CENTRAL PARKING CORPORATION - FORM DEF 14A
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant £
Check the
appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2)) |
þ Definitive Proxy Statement
£ Definitive Additional Materials
£
Soliciting Material pursuant to 14a-11(c) or Rule 14a-12
Central Parking Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
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was determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
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2401 21st Avenue South, Suite 200
Nashville, Tennessee 37212
To Our Shareholders:
On behalf of the Board of Directors, it is our pleasure to invite you to attend the Annual
Meeting of Shareholders of Central Parking Corporation.
As shown in the formal notice enclosed, the meeting will be held on Tuesday, February 21,
2006, at 10:00 a.m. (Central Standard Time) at our corporate headquarters in Nashville, Tennessee.
The purpose of this years meeting is to elect directors, adopt the 2006 Long-Term Incentive Plan
and transact such other business as may properly come before the meeting. The meeting will include
a report on Central Parking Corporations activities for the fiscal year ended September 30, 2005,
and there will be an opportunity for comments and questions from shareholders.
Whether or not you plan to attend the meeting, it is important that you are represented and
that your shares are voted. Accordingly, after reviewing the Proxy Statement, we ask you to vote
using the telephone or Internet voting instructions found on the enclosed proxy card or to
complete, sign and date the proxy card and return it as soon as possible in the postage-paid
envelope provided. Early return of your proxy or vote over the Internet or by telephone will permit
us to avoid the expense of soliciting the votes of shareholders.
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Sincerely, |
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Monroe J. Carell, Jr. |
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Executive Chairman |
January 30, 2006
TABLE OF CONTENTS
CENTRAL PARKING CORPORATION
2401 21st Avenue South
Nashville, Tennessee 37212
(615) 297-4255
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held February 21, 2006
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Central Parking Corporation,
a Tennessee corporation (the Company), will be held at the Companys headquarters, 2401 21st
Avenue South, Third Floor, Nashville, Tennessee, on Tuesday, February 21, 2006, at 10:00 a.m.
(Central Standard Time) (the Annual Meeting) for the following purposes:
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To elect nine directors for the term ending at the Annual Meeting of
Shareholders to be held in 2007; |
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To approve the adoption of the Central Parking Corporation 2006 Long-Term
Incentive Plan; and |
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To transact such other business as may properly come before the Annual
Meeting and any continuations and adjournments thereof. |
The Board of Directors has fixed the close of business on December 30, 2005, as the record
date for determining the holders of the common stock of the Company entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof.
The common stock of the Company should be represented as fully as possible at the Annual
Meeting. Therefore, please vote using the telephone or Internet voting instructions found on the
enclosed proxy card or sign and return the enclosed proxy at your earliest convenience. You may, of
course, revoke your proxy at any time before it is voted at the Annual Meeting. However, voting by
telephone or Internet or signing and returning the proxy will assure your representation at the
Annual Meeting if you do not attend.
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By Order of the Board of Directors |
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Henry J. Abbott, Secretary |
Nashville, Tennessee
January 30, 2006
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN,
DATE AND RETURN YOUR PROXY.
CENTRAL PARKING CORPORATION
2401 21st Avenue South
Nashville, Tennessee 37212
(615) 297-4255
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be Held February 21, 2006
INTRODUCTION AND VOTING PROCEDURES
This Proxy Statement is being furnished in connection with the solicitation of proxies by the
Board of Directors (the Board) of Central Parking Corporation, a Tennessee corporation (Central
Parking or the Company), for use at the Annual Meeting of Shareholders of the Company to be held
at the Companys headquarters, 2401 21st Avenue South, Third Floor, Nashville, Tennessee, on
Tuesday, February 21, 2006, at 10:00 a.m. (Central Standard Time) and at any continuations and
adjournments thereof (the Annual Meeting). This Proxy Statement is first being mailed on or about
January 30, 2006, to holders of the common stock, par value $0.01 per share, of the Company (the
Common Stock) of record at the close of business on December 30, 2005. The cost of this
solicitation will be borne by the Company.
The shares of Common Stock held by each shareholder who votes by Internet or telephone or who
signs and returns the enclosed proxy will be counted for purposes of determining the presence of a
quorum at the Annual Meeting unless such proxy shall be timely revoked. If the enclosed form of
proxy is executed and returned, it may, nevertheless, be revoked at any time before it is voted by
delivery of a written revocation or a duly executed proxy bearing a later date to the Secretary of
the Company at its headquarters or by the shareholder personally attending and voting his or her
shares at the Annual Meeting. Instructions for voting on the Internet or by telephone may be found
in the Proxy Voting Instructions accompanying the Proxy Card.
The Board has fixed the close of business on December 30, 2005, as the record date for the
Annual Meeting. Only shareholders of record at the close of business on December 30, 2005, are
entitled to notice of and to vote at the Annual Meeting. At the close of business on such date,
there were 31,939,656 shares of Common Stock outstanding and entitled to vote at the Annual
Meeting. Each share of Common Stock entitles the holder thereof to one vote on each matter to be
considered at the Annual Meeting. A quorum (i.e., holders of record of a majority of the shares of
Common Stock outstanding and entitled to vote at the meeting) is required for any vote taken at the
Annual Meeting. Assuming a quorum is present with respect to such matters, the affirmative vote of
a plurality of the shares of Common Stock cast is required for the election of directors and the
affirmative votes must exceed the negative votes of the shares of Common Stock cast for approval of
the 2006 Long-Term Incentive Plan and any other matter submitted to a vote of the shareholders at
the Annual Meeting. Under Tennessee law, abstentions and broker non-votes (i.e., shares held by
brokers or nominees as to which instructions have not been received from the beneficial owners or
persons entitled to vote and as to which the broker or nominee does not have discretionary power to
vote on a particular matter) are treated as present and entitled to vote and, therefore, will be
counted in determining whether a quorum is present. However, abstentions and non-votes will not be
counted as affirmative or negative votes cast and on the approval of any matters which require a
majority vote for approval, will have no effect on the vote. They have no legal effect on the
election of directors.
The Annual Report to Shareholders of the Company (the Annual Report) for the fiscal year
ended September 30, 2005, is being mailed concurrently with this Proxy Statement to all holders of
Common Stock of record at the close of business on December 30, 2005. In addition, the Company has
provided (at Company expense) brokers, dealers, banks, voting trustees and their nominees with
additional copies of the Proxy Statement and the Annual Report for distribution to beneficial
owners of the Companys Common Stock as of the record date. Additional copies of the Annual Report
and the Annual Report on Form 10-K for the fiscal year ended September 30, 2005 (but without
exhibits to the Form 10-K) may be obtained without charge upon request to Kate Leahy, 2401 21st
Avenue South, Nashville, Tennessee 37212; (615) 297-4255; or via e-mail to kleahy@parking.com.
EACH PROPERLY EXECUTED PROXY RECEIVED IN TIME FOR THE ANNUAL MEETING WILL BE VOTED AS SPECIFIED
THEREIN. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED THEREBY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEES NAMED HEREIN WHO ARE STANDING FOR ELECTION AS DIRECTORS AND FOR THE APPROVAL OF THE
2006 LONG-TERM INCENTIVE PLAN. Management does not know of any other matters that will be presented
for action at the Annual Meeting of Shareholders. If any other matter does come before the Annual
Meeting of Shareholders, however, the persons appointed in the proxy will vote in accordance with
their best judgment on such matter.
PROPOSAL I.
ELECTION OF DIRECTORS
The Board of Directors is not classified so all of our directors are elected annually. The
current Board of Directors consists of eight directors. One director, Cecil Conlee, is not
standing for re-election. Claude Blankenship and Emanuel Eads have been nominated as additional
directors. As a result, nine directors have been nominated for election at the Annual Meeting.
Proxies cannot be voted for a greater number of persons than the number of nominees named in the
proxy.
We propose that the nominees listed below be elected as members of the Board of Directors at
the Annual Meeting. Each of the nominees will be elected to serve as a director until the annual
meeting of shareholders in 2007 or until his or her respective successor is duly elected and
qualified. If a nominee becomes unable or unwilling to accept nomination or election, the person or
persons voting the proxy will vote for such other person or persons as may be designated by the
Board of Directors. The Board has determined that five of the current eight directors (Mr. Baker,
Mr. Nelson, Mr. Shell, Mr. Smith and Mr. Conlee ) are independent directors within the meaning of
the listing requirements of the New York Stock Exchange. Mr. Conlee is not standing for
reelection, but the Board anticipates that Mr. Blankenship, if he is elected, will qualify as an
additional independent director within the meaning of the listing requirements of the New York
Stock Exchange
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Director |
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Positions with Company, Directorships and Business |
Name and Age |
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Since |
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Experience for Last Five Years |
Monroe J. Carell, Jr., 74
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1979 |
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Executive Chairman of the Board of Directors of the
Company since August 2005. Mr. Carell served as
Chairman of the Board of Directors from 1979 to
until being named Executive Chairman. Mr. Carell
also served as Chief Executive Officer from 1979
until April 2001 and from May 2003 to August 2005.
Mr. Carell has served as a trustee of Vanderbilt
University since 1991 and is a life member of the
Urban Land Institute. |
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Raymond T. Baker, 55
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2004 |
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Partner, Gold Crown Management Company, a real
estate asset management company, from 1974 to
present. Mr. Baker is the founder and has served as
Co-Director of the Gold Crown Foundation since 1986.
He is a member of the Board of Directors of Alpine
Banks of Colorado. Mr. Baker also serves on the
Steele Street Bank Board of Directors and Land Title
Guarantee Board of Directors. Mr. Baker is
currently serving as Chairman of the Board of the
Denver Metropolitan Major League Baseball Stadium
District; Chairman of the Board of the Metropolitan
Football Stadium District (Denver); Former Chair of
the Colorado Commission on Higher Education and the
Colorado Commission on Higher EducationCapital
Development Committee. |
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Claude Blankenship, 65
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Nominee
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Executive Managing Partner, Blankenship CPA Group, a
firm that provides audit, tax, accounting and
business consulting services, since September 1992.
Mr. Blankenship is a member of the American
Institute of Certified Public Accountants (AICPA)
and serves on the AICPA Executive Committee for
Private Companies Practice Section. He is also a
member and past president of the Tennessee Society
of Certified Public Accountants. Mr. Blankenship
currently serves on the Board of Directors of Faith
Family Clinic and the Family Foundation. |
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Director |
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Positions with Company, Directorships and Business |
Name and Age |
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Since |
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Experience for Last Five Years |
Kathryn Carell Brown, 43
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2004 |
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Mrs. Brown was employed in various corporate staff
positions with the Company from 1986 through 1996.
She served as Project Manager for Herbert and
Company, a residential construction company, from
February 1998 until December 2000. Mrs. Brown
currently serves as Vice Chairman of the Tennessee
Repertory Theater and a member of the Board of
Trustees of The Ensworth School. Mrs. Brown is the
daughter of Monroe J. Carell, Jr., Executive
Chairman of the Board of Directors of the Company. |
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Emanuel J. Eads, 54
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Nominee
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President and Chief Executive Officer since August
2005. Mr. Eads served as President and Chief
Operating Officer from May 2003 to August 2005. He
served as President Business Development from
October 2001 until his appointment as President and
Chief Operating Officer. Prior to October 2001, Mr.
Eads served as Executive Vice President, a position
he assumed in August 1998. Employed by the Company
since 1974, Mr. Eads previously served in a variety
of positions of increasing responsibility including
Senior Vice President, Regional Manager and General
Manager. |
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Lewis Katz, 64
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1998 |
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Mr. Katz serves as Governor of the New Jersey Nets,
a National Basketball Association franchise. He
served as the Chief Executive Officer of Kinney
System Holding Corp., a parking services company,
from November 1990 until the Company acquired Kinney
in February 1998. |
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Edward G. Nelson, 74
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1993 |
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Mr. Nelson formed Nelson Capital Corp., a merchant
banking firm, in 1985, and has served as Chairman
and President since its organization. Mr. Nelson
serves as a director of Bucyrus International, Inc.,
a manufacturer of surface mining equipment, Ohio
Steel Forge, a subsidiary of Daido Steel of Japan
and Evolved Digital Solutions, a radiology
management company. Mr. Nelson also serves as a
trustee of Vanderbilt University and is Honorary
Consul General of Japan. |
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Owen G. Shell, Jr., 69
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2004 |
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Mr. Shell is a private investor. He served as
President of the Asset Management Group of Bank of
America Corporation from November 1996 until June
2001. From 1986 until 1996, Mr. Shell served as
President of Bank of America/Tennessee and Chairman
of the Commercial Corporate Forum for Bank of
America Corporation. He has served as a director and
member of the Audit Committee of LifePoint
Hospitals, Inc. since December 2002. |
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William B. Smith, 62
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2004 |
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Mr. Smith has served as an Advisory Director of
Morgan Stanley & Co. Incorporated, a financial
services firm, since July 2000. From May 1997 until
July 2000, Mr. Smith served as Managing Director of
Morgan Stanley, head of Morgan Stanley Realty and a
member of the Investment Banking Department. He
joined Dean Witter Discover, which merged with
Morgan Stanley in May 1997, in 1982. Mr. Smith has
served as a director of Pulte Homes, Inc., a real
estate home building company, since March 2001. |
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED NOMINEES. THE
AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST BY THE SHARES ENTITLED TO VOTE ON EACH DIRECTOR
IS NECESSARY FOR HIS OR HER ELECTION.
3
EXECUTIVE OFFICERS
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Year of |
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Positions With The Company And Business |
Name & Age |
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Employment |
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Experience For The Last Five Years |
Monroe J. Carell, Jr., 74
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1967 |
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Executive Chairman of the Board of Directors since
August 2005. Mr. Carell served as Chairman of the Board
from 1979 until being named Executive Chairman. He also
served as Chief Executive Officer from 1979 until April
2001 and from May 2003 until August 2005. |
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Emanuel J. Eads, 54
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1974 |
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Named Chief Executive Officer in August 2005. Mr. Eads
served as President and Chief Operating Officer from May
2003 until August 2005. He served as President
Business Development from October 2001 until his
appointment as President and Chief Operating Officer.
Prior to October 2001, Mr. Eads served as Executive Vice
President, a position he assumed in August 1998.
Employed by the Company since 1974, Mr. Eads previously
served in a variety of positions of increasing
responsibility including Senior Vice President, Regional
Manager and General Manager. |
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James H. Bond, 63
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1971 |
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President International Operations since October 2001.
Mr. Bond has been employed by the Company since 1971 in
a variety of positions of increasing responsibility and
served as President and Chief Operating Officer until
October 2001. |
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William H. Bodenhamer, 53
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2001 |
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President of the Companys USA Parking subsidiary, which
was acquired by the Company in October 2001. Mr.
