x 19.00 27.2% 80.1% 186.6 235.6 16.1x 13.0x 7.8x 6.1x 10.6x 8.2x 19.25 28.9% 82.5% 189.1 238.1 16.3x 13.2x 7.9x 6.2x 10.7x 8.2x 7/14/2000 - - --------- $14.94 $146.7 $195.7 12.6x 10.2x 6.5x 5.1x 8.8x 6.8x 06/29/2000 - Announcement Date - - ---------- $10.55 $103.6 $152.6 8.9x 7.2x 5.1x 4.0x 6.8x 5.3x
- - -------------------------------------------- (a) Based on 9.821 million shares outstanding. (b) Market Value plus net debt of $49.0 million (c) Based on LTM actual EPS of $1.18. (d) Based on projected 2000 EPS of $1.46 per management budget with acquisitions. (e) Based on actual LTM EBITDA of $30 million. (f) Based on projected 2000 EBITDA of $38 million per management budget with acquisitions. (g) Based on actual LTM EBIT of $22 million. (h) Based on projected 2000 EBIT of $29 million per management budget with acquisitions. ________________________________________________________________________________ -2- Benedetto, Gartland & Company, Inc.
Carey International Inc. - - ----------------------------------------------------------------------------------------------------------------- Comparable Public Company Trading Analysis Transportation Services Companies % Below/Above Market Enterprise Market Value as Multiple of: ---------------------------------------------- Stock Price 52-week Value Value LTM Cal. 2000 Cal. 2001 Common Cash Company 14-Jul-00 High - Low (in mil) (in mil) EPS EPS (1) EPS (1) Equity Flow ------------------------------------- ------------- -------- ---------- ------- --------- --------- ------ ------- Central Parking Corp. 24 5/8 31.2% - 71.3% $899 $1,355 29.5x 20.9x 17.4x 2.5x 12.4x Miller Industries, Inc. 1 3/4 65.9% - 0.0% 82 206 NM NM NM 0.4 3.5 Aviation Sales Company 6 3/8 85.7% - 82.1% 96 539 NM NM NM 0.4 NM Rural/Metro Corp. 1 3/4 83.5% - 55.6% 26 333 15.6 NM NM 0.2 0.7 United Road Services, Inc. 3 95.9% - 500.0% 5 134 NM NM NM 0.0 NM ------------------------------------------------------------------------------------------------ Mean 22.6x 20.9x 17.4x 0.7x 5.6x Median 22.6x 20.9x 17.4x 0.4x 3.5x ------------------------------------------------------------------------------------------------ Industry Consolidators % Below/Above Market Enterprise Market Value as Multiple of: ---------------------------------------------- Stock Price 52-week Value Value LTM Cal. 2000 Cal. 2001 Common Cash Company 14-Jul-00 High - Low (in mil) (in mil) EPS EPS (1) EPS (1) Equity Flow ------------------------------------- ------------- -------- ---------- ------- --------- --------- ------ ------- NCO Group, Inc. 26 1/16 52.5% - 51.1% $667 $957 16.6x 13.8x 11.1x 1.9x 10.2x FYI Incorporated 35 9/16 0.5% - 46.6% 534 649 20.9 18.5 15.8 2.7 12.8 Comfort Systems USA, Inc. 4 3/4 74.5% - 31.0% 178 486 4.7 4.0 3.7 0.4 2.8 Consolidated Graphics, Inc. 12 1/8 75.8% - 29.3% 173 413 4.7 5.0 4.1 0.6 2.2 Navigant International 11 1/8 11.0% - 87.4% 155 297 10.4 9.4 8.0 1.2 6.5 Lason, Inc. 2 13/32 95.2% - 6.9% 47 378 NM NM NM 0.1 1.9 ------------------------------------------------------------------------------------------------- Mean 11.5x 10.1x 8.6x 1.2x 6.1x Median 10.4x 9.4x 8.0x 0.9x 4.6x ------------------------------------------------------------------------------------------------- All Comparables ------------------------------------------------------------------------------------------------ Mean 14.6x 11.9x 10.0x 1.0x 5.9x Median 15.6x 11.6x 9.6x 0.4x 3.5x ------------------------------------------------------------------------------------------------- CARY Valuation Parameter $1.18 $1.34 $1.67 $98.4 $22.7 ------------------------------------------------- Implied CARY Share Price based on All Comparables (2) $17.32 $16.00 $16.72 $9.67 $13.65 $18.50 $15.56 $15.93 $4.40 $8.07 ------------------------------------------------- Carey International, Inc. 14 15/16 44.7%- 129.8% $147 $196 12.6x 11.1x 9.0x 1.5x 6.5x Transportation Services Companies Ent. Val. as a Multiple of: 5 Year --------------------------- LTM LTM LTM EPS Growth Company Revenue EBIT EBITDA Proj. (1) ----------------------------- -------- ------- ------- ---------- Central Parking Corp. 1.82x 16.8x 10.5x 20.0% Miller Industries, Inc. 0.36 NM NM 30.0% Aviation Sales Company 0.79 NM NM 27.5% Rural/Metro Corp. 0.58 9.7 4.9 20.0% United Road Services, Inc. 0.51 NM NM 19.0% -------------------------------------- 0.81x 13.2x 7.7x 23.3% 0.58x 13.2x 7.7x 20.0% -------------------------------------- Industry Consolidators Ent. Val. as a Multiple of: 5 Year --------------------------- LTM LTM LTM EPS Growth Company Revenue EBIT EBITDA Proj. (1) ----------------------------- -------- ------- ------- ---------- NCO Group, Inc. 1.75x 10.8x 8.3x 28.0% FYI Incorporated 1.66 13.4 10.1 20.7% Comfort Systems USA, Inc. 0.34 5.4 4.2 6.5% Consolidated Graphics, Inc. 0.71 5.3 3.9 20.0% Navigant International 1.20 9.4 7.1 18.0% Lason, Inc. 0.73 NM NM 27.2% -------------------------------------- 1.06x 8.9x 6.7x 20.1% 0.96x 9.4x 7.1x 20.4% -------------------------------------- All Comparables ------------------------------------------------------------------------------------------- Mean 0.95x 10.1x 7.0x 21.5% Median 0.96x 9.7x 7.1x 20.0% ------------------------------------------------------------------------------------------- CARY Valuation Parameter $225.3 $22.3 $30.2 -------------------------- Implied CARY Share Price based on All Comparables (2) $16.78 $18.00 $16.55 $11.65 $17.09 $16.83 ------------------------- 0.87x 8.8x 6.5x 24.3%
------------------------ Note: Excludes multiples which are not meaningful, negative, or denoted with an * (1) Source: IBES. Where 2000/2001 estimates not available, estimate calculated by growing previous year estimate at 5-year projected growth rate or historical quarterly growth. (2) Based on 9.821 million shares outstanding. Share prices based on Enterprise Value (Revenue, EBIT, EBITDA) are less net debt of $49.0 mil - - -------------------------------------------------------------------------------- - - -3- Benedetto, Gartland & Company, Inc.
Carey International, Inc. - - ----------------------------------------------------------------------------------------------------------------------------- Discounted Cash Flow Analysis 8% Internal Growth Rate, $40.0 Million Acquired Revenue (dollars in millions, except per share data) Fiscal Year Ending November 30, Projected Fiscal Year Ended November 30, (a) -------------------------------- -------------------------------------------- 1997 1998 1999 2000 2001 2002 2003 2004 -------------------------------- -------------------------------------------- Sales $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1 EBITDA 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4 Less: Depreciation (2.0) (2.5) (3.8) (5.5) (6.9) (7.4) (7.7) (8.1) -------------------------------- -------------------------------------------- EBITA 9.9 15.8 24.2 32.8 38.2 47.3 57.4 68.3 Less: Taxes @ 41.5% (4.1) (6.5) (10.1) (13.6) (15.9) (19.6) (23.8) (28.4) -------------------------------- -------------------------------------------- Tax-effected EBITA 5.8 9.2 14.2 19.2 22.4 27.7 33.6 40.0 Plus: Depreciation 5.5 6.9 7.4 7.7 8.1 Plus: Change in Deferred Taxes 0.0 0.0 0.0 0.0 0.0 Less: Capital/ Acquisition Expenditures (64.3) (34.6) (32.0) (32.0) (32.0) Less: Changes in Working Capital (2.4) (1.8) (2.6) (2.8) (3.0) -------------------------------- -------------------------------------------- Free Cash Flow ($42.0) ($7.2) $0.5 $6.5 $13.0 A + B = C ---------- --------------------------------- ----------------------- Discounted (b) PV of Terminal Value as a Cash Flows Multiple of 2004 EBITDA (c) Enterprise Value (d) --------------------------------- ----------------------- Discount Rate (2000-2004) 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x - - ---------------- ---------- --------------------------------- ----------------------- 15.0% ($31.5) $208.9 $246.9 $284.8 $177.4 $215.4 $253.3 15.5% (31.5) 204.4 241.6 278.7 172.9 210.1 247.2 16.0% (31.5) 200.0 236.4 272.8 168.5 204.9 241.3 16.5% (31.5) 195.8 231.4 267.0 164.3 199.9 235.5 17.0% (31.5) 191.6 226.5 261.3 160.1 195.0 229.8 - D + E = F ------------ ----------- --------------------------------- Value Per Diluted Net Debt Equity Total Equity Value Share (f) --------------------------------- ----------------------- Discount Rate 5/31/00 (e) Investments 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x - - ---------------- ----------- ----------- --------------------------------- ----------------------- 15.0% $25.9 $0.0 $151.5 $189.5 $227.5 $12.98 $16.24 $19.49 ------ 15.5% 25.9 0.0 147.0 184.2 221.3 12.60 15.79 18.97 16.0% 25.9 0.0 142.7 179.0 215.4 12.23 15.34 18.46 16.5% 25.9 0.0 138.4 174.0 209.6 11.86 14.91 17.96 ------ 17.0% 25.9 0.0 134.3 169.1 203.9 11.51 14.49 17.48 -----------------------
______________________ (a) Projections based on BGC and management estimates. (b) Present values calculated as of latest fiscal year end. (c) Based on current public market Enterpise Value/EBITDA trading muliptle of 6.5x. (d) Discounted 5 years; based on 2004 EBITDA of $76.4 million. (e) Includes option proceeds of: $23.1 (f) Based on 11.667 million diluted shares outstanding as of May 31, 2000. - - -------------------------------------------------------------------------------- -4- Benedetto, Gartland & Company, Inc.
Carey International, Inc. - - ----------------------------------------------------------------------------------------------------------------------------------- Discounted Cash Flow Analysis 12% Internal Growth Rate, $60.0 Million Acquired Revenue (dollars in millions, except per share data) Fiscal Year Ending November 30, Projected Fiscal Year Ended November 30, (a) --------------------------------- ------------------------------------------------------- 1997 1998 1999 2000 2001 2002 2003 2004 --------------------------------- ------------------------------------------------------- Sales $86.4 $123.2 $ 191.1 $261.6 $330.5 $432.8 $547.5 $675.9 EBITDA 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1 Less: Depreciation (2.0) (2.5) (3.8) (5.5) (6.9) (7.4) (7.7) (8.1) --------------------------------- ------------------------------------------------------- EBITA 9.9 15.8 24.2 32.8 41.6 56.1 72.5 91.0 Less: Taxes @ 41.5% (4.1) (6.5) (10.1) (13.6) (17.3) (23.3) (30.1) (37.8) --------------------------------- ------------------------------------------------------- Tax-effected EBITA 5.8 9.2 14.2 19.2 24.3 32.8 42.4 53.2 Plus: Depreciation 5.5 6.9 7.4 7.7 8.1 Plus: Change in Deferred Taxes 0.0 0.0 0.0 0.0 0.0 Less: Capital/Acquisition Expenditures (64.3) (49.6) (47.0) (47.0) (47.0) Less: Changes in Working Capital (2.4) (2.7) (4.0) (4.5) (5.1) --------------------------------- ------------------------------------------------------- Free Cash Flow ($42.0) ($21.2) ($10.9) ($1.4) $9.2
A + B = C ----------- ------------------------------ -------------------------------- Discounted (b) PV of Terminal Value as a Cash Flows Multiple of 2004 EBITDA (c) Enterprise Value (d) --------------------------------- ------------------------------- Discount Rate (2000-2004) 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x - - ----------------------- ----------- --------------------------------- ------------------------------- 17.5% ($54.4) $243.3 $287.5 $331.7 $188.9 $233.1 $277.4 18.0% (54.1) 238.2 281.5 324.8 184.1 227.4 270.7 18.5% (53.8) 233.2 275.6 318.0 179.4 221.8 264.2 19.0% (53.5) 228.3 269.8 311.4 174.8 216.3 257.9 19.5% (53.2) 223.6 264.2 304.9 170.4 211.0 251.7
- D + E = F ------------ ------------ ------------------------ Net Debt Equity Total Equity Value Value Per Diluted Share (f) ---------------------------- ---------------------------- Discount Rate 5/31/00 (e) Investments 5.5x 6.5x 7.5x 5.5x 6.5x 7.5x - - ----------------------- ----------- ----------- ---------------------------- ----------------------------- 17.5% $25.9 $0.0 $163.0 $207.3 $251.5 $13.97 $17.76 $21.56 ----------- 18.0% 25.9 0.0 158.2 201.5 244.8 13.56 17.27 20.98 18.5% 25.9 0.0 153.5 195.9 238.3 13.16 16.79 20.43 19.0% 25.9 0.0 148.9 190.5 232.0 12.77 16.32 19.88 ----------- 19.5% 25.9 0.0 144.5 185.1 225.8 12.38 15.87 19.35 ---------------------------
- - ---------------------------------------- (a) Projections based on BGC and management estimates. (b) Present values calculated as of latest fiscal year end. (c) Based on current public market Enterpise Value/EBITDA trading muliptle of 6.5x. (d) Discounted 5 years; based on 2004 EBITDA of $99.1 million. (e) Includes option proceeds of: $23.1 (f) Based on 11.667 million diluted shares outstanding as of May 31, 2000. - - -------------------------------------------------------------------------------- -5- Benedetto, Gartland & Company, Inc. Carey International, Inc. - - -------------------------------------------------------------------------------- Analysis of Weighted Average Cost of Capital
Assumptions ------------------------------------------------------------------------------------------------------------------------------- Three Month Treasury Bill (at 7/14/00) 5.98% Estimated Future Market Return (b) 13.59% Ten Year Government Bond (at 7/14/00) 6.09% Estimated Future Risk Free Rate (c) 4.69% ----------- Historical Spread Between Long Bond & Bill (a) 1.40% Estimated Differential 8.90% Historical Spread Between Long Bond & S&P500 (a) 7.50% Small Cap Premium (a) 4.20% -------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------ Levered Tax Net Debt to Unlevered Levered Unlevered Comparable Companies Beta (d) Rate Equity (e) Beta (f) Return Return --------------------------- ------------ ------------- ----------- ------------ ----------- ---------- Carey International, Inc. 1.70 41.5% 33.4% 1.42 19.8% 17.3% Central Parking Corp. 1.10 41.5% 50.6% 0.85 14.5% 12.2% NCO Group, Inc. 1.97 41.5% 43.3% 1.57 22.2% 18.7% FYI Incorporated 0.80 41.5% 21.5% 0.71 11.8% 11.0% Consolidated Graphics, Inc. 0.85 41.5% 139.5% 0.47 12.3% 8.9% Navigant International 1.03 41.5% 91.5% 0.67 13.9% 10.7% ------------ ------------- ----------- ------------ ----------- ---------- Average 1.24 41.5% 63.3% 0.95 15.7% 13.1%
----------------------------------------------------------------------------- Net Debt/Equity Cost of Equity at Various Unlevered Beta and Capital Rates ----------------------------------------------------------------------------- Capital Structures 0.47 0.71 0.95 1.26 1.57 ------------------ ------------- ------------ ------------ ----------- ---------- 0.0% 13.1% 15.2% 17.3% 20.1% 22.9% 10.0% 13.3% 15.6% 17.8% 20.8% 23.7% --------------------------- 20.0% 13.5% 15.9% 18.3% 21.4% 24.5% 30.0% 13.8% 16.3% 18.8% 22.1% 25.3% --------------------------- 40.0% 14.0% 16.7% 19.3% 22.7% 26.1% 50.0% 14.3% 17.0% 19.8% 23.4% 27.0% ----------------------------------------------------------------------------- Net Debt/Capitalization Est. Cost Weighted Average Cost of Capital at Various Unlevered Beta and Capital Rates ----------------------------------------------------------------------------- Capital Structures of Debt 0.47 0.71 0.95 1.26 1.57 ------------------ ------- ------------- ------------ ------------ ----------- ---------- 0.0% 9.00% 13.1% 15.2% 17.3% 20.1% 22.9% 9.1% 9.20% 12.6% 14.6% 16.7% 19.4% 22.0% --------------------------- 16.7% 9.40% 12.2% 14.2% 16.2% 18.8% 21.3% 23.1% 9.70% 11.9% 13.8% 15.8% 18.3% 20.8% --------------------------- 28.6% 10.00% 11.7% 13.6% 15.5% 17.9% 20.3% 33.3% 10.40% 11.5% 13.4% 15.2% 17.6% 20.0%
_______________________________________________ * Excluded from averages. (a) Source: Ibbottson & Sinquefeld 1999 Yearbook. (b) Thirty year government bond yield plus the historical spread between the long bond and the S&P 500. (c) Thirty year government bond yield less the historical spread between the long bond and the three month bill. (d) Based on five year historical (or all available) data using the S&P 500 as a proxy for the market. Source: Market Guide.com. (e) Book Value of Net Debt to Market Value of Equity. (f) Unlevered beta equals (Levered Beta/(1 + ((1 - Tax Rate) * Debt/Equity)). ---------------------------------------------------------------------------- -6- Benedetto, Gartland & Company Inc. Carey International, Inc. - - -------------------------------------------------------------------------------- M & A Transaction Analysis - Selected Service Providers (Dollars in millions, except per share data)
Date Date Equity Enterprise Announced Effective Acquiror Name Target Name Business Description Value Value - - ----------- ----------- ------------- ----------- -------------------- ----- ----- 06/08/1999 07/26/1999 Stagecoach Holdings, Coach USA Inc. Provides transportation $1,140.7 $1,778.7 plc services 10/19/1998 03/16/1999 Laidlaw Inc. Greyhound Lines Transit services 390.8 722.7 01/17/2000 04/28/2000 Wesco Holdings Midwest Cort Business Services Furniture rental services 384.6 477.2 Corp. 02/22/2000 05/05/2000 Airtours, plc Travel Services Distr. of travel 368.5 356.9 International services (internet) ---------------------- 09/02/1998 12/10/1998 Rent-Way Inc. Home Choice Holdings Equipment rental services 231.5 295.7 09/06/1999 12/01/1999 Amdocs Ltd. International Telecom. Computerized billing 226.1 186.5 Data, Inc. services 03/03/1997 05/30/1997 Flserve Inc. BHC Financial Inc. Data processing services 212.1 236.8 03/17/2000 Pending Investor Group Neff Corporation Equipment rental services 190.5 670.1 12/23/1997 04/01/1998 Outsourcing Solutions Union Corp. Adjustment collection 182.7 151.0 Inc. services 02/11/1998 06/10/1998 Apollo Management MTL Inc. Tank truck carrier 181.8 238.5 services 06/07/1999 09/30/1999 Yellow Corp. Jevic Transportation Provides trucking 154.5 193.7 Inc. services ---------------------- 08/14/1996 11/07/1996 OSI Holdings Corp. Payco American Corp. Credit collection 142.2 125.8 services 02/10/1999 03/22/1999 GlobeGround GmbH Hudson General Corp Aviation services 132.6 116.8 03/08/1999 06/24/1999 Anteon Corp. Analysis & Technology Provide engineering 108.2 115.3 Inc. services 10/17/1997 02/27/1998 Weiss, Peck & Greer ATC Group Services Inc. Engineering services 93.7 129.2 LLC 11/26/1997 02/25/1998 J.W. Childs Equity Universal Hospital Medical equipment rental 84.9 118.4 Partners LP Services services --------------------------------------------------- Statistics for Deals with Equity Values ranging from $150-$250 (in red) Average $ 197.0 $ 281.8 Median 190.5 236.8 --------------------------------------------------- CARY Valuation Parameter --------------------------------------------------- Implied CARY Share Price based on Comparable M&A Transactions (1) Average Median --------------------------------------------------- Equity Value Offer Price Premium to Enterprise Value to LTM to LTM Pre-Announcement Stock Price - - -------------------------- -------------- ------------------------------ EBITDA EBIT Net Inc. 1 Day 1 Week 4 Weeks ------ ---- -------- ----- ------ ------- 9.3x 13.6x 20.8x 35.2% 40.6% 62.7% 9.0x 15.6x 20.7x 33.3% 79.3% 42.5% 4.4x 8.9x 13.9x 63.5% 66.5% 62.9% 15.7x 24.8x 43.0x 46.5% 62.5% 86.5% - - ----------------------------------------------------------------------------- 3.0x 6.0x NM 7.2% 4.1% 7.7% 4.0x 7.1x 13.5x 61.0% 66.1% 61.0% 7.3x 7.8x 11.6x 67.5% 60.0% 82.3% 5.4x 8.3x NM 9.9% 34.6% 25.2% 7.9x 10.3x NM 14.5% 13.5% 23.5% 6.5x 11.8x 18.0x 37.9% 38.5% 56.1% 5.8x 10.9x 16.1x 30.2% 45.5% 51.4% - - ----------------------------------------------------------------------------- 4.3x 14.1x 30.6x 19.1% 17.9% 60.0% 5.5x 9.2x 11.1x 21.6% 38.2% 52.0% 8.7x 11.6x 23.0x 18.9% 16.2% 23.8% 8.3x 10.7x 19.3x 0.0% (8.1%) 10.3% 4.5x 11.5x 20.1x 29.2% 29.2% 25.3% - - ----------------------------------------------------------------------------- 5.1x 8.9x 14.8x 32.6% 37.5% 43.9% 5.4x 8.3x 14.8x 30.2% 38.5% 51.4% - - ----------------------------------------------------------------------------- $ 30.2 $ 22.3 $ 12.0 $10.55 $11.25 $ 9.06 - - ----------------------------------------------------------------------------- $10.60 $15.21 $18.11 $13.99 $15.47 $13.04 $11.76 $13.87 $18.12 $13.74 $15.58 $13.72 - - -----------------------------------------------------------------------------
_____________________________ Source: SEC Filings and Securities Data Corporation. (1) Based on 9.821 million shares outstanding. Share prices based on Enterprise Value (Revenue, EBIT, EBITDA) are less net debt of $49.0 million. CARY share price information reflects 6/29/00 announcement date. - - -------------------------------------------------------------------------------- - - -7- Benedetto, Gartland & Company, Inc. Carey International, Inc. - - -------------------------------------------------------------------------------- Hypothetical Stock Price Analysis 8% Internal Growth Rate, $40.0 Million Acquired Revenue (Dollars in millions, except per share data)
Year ending on or about November 30, ----------------------------------------------------------------------------------------------- Historical Projected (a) ----------------------------------------------------------------------------------------------- 1997 1998 1999 2000 2001 2002 2003 2004 ----------------------------------------------------------------------------------------------- Net sales $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1 EBITDA 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4 Earnings per share $0.74 $0.92 $1.17 $1.46 $1.58 $2.02 $2.54 $3.19 Current 1999 Actual P/E Multiple 12.8x 12.8x 12.8x 12.8x 12.8x 12.8x Implied Stock Price $14.94 $18.67 $20.23 $25.78 $32.48 $40.75 Implied Stock Price Discounted at Cost of Equity ----------------------------------------------------------------------- Cost of Equity Current 2000 2001 2002 2003 2004 - - -------------------------- ----------------------------------------------------------------------- 18% $14.94 $15.82 $14.53 $15.69 $16.75 $17.81 -----------------------
____________________________ (a) Projected data based on 2000 budget with acquisitions and management and BGC estimates. - - -------------------------------------------------------------------------------- -8- Benedetto, Gartland & Company, Inc. Carey International, Inc. - - -------------------------------------------------------------------------------- Hypothetical Stock Price Analysis 12% Internal Growth Rate, $60.0 Million Acquired Revenue (Dollars in millions, except per share data)
Year ending on or about November 30, -------------------------------------------------------------------------------------------- Historical Projected (a) -------------------------------------------------------------------------------------------- 1997 1998 1999 2000 2001 2002 2003 2004 -------------------------------------------------------------------------------------------- Net sales $86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9 EBITDA 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1 Earnings per share $0.74 $0.92 $1.17 $1.46 $1.72 $2.37 $3.17 $4.21 Current 1999 Actual P/E Multiple 12.8x 12.8x 12.8x 12.8x 12.8x 12.8x Implied Stock Price $14.94 $18.67 $21.98 $30.21 $40.50 $53.71 Implied Stock Price Discounted at Cost of Equity -------------------------------------------------------------------- Cost of Equity Current 2000 2001 2002 2003 2004 - - --------------------------------- -------------------------------------------------------------------- 25% $14.94 $14.94 $14.07 $15.47 $16.59 $17.60 --------------------
_________________________________________________ (a) Projected data based on 2000 budget with acquisitions and management and BGC estimates. - - -------------------------------------------------------------------------------- -9- Benedetto, Gartland & Company, Inc. - - -------------------------------------------------------------------------------- Carey International, Inc. Income Statement 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Budget with expected acquisitions
Year ending November 30, ----------------------------------------------------------------------------------- Historical Budgeted Projected ----------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 Net sales $ 65.5 $ 86.4 $123.2 $ 191.1 $ 261.6 $ 307.5 $ 373.7 $ 444.4 $ 521.1 Annual growth 31.8% 42.6% 55.1% 36.9% 17.6% 21.4% 19.0% 17.3% Cost of goods sold 41.6 55.9 79.5 124.5 169.0 198.7 241.2 287.1 336.6 ----------------------------------------------------------------------------------- Gross margin 24.0 30.5 43.7 66.5 92.6 108.9 132.2 157.3 184.5 Sales, general & administrative expenses 15.7 18.8 25.7 38.5 54.3 63.8 77.4 92.2 108.1 Other expense/(income) (0.4) (0.2) (0.3) 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------------------------- Total 15.3 18.6 25.5 38.5 54.3 63.8 77.4 92.2 108.1 EBITDA 8.7 11.9 18.2 28.0 38.3 45.1 54.7 65.1 76.4 New acquisition goodwill 0.0 0.0 0.0 0.0 0.0 0.6 1.6 2.6 3.0 Base depreciation and amortization 3.2 3.4 4.4 7.1 9.4 11.5 12.0 12.4 12.7 ----------------------------------------------------------------------------------- EBIT 5.5 8.6 13.8 21.0 28.9 32.9 41.1 50.1 60.7 Net interest expense/(income) 1.7 0.9 (0.5) 0.6 3.4 5.2 5.6 5.3 4.5 ----------------------------------------------------------------------------------- Earnings before tax 3.8 7.7 14.3 20.4 25.5 27.7 35.5 44.8 56.2 Provision for taxes (at projected 41.5%) 0.3 3.2 5.9 8.6 10.6 11.6 14.9 18.9 23.6 ----------------------------------------------------------------------------------- Net income from continuing operations 3.5 4.5 8.4 11.8 14.9 16.2 20.6 26.0 32.6 Other Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net income $ 3.5 $ 4.5 $ 8.4 $ 11.8 $ 14.9 $ 16.2 $ 20.6 $ 26.0 $ 32.6 =================================================================================== Shares outstanding (000's) 3,794 6,137 9,094 10,057 10,200 10,200 10,200 10,200 10,200 Earnings per share $ 0.92 $ 0.74 $ 0.92 $ 1.17 $ 1.46 $ 1.58 $ 2.02 $ 2.54 $ 3.19 Margins - - ------- Gross before depreciation 36.6% 35.3% 35.5% 34.8% 35.4% 35.4% 35.4% 35.4% 35.4% EBITDA 13.2% 13.8% 14.8% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% EBIT 8.4% 10.0% 11.2% 11.0% 11.1% 10.7% 11.0% 11.3% 11.6% Net 5.3% 5.2% 6.8% 6.2% 5.7% 5.3% 5.5% 5.8% 6.2% SG&A before depr. and amort. as a % of sales 23.9% 21.8% 20.9% 20.1% 20.7% 20.7% 20.7% 20.7% 20.7% Reduction in SG&A 0.0% 0.0% 0.0% 0.0% 0.0% Coverages - - --------- EBITDA/Net Interest Expense 5.0x 13.1x NM 48.4x 11.3x 8.7x 9.8x 12.3x 17.0x EBIT/Net Interest Expense 3.2x 9.4x NM 36.2x 8.5x 6.3x 7.4x 9.4x 13.5x
- - -------------------------------------------------------------------------------- Page 1 of 10 - - ------------------------------------------------------------------------------- Carey International, Inc. Cash Flow Statement 8% Internal Growth Rate, $40.0 ($ in millions, except where noted) Million Acquired Revenue
Year ending November 30, ---------------------------------------------------- Projected ---------------------------------------------------- 2000 2001 2002 2003 2004 ---------------------------------------------------- OPERATING ACTIVITIES Net income $ 14.9 $ 16.2 $ 20.6 $ 26.0 $ 32.6 Depreciation and amortization 9.4 12.1 13.7 15.0 15.7 Equity income from unconsolidated affiliates 0.0 0.0 0.0 0.0 0.0 Change in working capital (2.4) (1.8) (2.6) (2.8) (3.0) Change in other assets and liabilities 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Cash provided by/(used in) operating activities $ 21.9 $ 26.5 $ 31.7 $ 38.1 $ 45.2 INVESTING ACTIVITIES Capital expenditures ($ 13.3) ($ 4.6) ($ 2.0) ($ 2.0) ($ 2.0) Acquisition expenditures (45.0) (30.0) (30.0) (30.0) (30.0) Disposition/(purchase) of assets 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Cash provided by/(used in) investing activities ($ 58.3) ($ 34.6) ($ 32.0) ($ 32.0) ($ 32.0) Free Cash Flow ($ 36.4) ($ 8.1) ($ 0.3) $ 6.1 $ 13.2 FINANCING ACTIVITIES Proceeds from/(payments to) term debt $ 32.8 $ 8.1 $ 0.3 ($ 6.1) ($ 13.2) Proceeds from/(payments to) capital leases 0.0 0.0 0.0 0.0 0.0 Issuance of/(repurchase of) common stock 0.0 0.0 0.0 0.0 0.0 Dividends paid 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Cash provided by/(used in) financing activities $ 32.8 $ 8.1 $ 0.3 ($ 6.1) ($ 13.2) Effect of exchange rate changes on cash and cash equivalents $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Increase/(decrease) in cash and cash equivalents (3.6) 0.0 0.0 0.0 0.0 Beginning cash balance 8.6 5.0 5.0 5.0 5.0 ---------------------------------------------------- Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0
- - ------------------------------------------------------------------- Projection 2 Page 2 of 10
- - ----------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Balance Sheet 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, -------------------------------------------------------------------------------------- Historical Projected -------------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 -------------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 2.9 $ 5.3 $ 14.5 $ 8.6 $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0 Accounts receivable, net of allowances 10.5 15.9 17.9 32.4 44.4 52.2 63.3 75.4 88.4 Other receivables 0.4 0.7 1.2 1.7 1.5 1.8 2.2 2.6 3.1 Prepaid expenses and other 2.1 1.4 1.3 1.6 2.2 2.6 3.2 3.8 4.4 -------------------------------------------------------------------------------------- Total current assets 15.9 23.4 34.9 44.4 53.2 61.6 73.7 86.8 100.9 Property and equipment, net 5.8 9.3 12.9 27.4 35.1 32.9 27.5 21.8 15.7 Existing intangibles, net 19.3 42.6 70.4 94.5 135.6 130.9 126.3 121.6 117.0 New acquired goodwill 0.0 0.0 0.0 0.0 0.0 29.4 57.8 85.1 112.1 Deferred income taxes and other 2.2 2.0 1.5 2.8 2.8 2.8 2.8 2.8 2.8 Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1 Total Assets $ 44.0 $85.4 $129.2 $178.1 $235.8 $266.7 $297.2 $327.3 $357.7 ====================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 11.6 $17.1 $ 18.1 $ 27.9 $ 37.8 $ 44.5 $ 54.0 $ 64.3 $ 75.4 Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -------------------------------------------------------------------------------------- Total current liabilities 11.6 17.1 18.1 27.9 37.8 44.5 54.0 64.3 75.4 Term debt 17.7 3.8 4.3 25.1 57.9 66.0 66.3 60.2 47.0 Capital leases 0.9 1.7 1.2 1.4 1.4 1.4 1.4 1.4 1.4 Deferred liabilities 0.1 1.2 0.4 4.0 4.0 4.0 4.0 4.0 4.0 Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2 Shareholders' Equity: Capital stock 1.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Additional paid in capital 7.8 45.2 78.7 81.5 81.5 81.5 81.5 81.5 81.5 Retained earnings (1.4) 3.1 11.4 23.0 37.9 54.0 74.6 100.6 133.2 Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -------------------------------------------------------------------------------------- Total shareholders' equity 7.6 48.3 90.1 104.6 119.5 135.7 156.3 182.2 214.8 Total Liabilities and Shareholders' Equity $ 44.0 $85.4 $129.2 $178.1 $235.8 $266.7 $297.2 $327.3 $357.7 ====================================================================================== Capital Ratios - - -------------- Total Debt/EBITDA 1.5x 1.5x 1.2x 0.9x 0.6x Debt/Equity 244.8% 11.3% 6.1% 25.3% 49.6% 49.7% 43.4% 33.8% 22.5% Debt/Total Book Capital 71.0% 10.1% 5.7% 20.2% 33.2% 33.2% 30.2% 25.3% 18.4% - - ------------------------------------------------------------------------------------------------------------------------Projection 2
Page 3 of 10
- - -------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Working Capital Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ----------------------------------------------------------------------------------- Historical Projected ----------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 ----------------------------------------------------------------------------------- Sales $65.5 $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1 Cost of goods sold 41.6 55.9 79.5 124.5 169.0 198.7 241.2 287.1 336.6 Ratios - - ------ Accounts receivable (Days outstanding) 57.9 66.4 52.2 61.1 61.1 61.1 61.1 61.1 61.1 Other receivables (Days outstanding) 2.2 2.8 3.6 3.3 3.3 3.3 3.3 3.3 3.3 Prepaid expenses/sales 3.1% 1.7% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% Accounts payable (Days outstanding) 100.2 109.9 81.9 80.6 80.6 80.6 80.6 80.6 80.6 Other current liabilities/COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% WORKING CAPITAL Accounts receivable $10.5 $15.9 $17.9 $32.4 $44.4 $52.2 $63.3 $75.4 $88.4 Other receivables 0.4 0.7 1.2 1.7 1.5 1.8 2.2 2.6 3.1 Prepaid expenses 2.1 1.4 1.3 1.6 2.2 2.6 3.2 3.8 4.4 ----------------------------------------------------------------------------------- CURRENT ASSETS $13.0 $18.0 $20.4 $35.8 $48.2 $56.6 $68.7 $81.8 $95.9 Accounts payable $11.6 $17.1 $18.1 $27.9 $37.8 $44.5 $54.0 $64.3 $75.4 Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------------------------- CURRENT LIABILITIES $11.6 $17.1 $18.1 $27.9 $37.8 $44.5 $54.0 $64.3 $75.4 Working capital $1.4 $1.0 $2.3 $7.9 $10.3 $12.1 $14.7 $17.5 $20.6 Cash from/(used in) working capital $0.5 ($1.3) ($5.6) ($2.4) ($1.8) ($2.6) ($2.8) ($3.0) Cash from/(used in): - - -------------------- Accounts receivable ($5.4) ($1.9) ($14.6) ($12.0) ($7.8) ($11.2) ($12.1) ($13.0) Other receivables (0.3) (0.6) (0.5) 0.2 (0.3) (0.4) (0.4) (0.5) Prepaid expenses 0.6 0.1 (0.3) (0.6) (0.4) (0.6) (0.6) (0.7) Accounts payable 5.5 1.0 9.8 10.0 6.6 9.5 10.3 11.1 Other current liabilities - - - - 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------------------------- Total $0.5 ($1.3) ($5.6) ($2.4) ($1.8) ($2.6) ($2.8) ($3.0) Deferred income taxes and other $2.2 $2.0 $1.5 $2.8 $2.8 $2.8 $2.8 $2.8 $2.8 Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1 ----------------------------------------------------------------------------------- OTHER ASSETS $3.0 $10.1 $11.0 $11.9 $11.9 $11.9 $11.9 $11.9 $11.9 Deferred liabilities $0.1 $1.2 $0.4 $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2 ----------------------------------------------------------------------------------- OTHER LIABILITIES $6.3 $14.6 $15.5 $19.2 $19.2 $19.2 $19.2 $19.2 $19.2 Changes in Other Assets and Liabilities $1.1 $0.1 $2.8 $0.0 $0.0 $0.0 $0.0 $0.0 - - -------------------------------------------------------------------------------------------------------------------------------- Projection 2
Page 4 of 10
- - ---------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Depreciation Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ---------------------------------------------------------------------------------------------- Historical Projected ---------------------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 ---------------------------------------------------------------------------------------------- Sales $65.5 $86.4 $123.2 $191.1 $261.6 $307.5 $373.3 $444.4 $521.1 Capital expenditures/sales 4.7% 4.7% 3.6% 6.6% 5.1% 1.5% 0.5% 0.5% 0.4% - - ---------------------------------------------------------------------------------------------------------------------------------- Beginning gross fixed assets $ 37.1 $ 50.4 $ 55.1 $ 57.1 $ 59.1 Capital expenditures $ 3.1 $ 4.1 $ 4.5 $ 12.6 2.0 2.0 2.0 2.0 2.0 Software development 11.3 2.6 0.0 0.0 0.0 (Disposition and other charges) 0.0 0.0 0.0 0.0 0.0 Ending gross fixed assets ------------------------------------------------- $ 50.4 $ 55.1 $ 57.1 $ 59.1 $ 61.1 Beginning accumulated depreciation $ 9.8 $ 15.3 $ 22.2 $ 29.5 $ 37.3 - - ---------------------------------------------------------------------------------------------------------------------------------- Beginning (FYE 1999) Implied Net PP&E $27.4 Useful Less: Land 0.0 Life ----- ---- PP&E depreciated $27.4 6.0 years $ 4.6 $ 4.6 $ 4.6 $ 4.6 $ 4.6 Total Capital Expenditures ------------ 2000 $2.0 6.0 years $ 0.2 $ 0.3 $ 0.3 $ 0.3 $ 0.3 2001 2.0 0.2 0.3 0.3 0.3 2002 2.0 0.2 0.3 0.3 2003 2.0 0.2 0.3 2004 2.0 0.2 Software Depreciation $11.3 7.0 years $ 0.8 $ 1.6 $ 1.6 $ 1.6 $ 1.6 2.6 0.2 0.4 0.4 0.4 Total depreciation $ 2.5 $ 3.8 $ 5.5 $ 6.9 $ 7.4 $ 7.7 $ 8.1 As a % of net PP&E 19.1% 13.9% 15.7% 20.9% 26.8% 35.4% 51.1% Ending accumulated depreciation $ 6.0 $ 9.8 $ 15.3 $ 22.2 $ 29.5 $ 37.3 $ 45.3 Property and equipment, net $12.9 $ 27.4 $ 35.1 $ 32.9 $ 27.5 $ 21.8 $ 15.7 - - --------------------------------------------------------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------------------------------------------- Projection 2
Page 5 of 10
- - -------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Debt and Interest Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ---------------------------------------------------- Projected ---------------------------------------------------- 2000 2001 2002 2003 2004 ---------------------------------------------------- Free cash flow ($ 36.4) ($ 8.1) ($ 0.3) $ 6.1 $13.2 Proceeds from/(repurchase of) equity 0.0 0.0 0.0 0.0 0.0 Dividends paid 0.0 0.0 0.0 0.0 0.0 Foreign currency translation 0.0 0.0 0.0 0.0 0.0 Beginning cash balance 8.6 5.0 5.0 5.0 5.0 Less: Minimum cash balance (5.0) (5.0) (5.0) (5.0) (5.0) ---------------------------------------------------- Total cash available for debt service ($ 32.8) ($ 8.1) ($ 0.3) $ 6.1 $13.2 Beginning balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4 Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - capital leases 1.4 1.4 1.4 1.4 1.4 Discretionary borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4 Funds available for debt repayment ($ 32.8) ($ 8.1) ($ 0.3) $ 6.1 $13.2 Beginning balance - term debt $ 25.1 $57.9 $66.0 $66.3 $60.2 Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - term debt 25.1 57.9 66.0 66.3 60.2 Discretionary borrowings/(repayment) 32.8 8.1 0.3 (6.1) (13.2) ----------------------------------------------------- Ending balance - term debt $ 57.9 $66.0 $66.3 $60.2 $47.0 Cash available after all repayments $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Plus: Minimum cash balance 5.0 5.0 5.0 5.0 5.0 ---------------------------------------------------- Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0 - - -------------------------------------------------------------------------------------------------------------------------------- - - -------------------------------------------------------------------------------------------------------------------------------- Average Balance Outstanding Term debt $ 41.5 $61.9 $66.2 $63.3 $53.6 Capital Leases 1.4 1.4 1.4 1.4 1.4 Cash and cash equivalents 6.8 5.0 5.0 5.0 5.0 Interest Expense Term debt 8.50% $ 3.5 $ 5.3 $ 5.6 $ 5.4 $ 4.6 Capital Leases 6.00% 0.1 0.1 0.1 0.1 0.1 Cash and cash equivalents 3.00% (0.2) (0.2) (0.2) (0.2) (0.2) ---------------------------------------------------- Total interest expense/(income) $ 3.4 $ 5.2 $ 5.6 $ 5.3 $ 4.5 - - -------------------------------------------------------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------------------------------------------- Projection 2
Page 6 of 10
- - ---------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Shareholders' Equity and Investment Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ------------------------------------------------------------ Actual Projected ------------------------------------------------------------ 1999 2000 2001 2002 2003 2004 ------------------------------------------------------------- - - ---------------------------------------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Capital stock Beginning balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1 Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1 Additional paid in capital Beginning balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5 Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5 Foreign currency translation adjustments Beginning balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Retained earnings Beginning balance $ 23.0 $ 37.9 $ 54.0 $ 74.6 $ 100.6 Net income/(loss) 14.9 16.2 20.6 26.0 32.6 Dividends 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 37.9 $ 54.0 $ 74.6 $ 100.6 $ 133.2 - - ---------------------------------------------------------------------------------------------------------------------------------- Shares outstanding Beginning balance Shares issued/(purchased) Ending balance Annual dividend per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Total dividends paid $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 - - ---------------------------------------------------------------------------------------------------------------------------------- - - ----------------------------------------------------------------------------------------------------------------------Projection 2
Page 7 of 10
- - ------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Amortization Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ------------------------------------------------------------------- Actual Projected ------------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 ------------------------------------------------------------------- Sales $191.1 $261.6 $307.5 $373.3 $444.4 $521.1 Additions to intangibles/sales 0.0% 17.2% 0.0% 0.0% 0.0% 0.0% - - ------------------------------------------------------------------------------------------------------------------------------- Beginning intangibles $104.3 $149.3 $149.3 $149.3 $149.3 Additions to intangibles 45.0 0.0 0.0 0.0 0.0 (Disposition and other charges) 0.0 0.0 0.0 0.0 0.0 -------------------------------------------------------- Ending goodwill $149.3 $149.3 $149.3 $149.3 $149.3 Beginning accumulated amortization $ 6.5 $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 - - ------------------------------------------------------------------------------------------------------------------------------- Implied Amortization Period 1999 Beginning net ------ intangibles $94.5 30.0 years $ 3.1 $ 3.1 $ 3.1 $ 3.1 $ 3.1 Additions --------- 2000 $45.0 30.0 years $ 0.8 $ 1.5 $ 1.5 $ 1.5 $ 1.5 2001 0.0 0.0 0.0 0.0 0.0 2002 0.0 0.0 0.0 0.0 2003 0.0 0.0 0.0 2004 0.0 0.0 Total amortization $ 3.3 $ 3.9 $ 4.6 $ 4.6 $ 4.6 $ 4.6 As a % of net goodwill 3.5% 2.9% 3.6% 3.7% 3.8% 4.0% Ending accumulated amortization $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 $ 32.3 Goodwill, net $ 94.5 $135.6 $130.9 $126.3 $121.6 $117.0 - - ------------------------------------------------------------------------------------------------------------------------------- - - ------------------------------------------------------------------------------------------------------------------ Projection 2
Page 8 of 10
- - ---------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Revenue Growth Schedule 8% Internal Growth Rate, $40.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, -------------------------------------------------------------------- Actual Budgeted Projected -------------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 -------------------------------------------------------------------- Acquired revenue 2000 Base Sales $261.6 $282.5 $305.1 $329.5 $355.9 2001 Acquired Sales 25.0 43.2 46.7 50.4 2002 Acquired Sales 25.0 43.2 46.7 2003 Acquired Sales 25.0 43.2 2004 Acquired Sales 25.0 -------------------------------------------------------------------- $0.0 $261.6 $307.5 $373.3 $444.4 $521.1 Target Revenue Prototype Year ---------------------------------------------- Quarterly breakdown of acquired revenue Run Rate Q1 Q2 Q3 Q4 Annual ---------- ------ ------ ------ ------ -------- 1st Quarter Acquisitions $10.0 $2.5 $2.5 $2.5 $ 2.5 $10.0 2nd Quarter Acquisitions 10.0 2.5 2.5 2.5 7.5 3rd Quarter Acquisitions 10.0 2.5 2.5 5.0 4th Quarter Acquisitions 10.0 2.5 2.5 ------------------------------------------------------------- $40.0 $2.5 $5.0 $7.5 $10.0 $25.0 Year ending November 30, ------------------------------------------------------ Budgeted ------------------------------------------------------ 2000 2001 2002 2003 2004 ------------------------------------------------------ New acquisition goodwill 2001 Acquired Sales $0.6 $1.0 $1.0 $1.0 2002 Acquired Sales 0.6 1.0 1.0 2003 Acquired Sales 0.6 1.0 2004 Acquired Sales 0.6 ------------------------------------------------------ Annual amortization $0.0 $0.6 $1.6 $2.6 $3.6 Purchase Price by Prototype Year ---------------------------------------------- Quarterly breakdown of new acquisition goodwill Quarter Q1 Q2 Q3 Q4 Annual --------- ------ ------ ------ ------ -------- 1st Quarter Acquisitions $ 7.5 $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.3 2nd Quarter Acquisitions 7.5 0.1 0.1 0.1 0.2 3rd Quarter Acquisitions 7.5 0.1 0.1 0.1 4th Quarter Acquisitions 7.5 0.1 0.1 Total amortization $ 30.0 $ 0.1 $ 0.1 $ 0.2 $ 0.3 $ 0.6 ----------------------------------------------------------- Purchase price as a % of revenue 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% - - --------------------------------------------------------------------------------------------------------------- Projection 2
Page 9 of 10 ________________________________________________________________________________ Carey International, Inc. Identified 8% Internal Growth Rate, $40.0 Acquisition Adjustments Million Acquired Revenue
------------------------------------------ Consideration for Identified Acquisitions Cash $0.0 Stock 0.0 Actual Pro Forma -------- Total $0.0 11/30/99 Adjustments 11/30/99 ------------------------------------------ -------- ----------- -------- ASSETS Cash and cash equivalents $ 8.6 $ 8.6 Accounts receivable, net of allowances 32.4 32.4 Other receivables 1.7 1.7 Prepaid expenses and other 1.6 1.6 -------- -------- Total current assets 44.4 44.4 Property and equipment, net 27.4 $0.0 27.4 Existing intangibles, net 94.5 0.0 94.5 New acquired goodwill 0.0 0.0 Deferred income taxes and other 2.8 0.0 2.8 Notes receivable 9.1 9.1 ---------- Total Assets $178.1 $0.0 $178.1 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 27.9 $ 27.9 Other current liabilities 0.0 0.0 -------- -------- Total current liabilities 27.9 27.9 Term debt 25.1 $0.0 25.1 Capital leases 1.4 1.4 Deferred liabilities 4.0 4.0 Deferred revenue 15.2 15.2 Shareholders' Equity: Capital stock 0.1 0.1 Additional paid in capital 81.5 0.0 81.5 Retained earnings 23.0 23.0 Foreign currency translation adjustments 0.0 0.0 -------- -------- Total shareholders' equity 104.6 104.6 ---------- Total Liabilities and Shareholders' Equity $178.1 $0.0 $178.1 ======== ======== Shares Outstanding 10,200 0 10,200
____________________________________________________________________Projection 2 Page 10 of 10
- - ------------------------------------------------------------------------------------------------------------------------------------ Carey International, Inc. Income Statement 12% Internal Growth Model Assumptions Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Budget with expected acquisitions Year ending November 30, ----------------------------------------------------------------------------------- Historical Budgeted Projected ----------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 ----------------------------------------------------------------------------------- Net sales $ 65.5 $ 86.4 $123.2 $ 191.1 $ 261.6 $ 330.5 $ 432.8 $547.5 $675.9 Annual growth 31.8% 42.6% 55.1% 36.9% 26.3% 31.0% 26.5% 23.5% Cost of goods sold 41.6 55.9 79.5 124.5 169.0 213.5 279.6 353.7 436.6 ----------------------------------------------------------------------------------- Gross margin 24.0 30.5 43.7 66.5 92.6 117.0 153.2 193.8 239.3 Sales, general & administrative expenses 15.7 18.8 25.7 38.5 54.3 68.5 89.8 113.6 140.2 Other expense/(income) (0.4) (0.2) (0.3) 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------------------------- Total 15.3 18.6 25.5 38.5 54.3 68.5 89.8 113.6 140.2 EBITDA 8.7 11.9 18.2 28.0 38.3 48.4 63.4 80.2 99.1 New acquisition goodwill 0.0 0.0 0.0 0.0 0.0 0.9 2.4 3.9 4.5 Base depreciation and amortization 3.2 3.4 4.4 7.1 9.4 11.5 12.0 12.4 12.7 ----------------------------------------------------------------------------------- EBIT 5.5 8.6 13.8 21.0 28.9 36.0 49.0 63.9 81.9 Net interest expense/(income) 1.7 0.9 (0.5) 0.6 3.4 5.8 7.3 7.9 7.7 ----------------------------------------------------------------------------------- Earnings before tax 3.8 7.7 14.3 20.4 25.5 30.2 41.7 56.0 74.2 Provision for taxes (at projected 41.5%) 0.3 3.2 5.9 8.6 10.6 12.6 17.6 23.7 31.2 ----------------------------------------------------------------------------------- Net income from continuing operations 3.5 4.5 8.4 11.8 14.9 17.6 24.1 32.4 42.9 Other Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net income $ 3.5 $ 4.5 $ 8.4 $ 11.8 $ 14.9 $ 17.6 $ 24.1 $32.4 $42.9 =================================================================================== Shares outstanding (000's) 3,794 6,137 9,094 10,057 10,200 10,200 10,200 10,200 10,200 Earnings per share $ 0.92 $ 0.74 $ 0.92 $ 1.17 $ 1.46 $ 1.72 $ 2.37 $3.17 $4.21 Margins - - ------- Gross before depreciation 36.6% 35.3% 35.5% 34.8% 35.4% 35.4% 35.4% 35.4% 35.4% EBITDA 13.2% 13.8% 14.8% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% EBIT 8.4% 10.0% 11.2% 11.0% 11.1% 10.9% 11.3% 11.7% 12.1% Net 5.3% 5.2% 6.8% 6.2% 5.7% 5.3% 5.6% 5.9% 6.3% SG&A before depr. and amort. as a % of sales 23.9% 21.8% 20.9% 20.1% 20.7% 20.7% 20.7% 20.7% 20.7% Reduction in SG&A 0.0% 0.0% 0.0% 0.0% 0.0% Coverages - - --------- EBITDA/Net Interest Expense 5.0x 13.1x NM 48.4x 11.3x 8.3x 8.7x 10.1x 12.9x EBIT/Net Interest Expense 3.2x 9.4x NM 36.2x 8.5x 6.2x 6.7x 8.1x 10.6x - - ---------------------------------------------------------------------------------------------------------------------- Projection 2
Page 1 of 10
- - ---------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Cash Flow Statement 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ---------------------------------------------------------- Projected ---------------------------------------------------------- 2000 2001 2002 2003 2004 ---------------------------------------------------------- OPERATING ACTIVITIES Net income $ 14.9 $ 17.6 $ 24.1 $ 32.4 $ 42.9 Depreciation and amortization 9.4 12.5 14.5 16.3 17.2 Equity income from unconsolidated affiliates 0.0 0.0 0.0 0.0 0.0 Change in working capital (2.4) (2.7) (4.0) (4.5) (5.1) Change in other assets and liabilities 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------------- Cash provided by/(used in) operating activities $ 21.9 $ 27.3 $ 34.6 $ 44.1 $ 55.1 INVESTING ACTIVITIES Capital expenditures ($13.3) ($4.6) ($2.0) ($2.0) ($2.0) Acquisition expenditures (45.0) (45.0) (45.0) (45.0) (45.0) Disposition/(purchase) of assets 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------------- Cash provided by/(used in) investing activities ($58.3) ($49.6) ($47.0) ($47.0) ($47.0) Free Cash Flow ($36.4) ($22.3) ($12.4) ($2.9) $ 8.1 FINANCING ACTIVITIES Proceeds from/(payments to) term debt $ 32.8 $ 22.3 $ 12.4 $ 2.9 ($8.1) Proceeds from/(payments to) capital leases 0.0 0.0 0.0 0.0 0.0 Issuance of/(repurchase of) common stock 0.0 0.0 0.0 0.0 0.0 Dividends paid 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------------- Cash provided by/(used in) financing activities $ 32.8 $ 22.3 $ 12.4 $ 2.9 ($8.1) Effect of exchange rate changes on cash and cash $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 equivalents Increase/(decrease) in cash and cash (3.6) 0.0 0.0 0.0 0.0 equivalents Beginning cash balance 8.6 5.0 5.0 5.0 5.0 ---------------------------------------------------------- Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0 - - --------------------------------------------------------------------------------------------------------- Projection 2
Page 2 of 10
- - ------------------------------------------------------------------------------------------------------------------------------------ Carey International, Inc. Balance Sheet 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ---------------------------------------------------------------------------------------- Historical Projected ---------------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 ---------------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 2.9 $ 5.3 $ 14.5 $ 8.6 $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0 Accounts receivable, net of allowances 10.5 15.9 17.9 32.4 44.4 56.1 73.4 92.9 114.7 Other receivables 0.4 0.7 1.2 1.7 1.5 1.9 2.5 3.2 4.0 Prepaid expenses and other 2.1 1.4 1.3 1.6 2.2 2.8 3.7 4.7 5.8 ---------------------------------------------------------------------------------------- Total current assets 15.9 23.4 34.9 44.4 53.2 65.8 84.7 105.8 129.4 Property and equipment, net 5.8 9.3 12.9 27.4 35.1 32.9 27.5 21.8 15.7 Existing intangibles, net 19.3 42.6 70.4 94.5 135.6 130.9 126.3 121.6 117.0 New acquired goodwill 0.0 0.0 0.0 0.0 0.0 44.1 86.6 127.7 168.2 Deferred income taxes and other 2.2 2.0 1.5 2.8 2.8 2.8 2.8 2.8 2.8 Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1 Total Assets $ 44.0 $ 85.4 $129.2 $178.1 $235.8 $285.7 $337.0 $388.8 $442.3 ======================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8 Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------------------------------------------- Total current liabilities 11.6 17.1 18.1 27.9 37.8 47.8 62.6 79.2 97.8 Term debt 17.7 3.8 4.3 25.1 57.9 80.2 92.6 95.5 87.4 Capital leases 0.9 1.7 1.2 1.4 1.4 1.4 1.4 1.4 1.4 Deferred liabilities 0.1 1.2 0.4 4.0 4.0 4.0 4.0 4.0 4.0 Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2 Shareholders' Equity: Capital stock 1.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Additional paid in capital 7.8 45.2 78.7 81.5 81.5 81.5 81.5 81.5 81.5 Retained earnings (1.4) 3.1 11.4 23.0 37.9 55.4 79.6 111.9 154.9 Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------------------------------------------- Total shareholders' equity 7.6 48.3 90.1 104.6 119.5 137.1 161.2 193.5 236.5 Total Liabilities and Shareholders' Equity $ 44.0 $ 85.4 $129.2 $178.1 $235.8 $285.7 $337.0 $388.8 $442.3 ======================================================================================== Capital Ratios - - -------------- Total Debt/EBITDA 1.5x 1.7x 1.5x 1.2x 0.9x Debt/Equity 244.8% 11.3% 6.1 % 25.3% 49.6% 59.6% 58.3% 50.1% 37.6% Debt/Total Book Capital 71.0% 10.1% 5.7 % 20.2% 33.2% 37.3% 36.8% 33.4% 27.3% - - ----------------------------------------------------------------------------------------------------------------------- Projection 2
Page 3 of 10