Bodenhamer founded USA Parking in 1980 and has served as
its president since that time. USA Parking provides
valet parking and transportation services primarily to
the hospitality industry. |
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Robert Cizek, 41
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1990 |
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Senior Vice President since May 2000. Mr. Cizek is
responsible for the Companys operations in the
Southeast and Texas. He also oversees the Companys
Government Services segment. He served as a regional
manager for the Company from March 1995 until his
appointment as Senior Vice President. Prior to March
1995, Mr. Cizek served as a general manager and
operations manager for the Company. |
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Jeff Heavrin, 44
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2002 |
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Senior Vice President and Chief Financial Officer since
June 2005. Mr. Heavrin served as Vice President and
Controller of the Company from December 2002 to June
2005 and served as interim Chief Financial Officer from
March to June 2005. Prior to joining the Company, Mr.
Heavrin served as Controller of Service Merchandise, a
retailer, from December 1998 to December 2002. Prior
to December 1998, he held positions of increasing
responsibility with Deloitte Touche. Mr. Heavrin is a
Certified Public Accountant. |
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Donald N. Holmes, 55
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2002 |
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Senior Vice President Human Resources since January
2002. From 1990 to 2001, Mr. Holmes held positions of
increasing responsibility in human resources with CSX
Transportation, including Assistant Vice President,
Human Resources Operations. He previously held various
human resources positions with SmithKline Beecham
Corporation. |
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Year of |
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Positions With The Company And Business |
Name & Age |
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Employment |
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Experience For The Last Five Years |
Alan J. Kahn, 45
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1982 |
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Executive Vice President since August 2005. Mr. Kahn
served as Senior Vice President from April 1996 to
August 2005. He is responsible for the Companys
operations in the Midwest, Rocky Mountains,
Mid-Atlantic, Upstate New York, Canada (except British
Columbia) and Europe. He previously served in various
other positions with the Company, including general and
regional manager. Mr. Kahn serves on the Executive
Committee of the National Parking Association and is
Secretary of the association. |
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Gregory D. Maxey, 48
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1979 |
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Senior Vice President responsible for the Companys
operations in the Mid-Atlantic region and portions of
the Southeast since December 2002. Mr. Maxey served as
Managing Director of the Companys European operations
from 1999 until appointed to his current position. From
1995 to 1999, he served as International Marketing
Director for the Company. He previously served in a
variety of other positions with the Company including
regional and general manager. |
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Benjamin F. Parrish, Jr., 49
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1998 |
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Senior Vice President and General Counsel since August
1998. From 1993 to 1998, Mr. Parrish served as Senior
Vice President and General Counsel of Smith & Nephew,
Inc., a medical products company. |
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William R. Porter, 51
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1996 |
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Senior Vice President Acquisitions since November
1996. From 1991 to 1996, Mr. Porter served as Executive
Vice President Marketing for Ace Parking, a parking
management company. |
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Gregory J. Stormberg, 43
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1996 |
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Executive Vice President since August 2005. Mr.
Stormberg served as Senior Vice President from October
2002 to August 2005. He is responsible for the
Companys operations in the Northeast, Southwest,
Southeast and the West Coast. From February 1997 until
his appointment as Senior Vice President, Mr. Stormberg
served as Regional Manager of the Companys operations
in Texas and portions of the Southwest. |
5
OWNERSHIP BY MANAGEMENT AND CERTAIN SHAREHOLDERS
The table below sets forth certain information regarding the beneficial ownership of the
Common Stock as of December 30, 2005, of (i) each person known to the Company to beneficially own
5% or more of the Common Stock, (ii) each director, nominee and Named Executive Officer, and (iii)
all directors, nominees and executive officers of the Company as a group. On that date, 31,939,656
shares were outstanding. Unless otherwise indicated, the persons listed below have sole voting and
investment power over the shares of the Common Stock indicated.
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Amount and |
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Nature of |
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Beneficial |
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Beneficial Owner |
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Ownership(1) |
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Percent(1) |
Monroe J. Carell, Jr.
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6,495,827 |
(2) |
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20.18 |
% |
2401 21st Avenue South, Suite 200,
Nashville, Tennessee 37212 |
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The Carell Childrens Trust (3)
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6,696,153 |
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20.97 |
% |
One Belle Meade Place, Suite 310, 4400 Harding Road,
Nashville, Tennessee 37205 |
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T. Rowe Price Associates, Inc.
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2,835,600 |
(4) |
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8.88 |
% |
100 E. Pratt Street
Baltimore, Maryland 21202 |
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Dimensional Fund Advisors
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2,591,130 |
(5) |
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8.11 |
% |
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 |
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Columbia Wanger Asset Management
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2,636,900 |
(6) |
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8.26 |
% |
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606 |
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Raymond T. Baker |
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5,000 |
(7) |
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* |
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William H. Bodenhamer |
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177,269 |
(8) |
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* |
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James H. Bond |
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551,659 |
(9) |
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1.71 |
% |
Kathryn Carell Brown |
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2,015,912 |
(10) |
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6.31 |
% |
Cecil Conlee |
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51,247 |
(11) |
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* |
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Edward G. Nelson |
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27,500 |
(12) |
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* |
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Emanuel J. Eads |
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268,632 |
(13) |
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* |
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Jeff Heavrin |
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13,996 |
(14) |
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* |
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Alan Kahn |
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204,395 |
(15) |
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* |
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Lewis Katz |
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699,686 |
(16) |
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2.19 |
% |
Owen G. Shell |
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6,000 |
(17) |
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* |
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William B. Smith |
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4,000 |
(18) |
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* |
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Gregory J. Stormberg |
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87,625 |
(19) |
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* |
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Directors and executive officers as a group (19 persons) |
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11,445,936 |
(20) |
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33.60 |
% |
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* |
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Indicates less than 1%. |
(1) |
For purposes of this table, a person or group of persons is deemed to have beneficial
ownership of any shares that such person or group has the right to acquire within 60 days
after the date set forth above, or with respect to which such person otherwise has or shares
voting or investment power. For purposes of computing beneficial ownership and the
percentages of outstanding shares held by each person or group of persons on a given date,
shares which such person or group has the right to acquire within 60 days after such date
are shares for which such person has beneficial ownership and are deemed to be outstanding
for purposes of computing the percentage for such person, but are not deemed to be
outstanding for the purpose of computing the percentage of any other person. |
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(2) |
|
Includes options to purchase 218,207 shares of Common Stock granted pursuant to the Key
Personnel Plan, 26,513 deferred stock units, 124,999 shares held by the Monroe Carell, Jr.
Foundation and 296,141 shares held by the Monroe Carell, Jr. 2003 Grantor Retained Annuity
Trust. Excludes 6,696,153 shares held by The Carell Childrens Trust. See footnote 3. |
|
|
(3) |
|
The Carell Childrens Trust is a trust created by Mr. Carell in 1987 for the benefit of
his children. The trustee is Equitable Trust Company. |
|
|
(4) |
|
Based on Amendment No. 4 to Schedule 13G filed by T. Rowe Price Associates, Inc. with the
Securities and Exchange Commission on February 15, 2005. |
|
|
(5) |
|
Based on Schedule 13G filed by Dimensional Fund Advisors with the Securities and Exchange
Commission on February 9, 2005. |
|
|
(6) |
|
Based on Schedule 13G filed by Columbia Wanger Asset Management with the Securities and
Exchange Commission on February 10, 2005. |
|
|
(7) |
|
Includes 3,000 directly owned shares and 2,000 shares of restricted stock. |
|
|
(8) |
|
Includes 61,769 deferred stock units and options to purchase 115,500 shares of Common
Stock. |
|
|
(9) |
|
Includes 267,750 shares of stock held in an irrevocable trust that were granted under the
Companys 1995 Restricted Stock Plan in connection with Mr. Bonds Performance Unit
Agreement, 2,250 shares held by his spouse, 11,806 shares directly owned, 5,353 deferred
stock units, and options to purchase 264,500 shares of Common Stock granted pursuant to the
Companys Key Personnel Plan. This amount excludes 700 shares held by the Andrew Bond Trust
with respect to which Mr. Bond disclaims beneficial ownership. |
|
|
(10) |
|
Includes 81,630 shares held by the 1996 Carell Grandchildrens Trusts with respect to
which Mrs. Brown is a co-trustee, 20,000 shares held by the Kathryn Carell Brown Foundation
with respect to which Mrs. Brown serves on the Board of Trustees, 79,303 shares held by the
2002 Katheryn Carell Brown Charitable Trust, 1,832,860 shares held by various trusts of
which Mrs. Brown serves on the committee which has investment power with respect to Central
Parking Common Stock held by such trusts and 2,000 restricted shares. This amount excludes
6,696,153 shares held by The Carell Childrens Trust with respect to which Mrs. Brown is a
beneficiary. See footnote 3. This amount also excludes 61,823 shares held by her spouse and
trusts for the benefit of Mrs. Browns children of which Mrs. Brown disclaims beneficial
ownership. |
|
|
(11) |
|
Includes options to purchase 38,750 shares of Common Stock, 4,000 restricted shares and
8,497 shares directly owned by Mr. Conlee. |
|
|
(12) |
|
Includes 4,500 shares held by Mr. Nelsons spouse, of which Mr. Nelson disclaims
beneficial ownership, and options to purchase 27,500 shares of Common Stock, restricted
shares of 4,000 and directly owned shares of 23,943. |
|
|
(13) |
|
Includes 18,993 deferred stock units, options to purchase 249,750 shares of Common Stock
and 16,174 shares directly owned by Mr. Eads. |
|
|
(14) |
|
Includes options to purchase 12,750 shares of common stock. |
|
|
(15) |
|
Includes 13,154 deferred stock units options to purchase 179,750 shares of common stock
and 11,491 shares directly owned by Mr. Kahn. |
|
|
(16) |
|
Includes 667,779 shares of Common Stock owned by a partnership of which Mr. Katz is a
general partner, options to purchase 25,250 shares of the Companys Common Stock, 4,000
restricted shares and 2,657 shares directly owned by Mr. Katz. |
|
|
(17) |
|
Includes 4,000 shares directly owned and 2,000 restricted shares. |
|
|
(18) |
|
Includes 2,000 directly owned shares and 2,000 restricted shares of stock. |
|
|
(19) |
|
Includes options to purchase 87,625 shares of common stock. |
|
|
(20) |
|
Includes options to purchase 1,976,582 shares of the Companys Common Stock, 152,381
deferred stock units and 287,750 shares of Restricted Stock. |
7
EXECUTIVE COMPENSATION
The following table summarizes information concerning cash and non-cash compensation paid to
or accrued for the benefit of the persons who served as Central Parkings Chief Executive Officer
and the persons who were the four other most highly compensated executive officers during fiscal
2005 (the Named Executive Officers) for all services rendered in all capacities to Central
Parking for the fiscal years indicated.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Compensation |
|
Long-Term Compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
Restricted |
|
Underlying |
|
All Other |
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
Compen- |
|
Stock |
|
Options/ |
|
Compen- |
Principal Position |
|
Year |
|
Salary($)(1) |
|
Bonus($)(1) |
|
sation($)(2) |
|
Awards($) |
|
SARs(#)(3) |
|
sation($)(4) |
Monroe J. Carell, Jr. |
|
|
2005 |
|
|
|
525,591 |
|
|
|
123,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,619 |
(6) |
Excutive Chairman (5) |
|
|
2004 |
|
|
|
543,906 |
|
|
|
137,500 |
|
|
|
33,994 |
|
|
|
|
|
|
|
23,000 |
|
|
|
21,202 |
(7) |
|
|
|
2003 |
|
|
|
525,000 |
|
|
|
275,000 |
|
|
|
39,267 |
|
|
|
|
|
|
|
25,000 |
|
|
|
17,328 |
(8) |
Emanuel J. Eads |
|
|
2005 |
|
|
|
466,795 |
|
|
|
150,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,200 |
|
President and Chief |
|
|
2004 |
|
|
|
448,767 |
|
|
|
125,000 |
|
|
|
|
|
|
|
|
|
|
|
23,000 |
|
|
|
8,200 |
|
Executive Officer (9) |
|
|
2003 |
|
|
|
400,000 |
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
8,000 |
|
Gregory J. Stormberg |
|
|
2005 |
|
|
|
300,329 |
|
|
|
300,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,219 |
(10) |
Executive Vice President |
|
|
2004 |
|
|
|
299,178 |
|
|
|
225,000 |
|
|
|
|
|
|
|
|
|
|
|
23,000 |
|
|
|
8,200 |
|
|
|
|
2003 |
|
|
|
295,151 |
|
|
|
120,000 |
|
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
|
47,620 |
(11) |
James H. Bond |
|
|
2005 |
|
|
|
448,768 |
|
|
|
41,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,200 |
|
President International |
|
|
2004 |
|
|
|
448,768 |
|
|
|
118,500 |
|
|
|
|
|
|
|
|
|
|
|
23,000 |
|
|
|
8,000 |
|
Operations |
|
|
2003 |
|
|
|
450,000 |
|
|
|
185,164 |
|
|
|
|
|
|
|
|
|
|
|
45,000 |
|
|
|
8,000 |
|
William H. Bodenhamer |
|
|
2005 |
|
|
|
351,726 |
|
|
|
102,994 |
|
|
|
93,092 |
|
|
|
|
|
|
|
|
|
|
|
8,200 |
|
President
USA Parking |
|
|
2004 |
|
|
|
149,589 |
|
|
|
350,000 |
|
|
|
100,021 |
|
|
|
|
|
|
|
23,000 |
|
|
|
8,200 |
|
|
|
|
2003 |
|
|
|
149,589 |
|
|
|
300,000 |
|
|
|
89,918 |
|
|
|
|
|
|
|
25,000 |
|
|
|
8,000 |
|
Alan Kahn |
|
|
2005 |
|
|
|
310,685 |
|
|
|
142,642 |
|
|
|
7,132 |
|
|
|
|
|
|
|
|
|
|
|
8,200 |
|
Executive Vice President
(9) |
|
|
2004 |
|
|
|
299,178 |
|
|
|
211,368 |
|
|
|
10,568 |
|
|
|
|
|
|
|
23,000 |
|
|
|
8,200 |
|
|
|
|
2003 |
|
|
|
297,068 |
|
|
|
164,046 |
|
|
|
12,303 |
|
|
|
|
|
|
|
25,000 |
|
|
|
8,000 |
|
|
|
|
(1) |
|
Includes amounts deferred under the Companys Profit Sharing and 401(k) Savings Plan
and Deferred Stock Unit Plan. |
|
(2) |
|
Except as otherwise noted, these amounts represent the dollar value as of the end of
each fiscal year of premium shares awarded each year under the Companys Deferred Stock
Unit Plan. The premium units vest ratably over a four-year period from the date of grant. |
|
(3) |
|
These amounts represent the number of shares subject to options granted each year under
the Companys 1995 Incentive and Nonqualified Stock Option Plan for Key Personnel. No stock
appreciation rights were granted under this plan. |
|
(4) |
|
These amounts include contributions by the Company to the Companys Profit Sharing and
401(k) Savings Plan, and miscellaneous compensation. |
|
(5) |
|
Served as Chairman and Chief Executive Officer from May 2003 to August 2, 2005. |
|
(6) |
|
Includes $7,419 in insurance premiums. |
|
(7) |
|
Includes $13,002 in insurance premiums. |
|
(8) |
|
Includes $9,328 in insurance premiums. |
|
(9) |
|
Named President and Chief Executive Officer on August 2, 2005. Served as President and
Chief Operating Officer from May 2003 to August 2, 2005. |
|
(10) |
|
Includes relocation expenses of $74,019.
|
|
(11) |
|
Includes relocation expenses of $39,620. |
Option Grants
Central Parking did not grant any options to acquire Common Stock or stock appreciation rights
to the Named Executive Officers during the fiscal year ended September 30, 2005.