- - ----------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Working Capital Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ------------------------------------------------------------------------------------ Historical Projected ------------------------------------------------------------------------------------ 1996 1997 1998 1999 2000 2001 2002 2003 2004 ------------------------------------------------------------------------------------ Sales $ 65.5 $ 86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9 Cost of goods sold 41.6 55.9 79.5 124.5 169.0 213.5 279.6 353.7 436.6 Ratios - - ------ Accounts receivable (Days outstanding) 57.9 66.4 52.2 61.1 61.1 61.1 61.1 61.1 61.1 Other receivables (Days outstanding) 2.2 2.8 3.6 3.3 3.3 3.3 3.3 3.3 3.3 Prepaid expenses/sales 3.1% 1.7% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% Accounts payable (Days outstanding) 100.2 109.9 81.9 80.6 80.6 80.6 80.6 80.6 80.6 Other current liabilities/COGS 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% WORKING CAPITAL Accounts receivable $ 10.5 $ 15.9 $ 17.9 $ 32.4 $ 44.4 $ 56.1 $ 73.4 $ 92.9 $114.7 Other receivables 0.4 0.7 1.2 1.7 1.5 1.9 2.5 3.2 4.0 Prepaid expenses 2.1 1.4 1.3 1.6 2.2 2.8 3.7 4.7 5.8 ------------------------------------------------------------------------------------ CURRENT ASSETS $ 13.0 $ 18.0 $ 20.4 $ 35.8 $ 48.2 $ 60.8 $ 79.7 $100.8 $124.4 Accounts payable $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8 Other current liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ------------------------------------------------------------------------------------ CURRENT LIABILITIES $ 11.6 $ 17.1 $ 18.1 $ 27.9 $ 37.8 $ 47.8 $ 62.6 $ 79.2 $ 97.8 Working capital $ 1.4 $ 1.0 $ 2.3 $ 7.9 $ 10.3 $ 13.0 $ 17.1 $ 21.6 $ 26.7 Cash from/(used in) working capital $ 0.5 ($1.3) ($5.6) ($2.4) ($2.7) ($4.0) ($4.5) ($5.1) Cash from/(used in): - - ------------------ Accounts receivable ($5.4) ($1.9) ($14.6) ($12.0) ($11.7) ($17.4) ($19.5) ($21.8) Other receivables (0.3) (0.6) (0.5) 0.2 (0.4) (0.6) (0.7) (0.8) Prepaid expenses 0.6 0.1 (0.3) (0.6) (0.6) (0.9) (1.0) (1.1) Accounts payable 5.5 1.0 9.8 10.0 10.0 14.8 16.6 18.6 Other current liabilities -- -- 0.0 0.0 0.0 0.0 0.0 0.0 -------------------------------------------------------------------------- Total $ 0.5 ($1.3) ($5.6) ($2.4) ($2.7) ($4.0) ($4.5) ($5.1) Deferred income taxes and other $ 2.2 $ 2.0 $ 1.5 $ 2.8 $ 2.8 $ 2.8 $ 2.8 $2.8 $2.8 Notes receivable 0.8 8.2 9.5 9.1 9.1 9.1 9.1 9.1 9.1 ------------------------------------------------------------------------------------ OTHER ASSETS $ 3.0 $ 10.1 $ 11.0 $ 11.9 $ 11.9 $ 11.9 $ 11.9 $11.9 $11.9 Deferred liabilities $ 0.1 $ 1.2 $ 0.4 $ 4.0 $ 4.0 $ 4.0 $ 4.0 $4.0 $4.0 Deferred revenue 6.2 13.4 15.1 15.2 15.2 15.2 15.2 15.2 15.2 ------------------------------------------------------------------------------------ OTHER LIABILITIES $ 6.3 $ 14.6 $ 15.5 $ 19.2 $ 19.2 $ 19.2 $ 19.2 $19.2 $19.2 Changes in Other Assets and Liabilities $ 1.1 $ 0.1 $ 2.8 $ 0.0 $ 0.0 $ 0.0 $0.0 $0.0 - - ----------------------------------------------------------------------------------------------------------------------- Projection 2
Page 4 of 10
- - ------------------------------------------------------------------------------------------------------------------------------------ Carey International, Inc. Depreciation Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ------------------------------------------------------------------------------- Historical Projected ------------------------------------------------------------------------------- 1996 1997 1998 1999 2000 2001 2002 2003 2004 ------------------------------------------------------------------------------- Sales $65.5 $86.4 $123.2 $191.1 $261.6 $330.5 $432.8 $547.5 $675.9 Capital expenditures/sales 4.7% 4.7% 3.6% 6.6% 5.1% 1.4% 0.5% 0.4% 0.3% - - ------------------------------------------------------------------------------------------------------------------------------------ Beginning gross fixed assets $37.1 $50.4 $55.1 $57.1 $59.1 Capital expenditures $3.1 $4.1 $4.5 $12.6 2.0 2.0 2.0 2.0 2.0 Software development 11.3 2.6 0.0 0.0 0.0 (Disposition and other charges) 0.0 0.0 0.0 0.0 0.0 --------------------------------------------- Ending gross fixed assets $50.4 $55.1 $57.1 $59.1 $61.1 Beginning accumulated depreciation $9.8 $15.3 $22.2 $29.5 $37.3 - - ------------------------------------------------------------------------------------------------------------------------------------ Beginning (FYE 1999) Implied Net PP&E $27.4 Useful Less: Land 0.0 Life ----- ---- PP&E depreciated $27.4 6.0 years $4.6 $4.6 $4.6 $4.6 $4.6 Total Capital Expenditures ------------ 2000 $2.0 6.0 years $0.2 $0.3 $0.3 $0.3 $0.3 2001 2.0 0.2 0.3 0.3 0.3 2002 2.0 0.2 0.3 0.3 2003 2.0 0.2 0.3 2004 2.0 0.2 Software Depreciation $11.3 7.0 years $0.8 $1.6 $1.6 $1.6 $1.6 2.6 0.2 0.4 0.4 0.4 --------------------------------------------- Total depreciation $2.5 $3.8 $5.5 $ 6.9 $7.4 $7.7 $8.1 As a % of net PP&E 19.1% 13.9% 15.7% 20.9% 26.8% 35.4% 51.1% Ending accumulated depreciation $6.0 $9.8 $15.3 $22.2 $29.5 $37.3 $45.3 Property and equipment, net $12.9 $27.4 $35.1 $32.9 $27.5 $21.8 $15.7 - - ------------------------------------------------------------------------------------------------------------------------------------
- - -------------------------------------------------------------------- Projection 2 Page 5 of 10
- - --------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Debt and Interest Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ---------------------------------------------------- Projected ---------------------------------------------------- 2000 2001 2002 2003 2004 ---------------------------------------------------- Free cash flow ($36.4) ($22.3) ($12.4) ($ 2.9) $ 8.1 Proceeds from/(repurchase of) equity 0.0 0.0 0.0 0.0 0.0 Dividends paid 0.0 0.0 0.0 0.0 0.0 Foreign currency translation 0.0 0.0 0.0 0.0 0.0 Beginning cash balance 8.6 5.0 5.0 5.0 5.0 Less: Minimum cash balance (5.0) (5.0) (5.0) (5.0) (5.0) ---------------------------------------------------- Total cash available for debt service ($32.8) ($22.3) ($12.4) ($ 2.9) $ 8.1 Beginning balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4 Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - capital leases 1.4 1.4 1.4 1.4 1.4 Discretionary borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - capital leases $ 1.4 $ 1.4 $ 1.4 $ 1.4 $ 1.4 Funds available for debt repayment ($32.8) ($22.3) ($12.4) ($ 2.9) $ 8.1 Beginning balance - term debt $25.1 $57.9 $80.2 $92.6 $ 95.5 Mandatory borrowings/(repayment) 0.0 0.0 0.0 0.0 0.0 ---------------------------------------------------- Ending balance - term debt 25.1 57.9 80.2 92.6 95.5 Discretionary borrowings/(repayment) 32.8 22.3 12.4 2.9 (8.1) ---------------------------------------------------- Ending balance - term debt $57.9 $80.2 $92.6 $95.5 $ 87.4 Cash available after all repayments $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Plus: Minimum cash balance 5.0 5.0 5.0 5.0 5.0 ---------------------------------------------------- Ending cash balance $ 5.0 $ 5.0 $ 5.0 $ 5.0 $ 5.0 - - --------------------------------------------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------------------------------------- Average Balance Outstanding Term debt $41.5 $69.0 $86.4 $94.0 $ 91.5 Capital Leases 1.4 1.4 1.4 1.4 1.4 Cash and cash equivalents 6.8 5.0 5.0 5.0 5.0 Interest Expense Term debt 8.50% $ 3.5 $ 5.9 $ 7.3 $ 8.0 $ 7.8 Capital Leases 6.00% 0.1 0.1 0.1 0.1 0.1 Cash and cash equivalents 3.00% (0.2) (0.2) (0.2) (0.2) (0.2) ---------------------------------------------------- Total interest expense/(income) $ 3.4 $ 5.8 $ 7.3 $ 7.9 $ 7.7 - - --------------------------------------------------------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------------------------------------------- Projection 2
Page 6 of 10 Carey International, Inc. 12% Internal Growth Rate, $60.0 Shareholders' Equity and Investment Million Acquired Revenue Schedule ($ in millions, except where noted)
Year ending November 30, ----------------------------------------------------------------------- Actual Projected ----------------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 ----------------------------------------------------------------------- SHAREHOLDERS' EQUITY Capital stock Beginning balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1 Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.1 Additional paid in capital Beginning balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5 Proceeds from shares issued/(purchased) 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 81.5 $ 81.5 $ 81.5 $ 81.5 $ 81.5 Foreign currency translation adjustments Beginning balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Foreign currency translation adjustments 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 Retained earnings Beginning balance $ 23.0 $ 37.9 $ 55.4 $ 79.6 $111.9 Net income/(loss) 14.9 17.6 24.1 32.4 42.9 Dividends 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------- Ending balance $ 37.9 $ 55.4 $ 79.6 $111.9 $154.9 - - ------------------------------------------------------------------------------------------------------------------------------ Shares outstanding Beginning balance Shares issued/(purchased) Ending balance Annual dividend per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Total dividends paid $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 - - ------------------------------------------------------------------------------------------------------------------------------
____________________________________________________________________Projection 2 Page 7 of 10 - - -------------------------------------------------------------------------------- Carey International, Inc. Amortization Schedule 12% Internal Growth Rate, ($ in millions, except where noted) $60.0 Million Acquired Revenue
Year ending November 30, -------------------------------------------------------------- Actual Projected -------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 -------------------------------------------------------------- Sales $191.1 $261.6 $330.5 $432.8 $547.5 $675.9 Additions to intangibles/sales 0.0% 17.2% 0.0% 0.0% 0.0% 0.0% - - ------------------------------------------------------------------------------------------------------------------------------------ Beginning intangibles $104.3 $149.3 $149.3 $149.3 $149.3 Additions to intangibles 45.0 0.0 0.0 0.0 0.0 (Disposition and other charges) 0.0 0.0 0.0 0.0 0.0 --------------------------------------------------- Ending goodwill $149.3 $149.3 $149.3 $149.3 $149.3 Beginning accumulated amortization $ 6.5 $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 - - ------------------------------------------------------------------------------------------------------------------------------------
Implied Amortization Period ------ 1999 Beginning net intangibles $94.5 30.0 years $ 3.1 $ 3.1 $ 3.1 $ 3.1 $ 3.1 Additions 2000 $45.0 30.0 years $ 0.8 $ 1.5 $ 1.5 $ 1.5 $ 1.5 2001 0.0 0.0 0.0 0.0 0.0 2002 0.0 0.0 0.0 0.0 2003 0.0 0.0 0.0 2004 0.0 0.0 Total amortization $ 3.3 $ 3.9 $ 4.6 $ 4.6 $ 4.6 $ 4.6 As a % of net goodwill 3.5% 2.9% 3.6% 3.7% 3.8% 4.0% Ending accumulated amortization $ 9.8 $ 13.7 $ 18.3 $ 23.0 $ 27.6 $ 32.3 Goodwill, net $ 94.5 $135.6 $130.9 $126.3 $121.6 $117.0 - - ------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------- Projection 2 Page 8 of 10
- - ---------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. Revenue Growth Schedule 12% Internal Growth Rate, $60.0 Million Acquired Revenue ($ in millions, except where noted) Year ending November 30, ----------------------------------------------------------------------- Actual Budgeted Projected ----------------------------------------------------------------------- 1999 2000 2001 2002 2003 2004 ----------------------------------------------------------------------- Acquired revenue 2000 Base Sales $261.6 $293.0 $328.1 $367.5 $411.6 2001 Acquired Sales 37.5 67.2 75.3 84.3 2002 Acquired Sales 37.5 67.2 75.3 2003 Acquired Sales 37.5 67.2 2004 Acquired Sales 37.5 ----------------------------------------------------------------------- $ 0.0 $261.6 $330.5 $432.8 $547.5 $675.9
Target Revenue Prototype Year ------------------------------------------------------------ Quarterly breakdown of acquired revenue Run Rate Q1 Q2 Q3 Q4 Annual -------- -- -- -- -- ------ 1st Quarter Acquisitions $15.0 $ 3.8 $ 3.8 $ 3.8 $ 3.8 $ 15.0 2nd Quarter Acquisitions 15.0 3.8 3.8 3.8 11.3 3rd Quarter Acquisitions 15.0 3.8 3.8 7.5 4th Quarter Acquisitions 15.0 3.8 3.8 ----------------------------------------------------------------------- $60.0 $ 3.8 $ 7.5 $ 11.3 $ 15.0 $ 37.5
Year ending November 30, ------------------------------------------------------------- Budgeted ------------------------------------------------------------- 2000 2001 2002 2003 2004 ------------------------------------------------------------- New acquisition goodwill 2001 Acquired Sales $ 0.9 $ 1.5 $ 1.5 $ 1.5 2002 Acquired Sales 0.9 1.5 1.5 2003 Acquired Sales 0.9 1.5 2004 Acquired Sales 0.9 ------------------------------------------------------------- Annual amortization $ 0.0 $ 0.9 $ 2.4 $ 3.9 $ 4.5
Purchase Price by Prototype Year ------------------------------------------------------------ Quarterly breakdown of new acquisition goodwill Quarter Q1 Q2 Q3 Q4 Annual ------- -- -- -- -- ------ 1st Quarter Acquisitions $11.3 $ 0.1 $ 0.1 $ 0.1 $ 0.1 $ 0.4 2nd Quarter Acquisitions 11.3 0.1 0.1 0.1 0.3 3rd Quarter Acquisitions 11.3 0.1 0.1 0.2 4th Quarter Acquisitions 11.3 0.1 0.1 ----------------------------------------------------------------------- Total amortization $45.0 $ 0.1 $ 0.2 $ 0.3 $ 0.4 $ 0.9 Purchase price as a % of revenue 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% - - --------------------------------------------------------------------------------------------------------------- Projection 2
Page 9 of 10
- - -------------------------------------------------------------------------------------------------------------------------------- Carey International, Inc. 12% Internal Growth Rate, $60.0 Million Acquired Revenue Identified Acquisition Adjustments ----------------------------------------- Consideration for Identified Acquisitions Cash $0.0 Stock 0.0 Actual Pro Forma ------ Total $0.0 11/30/1999 Adjustments 11/30/1999 ----------------------------------------- ---------- ----------- ---------- ASSETS $ 8.6 $ 8.6 Cash and cash equivalents 32.4 32.4 Accounts receivable, net of allowances 1.7 1.7 Other receivables 1.6 1.6 ------- ------- Prepaid expenses and other 44.4 44.4 Total current assets Property and equipment, net 27.4 $ 0.0 27.4 Existing intangibles, net 94.5 0.0 94.5 New acquired goodwill 0.0 0.0 Deferred income taxes and other 2.8 0.0 2.8 Notes receivable 9.1 9.1 -------- Total Assets $ 178.1 $ 0.0 $ 178.1 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 27.9 $ 27.9 Other current liabilities 0.0 0.0 ------- ------- Total current liabilities 27.9 27.9 Term debt 25.1 $ 0.0 25.1 Capital leases 1.4 1.4 Deferred liabilities 4.0 4.0 Deferred revenue 15.2 15.2 Shareholders' Equity: Capital stock 0.1 0.1 Additional paid in capital 81.5 0.0 81.5 Retained earnings 23.0 23.0 Foreign currency translation adjustments 0.0 0.0 ------- -------- Total shareholders' equity 104.6 104.6 --------- Total Liabilities and Shareholders' Equity $ 178.1 $ 0.0 $ 178.1 ======= ======== Shares Outstanding 10,200 0 10,200 - - --------------------------------------------------------------------------------------------------------------------------------
Page 10 of 10 Projection 2 EX-99.C.4 13 0013.txt EXHIBIT (C)(4) Exhibit (c)(4) - - -------------------------------------------------------------------------------- CAREY International Inc. Presentation to the Independent Committee of the Board of Directors July 11, 2000 Friedman, Billings, Ramsey & Co., Inc. [LOGO] - - -------------------------------------------------------------------------------- Scope of Engagement Analysis Methodology included: - - - Comparable company analyses - public travel companies and consolidators - - - Merger and acquisition transactions - travel and business services companies and consolidators - - - Premiums paid analysis - - - Discounted cash flow analysis - - - Leveraged buyout analysis Friedman Billings Ramsey [LOGO] Executive Summary 7 Friedman Billings Ramsey [LOGO] Transaction Valuation and Multiples Price/Share $ 19.00 $ 18.25 $ 18.00 # shares outstanding 9.7 9.7 9.7 ----------- ---------- --------- Market Cap. $ 185.1 $ 177.8 $ 175.3 Purchase warrants/options, net 15.6 14.0 13.5 ----------- ---------- --------- 200.7 191.8 188.8 Total Debt and CLO 41.4 41.4 41.4 ----------- ---------- --------- Total transaction value $ 242.1 $ 233.2 $ 230.2 =========== ========== =========
Historical Results ------------------------------- Operating results FY 1999 LTM 5/31/00 - - --------------------------- ------------------------------- Revenue $ 191.1 $ 224.1 EBITDA 28.0 30.3 EBIT 21.0 22.7 Net Income $ 11.8 $ 12.2
@$19.00 @$18.25 @$18.00 ----------------------------- --------------------------- ------------------------- Transaction multiples FY 1999 LTM 5/31/00 FY 1999 LTM 5/31/00 FY 1999 LTM 5/31/00 - - --------------------------- ----------------------------- --------------------------- ------------------------- Revenue 1.3x 1.1x 1.2x 1.0x 1.2x 1.0x EBITDA 8.6x 8.0x 8.3x 7.7x 8.2x 7.6x EBIT 11.5x 10.6x 11.1x 10.3x 11.0x 10.1x P/E 17.0x 16.4x 16.3x 15.7x 16.0x 15.4x
Friedman Billings Ramsey [LOGO] Comparable Company Analysis >> Few direct comparables to Carey >> Many public comparable companies have illiquid stocks below $5.00 / share leading to questionable valuation multiples >> Two groups of public comparables: . Travel Services/Transportation . Consolidators Friedman Billings Ramsey [LOGO] Comparable Company Analysis Travel Services/Transportation Companies (in millions)
Price on 52 Weeks Market -------- Company Name Business 7/8/00 High Low Capitalization - - -------------------------------------------------------------------------------------------------------------------------- Over $1 billion Laidlaw Inc. Transportation services $ 0.50 $ 7.94 $ 0.31 $ 165.1 Sabre Holdings Corp. Diversified travel services 25.88 66.80 25.56 3,339.5 Galileo International, Inc. Diversified travel services 20.13 58.69 16.50 1,840.2 - - -------------------------------------------------------------------------------------------------------------------------- Under $500 million Rural Metro Diversified health + safety services 1.88 10.00 1.13 27.4 Navigant International Inc. Corporate travel mgmt 11.00 12.50 5.94 144.1 Miller Industries Towing services 1.94 5.94 1.44 90.5 Kroll O Gara Co Armored car / Security services 6.44 27.75 4.38 143.3 United Road Services Inc Towing and transportation services 3.50 58.44 0.50 6.2 Mercury Air Group Inc. Aviation services 5.00 9.63 4.63 32.4 Global Vacation Group Inc. Diversified travel services 2.81 6.38 2.44 40.5 Carey International $ 14.06 $ 27.00 $ 6.50 $ 137.0 LTM ------------------------------------------ Enterprise Company Name Business Value (Ent. V) Revenue EBITDA EBIT Net Income - - ---------------------------------------------------------------------------------- ------------------------------------------ Over $ 1 billion Laidlaw Inc. Transportation services $ 3,519.4 $ 2,785.3 $ 473.2 $ 237.9 $ 104.1 Sabre Holdings Corp. Diversified travel services 3,478.9 2,441.4 619.9 363.0 304.8 Galileo International, Inc. Diversified travel services 2,483.9 1,562.8 460.0 291.4 187.6 - - ------------------------------------------------------------------------------------------------------------------------------ Under $500 million Rural Metro Diversified health + safety services 327.1 574.8 (22.1) (55.9) (52.3) Navigant International Inc. Corporate travel mgmt 269.6 247.9 39.9 29.6 12.7 Miller Industries Towing services 215.0 570.7 25.0 7.3 (3.4) Kroll O Gara Co Armored car / Security services 200.7 315.3 18.5 3.0 (3.9) United Road Services Inc Towing and transportation services 132.8 261.1 (12.5) (29.6) (34.6) Mercury Air Group Inc. Aviation services 100.4 309.9 22.0 12.2 4.1 Global Vacation Group Inc. Diversified travel services 24.2 130.6 0.4 (6.4) (4.6) Carey International $ 167.7 $ 224.1 $ 30.3 $ 22.7 $ 12.2
Comparable Company Analysis Travel Services/Transportation Companies
Margins LTM ---------------------------- -------------------------------------------------------------------- Ent. V / Ent. V / Ent. V / Market Cap / Debt / Company Name EBITDA EBIT Net Income Revenue EBITDA /(1)/ EBIT /(1)/ Net Income /(1)/ EBITDA - - --------------------------- ---------------------------- -------------------------------------------------------------------- Over $1 billion Laidlaw Inc. 17.0% 8.5% 3.7% 1.3x 7.4x 14.8x 1.6x(1) 7.2x Sabre Holdings Corp. 25.4% 14.9% 12.5% 1.4x 5.6x 9.6x 11.0x 0.6x Galileo International, Inc. 29.4% 18.6% 12.0% 1.6x 5.4x 8.5x 9.8x 1.5x - - ---------------------------------------------------------------------------------------------------------------------------------- Under $500 million Rural Metro NM NM NM 0.6x NM NM NM NM Navigant International Inc. 16.1% 11.9% 5.1% 1.1x 6.8x 9.1x 11.3x 3.2x Miller Industries 4.4% 1.3% NM 0.4x 8.6x 29.4x(1) NM 5.4x Kroll O Gara Co 5.9% 1.0% NM 0.6x 10.9x 66.9x(1) NM 2.0x United Road Services Inc NM NM NM 0.5x NM NM NM NM Mercury Air Group Inc. 7.1% 3.9% 1.3% 0.3x 4.6x 8.2x 8.0x 2.1x Global Vacation Group Inc. 0.3% NM NM 0.2x 68.3x(1) NM NM 82.9x Multiples - Over $1 billion - - ----------------------------------------------------------------------------------------- Average 23.9% 14.0% 9.4% 1.4x 6.1x 11.0x 10.4x Median 25.4% 14.9% 12.0% 1.4x 5.6x 9.6x 10.4x - - ----------------------------------------------------------------------------------------- Multiples - $500 million - $1 billion - - ----------------------------------------------------------------------------------------- Average NA NA NA NA NA NA NA Median NA NA NA NA NA NA NA - - ----------------------------------------------------------------------------------------- Multiples - Under $500 million - - ----------------------------------------------------------------------------------------- Average 6.7% 4.5% 3.2% 0.5x 7.7x 8.7x 9.6x Median 5.9% 2.6% 3.2% 0.5x 7.7x 8.7x 9.6x - - ----------------------------------------------------------------------------------------- Multiples - All - - ----------------------------------------------------------------------------------------- Average 13.2% 8.6% 6.9% 0.8x 7.0x 10.0x 10.0x Median 11.6% 8.5% 5.1% 0.6x 6.8x 9.1x 10.4x - - ----------------------------------------------------------------------------------------- Carey International /(2)/ 13.5% 10.1% 5.5% 0.6x 4.8x 6.4x 9.4x 1.3x Company Name Comments - - --------------------------- ------------------------------------------ Over $1 billion Laidlaw Inc. Safety Kleen in bankruptcy Sabre Holdings Corp. Galileo International, Inc. Negative operating results - - ----------------------------------------------------------------------------- Under $500 million Rural Metro Negative operating results Navigant International Inc. Miller Industries Declining operating results Kroll O Gara Co Aborted sale; Negative operating results United Road Services Inc Negative operating results Mercury Air Group Inc. Global Vacation Group Inc. Negative operating results
(1) Shaded values omitted from average and median calculations. (2) Trading multiples at current stock price. Friedman Billings Ramsey [LOGO] Comparable Company Analysis Travel Services/Transportation Companies - Implied Valuation for Carey (in millions) Multiples - Over $1 billion
Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ----------------------- ----------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median ----------------------- ----------------------- ---------------------- ---------------------- Multiple 1.4x 1.4x 6.1x 5.6x 11.0x 9.6x 10.4x 10.4x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 ----------------------- ----------------------- ---------------------- ---------------------- Implied Ent. Value 313.8 313.8 184.7 169.5 250.2 218.4 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - ----------------------- ----------------------- ---------------------- ---------------------- Implied Equity Value $ 283.1 $ 283.1 154.0 138.9 219.5 187.7 127.3 127.3 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 ----------------------- ----------------------- ---------------------- ---------------------- Implied Share Price $ 29.06 $ 29.06 $ 15.81 $ 14.26 $ 22.54 $ 19.27 $ 13.07 $ 13.07
Multiples - $500 million - $1 billion
Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ----------------------- ----------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median ----------------------- ----------------------- ---------------------- ---------------------- Multiple 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x 0.0x Carey Value $ - $ - $ - $ - $ - $ - $ - $ - ----------------------- ----------------------- ---------------------- ---------------------- Implied Ent. Value - - - - - - - - Less: Debt - - - - - - - - Plus: Cash - - - - - - - - ----------------------- ----------------------- ---------------------- ---------------------- Implied Equity Value $ - $ - - - - - - - # of Shares - - - - - - - - ----------------------- ----------------------- ---------------------- ---------------------- Implied Share Price $ - $ - $ - $ - $ - $ - $ - $ -
Friedman Billings Ramsey [LOGO] Comparable Company Analysis Travel Services/Transportation Companies - Implied Valuation for Carey (in millions) Multiples - Under $500 million
Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income --------------------- ----------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median --------------------- ----------------------- ---------------------- ---------------------- Multiple 0.5x 0.5x 7.7x 7.7x 8.7x 8.7x 9.6x 9.6x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 --------------------- ----------------------- ---------------------- ---------------------- Implied Ent. Value 112.1 112.1 233.1 233.1 197.9 197.9 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - --------------------- ----------------------- ---------------------- ---------------------- Implied Equity Value $ 81.4 $ 81.4 202.4 202.4 167.2 167.2 117.5 117.5 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 --------------------- ----------------------- ---------------------- ---------------------- Implied Share Price $ 8.36 $ 8.36 $ 20.78 $ 20.78 $ 17.17 $ 17.17 $ 12.06 $ 12.06
Multiples - All
Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income --------------------- ----------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median --------------------- ----------------------- ---------------------- ---------------------- Multiple 0.8x 0.6x 7.0x 6.8x 10.0x 9.1x 10.0x 10.4x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 --------------------- ----------------------- ---------------------- ---------------------- Implied Ent. Value 179.3 134.5 211.9 205.9 227.5 207.0 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - --------------------- ----------------------- ---------------------- ---------------------- Implied Equity Value $ 148.6 $ 103.8 181.3 175.2 196.8 176.3 122.4 127.3 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 --------------------- ----------------------- ---------------------- ---------------------- Implied Share Price $ 15.26 $ 10.66 $ 18.61 $ 17.99 $ 20.20 $ 18.10 $ 12.56 $ 13.07
Friedman Billings Ramsey [LOGO] Comparable Company Analysis Consolidators (in millions)
Price on 52 Week Market Enterprise ------- Company Name Business 7/8/00 High Low Capitalization Value (Ent. V) - - ------------------------------------------------------------------------------------------------------------------------------------ Over $1 billion Waste Management Inc. Waste mgmt $ 19.19 $ 56.00 $ 13.00 $11,917.1 $ 22,883.0 Republic Services Inc. Waste mgmt 16.88 25.50 8.88 2,962.0 4,155.9 United Rentals Inc. Equipment rental 18.00 31.00 13.00 1,297.2 4,052.0 Encompass Services Corp. Diversified maintenance services 5.56 14.44 4.63 350.2 1,512.8 - - ----------------------------------------------------------------------------------------------------------------------------------- $500 million - $1 billion NCO Group Inc Accounts receivable mgmt services 24.44 54.88 17.25 625.8 915.2 Pantry Inc Gas and convenience store 9.25 18.69 7.00 167.5 630.9 FYI Inc. Info document mgmt services 34.00 35.75 24.25 510.8 625.9 - - ----------------------------------------------------------------------------------------------------------------------------------- Under $500 million Integ. Elec. Serv. Inc. Diversifed electrical and data services 5.50 18.88 4.25 207.5 461.1 Comfort Systems USA Inc Diversified heat, AC, repair services 3.75 18.63 3.75 140.7 385.0 Consolidated Graphics Inc Printing services 9.50 50.13 8.50 135.3 376.1 Lason Inc. Integrated info mgmt services 2.53 50.50 2.25 49.3 180.4 Precept Bus. Serv. Inc. Printed business document distributor 1.53 7.88 1.00 15.6 43.3 Carey International $ 14.06 $ 27.00 $ 6.50 $ 137.0 $ 167.7 LTM ---------------------------------------------- Company Name Business Revenue EBITDA EBIT Net Income - - ----------------------------------------------------------------------------------------------------------------------- Over $1 billion Waste Management Inc. Waste mgmt $13,273.6 $1,701.9 $ 93.7 $ (686.7) Republic Services Inc. Waste mgmt 1,932.4 553.8 412.9 207.6 United Rentals Inc. Equipment rental 2,420.3 801.9 437.0 143.9 Encompass Services Corp. Diversified maintenance services 1,875.5 129.0 96.7 25.3 - - ----------------------------------------------------------------------------------------------------------------------- $500 million - $1 billion NCO Group Inc Accounts receivable mgmt services 546.8 113.8 87.0 38.4 Pantry Inc Gas and convenience store 2,128.0 241.5 189.2 168.9 FYI Inc. Info document mgmt services 391.0 64.2 48.5 25.9 - - ----------------------------------------------------------------------------------------------------------------------- Under $500 million Integ. Elec. Serv. Inc. Diversifed electrical and data services 1,328.0 86.2 75.0 29.4 Comfort Systems USA Inc Diversified heat, AC, repair services 1,440.7 114.4 90.5 39.8 Consolidated Graphics Inc Printing services 586.4 107.2 77.5 39.9 Lason Inc. Integrated info mgmt services 521.6 27.2 (13.5) (22.1) Precept Bus. Serv. Inc. Printed business document distributor 167.0 5.3 1.0 (4.9) Carey International $ 224.1 $ 30.3 $ 22.7 $ 12.2
Friedman Billings Ramsey [LOGO] Comparable Company Analysis Consolidators
Margins LTM -------------------------- ------------------------------------------- Ent. V/ Ent. V/ Ent. V/ Market Cap/ Debt/ Company Name EBITDA EBIT Net Income Revenue EBITDA EBIT (1) Net Income EBITDA Comments - - ------------------------------------------------------------------------------------------------- ------ ------------------------- Over $1 billion Waste Management Inc. 12.8% 0.7% NM 1.7x 13.4x 244.3x(1) NM 6.5x Republic Services Inc. 28.7% 21.4% 10.7% 2.2x 7.5x 10.1x 14.3x 2.2x United Rentals Inc. 33.1% 18.1% 5.9% 1.7x 5.1x 9.3x 9.0x 3.5x Encompass Services Corp. 6.9% 5.2% 1.3% 0.8x 11.7x 15.7x 13.8x 9.1x - - ----------------------------------------------------------------------------------------------------------------------------------- $500 million - $1 billion NCO Group Inc 20.8% 15.9% 7.0% 1.7x 8.0x 10.5x 16.3x 2.9x Pantry Inc 11.3% 8.9% 7.9% 0.3x 2.6x 3.3x 1.0x 2.2x Negative operating results FYI Inc. 16.4% 12.4% 6.6% 1.6x 9.7x 12.9x 19.7x 2.0x Beat IQ street estimates - - ----------------------------------------------------------------------------------------------------------------------------------- Under $500 million Integ. Elec. Serv. Inc. 6.5% 5.6% 2.2% 0.3x 5.3x 6.1x 7.1x 3.0x Comfort Systems USA Inc 7.9% 6.3% 2.8% 0.3x 3.4x 4.3x 3.5x 2.2x Consolidated Graphics Inc 18.3% 13.2% 6.8% 0.6x 3.5x 4.9x 3.4x 2.3x Lason Inc. 5.2% NM NM 0.3x 6.6x NM NM 11.9x Negative operating results Precept Bus. Serv. Inc. 3.2% 0.6% NM 0.3x 8.2x 41.5x(1) NM 9.0x Negative operating results Multiples - Over $1 billion - - ----------------------------------------------------------------------------------------------- Average 20.4% 11.3% 6.0% 1.6x 9.4x 11.7x 12.4x Median 20.7% 11.6% 5.9% 1.7x 9.6x 10.1x 13.8x - - ----------------------------------------------------------------------------------------------- Multiples - Between $500 million - $1 billion - - ----------------------------------------------------------------------------------------------- Average 16.2% 12.4% 7.2% 1.2x 6.8x 8.9x 12.3x Median 16.4% 12.4% 7.0% 1.6x 8.0x 10.5x 16.3x - - ----------------------------------------------------------------------------------------------- Multiples - Under $500 million - - ----------------------------------------------------------------------------------------------- Average 8.2% 6.4% 3.9% 0.4x 5.4x 5.1x 4.7x Median 6.5% 6.0% 2.8% 0.3x 5.3x 4.9x 3.5x - - ----------------------------------------------------------------------------------------------- Multiples - All - - ----------------------------------------------------------------------------------------------- Average 14.3% 9.8% 5.7% 1.0x 7.1x 8.6x 9.8x Median 12.1% 8.9% 6.6% 0.7x 7.1x 9.3x 9.0x - - ----------------------------------------------------------------------------------------------- Carey International /(2)/ 13.5% 10.1% 5.5% 0.7x 5.5x 6.2x 11.2x 1.3x
(1) Shaded values omitted from average and median calculations. (2) Trading multiples at current stock price. Friedman Billing Ramsey [LOGO] Comparable Company Analysis Consolidators - Implied Valuation for Carey (in millions)
Multiples - Over $1 billion Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income -------------------- ------------------- -------------------- ------------------- Average Median Average Median Average Median Average Median -------------------- ------------------- -------------------- ------------------- Multiple 1.6x 1.7x 9.4x 9.6x 11.7x 10.1x 12.4x 13.8x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 -------- -------- ------- -------- ------- -------- ------- --------- Implied Enterprise Value 358.6 381.0 284.6 290.7 266.1 229.7 - - Less : Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - -------- -------- ------- -------- ------- -------- ------- --------- Implied Equity Value $ 327.9 $ 350.4 253.9 260.0 235.5 199.1 151.8 168.9 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 -------- -------- ------- -------- ------- -------- ------- --------- Implied Share Price $ 33.67 $ 35.97 $ 26.07 $ 26.69 $ 24.17 $ 20.43 $ 15.58 $ 17.34 Multiples - $500 million - $1 billion Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income -------------------- ------------------- -------------------- ------------------- Average Median Average Median Average Median Average Median -------------------- ------------------- -------------------- ------------------- Multiple 1.2x 1.6x 6.8x 8.0x 8.9x 10.5x 12.3x 16.3x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 -------- -------- ------- -------- ------- -------- ------- --------- Implied Enterprise Value 269.0 358.6 205.9 242.2 202.4 238.8 - - Less : Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - -------- -------- ------- -------- ------- -------- ------- --------- Implied Equity Value $ 238.3 $ 327.9 175.2 211.5 171.8 208.2 150.5 199.5 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 -------- -------- ------- -------- ------- -------- ------- --------- Implied Share Price $ 24.46 $ 33.67 $ 17.99 $ 21.71 $ 17.63 $ 21.37 $ 15.45 $ 20.48
Friedman Billings Ramsey [LOGO] Comparable Company Analysis Consolidators - Implied Valuation for Carey (in millions)
Multiples - Under $500 million Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income --------------------- ---------------------- --------------------- ---------------------- Average Median Average Median Average Median Average Median --------------------- ---------------------- --------------------- ---------------------- Multiple 0.4x 0.3x 5.4x 5.3x 5.1x 4.9x 4.7x 3.5x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 --------------------- ---------------------- --------------------- ---------------------- Implied Enterprise Value 89.7 67.2 163.5 160.5 116.0 111.5 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - --------------------- ---------------------- --------------------- ---------------------- Implied Equity Value $ 59.0 $ 36.6 132.8 129.8 85.3 80.8 57.5 42.8 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 --------------------- ---------------------- --------------------- ---------------------- Implied Share Price $ 6.05 $ 3.75 $ 13.63 $ 13.32 $ 8.76 $ 8.29 $ 5.90 $ 4.40 Multiples - All Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income --------------------- ---------------------- ---------------------- ------------------------ Average Median Average Median Average Median Average Median --------------------- ---------------------- ---------------------- ------------------------ Multiple 1.0x 0.7x 7.1x 7.1x 8.6x 9.3x 9.8x 9.0x Carey Value $ 224.1 $224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 --------------------- ----------------------- ---------------------- ------------------------ Implied Enterprise Value 224.1 156.9 215.0 215.0 195.6 211.5 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - --------------------- ----------------------- ---------------------- ------------------------ Implied Equity Value $ 193.5 $126.2 184.3 184.3 164.9 180.9 $ 119.9 110.1 # of Shares 9.7 9.7 9.7 9.7 9.7 9.7 9.7 9.7 --------------------- ----------------------- ---------------------- ------------------------ Implied Share Price $ 19.86 $ 12.96 $ 18.92 $ 18.92 $ 16.93 $ 18.57 $ 12.31 $ 11.31
Friedman Billings Ramsey [LOGO] Carey vs. Indices [GRAPH APPEARS HERE] GRAPH COMPARES CAREY'S STOCK VS. THE FOLLOWING INDICES: RUSSELL 3000; S & P SMALL-CAP; WILSHIRE 3000 SMALL-CAP; AND NASDAQ Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Comparable Travel/Transportation Cos. - - --Carey International Inc.'s Stock Price vs. Galileo International, Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Mercury Air Group, Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Galileo Vacation Group, Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Kroll-O'Gara Company's Stock Price [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Comparable Travel/Transportation Cos. - - --Carey International, Inc.'s Stock Price vs. Miller Industries, Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Navigant International Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Laidlaw Inc.'s Stock Price [GRAPH APPEARS HERE] - - --Carey International, Inc.'s Stock Price vs. Rural/Metro Corporation's Stock Price [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Comparable Travel/Transportation Cos. - - ---------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Sabre Inc.'s Stock Price - - ---------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. United Road Services, Inc.'s Stock Price - - ---------------------------------------------------------------------- [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Consolidators - - ---------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Comfort Systems USA, Inc.'s Stock Price - - ---------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ----------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Encompass Services Corporation's Stock Price - - ----------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Consolidated Graphics, Inc.'s Stock Price - - ---------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. F.Y.I. Incorporated's Stock Price - - ---------------------------------------------------------------------- [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Consolidators - - ---------------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Integrated Electrical Services, Inc.'s Stock Price - - ---------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. NCO Group, Inc.'s Stock Price - - ---------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Lason, Inc.'s Stock Price - - ---------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - ---------------------------------------------------------------------------- ----Carey International, Inc.'s Stock Price vs. Pantry, Inc.'s Stock Price - - ---------------------------------------------------------------------------- [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Stock Price - Carey vs. Consolidators - - -------------------------------------------------------------------------- ----Carey international, Inc.'s Stock Price vs. Precept Business Services, Inc.'s Stock Price - - -------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - -------------------------------------------------------------------------- ----Carey international, Inc.'s Stock Price vs. United Rentals, Inc.'s Stock Price - - -------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - -------------------------------------------------------------------------- ----Carey international, Inc.'s Stock Price vs. Republic Services, Inc.'s Stock Price - - -------------------------------------------------------------------------- [GRAPH APPEARS HERE] - - -------------------------------------------------------------------------- ----Carey international, Inc.'s Stock Price vs. Waste Management, Inc.'s Stock Price - - -------------------------------------------------------------------------- [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] P/E - Carey vs. Travel/Transportation Cos. - - --Carey International, Inc.'s P/E vs. Galileo Int'l's P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Kroll O Gara Co.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Global Vacation's P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Mercury Air Group's P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] P/E - Carey vs. Travel/Transportation Cos. - - --Carey International, Inc.'s P/E vs. Miller Industries' P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Rural Metro's P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Navigant Int'l's P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Sabre Holdings Corp.'s P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] P/E - Carey vs. Travel/Transportation Cos. - - --Carey International, Inc.'s P/E vs. United Road Services Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Laidlaw's P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] P/E - Carey vs. Consolidators - - --Carey International, Inc.'s P/E vs. Comfort Systems USA Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Encompass Services Corp.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Consolidated Graphics' P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. FYI Inc.'s P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] P/E - Carey vs. Consolidators - - --Carey International, Inc.'s P/E vs. Integ. Elec. Serv. Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. NCO Group Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Lason Inc.'s P/E [GRAPH APPEARS HERE] - - -- Carey International, Inc.'s P/E vs. Pantry Inc.'s P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] - - --Carey International, Inc.'s P/E vs. Precept Bus Serv Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. United Rentals Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Republic Services Inc.'s P/E [GRAPH APPEARS HERE] - - --Carey International, Inc.'s P/E vs. Waste Management, Inc. (WMI)'s P/E [GRAPH APPEARS HERE] Friedman Billings Ramsey [LOGO] Comparable Company Analysis Description of Comparable Companies [LOGO OF NCO GROUP] NCO Group provides accounts-receivable management and related teleservices, including telemarketing, customer-service call centers, and other outsourced administrative services from its more than 75 call centers in North America, Puerto Rico, and the UK. [LOGO OF THE PANTRY, INC.] The Pantry operates nearly 1,300 stores in fast-growing cities and resort areas in several states. The company's long list of store names includes The Pantry, Handy Way, Lil' Champ, Depot, Food Chief, Dash-N, ETNA, Express Stop, Quick Stop, Smokers Express, Sprint, Wicker Mart, and Zip Mart. [LOGO OF PRECEPT] Precept is a business services outsourcing supplier, offering single source solutions for automated document management, inventory control, and other e- commerce services. The company also operates various corporate transportation services, mainly town car and limousine service. [LOGO OF REPUBLIC] Republic provides waste disposal services for commercial, industrial, municipal, and residential customers through 131 collection companies in 26 states. The company also operates 48 landfills and 70 transfer stations. [LOGO OF UNITED RENTALS] United Rentals rents construction and industrial equipment, hand tools, traffic control equipment, and special-event items such as tents and light towers, and trench-safety equipment. It also sells new and used equipment, rental-related supplies, and parts, serving as a distributor for heavy-equipment makers. [LOGO OF WASTE MANAGEMENT] Waste Management serves municipal, business, and residential customers in the US, Canada, and Mexico. It has a network of landfills and collection operations, as well as waste transfer, disposal, and recycling services. Friedman Billings Ramsay [LOGO] 37 Comparable Transaction Analysis + Few targets with businesses similar to Carey + Most relevant business models . Coach USA . Greyhound . Percept - Transportation Services Division + Analysis includes . Travel companies . Transportation companies . Business services companies . Consolidators . Transactions after 1/1/98 Friedman Billings Ramsey [LOGO] Comparable Transaction Analysis Merger and Acquisition Analysis (in millions)
Date Date Announced Effective Status Acquiror Name Target Name Business Description - - ---------------------------------------------------------------------------------------------------------------------------- Over $1 billion 6/14/99 7/26/99 Completed Stagecoach Holdings PLC Coach USA, Inc. Motorcoach charter services 6/28/99 7/30/99 Completed Atlas Copco N.A. Inc. Rental Service Corp. Rental services 6/16/98 9/30/98 Completed United Rentals US Rentals Rental services - - ---------------------------------------------------------------------------------------------------------------------------- $500 million - $1 billion 10/16/98 3/16/99 Completed Laidlaw, Inc. Greyhound Lines, Inc. Bus transportation 3/17/00 Pending Pending Investor Group NEFF Corp. Construction equipment rental services 2/24/00 Pending Pending Investor Group Res-Care Educate populations with special needs - - ---------------------------------------------------------------------------------------------------------------------------- Under $500 million 1/14/00 1/21/00 Completed Wesco Financial CORT Business Services Furniture rental services Corporation 2/21/00 5/5/00 Completed Airtours, plc Travel Services Travel services International 9/2/98 12/10/98 Completed Rent-Way, Inc. Home Choice Holdings Furniture rental services 2/11/98 6/10/98 Completed Apollo Management MTL Inc. Tank truck carrier services 7/27/99 9/1/99 Completed MSAS Global Logistics Mark VII Inc. Transportation and logistics services 6/7/99 9/30/99 Completed Yellow Corp. Jevic Transportation Trucking services 1/14/00 Pending Pending Equity Residential Globe Business Business furniture rentals Properties Resources 11/26/97 2/25/98 Completed Investor Group Universal Hospital Provides medical equipment rental Services services 1/12/99 1/7/99 Completed Investor Group Intrenet Trucking company 3/24/00 6/1/00 Completed MeriStar Hotels & Bridgestreet Temporary executive housing Resorts Accomodations 12/24/98 3/4/99 Completed Investor Group COHR, Inc. Equipment rental services 5/19/00 Pending Pending Investor Group Precept Business Provides chauffeured corporate Services - Trans. Srvcs. Division Transportation Carey International @$19.00 Carey International @$18.25 Carey International @$18.00 LTM ----------------------------------------------------------------------- Market Enterprise Net Cap Value Revenue EBITDA EBIT Income - - ------------------------------------------------------------------------------------------------------------------- $ 1,197.5 $ 1,835.5 $ 855.2 $ 191.4 $ 131.2 $ 55.5 714.6 1,487.8 644.6 254.5 114.4 31.5 1,036.3 1,310.2 464.2 155.8 66.6 34.1 - - ------------------------------------------------------------------------------------------------------------------- 419.3 739.4 836.0 78.8 47.6 35.8 190.5 670.1 397.1 123.0 54.6 10.1 389.7 662.3 631.6 52.5 35.6 11.5 - - ------------------------------------------------------------------------------------------------------------------- 384.0 477.2 346.8 109.2 53.9 27.7 368.0 356.4 179.0 22.7 14.9 8.8 231.0 289.7 251.9 61.4 (16.0) (15.3) 196.3 250.4 286.0 38.4 21.1 10.5 225.8 211.6 736.9 19.5 17.3 10.2 154.5 193.7 237.1 33.4 17.8 9.6 62.9 131.3 158.2 25.7 12.9 4.9 89.2 122.7 60.7 22.7 6.8 1.9 46.6 73.2 258.2 11.1 6.7 2.7 24.0 35.0 96.9 6.0 3.0 1.3 33.0 20.8 102.7 (33.7) (35.5) (32.7) - 20.0 31.5 6.1 3.0 - $ 200.7 $ 242.1 $ 224.1 $ 30.3 $ 22.7 $ 12.2 191.8 233.2 188.8 230.2
Friedman Billings Ramsey [LOGO] Comparable Transaction Analysis Merger and Acquisition Analysis
Date Date Announced Effective Status Acquiror Name Target Name - - ------------------------------------------------------------------------------------------------------- Over $1 billion 6/14/99 7/26/99 Completed Stagecoach Holdings PLC Coach USA, Inc. 6/28/99 7/30/99 Completed Atlas Copco N.A. Inc. Rental Service Corp. 6/16/98 9/30/98 Completed United Rentals US Rentals - - ------------------------------------------------------------------------------------------------------- $500 million - $1 billion Greyhound Lines, Inc. 10/16/98 3/16/99 Completed Laidlaw, Inc. NEFF Corp. 3/17/00 Pending Pending Investor Group Res-Care 2/24/00 Pending Pending Investor Group - - ------------------------------------------------------------------------------------------------------- Under $500 million 1/14/00 1/21/00 Completed Wesco Financial Corporation CORT Business Services 2/21/00 5/5/00 Completed Airtours, plc Travel Services International 9/2/98 12/10/98 Completed Rent-Way, Inc. Home Choice Holdings 2/11/98 6/10/98 Completed Apollo Management MTL Inc. 7/27/99 9/1/99 Completed MSAS Global Logistics Mark VII Inc. 6/7/99 9/30/99 Completed Yellow Corp. Jevic Transportation 1/14/00 Pending Pending Equity Residential Properties Globe Business Resources 11/26/97 2/25/98 Completed Investor Group Universal Hospital Services 1/12/99 1/7/99 Completed Investor Group Intrenet 3/24/00 6/1/00 Completed MeriStar Hotels & Resorts Bridgestreet Accomodations 12/24/98 3/4/99 Completed Investor Group COHR, Inc. 5/19/00 Pending Pending Investor Group Precept Business Services - Trans. Srvcs. Division LTM Margins - - ------------------------------------------------------------------- EV/ EV/ EV/ EQ/ Debt/ Net Revenue EBITDA EBIT NI EBITDA EBITDA EBIT Income - - ------------------------------------------------------------------ 2.1x 9.6x 14.0x 21.6x 3.3x 22.4% 15.3% 6.5% 2.3x 5.8x 13.0x 22.7x 3.0x 39.5% 17.7% 4.9% 2.8x 8.4x 19.7x 30.4x 1.8x 33.6% 14.3% 7.3% - - ------------------------------------------------------------------ 0.9x 9.4x 15.5x 11.7x 4.1x 9.4% 5.7% 4.3% 1.7x 5.4x 12.3x 18.9x 3.9x 31.0% 13.7% 2.5% 1.0x 12.6x 18.6x 33.9x 5.2x 8.3% 5.6% 1.8% - - ------------------------------------------------------------------ 1.4x 4.4x 8.9x 13.9x 0.9x 31.5% 15.5% 8.0% 2.0x 15.7x 23.9x 41.9x NM 12.7% 8.3% 4.9% 1.2x 4.7x NM NM 1.0x 24.4% NM NM 0.9x 6.5x 11.9x 18.7x 1.4x 13.4% 7.4% 3.7% 0.3x 10.9x 12.2x 22.1x NM 2.6% 2.3% 1.4% 0.8x 5.8x 10.9x 16.1x 1.2x 14.1% 7.5% 4.0% 0.8x 5.1x 10.2x 12.8x 2.7x 16.2% 8.2% 3.1% 2.0x 5.4x 18.0x 46.9x 1.5x 37.4% 11.2% 3.1% 0.3x 6.6x 10.9x 17.3x 2.4x 4.3% 2.6% 1.0% 0.4x 5.8x 11.7x 18.5x 1.8x 6.2% 3.1% 1.3% 0.2x NM NM NM NM NM NM NM 0.6x 3.3x 6.8x NA NA NA NA NA
Multiples - Over $1 billion ------------------------------------------------------------------------------------------------- Average 2.4x 7.9x 15.6x 24.9x 2.7x 31.8% 15.8% 6.2% Median 2.3x 8.4x 14.0x 22.7x 3.0x 33.6% 15.3% 6.5% ------------------------------------------------------------------------------------------------- Multiples - $500 million - $1 billion ------------------------------------------------------------------------------------------------- Average 1.2x 9.1x 15.5x 21.5x 4.4x 16.2% 8.4% 2.9% Median 1.0x 9.4x 15.5x 18.9x 4.1x 9.4% 5.7% 2.5% ------------------------------------------------------------------------------------------------- Multiples - Under $500 million ------------------------------------------------------------------------------------------------- Average 0.9x 6.7x 12.5x 23.1x 1.6x 16.3% 7.4% 3.4% Median 0.8x 5.8x 11.3x 18.5x 1.4x 13.8% 7.5% 3.1% ------------------------------------------------------------------------------------------------- Multiples - All ------------------------------------------------------------------------------------------------- Average 1.2x 7.4x 13.6x 23.2x 2.4x 19.2% 9.2% 3.9% Median 1.0x 5.8x 12.3x 18.9x 2.1x 15.2% 8.2% 3.7% ------------------------------------------------------------------------------------------------- Carey International @ $19.00 1.1x 8.0x 10.6x 16.4x 0.9x 13.5% 10.1% 5.5% Carey International @ $18.25 1.0x 7.7x 10.3x 15.7x Carey International @ $18.00 1.0x 7.6x 10.1x 15.4x
Friedman Billings Ramsey [lOGO] Comparable Transaction Analysis Merger and Acquisition Analysis - Implied Valuation for Carey (in millions)
Multiples - Over $1 billion Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ------------------------ ----------------------- ----------------------- ---------------------- Average Median Average Median Average Median Average Median ------------------------ ----------------------- ----------------------- ---------------------- Multiple 2.4x 2.3x 7.9x 8.4x 15.6x 14.0x 24.9x 22.7x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 ------------------------ ----------------------- ----------------------- ---------------------- Implied Ent. Value 537.9 515.5 239.2 254.3 354.8 318.5 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - Plus: Cash From Exercise of Options/Warrants 24.4 24.4 24.4 24.4 24.4 24.4 - - ------------------------ ----------------------- ----------------------- ---------------------- Implied Equity Value $ 531.7 $ 509.2 232.9 248.0 348.6 312.2 304.7 277.8 # of Diluted Shares 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 ----------------------- ----------------------- ----------------------- ---------------------- Implied Share Price $ 44.17 $ 42.31 $ 19.35 $ 20.61 $ 28.96 $ 25.93 $ 25.32 $ 23.08 Multiples - $500 million - $1 billion Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ----------------------- ----------------------- ----------------------- ---------------------- Average Median Average Median Average Median Average Median ----------------------- ----------------------- ----------------------- ---------------------- Multiple 1.2x 1.0x 9.1x 9.4x 15.5x 15.5x 21.5x 18.9x Carey Value $ 224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 ----------------------- ----------------------- ----------------------- ---------------------- Implied Ent. Value 269.0 224.1 275.5 284.6 352.6 352.6 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - Plus: Cash From Exercise of Options/Warrants 24.4 24.4 24.4 24.4 24.4 24.4 - - ----------------------- ----------------------- ----------------------- ---------------------- Implied Equity Value $ 262.7 $ 217.9 269.2 278.3 346.3 346.3 263.1 231.3 # of Diluted Shares 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 ----------------------- ----------------------- ----------------------- ---------------------- Implied Share Price $ 21.82 $ 18.10 $ 22.37 $ 23.12 $ 28.77 $ 28.77 $ 21.86 $ 19.22
Friedman Billings Ramsey [LOGO] Comparable Transaction Analysis Merger and Acquisition Analysis - Implied Valuation for Carey (in millions)
Multiples - Under $500 million Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ---------------------- ---------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median ---------------------- ---------------------- ---------------------- ---------------------- Multiple 0.9x 0.8x 6.7x 5.8x 12.5x 11.3x 23.1x 18.5x Carey Value $224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 ---------------------- ---------------------- ---------------------- ---------------------- Implied Ent. Value 201.7 179.3 202.9 175.6 284.3 257.0 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - Plus: Cash From Exercise of Options/Warrants 24.4 24.4 24.4 24.4 24.4 24.4 - - ---------------------- ---------------------- ---------------------- ---------------------- Implied Equity Value $195.4 $ 173.0 196.6 169.3 278.1 250.8 282.7 226.4 # of Diluted Shares 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 ---------------------- ---------------------- ---------------------- ---------------------- Implied Share Price $16.24 $ 14.38 $ 16.33 $14.07 $ 23.10 $ 20.83 $ 23.49 $ 18.81