8
Option Exercises and Values
The table below provides information with respect to exercises of options by the Named
Executive Officers during the fiscal year ended September 30, 2005 under Central Parkings Key
Personnel Plan and the year-end value of unexercised options. Central Parking has granted no stock
appreciation rights.
Aggregated Option/SAR Exercises in the Last Fiscal Year
and Period-End Option/SAR Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Unexercised |
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
In-the-Money |
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
Options/SARs at |
|
|
|
|
|
|
|
|
|
|
Options/SARs at |
|
Fiscal Year- |
|
|
Shares |
|
|
|
|
|
Fiscal Year-End(#) |
|
End($)(1) |
|
|
Acquired |
|
Value |
|
Exercisable/ |
|
Exercisable/ |
Name |
|
on Exercise(#) |
|
Realized($) |
|
Unexercisable |
|
Unexercisable |
Monroe J. Carell, Jr. |
|
|
|
|
|
|
|
|
|
|
218,207/12,500 |
|
|
|
143,070/27,750 |
|
Emanuel J. Eads |
|
|
13,500 |
|
|
|
|
|
|
|
249,750/12,500 |
|
|
|
71,070/27,750 |
|
James H. Bond |
|
|
18,000 |
|
|
|
|
|
|
|
264,500/12,500 |
|
|
|
71,070/27,750 |
|
Gregory J. Stormberg |
|
|
|
|
|
|
|
|
|
|
87,625/12,500 |
|
|
|
47,534/27,750 |
|
William H. Bodenhamer |
|
|
|
|
|
|
|
|
|
|
115,500/12,500 |
|
|
|
61,470/27,750 |
|
Alan Kahn |
|
|
|
|
|
|
|
|
|
|
179,750/12,500 |
|
|
|
56,670/27,750 |
|
|
|
|
(1) |
|
This amount represents the aggregate number of options multiplied by the difference between
$14.95 the fair market value of Central Parking Common Stock at September 30, 2005, and the
exercise price for each option. |
Equity Compensation Plan Information
The following table provides information about the Companys equity compensation plans in
effect at September 30, 2005, aggregated for two categories of plans: those approved by
shareholders and those not approved by shareholders.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
remaining available for |
|
|
Number of Securities to |
|
Weighted-average |
|
future issuance under equity |
|
|
be issued upon exercise |
|
exercise price of |
|
compensation plans |
|
|
of outstanding options, |
|
outstanding options, |
|
(excluding securities |
|
|
warrants and rights |
|
warrants and rights |
|
reflected in column (a)) |
Plan category |
|
(a) |
|
(b) |
|
(c) |
Employee stock purchase plan |
|
|
|
|
|
|
|
|
|
|
254,969 |
|
Stock option plan key/
Restricted stock plan (1) |
|
|
4,002,706 |
|
|
|
17.53 |
|
|
|
|
|
Stock option plan directors (1) |
|
|
150,500 |
|
|
|
27.15 |
|
|
|
|
|
Deferred stock unit plan |
|
|
142,710 |
|
|
|
18.79 |
|
|
|
336,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total-Plans approved by
security holders |
|
|
4,295,916 |
|
|
|
17.89 |
|
|
|
591,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total-Plans not approved by
security holders |
|
|
none |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total all plans |
|
|
4,295,916 |
|
|
|
17.89 |
|
|
|
591,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Plan has expired, so no securities remain available under this plan. |
9
Employment Agreements
Central Parking has entered into employment agreements with Messrs. Carell, Eads, Stormberg,
Bond, Bodenhamer and Kahn and other senior executives that provide for base salary and annual
performance-based bonus payments (see Summary Compensation Table for base salaries and amounts of
bonus payments). These employment agreements generally are for a term of one year but automatically
renew for additional one-year periods unless notice is provided at least thirty days prior to the
end of the term. The agreements may be terminated by the executive upon 30 days written notice or
may be terminated by the Company by complying with the severance provisions provided in the
agreement except in the case of a termination for cause, in which case the executive is not
entitled to severance. These agreements provide that in the event an executive is terminated
without cause (and such termination does not occur within two years following a change in control)
or the executive terminates his employment for good reason, the executive would receive one year of
base salary, bonus and welfare benefits, except in the case of Messrs. Carell and Eads, who would
receive two years of base salary, bonus and welfare benefits. Terminated executives would also
receive outplacement assistance with a value of up to $25,000. These agreements, other than Mr.
Carells agreement (Mr. Carells non-compete obligations are described below), provide that the
executive is subject to a non-competition covenant for 12 months following termination of
employment and non-solicitation covenants for 24 months following termination except in the case of
a termination following a change in control, in which case the non-competition and non-solicitation
covenants are waived.
These employment agreements further provide generally that in the event of a termination
without cause or a constructive discharge within two years following a change in control, most
senior executives would receive severance equal to two times base and bonus plus two years of
benefits. Messrs. Carell, Eads and Bond, and certain corporate staff executives, would receive
three times base and bonus plus three years of benefits in the event of a termination without cause
or a constructive discharge within two years following a change in control. Unvested stock options
and deferred stock units would vest immediately upon a change in control. The arrangements also
include an excise tax gross-up provision. A change in control is defined to include (i) the
acquisition of 30% or more of the outstanding stock of the Company other than through acquisitions
by the Company, a subsidiary, an employee benefit plan of the Company, or Monroe Carell or family
members or related entities; (ii) a change in the majority of the Board; (iii) consummation of a
merger, consolidation, or reorganization, unless following such transaction the shareholders prior
to the transaction continue to own more than 70% of the outstanding shares, Board members prior to
the transaction continue to constitute a majority of the Board and no person or control group owns
more than 30% of the stock (other than Mr. Carell, family members or related entities); or (iv)
consummation of the sale of all or substantially all of the Companys assets or the adoption of a
plan of liquidation.
The employment agreements generally define Termination for Cause as (i) executives
embezzlement, intentional mishandling of Company funds or theft or fraud with respect to the
business or affairs of the Company; (ii) executives conviction of a felony or other crime
involving moral turpitude which adversely affects executives job-related responsibilities; (iii) a
violation by executive of the non-competition and non-solicitation covenants in the agreement; and
(iv) executives deliberate and willful continuing refusal to substantially perform the duties and
obligations of his position. Constructive Discharge is defined as termination of executives
employment due to a failure of the Company to fulfill its obligations under the agreement in any
respect, including (i) any reduction in executives base salary or annual incentive award or any
other Company incentive plan target other than reductions not to exceed 25% applicable to all
executive officers of the Company; (ii) substantial reduction of benefits or (iii) the reduction in
the title, authority and/or duties of the executive.
On December 14, 2004, the Company entered into an Employment Agreement and a Revised Deferred
Compensation Agreement with Monroe Carell. The Employment Agreement and the Revised Deferred
Compensation Agreement were negotiated in connection with Mr. Carells return to the company as
chief executive officer. The Employment Agreement is described above. The Revised Deferred
Compensation Agreement replaced the prior deferred compensation agreement between Mr. Carell and
the Company dated October 1, 1988, as amended. The Revised Deferred Compensation agreement
provides that Mr. Carell is subject to non-competition and non-solicitation covenants during any
period payments are made under the agreement, including periods following termination of
employment, and for 12 months following the acceleration of amounts payable to Mr. Carell under the
agreement upon a change in control (as described below). Following the termination of his
employment, for any reason other than death, the Revised Deferred Compensation Agreement entitles
Mr. Carell to
10
annual payments of $500,000 until his death and, in the event his wife survives him, she is
entitled to annual payments of $500,000 until her death. The agreement further provides that in
the event of a change in control the annual payments shall cease, and the Company shall make a lump
sum payment to Mr. Carell equal to the then actuarial value of the foregoing annual payments
payable under this agreement. Mr. Carell also agrees to provide consulting services to the Company
following the termination of his employment. In addition, the agreement provides that if Mr.
Carell ceases to serve as the chief executive officer, he shall be entitled to annual payments of
$300,000 until the later of (i) the date he ceases to serve as non-employee chairman of the
Companys board of directors or (ii) the date five years following the first payment; provided such
payments shall cease if Mr. Carell breaches the non-competition or non-solicitation provisions. The
arrangements also include an excise tax gross-up provision. The Revised Deferred Compensation
Agreement was amended on October 27, 2005, to clarify the Companys obligations under the agreement
to provide health insurance coverage following termination of employment for Mr. Carell and his
wife. Under the amended agreement, Mr. Carell agreed to procure Medicare supplemental insurance
coverage that provides substantially the same level of benefits as the Companys plan. The Company
will reimburse Mr. Carell for the costs of such coverage for Mr. Carell and his wife. In the event
of a change in control, the Company will pay Mr. Carell or his widow a lump sum payment equal to
the actuarial value of the amounts payable by the Company for such coverage.
Under the terms of a Performance Unit Agreement dated as of June 26, 1986, as amended, between
Mr. Bond and the Company, Mr. Bond was issued 267,750 shares of Common Stock under the Companys
1995 Restricted Stock Plan, together with the right to receive additional shares of restricted
Common Stock in an amount determined by a formula based upon the Companys performance. Pursuant to
amendments to the Performance Unit Agreement effective May 31, 2001, and September 30, 2001, the
restricted shares were placed in an irrevocable trust and are distributable to Mr. Bond upon
termination of his employment with the Company for any reason. The market value of the restricted
shares was $4,002,863 on September 30, 2005.
Director Compensation
Non-employee directors of Central Parking receive an annual retainer of $20,000, a meeting fee
of $4,000 for each Board of Directors meeting attended, a meeting fee of $2,000 for each committee
meeting attended and an annual grant of 2,000 shares of restricted stock. Committee chairpersons
also receive an annual retainer of $5,000. Directors who are employees of Central Parking or its
affiliates do not receive additional compensation for services as a director of Central Parking.
All directors are reimbursed for actual expenses incurred in connection with attending meetings.
Board of Directors and Corporate Governance
During Central Parkings fiscal year ended September 30, 2005 (fiscal 2005), the Board held
eight meetings. The Board frequently meets in Executive Session, from which all employees of the
Company, except the Executive Chairman, are excluded. Matters relating to compensation, succession
planning and other more sensitive areas are discussed at these sessions. The Board also meets
regularly in Executive Session without the Executive Chairman. The presiding director solicits
topics for discussion from the other directors and provides feedback from the Executive Session to
the Chief Executive Officer and the General Counsel. The presiding director is chosen annually by a
majority vote of the non-executive directors. The current presiding director is Ed Nelson. The
Board has adopted Corporate Governance Guidelines, a current copy of which is available on the
Companys website, www.parking.com. In addition, copies of the Corporate Governance Guidelines may
be obtained without charge upon request to Kate Leahy, Central Parking Corporation Human Resources
Department, 2401 21st Avenue South, Nashville, Tennessee 37212; (615) 297-4255; or via e-mail to
kleahy@parking.com.
Committees of the Board of Directors
The Board has the following committees: Audit, Compensation and Nominating/Corporate
Governance. During fiscal 2005, the Audit Committee held thirteen meetings, the Compensation
Committee held six meetings and the Nominating/Corporate Governance Committee did not meet. During
fiscal 2005, all of the current directors of Central Parking attended at least 75% of the aggregate
number of meetings of the Board and the respective committees of the Board on which they served.
11
The Compensation Committee, which is comprised of Messrs. Conlee, Baker and Shell,, is
responsible for reviewing and recommending the appropriate compensation and benefits of officers of
Central Parking, administering Central Parkings 1995 Incentive and Nonqualified Stock Option Plan
for Key Personnel and overseeing Central Parkings various other compensation and benefit plans.
The Compensation Committee has a written charter, a current copy of which is available on the
Companys website, www.parking.com. In addition, copies of the Compensation Committee Charter may
be obtained without charge upon request to Kate Leahy, Central Parking Corporation Human Resources
Department, 2401 21st Avenue South, Nashville, Tennessee 37212; (615) 297-4255; or via e-mail to
kleahy@parking.com
The Audit Committee, which is comprised of Messrs. Nelson, Conlee and Smith, is responsible
for overseeing the auditing procedures and financial reporting of Central Parking, reviewing the
scope of Central Parkings annual audit and the fees charged by Central Parkings independent
registered public accounting firm, receiving, reviewing and accepting the reports of Central
Parkings independent registered public accounting firm, and overseeing Central Parkings systems
of internal accounting and management controls. The Audit Committee has a written charter, a
current copy of which is available on the Companys website,
www.parking.com. In addition, copies
of the Audit Committee Charter may be obtained without charge upon request to to Kate Leahy,
Central Parking Corporation Human Resources Department, 2401 21st Avenue South, Nashville,
Tennessee 37212; (615) 297-4255; or via e-mail to kleahy@parking.com
The Nominating/Corporate Governance Committee, which is responsible for identifying and
recommending to the Board nominees for director and for providing guidance to the Board on
corporate governance issues, is comprised of Messrs. Shell, Baker and Nelson. The
Nominating/Corporate Governance Committee will solicit recommendations for nominees from persons
whom the committee believes are likely to be familiar with qualified candidates, including members
of the Board and senior management. The Nominating/Corporate Governance Committee may also engage
a search firm to assist in identifying qualified candidates. The Nominating/Corporate Governance
Committee evaluates potential nominees by examining, among other things, their qualifications,
background information, references and relevant experience and selects individuals who have the
highest personal and professional integrity, have demonstrated exceptional ability and judgment
throughout their careers and who will be most effective, in conjunction with the other nominees to
the Board, in collectively serving the long-term interests of the shareholders. Mr. Blankenship
was recommended to the Nominating/Corporate Governance Committee by Monroe Carell, Executive
Chairman of the Board.
The Nominating/Corporate Governance Committee will consider nominees for director recommended
by shareholders if they are submitted in writing to the Corporate Secretary not later than the
120th calendar day before the date the Companys proxy statement was released to shareholders in
connection with the previous years annual meeting. Such written recommendation from shareholders
must set forth the names of such nominees and all supporting information relating to such persons,
including their qualifications for service as a director of the Company (including, without
limitation, such persons written consent to being named in the proxy statement as a nominee and to
serve as a director if elected). All nominees properly submitted to the Secretary will be
evaluated and considered by the members of the Nominating/Corporate Governance Committee using the
same criteria as nominees identified by the Nominating/Corporate Governance Committee itself. The
Board has determined that each member of the Nominating/Corporate Governance Committee is
independent as defined in the New York Stock Exchange listing standards. The Nominating/Corporate
Governance Committee has a written charter, a current copy of which is available on the Companys
website, www.parking.com. In addition, copies of the Nominating/Corporate Governance Committee
Charter may be obtained without charge upon request to Kate Leahy, Central Parking Corporation
Human Resources Department, 2401 21st Avenue South, Nashville, Tennessee 37212; (615) 297-4255; or
via e-mail to kleahy@parking.com
Shareholder Communication with the Board
Shareholders and other constituencies may communicate with the Board or individual members of
the Board by addressing written correspondence to Central Parking Corporation, 2401 21st
Avenue South, Suite 200, Nashville, Tennessee 37212, attention: Senior Vice President and General
Counsel, or by sending an e-mail to bparrish@parking.com. Inquiries sent by mail will be reviewed
by the Companys General Counsel and if they are
12
relevant to, and consistent with, the Companys operations, policies and philosophies, they will be
forwarded to the Audit Committee. This committee will monitor the correspondence and bring any
significant issues to the attention of the appropriate members of the Board.
Director Attendance at Annual Meeting
Central Parking encourages, but does not require, its board members to attend the Annual
Shareholders Meeting. Last year, all of our directors attended the 2005 Annual Shareholders
Meeting.
Compensation Pursuant to Plans
1995 Incentive and Nonqualified Stock Option Plan for Key Personnel
Under the 1995 Incentive and Nonqualified Stock Option Plan for Key Personnel (the Key
Personnel Plan), options to purchase an aggregate of 7,317,500 shares of Common Stock are
authorized for grant to directors, officers, and other key employees, consultants and advisors of
Central Parking and its subsidiaries. The Key Personnel Plan is administered by the Board of
Directors, which determines the vesting period and other terms of the options granted under the plan. Options granted to date have various vesting periods, generally
ranging from one year to nine years after the date of the grant and expire on the tenth anniversary
of their grant. The vesting of certain options may be accelerated if the Company achieves certain
earnings targets or stock price targets. The plan provides that the exercise price of an option
must not be less than the fair market value of the Common Stock on the trading day next preceding
the date of grant. Vested options generally are exercisable for a period of three months after
termination of employment. In the event of a merger or consolidation in which the Company is not
the surviving corporation and the options are not assumed or substituted by the surviving
corporation, all options will become exercisable immediately prior to such merger or consolidation.
As of September 30, 2005, 12 executive officers (one of whom is a director) and approximately 320
key employees held options to purchase a total of 4,002,706 shares under the Key Personnel Plan.
No new grants may be made under the Key Personnel Plan after August 2005.
1995 Restricted Stock Plan
In August 1995, Central Parkings Board of Directors and shareholders adopted the Restricted
Stock Plan under which restricted shares of Common Stock are available for grant to directors,
officers and other key employees and consultants of Central Parking and its subsidiaries. The plan
is administered by the Board of Directors or a committee designated by the Board, which has the
authority to select participants, make stock awards, determine the size and terms of stock awards
(subject to the terms of the plan) and to make other determinations with respect to the plan. A
participant vests in shares awarded under the plan in accordance with the vesting schedule
determined by the Board (or the committee designated by the Board to administer the plan), except
that a participant vests fully in any shares awarded under the plan in the event of a change of
control, as defined in the plan. As of September 30, 2005, one executive officer and ten
non-employee directors held a total of 296,410 shares issued under the Restricted Stock Plan. The
Restricted Stock Plan allows for the issuance of up to 7,317,500 shares of Common Stock, in the
aggregate, when taken together with shares available for grant under the Key Personnel Plan. A
total of 330,463 shares have been issued under the Restricted Stock Plan since inception of the
plan. In fiscal 2005, each non-employee director received a restricted stock award of 2,000 shares
of restricted stock. No new grants may be made under the Restricted Stock Plan after August 2005.
1996 Employee Stock Purchase Plan
The Company maintains an employee stock purchase plan that qualifies under Section 423 of the
Internal Revenue Code and permits substantially all of the Companys domestic employees (including
executive officers) to purchase shares of the Companys common stock. The plan authorizes the
issuance of up to 850,000 shares of Common Stock. As of September 30, 2005, 595,032 shares had been
issued under this plan. Participating employees may purchase common stock at a purchase price equal
to 85% of the lower of the fair market value of the common stock at the beginning or end of the
purchase period. Participation periods are annual and begin on April 1 of each year. Employees may
designate up to 10% of their annual salary (up to a maximum of $25,000) for the purchase of
13
common stock under the plan. A total of 39,012 shares were issued at a purchase price of
$14.60 per share to 516 employees in the most recent plan year, which ended on March 31, 2005. The
Company suspended contributions into the Plan effective April 1, 2005.
1995 Nonqualified Stock Option Plan for Directors
In August 1995, Central Parkings Board of Directors and shareholders adopted the 1995
Nonqualified Stock Option Plan for Directors under which nonqualified options to purchase an
aggregate of 475,000 shares of Common Stock are authorized for grant to non-employee directors of
Central Parking. Vested options generally are exercisable for a period of three months following
termination of service as a director. In the event of a merger or consolidation in which the
Company is not the surviving corporation and the options are not assumed or substituted by the
surviving corporation, all options will become exercisable immediately prior to such merger or
consolidation. As of September 30, 2005, directors held options to purchase an aggregate of
150,500 shares of Common Stock. No new grants may be made under the Directors Plan after August
2005.
Profit Sharing and 401(k) Savings Plan
Under the Central Parking System Profit Sharing and 401(k) Savings Plan, the Company matches
100% of each participants pre-tax contributions up to 3% of compensation and matches 50% of the
next 2% of compensation. All matching contributions are 100% vested when made. Substantially all of
Central Parkings full-time domestic employees (including all executive officers) are eligible to
participate in the plan. The plan also allows profit sharing contributions to be made by the
Company. The Company determines the amount of profit sharing contributions, if any, it will
contribute to the plan each year. Profit sharing contributions are allocated among participants
based on years of service and total compensation (up to $170,000). Profit sharing contributions
generally vest over a five-year period. Company contributions to the plan were approximately $2.4
million for fiscal 2005, comprised entirely of company matching contributions to participants in
the 401(k) plan. No profit-sharing contributions were made for fiscal 2005.
Deferred Stock Unit Plan
The Deferred Stock Unit Plan provides for the issuance of up to 375,000 shares of Common
Stock. Under the plan, key employees designated to participate in the plan can defer from 5% to 50%
of total cash compensation. Amounts deferred under the plan are converted into stock units. The
Company matches participants deferrals as follows: the first 20% of total compensation deferred is
matched at a rate of 25% and deferrals in excess of 20% of total compensation are matched at a rate
of 50%. Company matches are in the form of additional stock units, which vest on a pro rata basis
over a four-year period. For deferrals during the fiscal year, stock units are credited monthly
based on the closing price of the Companys Common Stock on the last trading day in the month. For
deferrals from the annual bonus paid following the end of the fiscal year, stock units are credited
based on the average of the twelve monthly closing prices used to credit stock units during the
fiscal year. A participants stock unit account is distributed in shares of Common Stock to the
participant or his designee upon the participants retirement, death, termination of employment,
commencement date selected by the participant at the time the participant elects to make the
deferral, or a change in control (as defined in the plan) of the Company. As of September 30, 2005,
ten executive officers were participants in the plan with an aggregate balance of 142,710. The
Company suspended contributions to the Deferred Stock Unit Plan effective October 1, 2005.
14
PROPOSAL II
PROPOSAL FOR APPROVAL OF THE 2006 LONG-TERM INCENTIVE PLAN
At the Annual Meeting, the shareholders will be requested to approve the Central Parking
Corporation 2006 Long-Term Incentive Plan (the Plan). The Companys 1995 Key Personnel Plan, 1995
Directors Plan and Restricted Stock Plan have all terminated by their terms, thus the Board
recommends approval of the new 2006 Long-Term Incentive Plan. The Board has unanimously adopted
resolutions approving, and recommending to the shareholders for their approval, the Plan. A copy
of the Plan is attached hereto as Appendix A.
The following is a summary of the principal features of the Plan. This summary, however, does
not purport to be a complete description of all of the provisions of the Plan. It is qualified in
its entirety by reference to the full text of the Plan. The effectiveness of the Plan is dependent
on the approval by shareholders within twelve months of its adoption by the Board.
Description of the Plan
General.
The purposes of the Plan are to (i) attract and retain current and prospective employees and
other service providers; (ii) motivate such persons, by means of appropriate incentives, to achieve
long range goals; (iii) provide incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further identify the interests of such persons with
those of the Companys shareholders by offering compensation that is based on the Companys common
stock and/or contingent on attaining certain performance goals and thereby promoting the long-term
financial interest of the Company, including the growth in value of the Companys equity and
enhancement of long-term shareholder return.
Further, the Plan is designed to give us additional flexibility to address changing accounting
rules and corporate governance practices by utilizing stock options, restricted stock, restricted
stock units (RSUs) and stock appreciation rights (SARs). The Key Personnel Plan and the Directors
Plan provided for only stock option grants. In light of frequent changes in the accounting
treatment of various equity incentives and the possibility of future accounting or tax changes, we
believe that it is advantageous for us to have maximum flexibility to design and implement future
equity compensation.
Administration.
The Compensation Committee will administer the Plan, and has complete discretion, subject to
the provisions of the Plan, to select the employees and other service providers to receive awards
under the Plan and determine the type, size and terms of the awards to be granted to each
individual selected. The Compensation Committee will also determine the time when the awards will
be granted and the duration of any applicable exercise and vesting period, including the criteria
for exercisability and vesting.
Shares Subject to the Plan.
The maximum number of shares of Company common stock which may be awarded and delivered under
the Plan shall be 1,500,000 shares of common stock. The shares issued under the Plan may be
currently authorized but unissued shares of common stock or currently held or subsequently acquired
by the Company as treasury shares, including shares purchased in the open market or in private
transactions.
The Compensation Committee may settle an award in cash rather than common stock but only to
the extent such right to settle an award in cash would not result in the recognition of income or
the imposition of interest and penalty under Section 409A of the Code. To the extent any shares of
common stock covered by an award are not delivered to a participant or beneficiary because the
award is forfeited or canceled, or the shares of common stock
15
are not delivered because the award is settled in cash or used to satisfy the applicable tax
withholding obligation, such shares shall not be deemed to have been delivered for purposes of
determining the maximum number of shares of common stock available for delivery under the Plan.
The Plan provides that unless the Compensation Committee determines that an award shall not be
designed to qualify as performance-based compensation, the maximum aggregate number of shares of
common stock that may be granted pursuant to any award granted in any one calendar year to any one
participant (i) shall be 300,000 shares in the form of options or SARs; (ii) shall be 300,000
shares in restricted stock or restricted stock units (iii) shall be 300,000 shares of common stock,
or equal to the value of 300,000 shares of common stock determined as of the date of vesting or
payout, as applicable for performance shares or performance; (iv) may not exceed $2,000,000
determined as of the date of vesting or payout, as applicable; with respect to cash based awards
and (v) shall be 300,000 shares of common stock with respect to awards of stock based awards. See
Performance Goals below.
Adjustments upon Changes in Capitalization, Merger or Sale of Assets.
In the event of a corporate transaction involving the Company (including, without limitation,
any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination or exchange of shares), the Compensation
Committee may adjust awards to preserve the benefits or potential benefits of the awards. Action by
the Compensation Committee may include: (i) adjustment of the number and kind of shares which may
be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding awards (as applicable); (iii) adjustment of the exercise price of outstanding awards;
and (iv) any other adjustments that the Compensation Committee determines to be equitable.
Termination of Employment or Service.
Each participantsaward agreement shall set forth the extent to which the participant shall
have the right to exercise the award following termination of the participants employment or
service with the Company. Such provisions shall be determined by the Compensation Committee, shall
be included in the award agreement, need not be uniform among all awards issued pursuant to this
Plan, and may reflect distinctions based on the reasons for termination.
Detrimental Activity.
Unless the award agreement specifies otherwise, the Compensation Committee may cancel,
rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred award
at any time if the participant is not in compliance with all applicable provisions of the award
agreement and the Plan, or if the participant engages in any Detrimental Activity. Detrimental
Activity shall mean any of the following: (i) the rendering of services for any organization or
engaging directly or indirectly in any business which is or becomes competitive with the Company,
or which organization or business, or the rendering of services to such organization or business,
is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the
disclosure to anyone outside the Company or the use in other than the business of the Company
without prior written authorization from the Company, of any confidential information or material,
relating to the business of the Company acquired by the participant either during or after
employment or service with the Company; (iii) the failure or refusal to disclose promptly and to
assign to the Company, all right, title and interest in any invention or idea, patentable or not,
made or conceived by the participant during employment or service by the Company relating in any
manner to the actual or anticipated business, research or development work of the Company or the
failure or refusal to do anything reasonably necessary to enable the Company to secure a patent
where appropriate in the United States and in other countries; (iv) any activity that results in
termination of the participants employment for cause; (v) a violation of any rules, policies,
procedures or guidelines of the Company; (vi) any attempt directly or indirectly to induce any
employee or service provider of the Company to be employed or perform services elsewhere or any
attempt directly or indirectly to solicit the trade or business of any current or prospective
customer, supplier or partner of the Company; (vii) the Participant being convicted of, or entering
a guilty plea with respect to, a felony or a crime involving financial impropriety or moral
turpitude, whether or not connected with the Company; or (viii) any other conduct or act determined
to be injurious, detrimental or prejudicial to any interest of the Company.
16
Upon exercise, payment or delivery pursuant to an award, the participant shall certify that he
or she is in compliance with the terms and conditions of the Plan and his or her award agreement
and is not engaged in any Detrimental Activity. In the event a participant engages in any
Detrimental Activity prior to, or during the six (6) months after, any exercise, payment or
delivery pursuant to an award agreement, such exercise, payment or delivery may be rescinded within
two years thereafter. In the event of any such rescission, the participant shall pay to the
Company the amount of any gain realized or payment received as a result of the rescinded exercise,
payment or delivery, in such manner and on such terms and conditions as may be required, and the
Company shall be entitled to set-off against the amount of any such gain any amount owed to the
participant by the Company.
New Plan Benefits.
Because benefits under the Plan will depend on the Compensation Committees actions and the
fair market value of common stock at various future dates, it is not possible to determine the
benefits that will be received by officers and other employees if the Plan is approved by the
shareholders. No benefits have been granted under the Plan as of the date hereof.