Multiples - All Enterprise Value / Enterprise Value / Enterprise Value / Market Capitalization / Revenue EBITDA EBIT Net Income ---------------------- ---------------------- ---------------------- ---------------------- Average Median Average Median Average Median Average Median ---------------------- ---------------------- ---------------------- ---------------------- Multiple 1.2x 1.0x 7.4x 5.8x 13.6x 12.3x 23.2x 18.9x Carey Value $224.1 $ 224.1 $ 30.3 $ 30.3 $ 22.7 $ 22.7 $ 12.2 $ 12.2 ---------------------- ---------------------- ---------------------- ---------------------- Implied Ent. Value 269.0 224.1 224.0 175.6 309.4 279.8 - - Less: Debt 41.4 41.4 41.4 41.4 41.4 41.4 - - Plus: Cash 10.7 10.7 10.7 10.7 10.7 10.7 - - Plus: Cash From Exercise of Options/Warrants 24.4 24.4 24.4 24.4 24.4 24.4 - - ---------------------- ---------------------- ---------------------- ---------------------- Implied Equity Value $262.7 $ 217.9 217.8 169.3 303.1 273.5 283.9 231.3 # of Diluted Shares 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 ---------------------- ---------------------- ---------------------- ---------------------- Implied Share Price $21.82 $ 18.10 $ 18.09 $14.07 $ 25.18 $ 22.72 $ 23.59 $ 19.22
Friedman Billings Ramsey [LOGO] Comparable Transaction Analysis Premiums Paid Analysis (in millions)
Date Date Announced Effective Status Acquiror Name Target Name - - ------------------------------------------------------------------------------------------------------------------ Over $1 billion 6/14/99 7/26/99 Completed Stagecoach Holdings PLC Coach USA, Inc. 6/28/99 7/30/99 Completed Atlas Copco N.A. Inc. Rental Service Corp. 6/16/98 9/30/98 Completed United Rentals US Rentals - - ------------------------------------------------------------------------------------------------------------------ $500 million - $1 billion 10/16/98 3/16/99 Completed Laidlaw, Inc. Greyhound Lines, Inc. 3/17/00 Pending Pending Investor Group NEFF Corp. 2/24/00 Pending Pending Investor Group Res-Care - - ------------------------------------------------------------------------------------------------------------------ Under $500 million 1/14/00 1/21/00 Completed Wesco Financial Corporation CORT Business Services 2/21/00 5/5/00 Completed Airtours, plc Travel Services International 9/2/98 12/10/98 Completed Rent-Way, Inc. Home Choice Holdings 2/11/98 6/10/98 Completed Apollo Management MTL Inc. 7/27/99 9/1/99 Completed MSAS Global Logistics Mark VII Inc. 6/7/99 9/30/99 Completed Yellow Corp. Jevic Transportation 1/14/00 Pending Pending Equity Residential Properties Globe Business Resources 11/26/97 2/25/98 Completed Investor Group Universal Hospital Services 1/12/99 1/7/99 Completed Investor Group Intrenet 3/24/00 6/1/00 Completed MeriStar Hotels & Resorts Bridgestreet Accomodations 12/24/98 3/4/99 Completed Investor Group COHR, Inc. 5/19/00 Pending Pending Investor Group Precept Business Services - Trans. Srvcs. Division Premium to Stock Price ------------------------------------- Business Description 1 Day 1 Week 4 Weeks - - ------------------------------------------------------------------------------------------------- Motorcoach charter services 8.7% 40.6% 62.7% Rental services 68.1% 74.4% 44.5% Rental services 5.1% 0.0% 1.6% - - ------------------------------------------------------------------------------------------------- Bus transportation 36.8% 79.3% 42.5% Construction equipment rental services 9.9% 34.6% 25.2% Educate populations with special needs 32.6% 24.8% 11.5% - - ------------------------------------------------------------------------------------------------- Furniture rental services 63.5% 66.5% 62.9% Travel services 46.5% 62.8% 86.5% Furniture rental services 72.0% 4.1% 7.7% Tank truck carrier services 37.9% 38.5% 56.1% Transportation and logistics services 23.5% 31.4% 37.4% Trucking services 30.2% 45.5% 51.4% Business furniture rentals 9.5% 8.3% -0.5% Provides medical equipment rental services 29.2% 29.2% 25.3% Trucking company -8.3% 5.8% 41.1% Temporary executive housing 54.8% 41.2% 50.0% Equipment rental services 66.4% 89.1% 116.7% Provides chauffeured corporate transportation
Over $1 billion --------------------------------------------------------------------- Average 27.3% 38.3% 36.3% Median 8.7% 40.6% 44.5% --------------------------------------------------------------------- $500 million - $1 billion --------------------------------------------------------------------- Average 26.4% 46.2% 26.4% Median 32.6% 34.6% 25.2% --------------------------------------------------------------------- Under $500 million --------------------------------------------------------------------- Average 38.7% 38.4% 48.6% Median 37.9% 38.5% 50.0% --------------------------------------------------------------------- All --------------------------------------------------------------------- Average 34.5% 39.8% 42.5% Median 32.6% 38.5% 42.5% --------------------------------------------------------------------- Carey International @ $19.00 35.1% 36.9% 112.6% Carey International @ $18.25 29.8% 31.5% 104.2% Carey International @ $18.00 28.0% 29.7% 101.4%
Friedman Billings Ramsey [LOGO] Comparable Transaction Analysis Premiums Paid Analysis - Implied Valuation for Carey (in millions)
Over $1 billion 1 Day Prior 1 Week Prior 4 Weeks Prior ------------------------------- ------------------------------- ------------------------------ Average Median Average Median Average Median ------------------------------- ------------------------------- ------------------------------ Premium 27.3% 8.7% 38.3% 40.6% 36.3% 44.5% Carey Stock Price $ 14.06 $ 14.06 $ 13.88 $ 13.88 $ 8.94 $ 8.94 ------------------------------- ------------------------------- ------------------------------ Implied Share Price $ 17.90 $ 15.29 $ 19.19 $ 19.51 $ 12.18 $ 12.91
$500 million - $1 billion 1 Day Prior 1 Week Prior 4 Weeks Prior ------------------------------- ------------------------------- ------------------------------ Average Median Average Median Average Median ------------------------------- ------------------------------- ------------------------------ Premium 26.4% 32.6% 46.2% 34.6% 26.4% 25.2% Carey Stock Price $ 14.06 $ 14.06 $ 13.88 $ 13.88 $ 8.94 $ 8.94 ------------------------------- ------------------------------- ------------------------------ Implied Share Price $ 17.78 $ 18.65 $ 20.29 $ 18.68 $ 11.30 $ 11.19
Under $500 million 1 Day Prior 1 Week Prior 4 Weeks Prior ------------------------------- ------------------------------- ------------------------------ Average Median Average Median Average Median ------------------------------- ------------------------------- ------------------------------ Premium 38.7% 37.9% 38.4% 38.5% 48.6% 50.0% Carey Stock Price $ 14.06 $ 14.06 $ 13.88 $ 13.88 $ 8.94 $ 8.94 ------------------------------- ------------------------------- ------------------------------ Implied Share Price $ 19.50 $ 19.39 $ 19.20 $ 19.22 $ 13.28 $ 13.41
All 1 Day Prior 1 Week Prior 4 Weeks Prior ------------------------------- ------------------------------- ------------------------------ Average Median Average Median Average Median ------------------------------- ------------------------------- ------------------------------ Premium 34.5% 32.6% 39.8% 38.5% 42.5% 42.5% Carey Stock Price $ 14.06 $ 14.06 $ 13.88 $ 13.88 $ 8.94 $ 8.94 ------------------------------- ------------------------------- ------------------------------ Implied Share Price $ 18.91 $ 18.65 $ 19.40 $ 19.22 $ 12.74 $ 12.74
Friedman Billings Ramsey [Logo] Discounted Cash Flow Analysis Discounted Cash Flow Analysis Management Projections Assumptions /(1)/ Base Case High Case ----------- ----------- Internal Growth Rate/Year 8% 12% Acquired Revenue/Year $40 MM $60 MM Purchase Consideration 100% cash 100% cash /(1)/ Management Projections dated June 21, 2000 Friedman Billings Ramsey [LOGO] 47 Discounted Cash Flow Analysis Base Case (in millions)
Cash Flow Statement - - ------------------------------------------------------------------------------------------------------------ Years ended November 30, Projected ------------------------------------------------------- 2000 2001 2002 2003 2004 ------------------------------------------------------- Net Income 14.9 16.4 20.8 26.1 32.6 Add: Net After-tax Int. Exp. 2.0 2.8 3.2 3.2 2.9 Add: Depreciation 5.5 6.9 7.4 7.7 8.1 Add: Amortization of Existing Intangibles 3.9 4.6 4.6 4.6 4.6 Add: Amortization of Acquired Goodwill 0.0 0.6 1.6 2.6 3.0 Decrease (Incr) in NWC (2.2) (1.8) (2.5) (2.8) (3.0) ------------- -------- -------- -------- --------- Operating Cash Flow 24.1 29.6 35.1 41.5 48.2 Acquisition Expenses 45.0 30.0 30.0 30.0 30.0 Capital Expenditures 13.3 4.6 2.0 2.0 2.0 ------------- -------- -------- -------- --------- Unlevered Free Cash Flow (34.2) (5.0) 3.1 9.5 16.2
Discounted Cash Flow Analysis Base Case - Valuation Matrix (in millions)
Terminal Multiple of 2004 EBITDA 5.0x 6.0x 7.0x 8.0x ------------------------------------------------------ 15.0% ($3.17) ($3.17) ($3.17) ($3.17) Present Value of Free Cash Flows 17.5% ($4.30) ($4.30) ($4.30) ($4.30) 20.0% ($5.31) ($5.31) ($5.31) ($5.31) 22.5% ($6.21) ($6.21) ($6.21) ($6.21) 25.0% ($7.02) ($7.02) ($7.02) ($7.02) 15.0% $189.66 $227.59 $265.52 $303.46 Present Value of Terminal Value 17.5% $169.21 $203.05 $236.89 $270.73 20.0% $151.06 $181.27 $211.49 $241.70 22.5% $134.95 $161.94 $188.93 $215.92 25.0% $120.64 $144.77 $168.90 $193.03 Discount Rate 15.0% $186.49 $224.42 $262.35 $300.28 Firm Value 17.5% $164.91 $198.75 $232.59 $266.43 20.0% $145.75 $175.96 $206.18 $236.39 22.5% $128.74 $155.73 $182.72 $209.71 25.0% $113.62 $137.75 $161.88 $186.00 15.0% $170.01 $207.94 $245.88 $283.81 Equity Value 17.5% $148.43 $182.27 $216.11 $249.95 20.0% $129.28 $159.49 $189.70 $219.91 22.5% $112.26 $139.25 $166.24 $193.24 25.0% $ 97.14 $121.27 $145.40 $169.53 ----------------------- 15.0% $ 16.91 $ 20.68 $ 24.45 $ 28.22 Implied Share Price 17.5% $ 14.76 $ 18.12 $ 21.49 $ 24.85 20.0% $ 12.85 $ 15.86 $ 18.86 $ 21.87 22.5% $ 11.16 $ 13.85 $ 16.53 $ 19.21 25.0% $ 9.66 $ 12.06 $ 14.46 $ 16.86 ------------------------------------------------------
(1) Transaction multiple is 7.8x EBITDA for LTM 5/31/00. Friedman Billings Ramsey [LOGO] Discounted Cash Flow Analysis High Case (in millions) Cash Flow Statement
Years ended November 30, Projected ---------------------------------------------------------------------- 2000 2001 2002 2003 2004 ---------------------------------------------------------------------- Net Income 14.9 18.4 24.9 33.1 43.4 Add: Net After-tax Int. Exp. 2.0 2.8 3.9 4.5 4.6 Add: Depreciation 5.5 6.9 7.4 7.7 8.1 Add: Amortization of Existing Intangibles 3.9 4.6 4.6 4.6 4.6 Add: Amortization of Acquired Goodwill 0.6 2.1 3.6 4.2 Decrease (Incr) in NWC (2.2) (2.7) (4.0) (4.4) (5.0) ---------- ---------- ---------- ---------- ---------- Operating Cash Flow 24.1 30.7 39.0 49.1 60.0 Acquisition Expenses 45.0 45.0 45.0 45.0 45.0 Capital Expenditures 13.3 4.6 2.0 2.0 2.0 ---------- ---------- ---------- ---------- ---------- Unlevered Free Cash Flow (34.2) (18.9) (8.0) 2.1 13.0
Friedman Billings Ramsey [LOGO] Discounted Cash Flow Analysis High Case - Valuation Matrix (in millions)
Terminal Multiple of 2004 EBITDA 5.0x 6.0x 7.0x 8.0x ------------------------------------------------------ 15.0% ($29.71) ($29.71) ($29.71) ($29.71) Present Value of Free Cash Flows 17.5% ($29.61) ($29.61) ($29.61) ($29.61) 20.0% ($29.48) ($29.48) ($29.48) ($29.48) 22.5% ($29.30) ($29.30) ($29.30) ($29.30) 25.0% ($29.10) ($29.10) ($29.10) ($29.10) 15.0% $245.98 $295.17 $344.37 $393.56 Present Value of Terminal Value 17.5% $219.45 $263.34 $307.23 $351.12 20.0% $195.92 $235.10 $274.28 $313.47 22.5% $175.03 $210.03 $245.04 $280.04 25.0% $156.47 $187.76 $219.05 $250.34 Discount Rate 15.0% $216.27 $265.46 $314.66 $363.85 Firm Value 17.5% $189.84 $233.73 $277.62 $321.51 20.0% $166.44 $205.62 $244.81 $283.99 22.5% $145.72 $180.73 $215.73 $250.74 25.0% $127.36 $158.66 $189.95 $221.24 15.0% $199.79 $248.99 $298.18 $347.38 Equity Value 17.5% $173.36 $217.25 $261.14 $305.03 20.0% $149.97 $189.15 $228.33 $267.52 22.5% $129.25 $164.25 $199.26 $234.26 25.0% $110.89 $142.18 $173.48 $204.77 ----------------------- 15.0% $ 19.87 $ 24.76 $ 29.65 $ 34.54 Implied Share Price 17.5% $ 17.24 $ 21.60 $ 25.97 $ 30.33 20.0% $ 14.91 $ 18.81 $ 22.70 $ 26.60 22.5% $ 12.85 $ 16.33 $ 19.81 $ 23.29 25.0% $ 11.03 $ 14.14 $ 17.25 $ 20.36 ------------------------------------------------------
(1) Transaction multiple is 7.8x EBITDA for LTM 5/31/00. Friedman Billings Ramsey [LOGO] Leveraged Buyout Analysis Friedman Billings Ramsey [LOGO] Leveraged Buyout Analysis Transaction Sources and Uses of Funds Equity varies with Share Price (in millions)
Base Case High Case $18.00 $18.25 $19.00 $20.00 $18.00 $18.25 $19.00 $20.00 Uses of Funds: Purchase Outstanding Shares 175.3 177.8 185.1 194.8 175.3 177.8 185.1 194.8 Purchase Options & Warrants 38.3 38.8 40.4 42.6 38.3 38.8 40.4 42.6 Repayment of Debt 39.3 39.3 39.3 39.3 39.3 39.3 39.3 39.3 Capital Leases 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Transaction Fees & Expenses 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 ---------------------------------------- ---------------------------------------- Total Uses of Funds $266.1 $269.1 $278.0 $289.9 $266.1 $269.1 $278.0 $289.9 ======================================== ======================================== Sources of Funds: Revolver 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 Capital Leases 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 Mezzanine Debt 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 Term Loan A 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 Term Loan B 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 New PIK Preferred 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 Equity - Ford 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 ---------------------------------------- ---------------------------------------- Equity - Chartwell 47.1 50.0 58.9 70.8 47.1 50.0 58.9 70.8 ---------------------------------------- ---------------------------------------- Equity - Wolfington 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Equity - Other Carey Management 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 ---------------------------------------- ---------------------------------------- Total Equity 70.5 73.5 82.4 94.3 70.5 73.5 82.4 94.3 Proceeds From Exercise of Options 24.8 24.8 24.8 24.8 24.8 24.8 24.8 24.8 ---------------------------------------- ---------------------------------------- Total Sources of Funds $266.1 $269.1 $278.0 $289.9 $266.1 $269.1 $278.0 $289.9 ======================================== ========================================
Friedman Billings Ramsey [LOGO] Leveraged Buyout Analysis Financial Ratios and IRRs Equity varies with Share Price (in millions)
Base Case High Case $18.00 $18.25 $19.00 $20.00 $18.00 $18.25 $19.00 $20.00 Financial Ratios Close Debt / EBITDA 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 2001 Debt / EBITDA 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 2001 EBITDA / Cash Interest 2.2 2.2 2.2 2.2 2.5 2.5 2.5 2.5 2001 EBITDA - CapEx / Cash Interest 2.0 2.0 2.0 2.0 2.2 2.2 2.2 2.2 IRRs Management fully vests options 2003 Chartwell / Ford 36.2% 34.8% 31.1% 26.7% 45.2% 43.8% 40.0% 35.5% 2003 Management 64.4% 63.8% 62.1% 60.4% 74.0% 73.4% 71.7% 69.8% 2003 Sr. Sub Debt 25.2% 25.2% 25.2% 25.2% 28.5% 28.5% 28.5% 28.6% 2004 Chartwell / Ford 33.5% 32.5% 29.6% 26.3% 41.8% 40.8% 37.9% 34.4% 2004 Management 58.1% 57.7% 56.6% 55.5% 66.9% 66.5% 65.4% 64.2% 2004 Sr. Sub Debt 24.7% 24.7% 24.7% 24.7% 28.2% 28.2% 28.3% 28.3% No Management Vesting 2003 Chartwell / Ford 40.9% 39.6% 35.8% 31.4% 50.1% 48.6% 44.8% 40.2% 2003 Management 40.9% 39.6% 35.8% 31.4% 50.1% 48.6% 44.8% 40.2% 2003 Sr. Sub Debt 25.2% 25.2% 25.2% 25.2% 28.5% 28.5% 28.5% 28.6% 2004 Chartwell / Ford 37.9% 36.9% 34.0% 30.6% 46.3% 45.3% 42.3% 38.9% 2004 Management 37.9% 36.9% 34.0% 30.6% 46.3% 45.3% 42.3% 38.9% 2004 Sr. Sub Debt 24.7% 24.7% 24.7% 24.7% 28.2% 28.2% 28.3% 28.3%
Friedman Billings Ramsey [LOGO] Conclusion Friedman Billings Ramsey [LOGO] Analysis Summary
Stock Price Stock Price Average Median Average Median ----------------- ----------------- Comparable Company Analysis Comparable Company Analysis Travel/ Transportation: Consolidators: Ent. Value / Revenue Ent. Value / Revenue Over $1 billion $ 29.06 $ 29.06 Over $1 billion $ 33.67 $ 35.97 $500 million - $1 billion NA NA $500 million - $1 billion 24.46 33.67 Under $500 million 8.36 8.36 Under $500 million 6.05 3.75 All 15.26 10.66 All 19.86 12.96 Ent. Value / EBITDA Ent. Value / EBITDA Over $1 billion 15.81 14.26 Over $1 billion 26.07 26.69 $500 million - $1 billion NA NA $500 million - $1 billion 17.99 21.71 Under $500 million 20.78 20.78 Under $500 million 13.63 13.32 All 18.61 17.99 All 18.92 18.92 Ent. Value / EBIT Ent. Value / EBIT Over $1 billion 22.54 19.27 Over $1 billion 24.17 20.43 $500 million - $1 billion NA NA $500 million - $1 billion 17.63 21.37 Under $500 million 17.17 17.17 Under $500 million 8.76 8.29 All 20.20 18.10 All 16.93 18.57 Market Cap. / Net Income Market Cap. / Net Income Over $1 billion 13.07 13.07 Over $1 billion 15.58 17.34 $500 million - $1 billion NA NA $500 million - $1 billion 15.45 20.48 Under $500 million 12.06 12.06 Under $500 million 5.90 4.40 All 12.56 13.07 All 12.31 11.31
Friedman Billings Ramsey [LOGO] Analysis Summary
Stock Price Stock Price Average Median Average Median ---------------- ---------------- Comparable Transaction Analysis Premiums Paid Ent. Value / Revenue 1 Day Prior Over $1 billion $ 44.17 $ 42.31 Over $1 billion $ 17.90 $ 15.29 $500 million - $1 billion 21.82 18.10 $500 million - $1 billion 17.78 18.65 Under $500 million 16.24 14.38 Under $500 million 19.50 19.39 All 21.82 18.10 All 18.91 18.65 Ent. Value / EBITDA 1 Week Prior Over $1 billion 19.35 20.61 Over $1 billion 19.19 19.51 $500 million - $1 billion 22.37 23.12 $500 million - $1 billion 20.29 18.68 Under $500 million 16.33 14.07 Under $500 million 19.20 19.22 All 18.09 14.07 All 19.40 19.22 Ent. Value / EBIT 4 Weeks Prior Over $1 billion 28.96 25.93 Over $1 billion 12.18 12.91 $500 million - $1 billion 28.77 28.77 $500 million - $1 billion 11.30 11.19 Under $500 million 23.10 20.83 Under $500 million 13.28 13.41 All 25.18 22.72 All 12.74 12.74 Market Cap. / Net Income Over $1 billion 25.32 23.08 DCF - High Case (8x LTM, 22.5% Discount rate) $ 23.29 $500 million - $1 billion 21.86 19.22 DCF - High Case (7x LTM, 22.5% Discount rate) 19.81 Under $500 million 23.49 18.81 All 23.59 19.22 DCF - Base Case (8x LTM, 22.5% Discount rate) $ 19.21 DCF - Base Case (7x LTM, 22.5% Discount rate) 16.53
Friedman Billings Ramsey [LOGO] EX-99.D.III 14 0014.txt EXHIBIT (D)(III) Exhibit (d)(iii) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 12, 2000, by and between CAREY INTERNATIONAL, INC., a Delaware corporation (the "Company") and VINCENT A. WOLFINGTON, of Washington, D.C. (the "Executive"). W I T N E S S E T H T H A T: - - - - - - - - - - - - - - WHEREAS the Executive has been employed by the Company or its predecessors in an executive capacity for approximately thirty (30) years; and WHEREAS, the Company and the Executive desire to enter into this Employment Agreement to set forth the terms and conditions of the Executive's employment with the Company and to provide the Executive the ability to receive severance benefits in certain circumstances; NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows: 1. Employment and Employment Period. The Company agrees to employ the Executive and the Executive agrees to be employed by the Company, on the terms and conditions set forth in this Agreement, for a period commencing on the date hereof and continuing thereafter until the earlier to occur of (a) the Executive's Normal Retirement Date under the Company's qualified retirement plan and (b) the termination of the Executive's employment pursuant to Section 5 (the "Employment Period"). 2. Title and Duties. The Executive shall serve the Company as its Chief Executive Officer. The Executive shall have the duties, responsibilities and authority commensurate with such position and such other duties and responsibilities as may be reasonably assigned to the Executive by the Board of Directors of the Company. The Executive shall report exclusively to the Board of Directors of the Company and shall perform his assigned duties and responsibilities at the offices of the Company in Washington, D.C. During the Employment Period, the Executive shall devote such working time, attention, skill and efforts during normal working hours to the performance of his duties as shall be reasonably necessary to carry out his duties and responsibilities hereunder, and shall do so faithfully and to the best of his abilities. The Company encourages participation by the Executive on community boards and committees and in activities generally considered to be in the public interest, but the Board of the Directors shall have the right to approve or disapprove, in its sole discretion, the Executive's participation on such boards and committees. 3. Compensation and Benefits. For the services rendered by the Executive to the Company during the Employment Period, the Company shall pay to the Executive the compensation and benefits set forth in this Section 3. (a) Salary. As compensation for services performed under and during the Employment Period, the Company shall pay to the Executive, in regular periodic installments, a minimum base salary (the "Base Salary") at the rate of Three Hundred Twenty-Five Thousand Dollars ($325,000) per year. The Executive's Base Salary may be adjusted upward from time to time at the sole discretion of the Board of Directors of the Company. (b) Incentive Compensation. In addition to the Base Salary provided for above, the Executive shall be entitled to receive each year incentive compensation, short and/or long term, in such amount as the Board of Directors shall determine. (c) Benefits. At all times during the term of this Agreement, the Executive shall be entitled to receive fringe benefits not less favorable to the Executive than the fringe benefits to which the Executive is entitled as of the date of this Agreement. The Company agrees that no provision of this Agreement is intended to, or shall be deemed to be, a grant or payment to the Executive in lieu of any rights and privileges to which the Executive may be entitled as an executive or employee of the Company under any other executive or other incentive plan, retirement, pension, insurance, hospitalization or other benefit plan which may now or hereafter be in effect, it being understood that the Executive shall have no lesser rights and privileges to participate in such plans or benefits than any other executive or employee of the Company. 4. Expenses. Subject to the reasonable policies and procedures of the Company, the Executive shall be entitled to be fully reimbursed for all reasonable expenses incurred by him in the performance of his duties hereunder, and the Company will reimburse the Executive from time to time for all such reasonable expenses upon presentation of a written itemized account thereof together with such vouchers, receipts and other evidence of such expenses as the Company may reasonably deem to be necessary. 