Options.
The Compensation Committee may grant nonqualified stock options or incentive stock options
under the Plan, and may provide for time-based vesting or vesting upon satisfaction of performance
goals and/or other conditions. Unless the Compensation Committee provides for earlier expiration,
incentive stock options will expire ten years after the date of grant.
The Compensation Committee will determine the exercise price for the shares of common stock
underlying each award at the time the award is granted. The exercise price for shares under an
incentive stock option may not be less than 100% of the fair market value of the common stock on
the date such option is granted. The fair market value price for a share of Company common stock
underlying each award is the closing price per share on the New York Stock Exchange on the date the
award is granted. As of January 26, 2006, the closing price for one share of the Companys common
stock was $14.92.
Restricted Stock or Restricted Stock Units
The Compensation Committee may award restricted stock or restricted stock units under the Plan
and, with respect to each such award, shall determine the number of shares associated with each
award, and the period of restriction and any other provisions as the Compensation Committee may
determine.
The Compensation Committee may impose, in the award agreement at the time of grant or anytime
thereafter, such other conditions and/or restrictions on any shares of restricted stock or
restricted stock units granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that the participants pay a stipulated purchase price for each share of
restricted stock or each restricted stock unit, restrictions based upon the achievement of specific
performance criteria, time-based restrictions on vesting following the attainment of the
performance criteria, time-based restrictions, restrictions under applicable laws or under the
requirements of any stock exchange or market upon which such shares are listed or traded, or
holding requirements or sale restrictions placed on the shares by the Company upon vesting of such
restricted stock or restricted stock units. To the extent deemed appropriate by the Compensation
Committee, the Company may retain the certificates representing shares of restricted stock, or
shares delivered in consideration of restricted stock units, in the Companys possession until such
time as all conditions and/or restrictions applicable to such shares have been satisfied or lapse.
Except as otherwise provided in the Plan, shares of restricted stock covered by each restricted
stock award shall become freely transferable by the participant after all conditions and
restrictions applicable to such shares have been satisfied or lapsed, and restricted stock units
may be paid in cash, shares of common stock, or a combination of cash and shares of common stock as
the Compensation Committee shall determine.
Except as otherwise determined by the Compensation Committee, participants holding shares of
restricted stock granted under the Plan shall be granted the right to exercise full voting rights
with respect to those shares during the
17
period of restriction. A participant shall have no voting rights with respect to any
restricted stock units granted under the Plan.
Each award agreement shall set forth the participants rights to dividends paid with respect
to the shares of common stock underlying restricted stock during the period of restriction. The
Compensation Committee may designate in the award agreement that a participant holding restricted
stock units may be entitled to dividend equivalents, the terms of which shall be determined by the
Compensation Committee. The Compensation Committee may apply any restrictions to the dividends or
dividend equivalents that the Compensation Committee deems appropriate. The Compensation Committee
may determine the form of payment of dividends or dividend equivalents, including cash, shares of
common stock, restricted stock, or restricted stock units.
When and if restricted stock units become payable, the participant shall be entitled to
receive payment from the Company in cash, shares of common stock with an equivalent value, in some
combination thereof, or in any other form determined by the Compensation Committee in its sole
discretion. The Compensation Committees determination regarding the form of payment shall be set
forth or reserved for later determination in the award agreement pertaining to the grant of the
restricted stock unit.
Stock Appreciation Rights
The Compensation Committee may grant stock appreciation rights or SARs under the Plan, and
determine the number of shares covered by each SAR. The Compensation Committee may provide for
time-based vesting or vesting upon satisfaction of performance goals and/or other conditions. Each
SAR entitles the holder thereof to an amount equal to the difference between the fair market value
of a share of Company common stock and a base value. The SAR base value is established by the
Compensation Committee and unless otherwise determined by the Compensation Committee, shall equal
100% of the per share fair market value of our common stock on the date of grant. Unless the
Compensation Committee provides for earlier expiration, SARs will expire ten years after the date
of grant. Unless otherwise provided by the Compensation Committee, unvested SARs will expire upon
termination of the participants service with the Company. The Compensation Committee may provide
in each award agreement the participants right to exercise SARs following termination of
employment or services with the Company.
Upon exercise of a SAR, the participant will receive payment from us in an amount determined
by multiplying (a) the difference between (i) the fair market value of a share on the date of
exercise and (ii) the base value times (b) the number of shares with respect to which the SAR is
exercised. At the discretion of the Compensation Committee, SARs may be settled in cash, shares of
common stock of equivalent value, in some combination thereof, or in any other form approved by the
Compensation Committee.
Performance Goals
Awards under the Plan may be made subject to performance measures as well as time-vesting
conditions. Such performance measures may be established and administered in accordance with the
requirements of Section 162(m) of the Code for awards intended to qualify as performance-based
compensation thereunder. To the extent that performance measures under the Plan are applied to
awards intended to qualify as performance-based compensation under Section 162(m) of the Code, such
performance measures must utilize one or more objective measurable performance goals as determined
by the Compensation Committee based upon one or more factors, including, but not limited to: (i)
net earnings or net income (before or after taxes); (ii) earnings per share; (iii) net sales
growth; (iv) net operating profit; (v) operating earnings; (vi) operating earnings per share; (vii)
return measures (including, but not limited to, return on assets, capital, equity, or sales);
(viii) cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow
return on capital); (ix) earnings before or after taxes, interest, depreciation, and/or
amortization and including/excluding capital gains and losses; (x) gross or operating margins; (xi)
productivity ratios; (xii) share price (including, but not limited to, growth measures and total
shareholder return); (xiii) expense targets; (xix) margins; (xx) operating efficiency; (xxi)
customer satisfaction; (xxii) employee and/or service provider satisfaction; (xxiii) working
capital targets; (xxiv) economic value added; (xxv) revenue growth; (xxvi) assets under management
growth; and (xxvii) rating agencies ratings.
18
Any performance measure may be used to measure the performance of the Company as a whole or
any business unit of the Company or any combination thereof, as the Compensation Committee may deem
appropriate, or any of the above performance measures as compared to the performance of a group of
comparator companies, or published or special index that the Compensation Committee deems
appropriate. In the award agreement, the Compensation Committee also has the authority to provide
for accelerated vesting of any award based on the achievement of performance goal(s). The
Compensation Committee may provide in any award agreement that any evaluation of attainment of a
performance goal may include or exclude any of the following events that occurs during the relevant
period: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of
changes in tax laws, accounting principles, or other laws or provisions affecting reported results;
(d) any reorganization and restructuring programs; (e) extraordinary nonrecurring items as
described in Accounting Principles Board Opinion No. 30 and/or in managements discussion and
analysis of financial condition and results of operations appearing in the Companys annual report
to shareholders for the applicable year; (f) acquisitions or divestitures; and (g) foreign exchange
gains and losses. To the extent such inclusions or exclusions affect awards, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.
Cash-Based Awards
Subject to the terms and provisions of the Plan, the Compensation Committee may grant
cash-based awards to participants in such amounts and upon such terms as the Compensation Committee
may determine. Each cash-based award shall have a value as may be determined by the Compensation
Committee. For each cash-based award, the Compensation Committee may establish performance criteria
in its discretion. If the Compensation Committee exercises its discretion to establish such
performance criteria, the number and/or value of cash-based awards will be determined in the manner
determined by the Compensation Committee to the extent to which the performance criteria are met.
Subject to the terms of the Plan, the holder of a cash-based award shall be entitled to receive
payout on the value of cash-based award determined as a function of the extent to which the
corresponding performance criteria, if any, have been achieved. Payment of earned cash-based
awards shall be as determined by the Compensation Committee and evidenced in the award agreement.
Subject to the terms of the Plan, the Compensation Committee may pay earned cash-based awards in
the form of cash or in shares of common stock (or in a combination thereof) that have an aggregate
fair market value equal to the value of the earned cash-based awards. Such shares of common stock
may be granted subject to any restrictions deemed appropriate by the Compensation Committee.
Stock-Based Awards
The Compensation Committee may grant other types of equity-based or equity-related awards not
otherwise described by the terms of the Plan in such amounts and subject to such terms and
conditions including, but not limited to being subject to performance criteria, or in satisfaction
of such obligations, as the Compensation Committee shall determine. Such awards may entail the
transfer of actual shares of common stock to participants, or payment in cash or otherwise of
amounts based on the value of shares of common stock.
Change of Control.
Except as otherwise provided in the Plan, the Compensation Committee may specify in an award
agreement that upon the occurrence of a Change in Control, such award will immediately vest and
become fully exercisable, the restrictions as to transferability of shares subject to the award
will be waived, and any and all forfeiture risks or other contingencies will lapse. A Change in
Control shall mean the first to occur of the following events: (i) the consummation of a plan of
liquidation with respect to the Company; (ii) the sale or other divestiture of all or substantially
all of the assets (excluding the sale of assets in the ordinary course of business or sale and
lease back and other transactions that are primarily a financing transaction for the Company or
related to an acquisition by an employee benefit plan of the Company) of the Company, including the
sale of its direct or indirect majority-owned subsidiaries; (iii) the acquisition by any person or
affiliated group of persons as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the 1934 Act) of thirty per cent (30%) or more of the outstanding voting power of
the Company so that such person or affiliated group shall become the beneficial owner, as defined
in Rule 13d-3 of the 1934 Act, directly or indirectly, of such voting power of the Company other
than acquisitions by the Company, a subsidiary of the Company, an employee benefit plan of the
Company, or Monroe J. Carell, Jr. or
19
his family members or any entity owned directly or indirectly by Mr. Carell or his family
members or his or their estates; (iv) the consummation of a consolidation or merger of the Company
with another entity, or the reorganization of the Company, unless (1) the consummation of such
consolidation, merger, or reorganization would result in the stockholders of the Company
immediately before such consolidation or merger owning, in the aggregate, more than seventy percent
(70%) of the outstanding voting power of the surviving entity immediately after such consolidation,
merger or reorganization; (2) the individuals who, as of the date hereof, constitute the Board of
the Company (the Incumbent Board) continue to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Companys shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or group other than the Board; and
(3) following the consummation of a consolidation or merger or reorganization, no person or
affiliated group of persons as defined in 1934 Act owns thirty percent (30%) or more (other than
Mr. Carell or his family members or any entity owned directly or indirectly by Mr. Carell or his
family members or his or their estates) of the outstanding voting power of the Company; or (v) the
members of the Incumbent Board cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Companys shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person or group other than the Board.
Eligibility.
Incentive stock options may be granted only to employees of the Company or its subsidiaries.
Non-statutory stock options, restricted stock awards and stock appreciation rights awards may be
granted under the Plan to employees and consultants of the Company, its affiliates and
subsidiaries, as well as to persons to whom offers of employment as employees have been granted.
The Compensation Committee, in its discretion, will select the individuals to whom options,
restricted stock awards and stock appreciation rights will be granted, the time or times at which
such awards are granted, and the number of shares subject to each grant.
Exercise of Award; Form of Consideration.
The Compensation Committee will determine when awards become exercisable. The means of payment
for shares issued upon exercise of an award will be specified in each award agreement. Under the
Plan, the exercise price may be payable in cash or by tendering shares of stock acceptable to the
Compensation Committee valued at fair market value as of the day of exercise, or in any combination
thereof, as determined by the Compensation Committee; provided, however, unless otherwise
determined by the Compensation Committee, no shares may be tendered unless such shares have been
held by the participant for six (6) months or more. In addition, the Compensation Committee may
permit a participant to elect to pay the exercise price upon the exercise of an incentive stock
option or non-qualified stock option by irrevocably authorizing a third party to sell shares of
stock (or a sufficient portion of the shares) acquired upon exercise of the incentive stock option
or non-qualified stock option and remit to the Company a sufficient portion of the sale proceeds to
pay the entire exercise price and any tax withholding resulting from such exercise. For
non-qualified stock options and stock received from restricted stock awards or upon the exercise of
stock appreciation rights, the option holder or stock recipient must also pay the Company, at the
time of purchase, the amount of federal, state, and local withholding taxes required to be withheld
by the Company.
Nontransferability of Awards.
Except as otherwise provided by the Compensation Committee, awards under the Plan may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution and may only be exercised by or be otherwise available to
the participant during his or her lifetime.
20
No ISO granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and distribution. Further,
all ISOs granted to a participant under the Plan shall be exercisable during his or her lifetime
only by such participant.
Other Provisions.
An award agreement may contain other terms, provisions, and conditions not inconsistent with
the Plan, as may be determined by the Compensation Committee. In the discretion of the
Compensation Committee, a participant may be granted any awards permitted under the provisions of
the Plan, and more than one award may be granted to a participant. Awards may be granted as
alternatives to or replacement of awards granted or outstanding under the Plan, or any other plan
or arrangement of the Company. Subject to the overall limitation on the number of shares of common
stock that may be delivered under the Plan, the Compensation Committee may use available shares of
common stock as the form of payment for compensation, grants or rights earned or due under any
other compensation plans or arrangements of the Company.
Amendment and Termination of the Plan.
The Compensation Committee may amend, alter, suspend or terminate the Plan, or any part
thereof, at any time and for any reason. However, the Company shall obtain shareholder approval for
any amendment to the Plan to the extent necessary and desirable to comply with applicable laws. No
such action by the Board or shareholders may alter or impair any award previously granted under the
Plan without the written consent of the participant. The Plan will only be effective if approved by
the shareholders of the Company. The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Options under it are outstanding; provided,
however, that no Options may be granted under the Plan after the ten (10) year anniversary of the
Effective Date.
Federal Income Tax Consequences Relating to the Plan
The federal income tax consequences to the Company and its employees of awards under the Plan
are complex and subject to change. The following discussion is only a summary of the general rules
applicable to the Plan based on federal income tax laws in effect on the date of this proxy
statement. This summary is not intended to be exhaustive and does not address all matters which
may be relevant to a particular participant based on his or her specific circumstances. The summary
expressly does not discuss the income tax laws of any state, municipality or non-U.S. taxing
jurisdiction, or the gift, estate, excise (including the rules applicable to deferred compensation
under Code Section 409A), or other tax laws other than federal income tax law. The following is not
intended or written to be used, and cannot be used, for the purposes of avoiding taxpayer
penalties. Because individual circumstances may vary, we advise all participants to consult their
own tax advisors concerning the tax implications of awards granted under the Plan.
A recipient of a stock option or SAR will not have taxable income upon the grant of the stock
option or SAR. For nonqualified stock options and SARs, the participant will recognize ordinary
income upon exercise in an amount equal to the difference between the fair market value of the
shares and the exercise price on the date of exercise. Any gain or loss recognized upon any later
disposition of the shares generally will be a capital gain or loss.