5. Termination and Termination of Benefits. The Executive's employment with the Company shall terminate under the following circumstances: (a) Death. In the event of the Executive's death during his employment under this Agreement, the Executive's employment shall terminate on the date of his death; provided, however, that, for a period of three (3) months following the Executive's death, the Company shall pay to the Executive's designated beneficiary (or to his estate, if he fails to make such designation) an amount equal to the Executive's salary at the rate of his Base Salary -2- in effect at the time of his death, such payments to be made on the same periodic dates as salary payments would have been made to the Executive had he not died. (b) Disability. In the event that the Executive becomes disabled, as determined under the Company's long-term disability income plan, during his employment under this Agreement, then, at the discretion of the Board of Directors of the Company, the Executive's employment hereunder shall terminate as of a date specified by the Board not earlier than ten (10) days following the Board's consideration of the matter. In such event, the Executive shall continue to receive his Base Salary under Section 3(a), and any benefits to which he is entitled in accordance with Section 3(c), until he becomes eligible for disability income under the Company's long-term disability income plan or, in the absence of a long-term disability income plan at the time of such disability, until the commencement of disability payments in accordance with the last sentence of this Section 5(b). Thereafter, for the period specified in such long-term disability income plan, the Executive shall be entitled to receive an annual disability benefit equal to the greater of (i) the amount of disability benefit payable under the plan and (ii) an amount per year equal to eighty (80) percent of the Executive's total compensation for the year immediately preceding his termination less any benefit payable to the Executive under such plan. While receiving such disability income payments, the Executive shall not receive any Base Salary or incentive compensation under Sections 3(a) or 3(b) (except a payment which has already been earned but is payable as of a later date), but shall (i) continue to participate (on the terms in effect at his date of disability) in the Company's other benefit plans and to receive other benefits as specified in Section 3(c) until his employment under this Agreement terminates or, if later, the date specified in such plans for termination of participation in the event of disability, and (ii) be deemed for purposes of the Company's retirement plans to have completed each year such number of hours of service with the Company as shall be necessary to avoid a "1- year break in service" within the meaning of Section 411(a)(6)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In the absence of a long-term disability income plan at the time of the Executive's disability, the determination of disability shall be made as if the Company's current long-term disability income plan were in effect at such time. (c) Termination by the Executive Without Good Reason. The Executive may resign from the Company at any time upon ninety (90) days prior written notice to the Board of Directors of the Company. In the event of resignation by the Executive under this Section 5(c), the Board of Directors may elect to waive the period of notice, or any portion thereof and, in such event, the Company will pay the Executive's Base Salary for the notice period (or for any remaining portion of the period). In the event of such termination by the Executive of his employment hereunder, the Executive shall be entitled to receive any accrued but unpaid Base Salary through the effective date of such termination and any accrued benefits payable to the Executive in accordance with the Company's benefits policies or the provisions of any benefit plan in which he is then a participant. -3- (d) Termination by the Company Without Cause. The Executive's employment under this Agreement may be terminated without cause by a vote of a majority of the members of the Board of Directors on written notice to the Executive. In the event of such termination, the Executive shall be entitled to the following benefits: (i) The Company shall pay to the Executive, in a lump sum within five (5) days of termination, as severance pay and in addition to any accrued but unpaid Base Salary and benefits to which he is entitled, an amount equal to three (3) times the Executive's total compensation received from the Company (including Base Salary and all other amounts payable pursuant to this Agreement) during the Executive's last full year of employment with the Company prior to such termination; (ii) Subject to his not becoming eligible to receive similar benefits elsewhere on similar terms, for a period of three (3) years following such termination or until the Executive attains age sixty- five (65), whichever is longer, the Company shall maintain in effect all employee welfare benefits (excluding any incentive compensation program) to which the Executive was entitled at any time during the six (6) months preceding such termination; and (iii) The Executive without further action by the Executive or the Company shall automatically become fully vested in all benefits accrued on his behalf under any benefit programs of the Company and in any options theretofore granted by the Company to the Executive remaining unexercised as of the date of termination. Any health care continuation period to which the Executive may be entitled under Section 4980B of the Code and/or Section 601 through Section 609 of the Employee Retirement Income Security Act of 1974 and under any analogous state or local law shall commence immediately following the period specified in clause (ii) hereof. Upon expiration of such health care continuation period, subject to the terms of any group health plan then in place, the Executive shall be entitled at his own expense to convert his coverage under such plan to an individual (or family) health care policy. In the event that the Executive's participation in any of the foregoing benefit plans is barred by law or otherwise, or in the event that any such benefit plan is discontinued or the benefits thereunder are materially reduced during such period, the Company shall provide the Executive with benefits substantially similar to those to which the Executive was entitled immediately prior to the date of his termination of employment. -4- (e) Termination by the Executive For Good Reason. The Executive may terminate his employment hereunder for Good Reason at any time upon thirty (30) days prior written notice to the Board of Directors of the Company. Only the following shall constitute "Good Reason" for such termination: (i) Failure by the Company to perform fully the terms of this Agreement other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and remedied by the Company promptly (but not later than five (5) days) after receiving notice thereof from the Executive; (ii) Any reduction in the Executive's Base Salary from the Company, unless such reduction is agreed upon in advance by the Executive; (iii) The assignment to the Executive of any duties inconsistent in any material respect with his position or with his authority, duties or responsibilities as Chief Executive Officer of the Company, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and remedied by the Company promptly (but not more than five (5) days) after receipt of notice thereof given by the Executive; (iv) Failure by the Company to continue in effect any benefit, retirement or compensation plan (including all plans of any nature described in this Agreement) in which the Executive is participating as of the date hereof (or plans providing substantially similar or greater benefits), or the Company takes any action which would adversely affect the Executive's participation in or reduce the Executive's benefits under any of such plans or deprive the Executive of any fringe benefit or perquisite enjoyed by the Executive as of the date hereof; (v) Any change, without the Executive's consent, in the place of the Executive's principal place of employment to a location more than fifty (50) miles outside the primary metropolitan statistical area including Washington, D.C.; or (vi) Any failure by the Company to obtain an assumption and agreement to perform this Agreement by a successor to the Company. -5- In such event, the Executive shall have no further obligations to the Company except his obligations under Section 7 hereof and shall be entitled to the termination benefits set forth in Section 5(d) above. (f) Termination by the Company For Cause. The Executive's employment hereunder may be terminated by the Company for Cause, effective immediately, by a vote of two-thirds (2/3) of the members of the Board of Directors of the Company on written notice to the Executive setting forth in reasonable detail the nature of such Cause; provided, however, that the Executive shall first have been accorded an opportunity upon reasonable notice to appear before the Board with counsel of his choice to discuss the basis for his proposed termination. Only the following shall constitute "Cause" for such termination: (i) The Executive's conviction of any felony (other than an offense related to the operation of an automobile which results only in a fine or other noncustodial penalty or an offense relating to any action taken by the Executive in carrying out the Company's business as directed by the Board of Directors of the Company) by a court of competent jurisdiction; (ii) The Executive's commission of an act of fraud or theft involving the Company; or (iii) Willful refusal or gross neglect by the Executive to perform the duties reasonably assigned to him and consistent with his position with the Company or otherwise to comply with the material terms of this Agreement, which refusal or gross neglect continues for more than twenty (20) days after the Executive receives written notice thereof from the Company. 6. Change of Control of the Company. In the event that a Change of Control of the Company occurs during the Employment Period, the Company shall pay to the Executive, within ten (10) days following the Change of Control, the sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000). For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a -6- majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. Anything in this Agreement to the contrary notwithstanding, in the event it is determined that any payment or distribution by the Company to the Executive or for his benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. Subject to the provisions of the next following paragraph, all determinations required to be made under this Section 6, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by the Company's principal independent accounting firm at the time such determination is made (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and the Executive within thirty (30) business days following the date the Change of Control occurs, or such earlier time as is requested by the Company. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that the Executive has substantial authority not to report any excise tax on his federal income tax return. Any determination by the Accounting Firm shall be binding upon the Company and the Executive except as provided elsewhere in this Section 6. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by the Company should have been made ("the Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to this Section 6 and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid promptly by the Company to the Executive or for his benefit. -7- The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive knows of such claim and shall apprise the Company of the nature of the claim and the date on which the claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting the claim as the Company reasonably requests in writing from time to time, including, without limitation, accepting legal representation with regard to the claim by an attorney selected by the Company, and acceptable to the Executive, (iii) cooperate with the Company (at no cost to the Executive) in good faith in order effectively to contest the claim, and (iv) permit the Company to participate in any proceedings relating the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payments of costs and expenses. Without limitation on the foregoing provisions of this Section 6, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company determines; provided, further, however, that (A) if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an -8- interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and (B) any request by the Company that the Executive extend the statute of limitations relating to payment of taxes for his taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section 6, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of this Section 6) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section 6, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross- Up Payment required to be paid. 7. Confidential Information. The Executive shall not at any time divulge, use, furnish, disclose or make available to anyone, other than an employee or Director of the Company with a reasonable need to know, any knowledge or information with respect to confidential or secret data, procedures or techniques of the Company, provided, however, that nothing in this Section 7 shall prevent the disclosure by the Executive of any such information which at any time comes into the public domain other than as a result of the violation of the terms of this Section 7 by the Executive or which is otherwise lawfully acquired by the Executive or disclosure by the Executive required by law. 8. Assignment. The Executive may not assign any rights or delegate any duties in or under this Agreement. This Agreement may be assigned, in whole but not in part, by the Company to any successor to the Company or its business or to any subsidiary or affiliate of the Company, provided that the assignee agrees in writing to be bound by its terms. 9. Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any prior or subsequent breach thereof. -9- 10. Amendment or Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and an officer of the Company acting on behalf of the Board of Directors of the Company. 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to choice or conflict of law principles. 12. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Notices. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to the Executive: Vincent A. Wolfington c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Attn: Chairman of the Board 14. Entire Agreement and Binding Effect. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. -10- 15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. 16. Headings. The Section headings appearing in this Agreement are for reference purposes only and shall not be considered a part of this Agreement or in any way modify, amend or affect its provisions. 17. No Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. Except as otherwise provided in Section 5(d)(ii) with respect to certain fringe benefits, no payment provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, or the Executive's receipt of income from any other source, after the termination of his employment with the Company. 18. Indemnification. The Executive shall be entitled at all times to be indemnified by the Company to the maximum extent permitted by law. The provisions of this Section 18 shall survive termination of this Agreement. 19. Withholding. All payments made by the Company hereunder shall be subject to withholding in accordance with applicable state and federal law. 20. Legal Fees. The Company shall pay to the Executive all reasonable legal fees and expenses incurred by the Executive in the preparation of this Agreement and in contesting or disputing any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by this Agreement, so long as the claim is not frivolous. 21. Dispute Resolution. If a dispute arises out of or relates to this Agreement, or the breach hereof, and if such dispute is not settled within a commercially reasonable time through negotiations, the parties shall attempt in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association, before resorting to arbitration, litigation or other dispute resolution procedures. No resolution or attempted resolution of any dispute or disagreement pursuant to this Section 21 shall be deemed to be a waiver of any term or provision of this Agreement or a consent to any breach or default, unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented. -11- IN WITNESS WHEREOF, the parties have executed this Agreement under seal as the date first above written. CAREY INTERNATIONAL, INC. By: /s/ Don R. Dailey ------------------------------ Name: Don R. Dailey Title: President EXECUTIVE: /s/ Vincent A. Wolfington ---------------------------------- Vincent A. Wolfington -12- EX-99.D.1V 15 0015.txt EXHIBIT (D)(IV) Exhibit (d)(iv) EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of May 12, 2000, by and between CAREY INTERNATIONAL, INC., a Delaware corporation (the "Company") and DON R. DAILEY, of Washington, D. C. (the "Executive"). W I T N E S S E T H T H A T: - - - - - - - - - - - - - - WHEREAS the Executive has been employed by the Company or its predecessors in an executive capacity for approximately thirty-two (32) years; and WHEREAS, the Company and the Executive desire to enter into this Employment Agreement to set forth the terms and conditions of the Executive's employment with the Company and to provide the Executive the ability to receive severance benefits in certain circumstances; NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows: 1. Employment and Employment Period. The Company agrees to employ the Executive and the Executive agrees to be employed by the Company, on the terms and conditions set forth in this Agreement, for a period commencing on the date hereof and continuing thereafter until the earlier to occur of (a) the Executive's Normal Retirement Date under the Company's qualified retirement plan and (b) the termination of the Executive's employment pursuant to Section 5 (the "Employment Period"). 2. Title and Duties. The Executive shall serve the Company as its President. The Executive shall have the duties, responsibilities and authority commensurate with such position and such other duties and responsibilities as may be reasonably assigned to the Executive by the Chief Executive Officer of the Company. The Executive shall report exclusively to the Chief Executive Officer of the Company and shall perform his assigned duties and responsibilities at the offices of the Company in Washington, D.C. During the Employment Period, the Executive shall devote substantially all of his working time, attention, skill and efforts during normal working hours to the performance of his duties, faithfully and to the best of his abilities. The Executive shall not engage in any other business activity during the term of this Agreement, other than an activity approved by the Chief Executive Officer. The Company encourages participation by the Executive on community boards and committees and in activities generally considered to be in the public interest, but the Chief Executive Officer and the Board of the Directors shall have the right to approve or disapprove, in their sole discretion, the Executive's participation on such boards and committees. 3. Compensation and Benefits. For the services rendered by the Executive to the Company during the Employment Period, the Company shall pay to the Executive the compensation and benefits set forth in this Section 3. (a) Salary. As compensation for services performed under and during the Employment Period, the Company shall pay to the Executive, in regular periodic installments, a minimum base salary (the "Base Salary") at the rate of Two Hundred Seventy-Five Thousand Dollars ($275,000) per year. The Executive's Base Salary may be adjusted upward from time to time at the sole discretion of the Chief Executive Officer of the Company. (b) Incentive Compensation. In addition to the Base Salary provided for above, the Executive shall be entitled to receive each year incentive compensation, short and/or long term, in such amount as the Board of Directors shall determine. (c) Benefits. At all times during the term of this Agreement, the Executive shall be entitled to receive fringe benefits not less favorable to the Executive than the fringe benefits to which the Executive is entitled as of the date of this Agreement. The Company agrees that no provision of this Agreement is intended to, or shall be deemed to be, a grant or payment to the Executive in lieu of any rights and privileges to which the Executive may be entitled as an executive or employee of the Company under any other executive or other incentive plan, retirement, pension, insurance, hospitalization or other benefit plan which may now or hereafter be in effect, it being understood that the Executive shall have no lesser rights and privileges to participate in such plans or benefits than any other executive or employee of the Company. 4. Expenses. Subject to the reasonable policies and procedures of the Company, the Executive shall be entitled to be fully reimbursed for all reasonable expenses incurred by him in the performance of his duties hereunder, and the Company will reimburse the Executive from time to time for all such reasonable expenses upon presentation of a written itemized account thereof together with such vouchers, receipts and other evidence of such expenses as the Company may reasonably deem to be necessary. 5. Termination and Termination of Benefits. The Executive's employment with the Company shall terminate under the following circumstances: (a) Death. In the event of the Executive's death during his employment under this Agreement, the Executive's employment shall terminate on the date of his death; provided, however, that, for a period of three (3) months following the Executive's death, the -2- Company shall pay to the Executive's designated beneficiary (or to his estate, if he fails to make such designation) an amount equal to the Executive's salary at the rate of his Base Salary in effect at the time of his death, such payments to be made on the same periodic dates as salary payments would have been made to the Executive had he not died. (b) Disability. In the event that the Executive becomes disabled, as determined under the Company's long-term disability income plan, during his employment under this Agreement, then, at the discretion of the Board of Directors of the Company, the Executive's employment hereunder shall terminate as of a date specified by the Board not earlier than ten (10) days following the Board's consideration of the matter. In such event, the Executive shall continue to receive his Base Salary under Section 3(a), and any benefits to which he is entitled in accordance with Section 3(c), until he becomes eligible for disability income under the Company's long-term disability income plan or, in the absence of a long-term disability income plan at the time of such disability, until the commencement of disability payments in accordance with the last sentence of this Section 5(b). Thereafter, for the period specified in such long-term disability income plan, the Executive shall be entitled to receive an annual disability benefit equal to the greater of (i) the amount of disability benefit payable under the plan and (ii) an amount per year equal to eighty (80) percent of the Executive's total compensation for the year immediately preceding his termination less any benefit payable to the Executive under such plan. While receiving such disability income payments, the Executive shall not receive any Base Salary or incentive compensation under Sections 3(a) or 3(b) (except a payment which has already been earned but is payable as of a later date), but shall (i) continue to participate (on the terms in effect at his date of disability) in the Company's other benefit plans and to receive other benefits as specified in Section 3(c) until his employment under this Agreement terminates or, if later, the date specified in such plans for termination of participation in the event of disability, and (ii) be deemed for purposes of the Company's retirement plans to have completed each year such number of hours of service with the Company as shall be necessary to avoid a "1- year break in service" within the meaning of Section 411(a)(6)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In the absence of a long-term disability income plan at the time of the Executive's disability, the determination of disability shall be made as if the Company's current long-term disability income plan were in effect at such time. (c) Termination by the Executive Without Good Reason. The Executive may resign from the Company at any time upon ninety (90) days prior written notice to the Board of Directors of the Company. In the event of resignation by the Executive under this Section 5(c), the Board of Directors may elect to waive the period of notice, or any portion thereof and, in such event, the Company will pay the Executive's Base Salary for the notice period (or for any remaining portion of the period). In the event of such termination by the Executive of his employment hereunder, the Executive shall be entitled to receive any accrued but unpaid Base Salary through the effective date of such termination and any accrued benefits payable to the Executive in accordance with the Company's benefits policies or the provisions of any benefit plan in which he is then a participant. -3- (d) Termination by the Company Without Cause. The Executive's employment under this Agreement may be terminated without cause by a vote of a majority of the members of the Board of Directors on written notice to the Executive. In the event of such termination, the Executive shall be entitled to the following benefits: (i) The Company shall pay to the Executive, in a lump sum within five (5) days of termination, as severance pay and in addition to any accrued but unpaid Base Salary and benefits to which he is entitled, an amount equal to three (3) times the Executive's total compensation received from the Company (including Base Salary and all other amounts payable pursuant to this Agreement) during the Executive's last full year of employment with the Company prior to such termination; (ii) Subject to his not becoming eligible to receive similar benefits elsewhere on similar terms, for a period of three (3) years following such termination or until the Executive attains age sixty- five (65), whichever is longer, the Company shall maintain in effect all employee welfare benefits (excluding any incentive compensation program) to which the Executive was entitled at any time during the six (6) months preceding such termination; and (iii) The Executive without further action by the Executive or the Company shall automatically become fully vested in all benefits accrued on his behalf under any benefit programs of the Company and in any options theretofore granted by the Company to the Executive remaining unexercised as of the date of termination. Any health care continuation period to which the Executive may be entitled under Section 4980B of the Code and/or Section 601 through Section 609 of the Employee Retirement Income Security Act of 1974 and under any analogous state or local law shall commence immediately following the period specified in clause (ii) hereof. Upon expiration of such health care continuation period, subject to the terms of any group health plan then in place, the Executive shall be entitled at his own expense to convert his coverage under such plan to an individual (or family) health care policy. In the event that the Executive's participation in any of the foregoing benefit plans is barred by law or otherwise, or in the event that any such benefit plan is discontinued or the benefits thereunder are materially reduced during such period, the Company shall -4- provide the Executive with benefits substantially similar to those to which the Executive was entitled immediately prior to the date of his termination of employment. (e) Termination by the Executive For Good Reason. The Executive may terminate his employment hereunder for Good Reason at any time upon thirty (30) days prior written notice to the Board of Directors of the Company. Only the following shall constitute "Good Reason" for such termination: (i) Failure by the Company to perform fully the terms of this Agreement other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and remedied by the Company promptly (but not later than five (5) days) after receiving notice thereof from the Executive; (ii) Any reduction in the Executive's Base Salary from the Company, unless such reduction is agreed upon in advance by the Executive; (iii) The assignment to the Executive of any duties inconsistent in any material respect with his position or with his authority, duties or responsibilities as President of the Company, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and remedied by the Company promptly (but not more than five (5) days) after receipt of notice thereof given by the Executive; (iv) Failure by the Company to continue in effect any benefit, retirement or compensation plan (including all plans of any nature described in this Agreement) in which the Executive is participating as of the date hereof (or plans providing substantially similar or greater benefits), or the Company takes any action which would adversely affect the Executive's participation in or reduce the Executive's benefits under any of such plans or deprive the Executive of any fringe benefit or perquisite enjoyed by the Executive as of the date hereof; (v) Any change, without the Executive's consent, in the place of the Executive's principal place of employment to a location more than fifty (50) miles outside the primary metropolitan statistical area including Washington, D.C.; or (vi) Any failure by the Company to obtain an assumption and agreement to perform this Agreement by a successor to the Company. -5- In such event, the Executive shall have no further obligations to the Company except his obligations under Section 7 hereof and shall be entitled to the termination benefits set forth in Section 5(d) above. (f) Termination by the Company For Cause. The Executive's employment hereunder may be terminated by the Company for Cause, effective immediately, by a vote of two-thirds (2/3) of the members of the Board of Directors of the Company on written notice to the Executive setting forth in reasonable detail the nature of such Cause; provided, however, that the Executive shall first have been accorded an opportunity upon reasonable notice to appear before the Board with counsel of his choice to discuss the basis for his proposed termination. Only the following shall constitute "Cause" for such termination: (i) The Executive's conviction of any felony (other than an offense related to the operation of an automobile which results only in a fine or other noncustodial penalty or an offense relating to any action taken by the Executive in carrying out the Company's business as directed by the Board of Directors of the Company) by a court of competent jurisdiction; (ii) The Executive's commission of an act of fraud or theft involving the Company; or (iii) Willful refusal or gross neglect by the Executive to perform the duties reasonably assigned to him and consistent with his position with the Company or otherwise to comply with the material terms of this Agreement, which refusal or gross neglect continues for more than twenty (20) days after the Executive receives written notice thereof from the Company. 