The acquisition of shares upon exercise of an incentive stock option will not result in any
taxable income to the participant, except, possibly, for purposes of the alternative minimum tax.
The gain or loss recognized by the participant on a later sale or other disposition of such shares
will either be long-term capital gain or loss or ordinary income, depending upon whether the
participant holds the shares for the legally-required period (currently two years from the date of
grant and one year from the date of exercise). If the shares are not held for the legally-required
period, the participant will recognize ordinary income equal to the lesser of (i) the difference
between the fair market value of the shares on the date of exercise and the exercise price, or (ii)
the difference between the sales price and the exercise price.
For restricted stock awards, unless the participant elects to be taxed at the time of grant,
the participant will not have taxable income upon the grant, but upon vesting will recognize
ordinary income equal to the fair market value
21
of the shares at the time of vesting less the amount paid for such shares (if any). Any gain
or loss recognized upon any later disposition of the shares generally will be a capital gain or
loss.
A participant is not deemed to receive any taxable income at the time restricted stock units
are granted. When vested restricted stock units (and dividend equivalents, if any) are settled and
distributed, the participant will recognize ordinary income equal to the amount of cash and/or the
fair market value of shares received less the amount paid for such restricted stock units (if any).
At the discretion of the Compensation Committee, a participant may be allowed to satisfy his
or her tax withholding requirements under federal and state tax laws in connection with the
exercise or receipt of an award by electing to have shares withheld, and/or by delivering or
attesting to us already-owned shares of our common stock.
If the participant is an employee or former employee, the amount the participant recognizes as
ordinary income in connection with an award is subject to withholding taxes (not applicable to
incentive stock options) and we are allowed a tax deduction equal to the amount of ordinary income
recognized by the participant, provided that, Code Section 162(m) contains special rules regarding
the federal income tax deductibility of compensation paid to our chief executive officer and to
each of our four other most highly compensated executive officers. The general rule is that annual
compensation paid to any of these specified executives will be deductible only to the extent that
it does not exceed $1,000,000. However, we can preserve the deductibility of certain compensation
in excess of $1,000,000 if such compensation qualifies as performance-based compensation by
complying with certain conditions imposed by the Code Section 162(m) rules (including the
establishment of a maximum number of shares with respect to which awards may be granted to any one
employee during one fiscal year) and if the material terms of such compensation are disclosed to
and approved by the stockholders (e.g., see Performance Goals above). The Plan is structured with
the intention that the Compensation Committee will have the discretion to make awards under the
Plan that would qualify as performance-based compensation and be deductible. We are seeking
stockholder approval of the Plan to comply with Code Section 162(m).
Vote Required and Board Recommendation
The affirmative vote of holders of a majority of the shares of common stock cast in person or
by proxy at the Annual Meeting is required for approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL II. THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE VOTES CAST BY THE SHARES ENTITLED TO VOTE IS NECESSARY FOR THE APPROVAL OF PROPOSAL
II.
COMPENSATION COMMITTEE REPORT
The following Compensation Committee Report is not deemed to be part of a document filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the
Securities Act), or the Securities Exchange Act of 1934, as amended (the Exchange Act), and is
not to be deemed incorporated by reference in any documents filed under the Securities Act or
Exchange Act, without the express consent of the persons named below.
The Compensation Committee (the Committee) of the Board reviews and approves compensation
levels for the Companys management personnel, including the Named Executive Officers. The
Committee, which was established in August 1995, held six meetings during the fiscal year ended
September 30, 2005.
Compensation Philosophy and Policies for Executive Officers
The Companys compensation program for senior executives consists of base salary and a
performance-based bonus.
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The Companys compensation philosophy is to differentiate the compensation awarded to its
executives and other employees by rewarding superior performance. As a result, salary adjustments
and bonuses are linked to performance.
Base Salary. The Company seeks to compensate its executives at or above comparable industry levels
in order to recruit and retain the best available executives. At the same time, the Company seeks
to incentivize executives to improve the profitability of the Company and seeks to create an
entrepreneurial spirit among its managers. In order to accomplish these goals, the Company
considers its bonus program to be an integral part of its overall compensation program and thus
considers base salaries and target bonuses on a combined basis in order to determine appropriate
compensation levels for its executives.
Performance Based Bonus. The Company seeks to incentivize its executives to increase the
profitability of the Company. In fiscal 2005, the performance based bonus for executives with
direct responsibility for operations was based primarily on a percentage of profits actually
achieved in his or her geographic region above threshold levels established for each executive. The
performance based bonus for executives at the corporate level was based on profits earned by the
Company as a whole. The Compensation Committee set bonus targets for each executive based on the
scope of the executives responsibilities. The purpose of the program is to increase the
executives focus on increasing profits.
Stock
Options. The Company has historically granted stock to officers of the Company By
granting options to officers with exercise prices equal to or higher than the market price on the
date of grant, the options only have value to the officer if the market price of the Companys
stock improves, and may not be exercised until such options vest. The Company believes that this
component of executive compensation focuses executives on the creation of shareholder value and
encourages equity ownership in the Company. In determining the actual size of stock option awards,
the Compensation Committee considers a variety of factors, including the value of the stock on the
date of grant, competitive practices, the executives stock holdings, the amount of options
previously granted to the executive, individual performance, and the Companys performance.
However, the financial accounting implications of stock option grants has changed significantly.
The Committee is currently re-evaluating its stock option program and is considering several
alternatives and the Company is seeking shareholder approval of the 2006 Long-Term Incentive Plan
to give the Company greater flexibility in stock based grants to officers of the Company.
Compensation of Chief Executive Officer
Securities and Exchange Commission regulations require corporate compensation committees to
disclose the bases for the compensation of a corporations chief executive officer relative to such
corporations performance.
The two individuals who served as the Companys chief executive officer during fiscal 2005,
Mr. Carell and Mr. Eads, who became chief executive officer on August 2, 2005, were eligible to
participate in the same executive compensation plans that are available to the other senior
executive officers, which are described above. The compensation committees general approach in
setting the chief executives annual compensation is derived from the same considerations described
above: to be competitive with the compensation plans of other U.S. public corporations of similar
size while having a large percentage of his potential compensation based upon the profitability of
the corporation.
In fiscal 2005, Mr. Carell received a base salary of $525,591 and a bonus of $123,020.
Effective with his promotion to chief executive officer on August 2, 2005, Mr. Eads base salary
was set at $550,000. Mr. Eads received a bonus of $150,358 for fiscal 2005. Messrs. Carells and
Eads bonuses for fiscal 2005 were based on a percentage of profits actually earned by the Company
as a whole.
Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally provides that
compensation in excess of $1 million paid to certain executive officers is not deductible unless it
is performance-based. The Compensation Committee will periodically review and consider whether
particular compensation and incentive payments to the Companys executives will be deductible for
federal income tax purposes. However, the
23
Compensation Committee retains the ability to evaluate the performance of the Companys
executives, including the Chief Executive Officer, and to pay appropriate compensation, even if it
may result in the non-deductibility of certain compensation under federal tax law.
THIS REPORT IS SUBMITTED BY CECIL CONLEE, RAY BAKER AND BOB SHELL, BEING ALL OF
THE MEMBERS OF THE COMPENSATION COMMITTEE OF THE COMPANYS BOARD.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Conlee, Baker and Shell served as members of the Compensation Committee of the
Companys Board of Directors during fiscal 2005. No interlocking relationship exists between the
members of the Companys Board of Directors or Compensation Committee and the board of directors or
compensation committee of any other company.
AUDIT COMMITTEE REPORT
The following Report of the Audit Committee shall not be deemed to be soliciting material or
to be filed with the SEC nor shall this information be incorporated by reference into any future
filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.
The primary purpose of the Audit Committee, as set forth in its charter adopted by the Board
of Directors, is to assist the Board of Directors in fulfilling its oversight responsibilities
relating to the quality and integrity of the Companys financial reports and financial reporting
processes and systems of internal controls. In fulfilling its oversight responsibilities, the Audit
Committee (1) reviewed and discussed the audited financial statements for the fiscal year ended
September 30, 2005, with management and KPMG LLP, the Companys independent auditors (2) discussed
with the auditors the matters required to be disclosed by Statement on Auditing Standards No. 61;
and (3) received and discussed with the auditors the written disclosures and the letter from the
auditors required by Independence Standards Board Statement No. 1.
During the fourth quarter of 2005, management of the Company became aware that certain employees in
its United Kingdom operation had engaged in unauthorized related party transactions utilizing
Company assets and had made improper and inaccurate accounting entries that resulted in the over
accrual of revenues and understatement of expenses during the first three quarters of fiscal 2005.
On September 29, 2005, the Audit Committee of the Board of Directors and senior management decided
to restate the Companys financial statements for the quarterly periods ended December 31, 2004,
March 31, 2005 and June 30, 2005 to reflect the correction of these accounting errors. In
addition, during the fourth quarter, the Company reassessed its accounting for interest rate swap
agreements related to its credit facility and has restated its quarterly financial statements
related to these interest rate swap agreements. As discussed below, material weaknesses in the
Companys internal control over financial reporting as of September 30, 2005 have been identified
and reported to the Audit Committee.
Internal Control Over Financial Reporting
Management conducted an assessment of the effectiveness of the Companys internal control over
financial reporting as of September 30, 2005 based on the framework set forth in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management has concluded that the Companys internal control
over financial reporting was not effective as of September 30, 2005 because of the material
weaknesses outlined below.
A material weakness in internal control over financial reporting is a significant deficiency,
or combination of significant deficiencies, that results in more than a remote likelihood that a
material misstatement of the financial statements would not be prevented or detected on a timely
basis by the Company.
Management has identified the following material weaknesses in connection with its assessment
of the effectiveness of the Companys internal control over financial reporting as of September 30,
2005:
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1. Inadequate company-level controls. We did not maintain effective company-level controls
as defined in the Internal ControlIntegrated Framework published by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). These deficiencies related to three of the five
components of internal control as defined by COSO (control environment, monitoring, and information
and communication). Specifically,
Our control environment did not sufficiently promote integrity and ethical values over
financial reporting throughout our management structure, and this material weakness was a
contributing factor in the development of other material weaknesses described below;
We had inadequate monitoring controls, including inadequate staffing and procedures to
ensure periodic evaluations of internal controls to ensure that appropriate personnel regularly
obtain evidence that controls are functioning effectively and that identified control deficiencies
are remediated timely; and
There was inadequate communication from management to employees regarding the importance of
controls and employees duties and control responsibilities.
These deficiencies resulted in more than a remote likelihood that a material misstatement of
our interim or annual financial statements would not be prevented or detected.
2. Inadequate Expertise in U.S. Generally Accepted Accounting Principles. Our finance and
accounting personnel were inadequately trained and lacked appropriate expertise in U.S. generally
accepted accounting principles to prepare financial information for inclusion in the Companys
consolidated financial statements. This deficiency resulted in the improper capitalization of
certain property and equipment, the improper recognition of revenue on certain management
agreements, improper accounting for interest rate swap agreements, the failure to recognize
impairment on property and equipment and other long-term assets which required adjustments to the
interim and annual financial statements.
3. Inadequate segregation of duties. We had inadequate procedures and controls to ensure
proper segregation of duties within our purchasing, disbursements and accounting processes. As a
result, misappropriations of assets occurred and were not detected in a timely manner. This
deficiency resulted in the misappropriation of assets due to the unauthorized transfer of certain
management contracts to a former officer of the United Kingdom subsidiary and the Companys
continued payment and recognition of management costs after the contracts were transferred, which
required adjustments to the interim and annual financial statements to write-off certain current
assets, property and equipment and goodwill.
4. Inadequate financial statement preparation and review procedures. We had inadequate
policies, procedures and personnel to ensure that accurate, reliable interim and annual financial
statements were prepared and reviewed on a timely basis. Specifically, we had insufficient levels
of supporting documentation and review and supervision of the Companys accounting and finance
departments. These deficiencies resulted in errors in the recognition of revenue, improper
capitalization of certain property and equipment, unsupported assets, unrecorded liabilities in the
United Kingdom subsidiary which required adjustments to the interim and annual financial
statements.
5. Inadequate reviews of account reconciliations, analyses and journal entries. We had
inadequate review procedures over account reconciliations, account and transaction analyses, and
journal entries. Specifically, deficiencies were noted in the following areas: a) management review
of supporting documentation, calculations and assumptions used to prepare the financial statements,
including spreadsheets and account analyses; and b) management review of journal entries recorded
during the financial statement preparation process. These deficiencies resulted in inappropriate
recognition of revenue, inappropriate classification of assets, unsupported assets, unrecorded
liabilities, which required adjustments to the interim and annual financial statements.
6. Inadequate controls over authorization of purchase and disbursement transactions. We had
inadequate controls over purchases and the disbursement of funds as well as the recording of
accruals for purchases and expenses. Specifically,
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Inadequate and ineffective policies over the authorization of purchases; |
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Ineffective invoice approval policies; |
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Ineffective supervisory oversight and/or review of the addition or removal of management contracts; and |
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Inadequate period-end cut-off procedures in the procurement cycle. |
These deficiencies increase the likelihood that unauthorized purchases and disbursements could
occur and not be detected in a timely manner. These deficiencies resulted in the misappropriation
of assets because of the unauthorized transfer of certain management contracts to a former officer
of the United Kingdom subsidiary and the Companys continued payment and recognition of management
costs after the contracts were transferred, unrecorded liabilities, which required adjustments to
the interim and annual financial statements.
7. Inadequate controls over revenue recognition. Our review procedures over accounting for
revenue recognition were not functioning effectively. Specifically, the review procedures over the
application of our revenue recognition policies for management agreements were inadequate.
These deficiencies resulted in the improper recognition of revenue on certain management
contracts, which required adjustments to the interim and annual financial statements.
In response to these material weaknesses, the Audit Committee conducted an investigation of
certain matters related to the United Kingdom subsidiary and management performed additional
analyses and other post-closing procedures to ensure our consolidated financial statements were
prepared in accordance with U.S. generally accepted accounting principles. Accordingly,
management, including our Chief Executive Officer and Chief Financial Officer, believes the
restated 2005 quarterly financial results and the consolidated financial statements as of September
30, 2005 included in the Annual Report on Form 10-K fairly present, in all material respects, our
results of operations for the periods presented. The Audit Committee noted managements efforts to
implement improvements in our internal control procedures. The Audit Committee will continue to
oversee and monitor our ongoing efforts to enhance internal controls. Based on the foregoing
reviews and meetings, the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Annual Report on Form 10-K for the year ended September 30,
2005, for filing with the Securities and Exchange Commission. The Audit Committee also recommended
the appointment of KPMG LLP as the Companys independent registered public accounting firm for
fiscal 2006.
The members of the Audit Committee are not professionally engaged in the practice of auditing
or accounting and are not experts in the fields of accounting or auditing, including in respect of
auditor independence. Members of the audit committee rely without independent verification on the
information provided to them and on the representations made by management and the independent
registered public accounting firm. Accordingly, the audit committees oversight does not provide
an independent basis to determine that management has maintained appropriate accounting and
financial reporting principles or appropriate internal control and procedures designed to assure
compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit
Committees considerations and discussions referred to above do not assure that the audit of the
Companys financial statements has been carried out in accordance with standards of the Public
Company Accounting Board (United States), that the financial statements are presented in accordance
with U.S. generally accepted accounting principles or that the Companys independent registered
public accounting firm are in fact independent.
The board of directors, in its business judgment, has determined that all members of the Audit
Committee are independent directors, qualified to serve on the Audit Committee pursuant to
Sections 303.01(B)(2)(a) and (3) of the New York Stock Exchanges listing standards. Cecil Conlee
has been designated as the financial expert within the meaning of the New York Stock Exchanges
listing standards.
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AUDIT COMMITTEE:
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Ed Nelson, Chairman |
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Cecil Conlee |
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William Smith |
26
CODE OF ETHICS
The Company has adopted a code of ethics as part of its corporate compliance program. The code
of ethics applies to all of the Companys officers and employees, including its chief executive
officer, chief financial officer and controller. The code is posted on the investors page of the
Companys website at www.parking.com. In addition, copies of the Companys code of ethics may be
obtained without charge upon request to Kate Leahy, Central Parking Corporation Human Resources
Department, 2401 21st Avenue South, Nashville, Tennessee 37212; (615) 297-4255; or via e-mail to
kleahy@parking.com. Any amendments to, or waivers from, this code of ethics will be posted on our
website.
CERTAIN TRANSACTIONS
The Company leases two properties from an entity 50% owned by Monroe Carell, Jr., the
Companys Chairman, and 50% owned by Mr. Carells three daughters, including Kathryn Carell Brown,
a director. The leases, which were entered into in 1995 for a term of ten years, were amended in
fiscal 2005. The amended leases have terms of two and three years respectively, Total rent
expense for the two locations in fiscal 2005, including percentage rent, was $315,000. Management
believes such transactions have been on terms no less favorable to the Company than those that
could have been obtained from unaffiliated persons
The Company owns a 50% interest in a limited liability company (LLC) that owns the Lodo
Garage in Denver, Colorado. The Company manages the garage under a long-term management agreement.
An offer to purchase the entire LLC was received from an unrelated third party and the owner of
the other 50% interest informed the Company of its desire to sell its interest. The Company
declined to sell its interest in the LLC and the third party buyer was not interested in purchasing
a 50% interest. The Company elected not to exercise its option to purchase the remaining 50%
interest and another buyer was sought by the parties. A company owned by Mr. Carell and his three
daughters including Kathryn Carell Brown, a director, purchased the remaining 50% interest in the
LLC at the price offered by the unrelated third party. The purchase was completed in February
2004. As a result, the entity owned by Mr. Carell and his daughters now owns 50% of the LLC and
the Company owns the remaining 50% of the LLC.
In connection with the Companys acquisition of Kinney System Holding Corp. (Kinney) in
February 1998, the Company entered into a consulting agreement with Lewis Katz, one of the
principal shareholders of Kinney and a director of the Company since May 1998. Under this
agreement, Mr. Katz is entitled to receive a base consulting fee of $200,000 a year beginning in
February 1999 and continuing for a period of four years. The agreement has been extended on a
year-to-year basis and is cancelable upon 60 days notice. The agreement also provides certain
incentives to Mr. Katz to seek new business opportunities for the Company. In this regard, Mr. Katz
is entitled to receive a participating consulting fee equal to 10% of adjusted operating
income, as defined in the agreement, from the operation of any new leased or managed parking
facilities that Mr. Katz secures for the Company. This participating consulting fee, which is to be
paid for a period of five years from the commencement date of the parking facility, is to be paid
only to the extent adjusted operating income from these new locations exceeds $200,000. In fiscal
2005, Mr. Katz received $200,000 under the consulting agreement.
A subsidiary of the Company entered into a limited partnership agreement with Arizin Ventures,
L.L.C. (Arizin), a company owned by Lewis Katz, in the fiscal year ended September 30, 1999. The
Company serves as the general partner of the partnership and Arizin serves as the limited partner.
Under the partnership agreement, Mr. Katz has agreed to seek new business opportunities in the form
of leases and management contracts to operate parking facilities as well as renewals of existing
leases and contracts as requested by the Company. The Company operates all of the partnerships
parking facilities. The Company owns 70% of the partnership and Arizin owns 30%. The partnership
agreement provides that the net profit or loss of the partnership equals the combined lot level
profit of each of the parking facilities operated by the partnership. Mr. Katz receives an
administrative fee of $50,000 per quarter as long as he remains active in seeking new contracts or
renewals for the partnership. Cash flow, after expenses, is distributed to the partners
semi-annually. Mr. Katz is not entitled to receive the participating consulting
27
fee under his consulting agreement (described above) for any opportunities presented to the
partnership. The partnership agreement provides that the Company has the right to purchase Mr.
Katz interest in the partnership at fair market value in certain circumstances, including Mr.
Katz death or incapacity. Fair market value will be determined by independent appraisal. Arizin
received $734,973 from the partnership in fiscal 2005.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys executive officers
and directors, and persons who own more than 10% of the registered class of the Companys equity
securities, to file reports of ownership and changes in ownership with the Securities and Exchange
Commission (SEC). Such executive officers, directors and greater than 10% shareholders are
required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they
file. The SEC requires public companies to disclose in their proxy statements whether persons
required to make such filings missed or made late filings. During fiscal 2005, all such filings and
disclosure requirements were met within the time allowed for all persons subject to Section 16(a)
except that Mr. Heavrin was late in filing his initial filing on Form 3 when he was named as Chief
Financial Officer in March 2005 and Mr. Eads was late in filing a Form 4.
PROPOSALS OF STOCKHOLDERS FOR 2006 ANNUAL MEETING
Shareholders intending to submit proposals for presentation at the 2007 Annual Meeting of
Shareholders of the Company and inclusion in the Proxy Statement and form of proxy for such meeting
must submit the proposal to the Company no later than October 2, 2006. Shareholders who intend to
present a proposal at the 2007 Annual Meeting of Shareholders without inclusion of such proposal in
the Companys proxy materials are required to provide notice of such proposal to the Company no
later than December 15, 2006. Shareholders should forward such proposals to Henry J. Abbott,
Secretary, Central Parking Corporation, 2401 21st Avenue South, Suite 200, Nashville, Tennessee
37212. Proposals must be in writing. Proposals should be sent to the Company by certified mail,
return receipt requested. The Company reserves the right to reject, rule out of order, or take
other appropriate action with respect to any proposal that does not comply with these and other
applicable requirements.
AUDITORS
The firm of KPMG LLP has served as the Companys independent registered public accounting firm
since September 30, 1991, and has been selected to serve in such capacity for the fiscal year ended
September 30, 2006. Representatives of KPMG LLP will attend the Annual Meeting to respond to
questions from shareholders and to make a statement if such representatives so desires.
28
AUDITORS FEES
The following table summarizes fees for professional services provided to the Company by KPMG
LLP for fiscal years ended September 30, 2005 and 2004:
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2004 |
|
Audit Fees (1) |
|
$ |
2,246,752 |
|
|
$ |
625,000 |
|
|
Audit-Related Fees (2) |
|
$ |
294,660 |
|
|
$ |
446,550 |
|
|
Tax Fees (3) |
|
$ |
11,200 |
|
|
$ |
129,200 |
|
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees for Services Provided |
|
$ |
2,552,612 |
|
|
$ |
1,200,750 |
|
|
|
|
(1) |
|
Audit Fees include fees for professional services rendered in connection with the audit of
the Companys consolidated annual financial statements for the years ended September 30, 2005
and 2004, and the limited reviews of the condensed financial statements included in the
Companys Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission
during fiscal 2005 and 2004. |
|
(2) |
|
In fiscal 2005, audit-related fees consisted of fees paid for professional services rendered in
connection with internal control reports; statutorily or contractually required audits of individual
parking facilities; and audits of employee benefit plans. In fiscal 2004, audit related fees consisted
principally of statutorily or contractually required audits of individual parking facilities and audits of employee
benefit plans, due diligence procedures on a business acquired during the year; and advisory
services related to internal control documentation. |
|
(3) |
|
Tax Fees for tax related services, principally consist of tax compliance services, rendered
to the Company by KPMG LLP. |
All the services described above were approved by our Audit Committee. In accordance with the
charter of our Audit Committee and consistent with the policies of the Securities and Exchange
Commission, all auditing services and all non-audit services to be provided by any independent
registered public accounting firm of the Company shall be pre-approved by the Audit Committee. In
assessing requests for services by the independent registered public accounting firm, the Audit
Committee considers whether such services are consistent with the registered public accounting firm
independence, and whether the independent registered public accounting firm is likely to provide
the most effective and efficient service based upon their familiarity with the Company.
The Audit Committee has considered whether the provision of services by KPMG LLP is compatible
with maintaining KPMG LLPs independence from the Company.
29
STOCK PERFORMANCE GRAPH
The stock price performance graph depicted below is not deemed to be part of a document filed
with the SEC pursuant to the Securities Act or the Exchange Act and is not to be deemed
incorporated by reference in any documents filed under the Securities Act or the Exchange Act
without the express consent of the Company.
The graph below compares the total cumulative return of the Companys Common Stock with the
securities of entities comprising the S&P 500 Index and S&P Commercial Services and Supplies Index.
Cumulative return assumes $100 invested in the Company or the respective index on September 30,
2000. Since there is no industry peer group, the Company utilized the S&P Specialized Services
Index. The graph presents information from September 30, 2000, to September 30, 2005.
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9/30/00 |
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9/30/01 |
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9/30/02 |
|
9/30/03 |
|
9/30/04 |
|
9/30/05 |
Central Parking Corporation |
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100 |
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|
|
71 |
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102 |
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63 |
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68 |
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77 |
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S&P 500 |
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100 |
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73 |
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58 |
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73 |
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83 |
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|
93 |
|
S&P Commercial Services & Supplies |
|
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100 |
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|
|
109 |
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|
104 |
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|
|
130 |
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149 |
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154 |
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30
APPENDIX A
CENTRAL PARKING CORPORATION
2006 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
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Page |
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SECTION 1.
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GENERAL
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1 |
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SECTION 2.
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DEFINED TERMS
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1 |
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SECTION 3.
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OPTIONS
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7 |
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SECTION 4.
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STOCK APPRECIATION RIGHTS
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9 |
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SECTION 5.
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RESTRICTED STOCK AND RESTRICTED STOCK UNITS
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10 |
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SECTION 6.
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PERFORMANCE SHARES AND PERFORMANCE UNITS
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12 |
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SECTION 7.
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CASH-BASED AWARDS AND STOCK-BASED AWARDS
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13 |
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SECTION 8.
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PERFORMANCE MEASURES
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14 |
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SECTION 9.
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OPERATION AND ADMINISTRATION
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16 |
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SECTION 10.
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CHANGE IN CONTROL
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20 |
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SECTION 11.
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COMMITTEE
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20 |
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SECTION 12.
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AMENDMENT AND TERMINATION
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21 |
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SECTION 13.
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CANCELLATION AND RESCISSION OF AWARDS
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21 |
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i
CENTRAL PARKING CORPORATION
2006 LONG-TERM INCENTIVE PLAN
SECTION 1. GENERAL
1.1 Purpose. The CENTRAL PARKING CORPORATION 2006 LONG-TERM INCENTIVE PLAN (Plan)
has been established by CENTRAL PARKING CORPORATION (the Company) to (i) attract and retain
persons eligible to participate in the Plan; (ii) motivate persons eligible to participate in the
Plan, by means of appropriate incentives, to achieve long range goals; (iii) provide incentive
compensation opportunities that are competitive with those of other similar companies; and (iv)
further identify the interests of persons eligible to participate in the Plan with those of the
Companys Shareholders by offering compensation that is based on the Companys common stock and/or
contingent on attaining certain performance goals and thereby promoting the long-term financial
interest of the Company and its Affiliates, including the growth in value of the Companys equity
and enhancement of long-term Shareholder return.
1.2 Participation. Subject to the terms and conditions of the Plan, the Committee
shall designate, from time to time, from among the Eligible Employees, those persons who will be
granted one or more Awards under the Plan and who will thereby become Participants in the Plan.
SECTION 2. DEFINED TERMS
Capitalized words and phrases contained herein shall have the following meanings:
2.1 Affiliate. The term Affiliate shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations of the Exchange Act of 1934, with reference to the
Company and shall also include any corporation, partnership, joint venture, limited liability
company, or other entity in which the Company owns, directly or indirectly, at least fifty percent
(50%) of the total combined voting power of such corporation or of the capital interest or profits
interest of such partnership or other entity.
2.2 Award. The term Award shall mean any Option, SAR, Restricted Stock, Restricted
Stock Unit, Performance Unit, Performance Share, Cash Based Award, or Stock Based Award granted
under the Plan.
2.3 Award Agreement. The term Award Agreement shall mean either (i) a written agreement entered into by the
Company or an Affiliate and a Participant setting forth the terms and conditions applicable to an
Award granted to such Participant under this Plan, or (ii) a written statement issued by the
Company or an Affiliate to a Participant describing the terms and conditions of an Award granted to
such Participant under this Plan.
2.4 Base Value. The term Base Value shall mean the amount used to determine the
value of Stock Appreciation Right granted hereunder which, unless otherwise
1
determined by the
Committee, shall equal the Fair Market Value of one share of Stock on the date a Stock Appreciation
Right is granted.
2.5 Board. The term Board shall mean the Board of Directors of the Company.
2.6 Cash-Based Award. The term Cash-Based Award shall mean an Award granted under
SECTION 7, the value of which is denominated in cash and which is not any other form of Award
described in this Plan.