6. Change of Control of the Company. In the event that a Change of Control of the Company occurs during the Employment Period, the Company shall pay to the Executive, within ten (10) days following the Change of Control, the sum of One Million Two Hundred Fifty Thousand Dollars ($1,250,000). For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a -6- majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. Anything in this Agreement to the contrary notwithstanding, in the event it is determined that any payment or distribution by the Company to the Executive or for his benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that, after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. Subject to the provisions of the next following paragraph, all determinations required to be made under this Section 6, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by the Company's principal independent accounting firm at the time such determination is made (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and the Executive within thirty (30) business days following the date the Change of Control occurs, or such earlier time as is requested by the Company. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with an opinion that the Executive has substantial authority not to report any excise tax on his federal income tax return. Any determination by the Accounting Firm shall be binding upon the Company and the Executive except as provided elsewhere in this Section 6. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by the Company should have been made ("the Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to this Section 6 and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid promptly by the Company to the Executive or for his benefit. -7- The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable after the Executive knows of such claim and shall apprise the Company of the nature of the claim and the date on which the claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting the claim as the Company reasonably requests in writing from time to time, including, without limitation, accepting legal representation with regard to the claim by an attorney selected by the Company, and acceptable to the Executive, (iii) cooperate with the Company (at no cost to the Executive) in good faith in order effectively to contest the claim, and (iv) permit the Company to participate in any proceedings relating the claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payments of costs and expenses. Without limitation on the foregoing provisions of this Section 6, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company determines; provided, further, however, that (A) if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an -8- interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and (B) any request by the Company that the Executive extend the statute of limitations relating to payment of taxes for his taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section 6, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of this Section 6) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to this Section 6, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 7. Confidential Information. The Executive shall not at any time divulge, use, furnish, disclose or make available to anyone, other than an employee or Director of the Company with a reasonable need to know, any knowledge or information with respect to confidential or secret data, procedures or techniques of the Company, provided, however, that nothing in this Section 7 shall prevent the disclosure by the Executive of any such information which at any time comes into the public domain other than as a result of the violation of the terms of this Section 7 by the Executive or which is otherwise lawfully acquired by the Executive or disclosure by the Executive required by law. 8. Assignment. The Executive may not assign any rights or delegate any duties in or under this Agreement. This Agreement may be assigned, in whole but not in part, by the Company to any successor to the Company or its business or to any subsidiary or affiliate of the Company, provided that the assignee agrees in writing to be bound by its terms. 9. Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any prior or subsequent breach thereof. -9- 10. Amendment or Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and an officer of the Company acting on behalf of the Board of Directors of the Company. 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to choice or conflict of law principles. 12. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Notices. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to the Executive: Don R. Dailey c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Attn: Chief Executive Officer 14. Entire Agreement and Binding Effect. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. 15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and -10- the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. 16. Headings. The Section headings appearing in this Agreement are for reference purposes only and shall not be considered a part of this Agreement or in any way modify, amend or affect its provisions. 17. No Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. Except as otherwise provided in Section 5(d)(ii) with respect to certain fringe benefits, no payment provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, or the Executive's receipt of income from any other source, after the termination of his employment with the Company. 18. Indemnification. The Executive shall be entitled at all times to be indemnified by the Company to the maximum extent permitted by law. The provisions of this Section 18 shall survive termination of this Agreement. 19. Withholding. All payments made by the Company hereunder shall be subject to withholding in accordance with applicable state and federal law. 20. Legal Fees. The Company shall pay to the Executive all reasonable legal fees and expenses incurred by the Executive in the preparation of this Agreement and in contesting or disputing any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by this Agreement, so long as the claim is not frivolous. 21. Dispute Resolution. If a dispute arises out of or relates to this Agreement, or the breach hereof, and if such dispute is not settled within a commercially reasonable time through negotiations, the parties shall attempt in good faith to settle the dispute by mediation under the Commercial Mediation Rules of the American Arbitration Association, before resorting to arbitration, litigation or other dispute resolution procedures. No resolution or attempted resolution of any dispute or disagreement pursuant to this Section 21 shall be deemed to be a waiver of any term or provision of this Agreement or a consent to any breach or default, unless such waiver or consent shall be in writing and signed by the party claimed to have waived or consented. -11- IN WITNESS WHEREOF, the parties have executed this Agreement under seal as the date first above written. CAREY INTERNATIONAL, INC. By: /s/ Vincent A. Wolfington --------------------------------- Name: Vincent A. Wolfington Title: Chairman of the Board EXECUTIVE: /s/ Don R. Dailey -------------------------------- Don R. Dailey -12- EX-99.D.V 16 0016.txt EXHIBIT (D)(V) Exhibit (d)(v) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Mr. David H. Haedicke Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Mr. Haedicke: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of Four Hundred Thousand Dollars ($400,000.00). Mr. David H. Haedicke Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Mr. David H. Haedicke Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: David H. Haedicke c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Mr. David H. Haedicke Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Mr. David H. Haedicke Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey ------------------------------- Agreed: /s/ David H. Haedicke - - ------------------------ David H. Haedicke -5- EX-99.D.VI 17 0017.txt EXHIBIT (D)(VI) Exhibit (d)(vi) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Mr. Devin J. Murphy Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Mr. Murphy: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of Two Hundred Thousand Dollars ($200,000.00). Mr. Devin J. Murphy Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Mr. Devin J. Murphy Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: Devin J. Murphy c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Mr. Devin J. Murphy Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Mr. Devin J. Murphy Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey -------------------------------- Agreed: /s/ Devin J. Murphy - - ------------------------ Devin J. Murphy -5- EX-99.D.VII 18 0018.txt EXHIBIT (D)(VII) Exhibit (d)(vii) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Ms. Sally A. Snead Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Ms. Snead: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of One Hundred Thousand Dollars ($100,000.00). Ms. Sally A. Snead Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Ms. Sally A. Snead Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: Sally A. Snead c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Ms. Sally A. Snead Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Ms. Sally A. Snead Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey ------------------------------- Agreed: /s/ Sally A. Snead - - ------------------------ Sally A. Snead -5- EX-99.D.VIII 19 0019.txt EXHIBIT (D)(VIII) Exhibit (d)(viii) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Mr. Guy C. Thomas Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Mr. Thomas: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of Three Hundred Thousand Dollars ($300,000.00). Mr. Guy C. Thomas Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Mr. Guy C. Thomas Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: Guy C. Thomas c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Mr. Guy C. Thomas Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Mr. Guy C. Thomas Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey ---------------------------- Agreed: /s/ Guy C. Thomas - - ---------------------------- Guy C. Thomas -5- EX-99.D.IX 20 0020.txt EXHIBIT (D)(IX) Exhibit (d)(ix) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Mr. Eugene S. Willard Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Mr. Willard: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of One Hundred Thousand Dollars ($100,000.00). Mr. Eugene S. Willard Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Mr. Eugene S. Willard Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: Eugene S. Willard c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Mr. Eugene S. Willard Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Mr. Eugene S. Willard Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey -------------------------- Agreed: /s/ Eugene S. Willard - - ---------------------------------- Eugene S. Willard -5- EX-99.D.X 21 0021.txt EXHIBIT (D)(X) Exhibit (d)(x) CAREY INTERNATIONAL, INC. 4530 Wisconsin Avenue, NW Washington, D.C. 20016 May 12, 2000 Mr. John C. Wintle Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, DC 20016 Dear Mr. Wintle: The Board of Directors (the "Board") of Carey International, Inc. (the "Company") has determined that it is in the best interests of the Company and its shareholders for the Company to agree, as provided herein, to pay you termination compensation under the circumstances described below. The Board recognizes that the continuing possibility of a sale or change of control of the Company is unsettling to you. Therefore, these arrangements are being made to help assure a continuing dedication by you to your duties to the Company by diminishing the inevitable distraction to you from the personal uncertainties and risks created by a pending sale or change of control of the Company. In particular, the Board believes it important, should the Company receive proposals from third parties with respect to its future, to enable you, without being influenced by the uncertainties of your own situation, to assess and advise the Board whether such proposals would be in the best interests of the Company and its shareholders and to take such other action regarding such proposals as the Board might determine to be appropriate. The Board also wishes to demonstrate to executives of the Company that the Company is concerned with the welfare of its executives and intends to see that loyal executives are treated fairly. 1. In view of the foregoing and in further consideration of your continued employment with the Company, the Company will pay to you, in the event that there occurs a Change of Control of the Company while you are employed by the Company, within ten (10) days following the Change of Control, the sum of One Hundred Thousand Dollars ($100,000.00). Mr. John C. Wintle Page 2 2. For purposes of this Agreement, "Change of Control" means (a) the acquisition by any person or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), except for an employee benefit plan sponsored by the Company, of beneficial ownership (within the meeting of Rule 13(d)-3 promulgated under the Exchange Act) of twenty (20) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the then outstanding voting securities of the Company that are entitled to vote generally in the election of directors, (b) individuals who, as of May 12, 2000, are members of the Company's Board of Directors or directors whose subsequent nomination or election was approved by a vote of at least a majority of such incumbents, but excluding any individual whose initial assumption of office occurs as a result of an actual or threatened solicitation to which Rule 14a -11 or Regulation 14A promulgated under the Exchange Act applies (or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute a majority of the Board, or (c) approval by the Company's shareholders of a reorganization, merger, consolidation or share exchange, unless the holders of the Company's common stock immediately prior to the transaction own a majority of the votes entitled to be cast for the directors immediately following such transaction, or (d) approval of the Company's shareholders of a liquidation or dissolution, or a sale, lease, exchange or other disposition (in one transaction or a series of transactions) of all, or substantially all, of the assets of the Company. 3. It is the intention of the Company and you that no payments by the Company to you or for your benefit under this Agreement or any other agreement or plan pursuant to which you are entitled to receive payments or benefits shall be non-deductible to the Company by reason of the operation of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") relating to parachute payments. Accordingly, notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of Section 280G of the Code, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum which can be deducted by the Company. To the extent that payments exceeding such maximum deductible amount have been made to or for your benefit, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate as determined under Section 1274(d) of the Code, compounded annually, or at such other rate as may be required in order that no such payments shall be non-deductible to the Company by reason of the operation of Section 280G. To the extent that there is more than one method of reducing the payments to bring them within the limitations of Section 280G, you shall determine which method shall be followed, provided that, if you fail to make such determination within forty-five (45) days after the Company has sent you written notice of the need of such reduction, the Company may -2- Mr. John C. Wintle Page 3 determine the method of such reduction in its sole discretion. If any dispute between the Company and you as to the amounts payable hereunder, or the method of calculating such amounts, cannot be resolved by the Company and you, either party after giving three (3) days written notice to the other may refer the dispute to an independent certified public accounting firm agreeable to both parties. The determination of such firm as to the amounts to be determined and the method of calculating such amounts shall be final and binding on both the Company and you. The Company shall bear the costs of any such determination. 4. This Agreement shall be binding upon and inure to the benefit of you, your estate and the Company and any successor or assign of the Company, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by you. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee or, if there be no such designee, to your estate. 5. Any notices required or permitted to be given hereunder shall be sufficient if in writing, and if delivered by hand, by courier, by facsimile, or sent by certified mail, return receipt requested, prepaid, to the addresses set forth below or such other address as either party may from time to time designate in writing to the other and shall be deemed given as of the date of the delivery if delivered by hand or by courier or, if mailed, three (3) days after the date of mailing. If to you: John C. Wintle c/o Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 If to the Company: Carey International, Inc. 4530 Wisconsin Avenue, N.W. Washington, D.C. 20016 Att.: Chief Executive Officer -3- Mr. John C. Wintle Page 4 6. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without regard to choice or conflicts of law principles. 7. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 8. Nothing in this Agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which you may qualify. Amounts which are vested benefits or which you are otherwise entitled to receive under any plan or program of the Company at or subsequent to any Change of Control shall be payable in accordance with such plan or program unless required to be paid earlier in accordance with this Agreement. 9. If you assert any claim in any contest (whether initiated by you or by the Company) as to the validity, enforceability or interpretation of any provision of this Agreement, the Company shall pay all reasonable legal fees and expenses incurred by you, so long as your claim is not frivolous. 10. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representations. 11. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and in pleading or proving any provision of this Agreement it shall not be necessary to produce more than one of such counterparts. -4- Mr. John C. Wintle Page 5 12. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If you are in agreement with the foregoing, please so indicate by signing and returning to the Company the enclosed copy of this letter, whereupon this letter shall constitute a binding agreement under seal between you and the Company. Very truly yours, CAREY INTERNATIONAL, INC. By /s/ Don R. Dailey ------------------------------- Agreed: /s/ John C. Wintle - - ----------------------------- John C. Wintle -5- EX-99.D.XI 22 0022.txt EXHIBIT (D)(XI) 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 ------------------------- Name: Vincent A. Wolfington ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman --------------------------- Name: Todd Berman ------------------------- Title: President ------------------------ Dated: 7/19/00 ------------------------ 2 EMPLOYMENT AGREEMENT TERMS - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Executive Vincent A. Wolfington - - -------------------------------------------------------------------------------- Effective Date Closing of Merger, except as otherwise provided below. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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). - - -------------------------------------------------------------------------------- Place of Company's principal executive offices in Washington, D.C. Performance - - -------------------------------------------------------------------------------- Base Salary $500,000 per year. - - -------------------------------------------------------------------------------- Annual Bonus Will participate in the Company's 2% EBITDA Bonus Pool Plan; provided, that, Executive shall be entitled to a minimum -------- ---- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- Benefits and Same as he is currently receiving from CI or as may be added Perquisites from time to time. - - -------------------------------------------------------------------------------- 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 -------- ---- Change in Control of the Company. - - -------------------------------------------------------------------------------- Termination - Same as current Employment Agreement. Disability. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 -------- ---- (A) or (B), such period is no less than three (3) years. - - -------------------------------------------------------------------------------- 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 - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 2 - - -------------------------------------------------------------------------------- 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 -------- ---- 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). - - -------------------------------------------------------------------------------- Governing Law Delaware. - - -------------------------------------------------------------------------------- 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 ----------------------------------------- _____________________________________________ Vincent A. Wolfington 3 EX-99.D.XII 23 0023.txt EXHIBIT (D)(XII) Exhibit (d)(xii) [LETTERHEAD OF TSUMURA INTERNATIONAL INC] #195361 v3 DRAFT/01/RWP 07/18/00 6:14pm 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. 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/ Don R. Dailey ----------------- Name: Don R. Dailey ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman --------------------------- Name: Todd Berman ------------------------- Title: President ------------------------ Dated: 7/19/00 ------------------------ 2 RETIREMENT/CONSULTING AGREEMENT TERMS - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Executive Don R. Dailey - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- Term On the Effective Date, Executive shall retire from the Company as its President and as a director of the Board and immediately thereafter, shall serve as a consultant through the earlier of (if the third anniversary thereof, (ii) Executive's termination for Cause or (iii) Executive death. - - -------------------------------------------------------------------------------- Position and Duties Consultant. During the Term, Executive shall provide such consulting services as may reasonably be requested from time to time by the Company. - - -------------------------------------------------------------------------------- Place of Company's principal executive of fees in Washington, Performance D.C. - - -------------------------------------------------------------------------------- Consulting Fee During the Term, Executive shall be paid a consulting fee of $200,000 for year one, $150,000 for year two and $100,000 for year three (or a pro-rata amount thereof in the event of an earlier termination of the consultancy). During the Term, Executive shall receive reimbursement for all travel and related expenses in the performance of his duties. - - -------------------------------------------------------------------------------- Benefits and During the Term, Executive shall be provided with Perquisites health and life insurance benefits on an enhanced basis from those that he is currently receiving; provided -------- that, the Company may satisfy part of this obligation ---- with respect to health insurance by paying Executive's COBRA continuation coverage premiums. In addition, during the Term, the Executive will be entitled to receive the same automobile allowance, including insurance, and use of the Company's car service to the same extent as such were provided prior to the Effective Date. Executive shall not be permitted to participate in any Company employee benefit plans unless the express terms of which provide eligibility for consultants and Executive meets such eligibility criteria. - - -------------------------------------------------------------------------------- Non-compete In consideration of a payment of $50,000, during the Covenant Term and one (1) year thereafter (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 his termination of Covenant service, Executive shall not disclose any confidential information or trade secrets without the Company's written consent and he shall return of all Company property upon termination of service. Nonsolicitation During the Restricted Period will not attempt to solicit any employee or customer or client of the Company. - - -------------------------------------------------------------------------------- Entire Agreement Upon execution of a definitive consulting 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 payment under Section 6 of the Employment Agreement in accordance with the terms and conditions thereof. - - -------------------------------------------------------------------------------- Governing Law Delaware - - -------------------------------------------------------------------------------- IN WITNESS WHEREOF, the undersigned agree as of the 19/th/ day of July, 2000, to negotiate in good faith to enter into a definitive retirement consulting agreement with terms and conditions which are consistent with the terms and conditions set forth above by the Effective Date. COMPANY By: /s/ Don R. Dailey -------------------------------- ___________________________________ Don R. Dailey EX-99.D.XIII 24 0024.txt EXHIBIT (D)(XIII) Exhibit (d)(xiii) [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/ Richard A. Anderson, Jr. ---------------------------- Name: Richard A. Anderson, Jr. ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XIV 25 0025.txt EXHIBIT (D)(XIV) 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 ------------------ Name: David Haedicke ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XV 26 0026.txt EXHIBIT (D)(XV) Exhibit (d)(xv) [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/ Gary L. Kessler ------------------- Name: Gary L. Kessler ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 Participants 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XVI 27 0027.txt EXHIBIT (D)(XVI) Exhibit (d)(xvi) [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/ Devin J. Murphy ------------------- Name: Devin J. Murphy ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 Participants 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XVII 28 0028.txt EXHIBIT (D)(XVII) Exhibit (d)(xvii) [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/ Sally A. Snead ------------------ Name: Sally A. Snead ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 Participants 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XVIII 29 0029.txt EXHIBIT (D)(XVIII) Exhibit (d)(xviii) [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/ Guy C. Thomas ----------------- Name: Guy C. Thomas ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XIX 30 0030.txt EXHIBIT (D)(XIX) Exhibit (d)(xix) [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/ Eugene Willard ------------------ Name: Eugene Willard ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.D.XX 31 0031.txt EXHIBIT (D)(XX) Exhibit (d)(xx) [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/ John Wintle --------------- Name: John Wintle ACKNOWLEDGED AND AGREED TO: ALUWILL ACQUISITION CORP. By: /s/ Todd Berman ------------------------- Name: Todd Berman ----------------------- Title: President ----------------------- Dated: 7/19/00 ----------------------- 2 MANAGEMENT INCENTIVE COMPENSATION - - -------------------------------------------------------------------------------- Provision Agreement --------- --------- - - -------------------------------------------------------------------------------- Participants Management Group other than Vincent Wolfington and Don Dailey. - - -------------------------------------------------------------------------------- Effective Date Closing of Merger. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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. - - -------------------------------------------------------------------------------- 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 ------------------------------------ ________________________________________ Vincent Wolfington EX-99.E.I 32 0032.txt EXHIBIT (E)(I) Exhibit (e)(1) CHARTWELL INVESTMENTS II LLC 717 Fifth Avenue 23rd Floor New York, New York 10022 July __, 2000 Aluwill Acquisition Corp. Eranja Acquisition Sub, Inc. c/o Chartwell Investments II LLC 717 Fifth Avenue 23rd Floor New York, New York 10022 Dear Sirs: This letter is to confirm our agreement that in connection with the transactions (the "Transactions") contemplated in the Agreement and Plan of ------------ Merger (the "Merger Agreement") by and among Carey International, Inc. (the ---------------- "Company"), Limousine Holdings, LLC, Aluwill Acquisition, Corp. ("Acquisition ------- ----------- Corp.") and Eranja Acquisition Sub, Inc. ("Merger Subsidiary") dated as of July - - ----- ----------------- 19, 2000, you have agreed to reimburse us at any time after the Offer Closing for the reasonable out-of-pocket costs and expenses which we have incurred in connection with the Transactions. You have also agreed to pay us a fee for advisory services we have rendered to you in connection with the financing of the Transactions (the "Financing") at the Closing equal to: one percent (1%) of --------- total capitalization of Acquisition Corp. and/or Merger Subsidiary, as the case may be, and the Company including, without limitation but without duplication, all debt funded in connection with the Transactions and common and preferred equity interests (the "Advisory Fee"). Capitalized terms not defined herein ------------ shall have the meanings ascribed to them in the Merger Agreement. These services are attributable to acting as exclusive financial advisor with respect to the Transactions and the Financing and negotiating and assisting with the documentation related to the Financing (collectively, the "Advisory -------- Services"). - - -------- Each of the parties hereto acknowledges that the Advisory Services for which the Advisory Fee is to be paid hereunder have been heretofore rendered by Chartwell Investments II LLC at your request in connection with the Financing as described above. From and after the Offer Closing, the Company, Acquisition Corp. and Merger Subsidiary agree to indemnify and hold Chartwell Investments II LLC, its officers, employees and agents (each an "Indemnified Party") harmless against ----------------- any liability, claim, loss or expenses, as and when incurred ("Damages"), to ------- which an Indemnified Party may become subject as a Aluwill Acquisition Corp. Eranja Acquisition Sub, Inc. July __, 2000 Page 2 result of the performance of the services described herein; provided, however, -------- ------- that Acquisition Corp. and Merger Subsidiary shall not be liable to an Indemnified Party for Damages resulting primarily and directly from the Indemnified Party's bad faith, gross negligence or willful misconduct, and Chartwell Investments II LLC shall so indemnify Acquisition Corp. and Merger Subsidiary for damages arising from its bad faith, gross negligence or willful misconduct. The benefits of this Agreement shall inure to the respective successors and assigns of the parties hereto and of the indemnified parties hereunder and their successors and assigns and representatives, and the obligations and liabilities assumed hereunder by the parties hereto shall be binding upon their respective successors and assigns. This Agreement shall not be assignable by the parties hereto without mutual written consent. This Agreement shall be subject to and governed by the laws of the State of Delaware without regard to its conflict of laws principles and rules. Aluwill Acquisition Corp. Eranja Acquisition Sub, Inc. July _, 2000 Page 3 If the foregoing comports with your understanding of our agreement, please sign below, whereupon this letter shall be a valid and binding agreement. Very truly yours, CHARTWELL INVESTMENTS II LLC By: ---------------------------- Name: -------------------------- Title: ------------------------- ACCEPTED AND AGREED AS OF THIS __ DAY OF ___________, 2000 CAREY INTERNATIONAL, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- ALUWILL ACQUISITION CORP. By: ------------------------------ Name: ---------------------------- Title: --------------------------- ERANJA ACQUISITION SUB, INC. By: ------------------------------ Name: ---------------------------- Title: --------------------------- EX-99.E.II 33 0033.txt EXHIBIT (E)(II) Exhibit (e)(ii) MANAGEMENT CONSULTING AGREEMENT ------------------------------- THIS MANAGEMENT CONSULTING AGREEMENT (the "Agreement"), dated as of --------- August __, 2000, by and between Carey International, Inc., a Delaware corporation (the "Company"), and Chartwell Investments II LLC, a Delaware ------- limited liability company (the "Consultant"). ---------- WHEREAS, the Company desires to avail itself of the expertise possessed by the Consultant and consequently has requested that the Consultant provide it, from time to time, with certain management consultant and advisory services related to the business, strategy, administration and affairs of the Company and the review and analysis of certain financial and other transactions; and WHEREAS, the Consultant and the Company agree that it is in their respective interests to enter into a management consulting agreement whereby, for the consideration specified herein, the Consultant shall provide such services as an independent consultant to the Company. NOW THEREFORE, in consideration of the mutual premises and covenants contained herein, the Company and the Consultant agree as follows: 1. Retention of Consultant. The Company hereby retains the Consultant, ----------------------- and the Consultant hereby accepts such retention, upon the terms and conditions set forth in this Agreement. 2. Effective Date/Term. This Agreement shall commence as of the date ------------------- of the Closing (as such term is defined in the Agreement and Plan of Merger (the "Merger Agreement") dated as of July 19, 2000, by and among Carey International, ---------------- Inc., Limousine Holdings, LLC and Aluwill Acquisition Corp.) and shall continue through the period ending on the tenth anniversary of such date, subject to renewal pursuant to paragraph 5 below (such period, including any renewal hereinafter referred to as the "Term"). ---- 3. Management Consulting Services. ------------------------------ (a) The Consultant shall advise the Company concerning such management matters relating to the Company's personnel, business and acquisition strategy, administration and proposed financial transactions, and other senior management matters relating to the Company as the Company shall reasonably and specifically request. The Consultant shall not be required to devote any specified amount of time to any such request, and shall be required to devote only so much time to any such request as the Consultant shall, in its reasonable discretion, deem necessary to complete such services. Such consulting services shall, in the Consultant's reasonable discretion, be rendered in person or by telephone or other communication. The Consultant shall (i) use its reasonable efforts to deal effectively with all subjects submitted to it hereunder and (ii) endeavor to further, by performance of its services hereunder, the policies and objectives of the Company. (b) The Consultant shall perform all such services as an independent contractor to the Company. The Consultant is not an agent or representative of the Company and has no authority to act for or to bind the Company without its prior written consent. (c) This Agreement shall in no way prohibit the Consultant from engaging in other activities, whether or not competitive with any business of the Company. The parties hereto agree that, in the event additional services not contemplated hereby are requested of the Consultant, the parties hereto shall negotiate the scope of, and appropriate compensation for, such additional services. 4. Compensation. ------------ (a) As compensation for the services provided by the Consultant hereunder, the Company shall pay to the Consultant, as provided herein, a fee (the "Management Fee") of the greater of $650,000 and 2% of the EBITDA of the Comany and its subsidiaries for each fiscal year of the Company during the Term hereof. The Management Fee shall be payable annually, in advance on the first day of the first fiscal quarter of each fiscal year of the Company during the Term (except that the first payment will be made on the date hereof), or, if such date is not a business day, on the next succeeding business day. For purposes hereof, "EBITDA" shall have the meaning set forth in the Credit Agreement dated as of August __, 2000 among the Company, the other Credit Parties signatory thereto, the Lenders party thereto, ____, as Administrative Agent and Lender thereunder and _______, as Documentation Agent and Lender thereunder (the "Credit Agreement") from time to time in effect. To the extent ---------------- that any amounts in excess of $____ are due with respect to any fiscal year, such payments shall be made within 10 business days after completion of the audit of the financial statements of the Company for such fiscal year. In the event that payment of any amount hereunder is prohibited by any financing agreement to which the Company is a party, such amount shall accrue and be made as soon as such prohibition lapses. The Company covenants and agrees that if an Event of Default under the Credit Agreement shall have occurred and be continuing, the Company shall not make any payment of the Management Fee hereunder but such fee shall accrue and be made as soon as such prohibition lapses. (b) In addition to the payment of the Management Fee, the Company shall reimburse the Consultant for all out-of-pocket costs and expenses reasonably incurred by the Consultant in connection with the provision of services hereunder, including reasonable legal, accounting, temporary and overtime secretarial, travel and entertainment fees and expenses, promptly upon receipt of a statement of such expense from the Consultant. (c) If the Agreement is terminated at the Company's option upon 30 days prior notice to the Consultant (the "Company's Termination Option"), the ---------------------------- Consultant shall, within five business days of termination, receive a payment equal to the amount of compensation the Consultant would have received thereunder, absent the exercise of the Company's Termination Option, if the Agreement had not been terminated until the date on which the Agreement would next have expired if not renewed. -2- 5. Renewal. This Agreement shall automatically be renewed by the ------- Board of Directors of the Company (the "Board") for additional 1-year periods ----- unless the Board determines not to renew the Agreement and gives written notice to the Consultant of non-renewal at least 60 business days prior to the date in which the Agreement would otherwise have been renewed. 6. Indemnification. The Company agrees to defend, indemnify and hold --------------- the Consultant, its officers, employees and agents (each an "Indemnified Party") ----------------- harmless against any liability, claim, loss or expenses (the "Damages") to which ------- an Indemnified Party may become subject as a result of the performance of the Consultant's services hereunder, such claims, losses or expenses shall be paid when and as incurred; provided that the Company shall not be liable to an Indemnified Party for Damages resulting primarily and directly from the Indemnified Party's bad faith, gross negligence or willful misconduct, and Consultant shall so indemnify the Company, its officers, employees and agents for Damages arising from its bad faith, gross negligence or willful misconduct. 7. Notices. Any notice, request, demand or other communications ------- required or permitted to be given under this Agreement shall be in writing and shall be effective and deemed to have been duly given when delivered personally or on the earlier to occur of (a) the date of delivery as shown by the return receipt; (b) two (2) days after the mailing thereof by registered or certified mail, return receipt requested, with first class postage prepaid; (c) confirmation of receipt of telecopy; or (d) the day after shipment by a nationally recognized overnight delivery service. All notices shall be addressed to the person at the addresses set forth on the signature page hereto. Any party hereto may at any time and from time to time change its address for purpose of receiving notices by giving notice thereof to the other party as provided in this Section 7. Any notice which is required to be made within a stated period of time shall be deemed timely if made before midnight of the last day of such period. 8. Binding Agreement; Benefit. This Agreement shall bind and inure -------------------------- to the benefit of any heirs or legal representatives of the Consultant and the Company. 9. Governing Law. This Agreement shall be subject to and governed by ------------- the laws of the State of Delaware regardless of applicable conflict of laws rules or principles or the fact that either or both of the parties now is or may become a resident of a different state or country. 10. Headings. Section headings are used for convenience only and -------- shall in no way affect the construction of this Agreement. 11. Entire Agreement; Additional Agreements; Amendments. This --------------------------------------------------- Agreement contains the entire understanding of the parties with respect to its subject matter; provided, however, that nothing contained herein shall be -------- ------- construed to prevent the Company from contracting with the Consultant for additional services pursuant to other, separately documented agreements. Neither this Agreement nor any part hereof may in any way be altered, amended, extended, waived, discharged or terminated except by a written agreement signed by each of the parties. -3- 12. Successors and Assigns. The benefits of this Agreement shall ---------------------- inure to the respective successors and assigns of the parties hereto and of the Indemnified Parties hereunder and their successors and assigns and representatives, and the obligations and liabilities assumed hereunder by the parties hereto shall be binding upon their respective successors and assigns. Consultant may not assign its rights and obligations hereunder except to an entity controlled by or under common control with Consultant. 13. Counterparts. This Agreement may be executed in any number of ------------ counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. 14. Confidentiality. The Consultant shall maintain the --------------- confidentiality of all proprietary information received by it in the course of its engagement hereunder relating to the Company, and shall not use the same for any purpose other than as contemplated herein. -4- IN WITNESS WHEREOF, the parties have duly executed this Consulting Agreement as of the date first above written. CAREY INTERNATIONAL, INC. By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- Address: ------------------------------------ -------------------------------------------- -------------------------------------------- -------------------------------------------- CHARTWELL INVESTMENTS II LLC By: ----------------------------------------- Name: --------------------------------------- Title: -------------------------------------- Address: ------------------------------------ -------------------------------------------- -------------------------------------------- -------------------------------------------- Management Consulting Agreement EX-99.E.III 34 0034.txt EXHIBIT (E)(III) Exhibit (e)(iii) Ford Management Consulting Agmt 07/21/00 1:24pm FORD MANAGEMENT CONSULTING AGREEMENT ------------------------------------ THIS MANAGEMENT CONSULTING AGREEMENT (the "Agreement"), dated as of August --------- __, 2000, by and between Carey International, Inc., a Delaware corporation (the "Company"), and Ford Motor Company, a Delaware corporation (the "Consultant"). ------- ---------- WHEREAS, the Company desires to avail itself of the expertise possessed by the Consultant and consequently has requested that the Consultant provide it, from time to time, with certain management consultant and advisory services related to the business, strategy, marketing and promotional aspects of the Company; and WHEREAS, the Consultant and the Company agree that it is in their respective interests to enter into a management consulting agreement whereby, for the consideration specified herein, the Consultant shall provide such services as an independent consultant to the Company. NOW THEREFORE, in consideration of the mutual premises and covenants contained herein, the Company and the Consultant agree as follows: 1. Retention of Consultant. The Company hereby retains the Consultant, ----------------------- and the Consultant hereby accepts such retention, upon the terms and conditions set forth in this Agreement. 2. Effective Date/Term. This Agreement shall commence as of the date of ------------------- the Closing (as such term is defined in the Agreement and Plan of Merger (the "Merger Agreement") dated as of July 19, 2000, by and among Carey International, ---------------- Inc., Limousine Holdings, LLC and Aluwill Acquisition Corp.) and shall continue through the period ending on the first to occur of (a) the tenth anniversary of such date, subject to renewal pursuant to paragraph 5 below and (b) Consultant ceasing to own all the Class A LLC Interest of Limousine Holdings, LLC (or its successor or equivalent Common Stock of the Company) owned by it on the date hereof, after giving effect to the transaction contemplated in the merger agreement. (such period, including any renewal hereinafter referred to as the "Term"). ---- 3. Management Consulting Services. ------------------------------ (a) The Consultant shall advise the Company concerning such matters relating to the Company's marketing and promotional matters, and other matters relating to the Company as the Company shall reasonably and specifically request. The Consultant shall not be required to devote any specified amount of time to any such request, and shall be required to devote only so much time to any such request as the Consultant shall, in its reasonable discretion, deem necessary to complete such services. Such consulting services shall, in the Consultant's reasonable discretion, be rendered in person or by telephone or other communication. The Consultant shall (i) use its reasonable efforts to deal effectively with all subjects submitted to it hereunder and (ii) endeavor to further, by performance of its services hereunder, the policies and objectives of the Company. (b) The Consultant shall perform all such services as an independent contractor to the Company. The Consultant is not an agent or representative of the Company and has no authority to act for or to bind the Company without its prior written consent. (c) This Agreement shall in no way prohibit the Consultant from engaging in other activities, whether or not competitive with any business of the Company. The parties hereto agree that, in the event additional services not contemplated hereby are requested of the Consultant, the parties hereto shall negotiate the scope of, and appropriate compensation for, such additional services. 4. Compensation. ------------ (a) As compensation for the services provided by the Consultant hereunder, the Company shall pay to the Consultant, as provided herein, a fee (the "Management Fee") of $250,000 for each fiscal year of the Company during -------------- the Term hereof. The Management Fee shall be payable annually, in advance on the first day of the first fiscal quarter of each fiscal year of the Company during the Term (except that the first payment will be made on the date hereof), or, if such date is not a business day, on the next succeeding business day. In the event that payment of any amount hereunder is prohibited by any financing agreement to which the Company is a party, such amount shall accrue and be made as soon as such prohibition lapses. The Company covenants and agrees that if an Event of Default under the Credit Agreement dated as of August ___, 2000 among the Company, the other Credit Parties signatory thereto, the Lenders party thereto, __________, as Administrative Agent and Lender thereunder and _______, as Documentation Agent and Lender thereunder (the "Credit Agreement") shall have ---------------- occurred and be continuing, the Company shall not make any payment of the Management Fee hereunder but such fee shall accrue and be made as soon as such prohibition lapses. (b) In addition to the payment of the Management Fee, the Company shall reimburse the Consultant for all out-of-pocket costs and expenses reasonably incurred by the Consultant in connection with the provision of services hereunder, including reasonable legal, accounting, temporary and overtime secretarial, travel and entertainment fees and expenses, promptly upon receipt of a statement of such expense from the Consultant. (c) If the Agreement is terminated at the Company's option upon 30 days prior notice to the Consultant (the "Company's Termination Option"), the ---------------------------- Consultant shall, within five business days of termination, receive a payment equal to the amount of compensation the Consultant would have received thereunder, absent the exercise of the Company's Termination Option, if the Agreement had not been terminated until the date on which the Agreement would next have expired if not renewed. 5. Renewal. This Agreement shall automatically be renewed by the Board of ------- Directors of the Company (the "Board") for additional 1-year periods unless the ----- Board determines not to renew the Agreement and gives written notice to the Consultant of non-renewal at least 60 business days prior to the date in which the Agreement would otherwise have been renewed. -2- 6. Indemnification. The Company agrees to defend, indemnify and hold --------------- the Consultant, its officers, employees and agents (each an "Indemnified Party") ----------------- harmless against any liability, claim, loss or expenses (the "Damages") to which ------- an Indemnified Party may become subject as a result of the performance of the Consultant's services hereunder, such claims, losses or expenses shall be paid when and as incurred; provided that the Company shall not be liable to an Indemnified Party for Damages resulting primarily and directly from the Indemnified Party's bad faith, gross negligence or willful misconduct, and Consultant shall so indemnify the Company, its officers, employees and agents for Damages arising from its bad faith, gross negligence or willful misconduct. 7. Notices. Any notice, request, demand or other communications ------- required or permitted to be given under this Agreement shall be in writing and shall be effective and deemed to have been duly given when delivered personally or on the earlier to occur of (a) the date of delivery as shown by the return receipt; (b) two (2) days after the mailing thereof by registered or certified mail, return receipt requested, with first class postage prepaid; (c) confirmation of receipt of telecopy; or (d) the day after shipment by a nationally recognized overnight delivery service. All notices shall be addressed to the person at the addresses set forth on the signature page hereto. Any party hereto may at any time and from time to time change its address for purpose of receiving notices by giving notice thereof to the other party as provided in this Section 7. Any notice which is required to be made within a stated period of time shall be deemed timely if made before midnight of the last day of such period. 8. Binding Agreement; Benefit. This Agreement shall bind and inure to -------------------------- the benefit of any heirs or legal representatives of the Consultant and the Company. 9. Governing Law. This Agreement shall be subject to and governed by ------------- the laws of the State of Delaware regardless of applicable conflict of laws rules or principles or the fact that either or both of the parties now is or may become a resident of a different state or country. 10. Headings. Section headings are used for convenience only and shall -------- in no way affect the construction of this Agreement. 11. Entire Agreement; Additional Agreements; Amendments. This --------------------------------------------------- Agreement contains the entire understanding of the parties with respect to its subject matter; provided, however, that nothing contained herein shall be -------- ------- construed to prevent the Company from contracting with the Consultant for additional services pursuant to other, separately documented agreements. Neither this Agreement nor any part hereof may in any way be altered, amended, extended, waived, discharged or terminated except by a written agreement signed by each of the parties. 12. Successors and Assigns. The benefits of this Agreement shall inure ---------------------- to the respective successors and assigns of the parties hereto and of the Indemnified Parties hereunder and their successors and assigns and representatives, and the obligations and liabilities assumed hereunder by the parties hereto shall be binding upon their respective successors and assigns. Consultant may not assign its rights and obligations hereunder except to an entity controlled by or under common control with Consultant. -3- 13. Counterparts. This Agreement may be executed in any number of ------------ counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. 14. Confidentiality. The Consultant shall maintain the confidentiality --------------- of all proprietary information received by it in the course of its engagement hereunder relating to the Company, and shall not use the same for any purpose other than as contemplated herein. -4- IN WITNESS WHEREOF, the parties have duly executed this Consulting Agreement as of the date first above written. CAREY INTERNATIONAL, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Address: ------------------------------- --------------------------------------- --------------------------------------- --------------------------------------- FORD MOTOR COMPANY By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Address: ------------------------------- --------------------------------------- --------------------------------------- Management Consulting Agreement -----END PRIVACY-ENHANCED MESSAGE-----