2.7 Change in Control. Unless otherwise determined by the Committee and set forth in
an applicable Award Agreement, the term Change in Control shall mean the first to occur of the
following events:
(i) the consummation of a plan of liquidation with respect to the Company;
(ii) the sale or other divestiture of all or substantially all of the assets
(excluding the sale of assets in the ordinary course of business or sale and lease
back and other transactions that are primarily a financing transaction for the
Company or related to an acquisition by an employee benefit plan of the Company) of
the Company, including the sale of its direct or indirect majority-owned
subsidiaries;
(iii) the acquisition by any person or affiliated group of persons as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the 1934
Act) of thirty per cent (30%) or more of the outstanding voting power of the
Company so that such person or affiliated group shall become the beneficial owner,
as defined in Rule 13d-3 of the 1934 Act, directly or indirectly, of such voting
power of the Company other than acquisitions by the Company, a subsidiary of the
Company, an employee benefit plan of the Company, or Monroe J. Carell, Jr. or his
family members or any entity owned directly or indirectly by Mr. Carell or his
family members or his or their estates;
(iv) the consummation of a consolidation or merger of the Company with another
entity, or the reorganization of the Company, unless
(1) the consummation of such consolidation, merger, or reorganization
would result in the stockholders of the Company immediately before such
consolidation or merger owning, in the aggregate, more than seventy
percent (70%) of the outstanding voting power of the surviving entity
immediately after such consolidation, merger or reorganization;
(2) the individuals who, as of the date hereof, constitute the Board of
the Company (the Incumbent Board) continue to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Companys shareholders, was approved
2
by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person or group other than the Board; and
(3) following the consummation of a consolidation or merger or
reorganization, no person or affiliated group of persons as defined in
1934 Act owns thirty percent (30%) or more (other than Mr. Carell or his
family members or any entity owned directly or indirectly by Mr. Carell
or his family members or his or their estates) of the outstanding voting
power of the Company; or
(v) the members of the Incumbent Board cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Companys shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on
behalf of a person or group other than the Board.
2.8 Code. The term Code shall mean the Internal Revenue Code of 1986, as amended.
A reference to any provision of the Code shall include reference to any successor provision of the
Code.
2.9 Committee. The Committee shall mean the committee selected by the Board to
administer the Plan pursuant to Section 11. The Committee shall at all times consist of two or
more persons, each of whom is a non-employee director within the meaning of 16b-3(b)(3) of the
Exchange Act of 1934, as amended, and each of whom is an outside director within the meaning of
Section 162(m) of the Code and the Regulations promulgated thereunder. If the Committee does not
exist, the Board shall be considered the Committee and may take any action under the Plan that
would otherwise be the responsibility of the Committee.
2.10 Company. The Company shall mean CENTRAL PARKING CORPORATION, a Tennessee
corporation.
2.11 Detrimental Activity. The term Detrimental Activity shall mean any of the
following:
(a) the rendering of services for any organization or engaging directly or indirectly
in any business which is or becomes competitive with the Company, or
3
which organization or
business, or the rendering of services to such organization or business, is or becomes
otherwise prejudicial to or in conflict with the interests of the Company or an Affiliate;
(b) the disclosure to anyone outside the Company or an Affiliate, or the use in other
than the business of the Company or an or an Affiliate, without prior written authorization
from the Company, of any confidential information or material, relating to the business of
the Company or an Affiliate, acquired by the Participant either during or after employment
or service with the Company or an Affiliate;
(c) the failure or refusal to disclose promptly and to assign to the Company, all
right, title and interest in any invention or idea, patentable or not, made or conceived by
the Participant during employment or service by the Company or an Affiliate, relating in any
manner to the actual or anticipated business, research or development work of the Company or
an Affiliate or the failure or refusal to do anything reasonably necessary to enable the
Company or an Affiliate to secure a patent where appropriate in the United States and in
other countries;
(d) any activity that results in termination of the Participants employment for cause;
(e) a violation of any rules, policies, procedures or guidelines of the Company or an
Affiliate;
(f) any attempt directly or indirectly to induce any employee or service provider of
the Company or an Affiliate to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any
current or prospective customer, supplier or partner of the Company or an Affiliate;
(g) the Participant being convicted of, or entering a guilty plea with respect to, a
felony or a crime involving financial impropriety or moral turpitude, whether or not
connected with the Company or an Affiliate; or
(h) any other conduct or act determined to be injurious, detrimental or prejudicial to
any interest of the Company or an Affiliate.
2.12 Effective Date. The Effective Date shall mean January 27, 2006, being the date
this Plan was adopted by the Board.
2.13 Eligible Employee. The term Eligible Employee shall mean
(a) With respect to an ISO, any person who, at the time the ISO is granted to such
person, is an employee, as such term is used in Section 422 of the Code and described in
Regulations Section 1.421-1(h)(1), of the Company or a Subsidiary.
(b) With respect to all Awards other than ISOs, any employee or service provider of the
Company or an Affiliate including, without limitation, directors, officers, consultants or
advisors of the Company. An Award may be granted to any such
4
person in connection with
hiring, retention or otherwise, prior to the date such person first performs services for
the Company or an Affiliate, provided that such Award shall not become vested prior to the
date such person first performs such services.
2.14 Exercise Price. The Exercise Price shall mean the exercise price of an Option
determined under Subsection 3.3 of the Plan.
2.15 Fair Market Value. For purposes of determining the Fair Market Value of a
share of Stock as of any date, the following rules shall apply:
(a) If the principal market for the Stock is a national securities exchange or the
NASDAQ stock market, then the Fair Market Value as of that date shall be the mean between
the lowest and highest reported sale prices of the Stock on that date on the principal
exchange or market on which the Stock is then listed or admitted to trading.
(b) If sale prices are not available or if the principal market for the Stock is not a
national securities exchange and the Stock is not quoted on the NASDAQ
stock market, the average between the highest bid and lowest asked prices for the Stock
on such day as reported on the NASDAQ OTC Bulletin Board Service or by the National
Quotation Bureau, Incorporated or a comparable service.
(c) If the day is not a business day, and as a result, Paragraphs (a) and (b) next
above are inapplicable, the Fair Market Value of the Stock shall be determined as of the
next earlier business day.
If Paragraphs (a), (b), and (c) next above are otherwise inapplicable, then the Fair Market Value
of the Stock shall be determined in good faith by the Committee.
2.16 Incentive Stock Option or ISO. An Incentive Stock Option or ISO shall mean
an Option that is intended to satisfy the requirements applicable to an incentive stock option
described in Section 422(b) of the Code and the Regulations promulgated thereunder.
2.17 Non-Qualified Stock Option or NQO. A Non-Qualified Stock Option or NQO shall
mean an Option that is not or is not intended to be an incentive stock option as that term is
described in Section 422(b) of the Code and the Regulations promulgated thereunder.
2.18 Option. An Option shall mean a right under the Plan entitling the Participant
to purchase shares of Stock at an Exercise Price established by the Committee. Any Option granted
under the Plan may be either an ISO or a NQO as determined in the discretion of the Committee.
2.19 Participant. A Participant shall mean an Eligible Employee (or the transferee
of an Eligible Employee if a transfer is permitted under the Plan and the applicable Award
Agreement) who has been designated by the Committee to receive an Award under the Plan.
5
2.20 Performance Based Compensation. Performance Based Compensation shall mean
compensation under an Award that is granted in order to provide remuneration solely on account of
the attainment of one or more Performance Goals under circumstances that satisfy the requirements
of Section 162(m) of the Code.
2.21 Performance Goal. Performance Goal shall mean a performance criterion selected
by the Committee for a given Award based on one or more of the Performance Measures.
2.22 Performance Measures. Performance Measures means measures as described in SECTION 8, the attainment of one or
more of which shall, as determined by the Committee, determine the vesting, right to payment, or
value of an Award that are designated to qualify as Performance Based Compensation.
2.23 Performance Period. Performance Period shall mean the period of time during
which the assigned performance criteria must be met in order to determine the degree of payout
and/or vesting with respect to an Award.
2.24 Performance Share. A Performance Share shall mean an Award granted under
Section 6.1 herein and subject to the terms of this Plan, denominated in Shares, the value of which
at the time it is payable is determined as a function of the extent to which corresponding
performance criteria have been achieved.
2.25 Performance Unit. A Performance Unit shall mean an Award granted under Section
6.1 herein and subject to the terms of this Plan, denominated in units, the value of which at the
time it is payable is determined as a function of the extent to which corresponding performance
criteria have been achieved.
2.26 Period of Restriction. Period of Restriction shall mean the period when
Restricted Stock or a Restricted Stock Unit is subject to forfeiture based on the passage of time,
the achievement of performance criteria, and/or upon the occurrence of other events as determined
by the Committee, in its discretion.
2.27 Person. The term Person shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
2.28 Plan. The Plan shall mean the CENTRAL PARKING CORPORATION 2006 LONG-TERM
INCENTIVE PLAN, as the same may be amended from time to time as permitted hereunder.
2.29 Regulations. Regulations shall mean the United States Treasury Regulations, including temporary
Regulations promulgated under the Code, as such Regulations may be amended from time to time
(including corresponding provisions of succeeding Regulations).
6
2.30 Restricted Stock. Restricted Stock shall mean an Award of shares of Stock
subject to a Period of Restriction, granted under SECTION 5 herein and subject to the terms of
this Plan.
2.31 Restricted Stock Unit. A Restricted Stock Unit shall mean an Award denominated
in units subject to a Period of Restriction, granted under SECTION 5 herein and subject to the
terms of this Plan.
2.32 Shareholders. Shareholders shall mean the shareholders of the Company.
2.33 Stock Appreciation Right or SAR. A Stock Appreciation Right or SAR shall
mean a right entitling a Participant to receive value equal to (or otherwise based on) the excess
of: (a) the Fair Market Value of a share of Stock; over (b) the Base Value.
2.34 Stock. The term Stock shall mean shares of common stock of the Company, no par
value.
2.35 Stock Based Award. The Term Stock Based Award shall mean an equity based or
equity related Award granted under SECTION 7 herein subject to the terms of this Plan and which is
not otherwise described by the Terms of this Plan.
2.36 Subsidiary or Subsidiaries. The term Subsidiary or Subsidiaries shall mean
any corporation during any period in which it is a subsidiary corporation as that term is defined
in Section 424(f) of the Code with respect to the Company that the Committee designates to be
subject to the Plan.
2.37 Ten Percent Shareholder. A Ten Percent Shareholder shall mean a Participant
who owns, directly or indirectly by attribution under Section 424(d) of the Code, more than ten
percent of the total combined voting power of all classes of stock of the Company or a Subsidiary.
SECTION 3. OPTIONS
3.1 Grant of Options. The Committee is hereby authorized to grant Options to such Eligible Employees as it, in
its discretion, deems advisable. Options granted may be in the form of ISOs or NQOs or any
combination thereof that the Committee, in its discretion, deems advisable. ISOs may be granted
only to Eligible Employees described in Paragraph 2.13(a).
3.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the duration of the Option, the number of shares of Stock to
which the Option pertains, the conditions upon which an Option shall become vested and exercisable,
and any such other provisions as the Committee shall determine. The Award Agreement also shall
specify whether the Option is intended to be an ISO or a NQO.
3.3 Exercise Price. The Exercise Price of each Option granted under the Plan shall be
established by the Committee or shall be determined by a method established by the
7
Committee at the
time the Option is granted. Notwithstanding the foregoing, in the case of an ISO, the Exercise
Price shall not be less than 100% (or 110% in the case of a Ten Percent Shareholder) of the Fair
Market Value of a share of Stock on the date the ISO is granted.
3.4 Exercise. An Option shall be exercisable in accordance with such terms and
conditions and during such periods as may be established by the Committee and specified in the
Award Agreement to which such Option relates. Notwithstanding the foregoing, no ISO may be
exercised more than ten (10) years (or five (5) years in the case of a Ten Percent Shareholder)
after the date the ISO was granted.
3.5 Payment of Option Exercise Price. The payment of the Exercise Price of an Option
granted under this Section 3 shall be subject to the following:
(a) Subject to the following provisions of this Subsection 3.5, the full Exercise Price
for shares of Stock purchased upon the exercise of any Option shall be paid at the time of
such exercise (except that, in the case of an exercise arrangement approved by the Committee
and described in Paragraph 3.5(c), payment may be made as soon as practicable after the
exercise).
(b) The Exercise Price shall be payable: (i) in cash; (ii) by shares of Stock
acceptable to the Committee, and valued at Fair Market Value as of the day of exercise (by
either actual delivery of shares or by attestation); or (ii) in any combination thereof, as
determined by the Committee; provided, unless otherwise determined by
the Committee, no shares may be tendered pursuant to this Paragraph unless such shares have been held by the
Participant for six (6) months or more.
(c) The Committee may permit a Participant to elect to pay the Exercise Price upon the
exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a
sufficient portion of the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise Price and any
tax withholding resulting from such exercise.
3.6 Restrictions on Share Transferability. The Committee may impose such restrictions
on any shares of Stock acquired pursuant to the exercise of an Option granted pursuant to this Plan
as it may deem advisable, including, without limitation, requiring the Participant to hold the
shares acquired pursuant to exercise for a specified period of time, or restrictions under
applicable laws or under the requirements of any stock exchange or market upon which such shares
are listed and/or traded.
3.7 Termination of Employment or Agency. Each Participants Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the Option following
termination of the Participants employment or service with the Company or its Affiliates. Such
provisions shall be determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among all Options issued
pursuant to this Plan, and may reflect distinctions based on the reasons for termination.
8
3.8 Nontransferability of Options.
(a) No ISO granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under this Plan shall be
exercisable during his or her lifetime only by such Participant.
(b) Except as otherwise provided in a Participants Award Agreement at the time of
grant, or thereafter by the Committee, NQO granted under this Plan may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. Further, except as otherwise provided in a
Participants Award Agreement at the time of grant or thereafter by the Committee, all NQOs
granted to a Participant under this Plan shall be exercisable during the Participants
lifetime only by such Participant.
3.9 Notification of Disqualifying Disposition. The Participant will notify the
Company upon the disposition of shares of Stock issued pursuant to the exercise of an ISO or shares
of Stock received as a dividend on Stock acquired through the exercise of an ISO. The Company will
use such information to determine whether a disqualifying disposition as described in Section
421(b) of the Code has occurred.
SECTION 4. STOCK APPRECIATION RIGHTS.
4.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, SARs may be granted to Participants at any time and from time to time and upon such terms as
shall be determined by the Committee in its discretion.
4.2 Stock Appreciation Rights Agreement. Each SAR Award shall be evidenced by an
Award Agreement that shall specify the Base Value, the term of the SAR, and any such other
provisions as the Committee shall determine.
4.3 Term of Stock Appreciation Rights. The term of a SAR granted under the Plan shall
be determined by the Committee, in its sole discretion, and except as determined otherwise by the
Committee and specified in the SAR Award Agreement, no SAR shall be exercisable later than the
tenth (10th) anniversary date of its grant.
4.4 Exercise of Stock Appreciation Rights. SARs may be exercised upon whatever terms
and conditions the Committee, in its sole discretion, imposes.
4.5 Payment on Exercise of Stock Appreciation Rights. Upon the exercise of a SAR, a
Participant shall be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of one share of Stock on the date of
exercise over the Base Value; by
(b) The number of shares of Stock with respect to which the SAR is exercised.
9
At the discretion of the Committee, a SAR may be settled in cash, shares of Stock of equivalent
value (based on the Fair Market Value on the date of exercise of the SAR), in some combination
thereof, or in any other form approved by the Committee at its sole discretion. The Committees
determination regarding the form of SAR payout shall be set forth or reserved for later
determination in the Award Agreement.
4.6 Termination of Employment or Service. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the SAR following termination of
the Participants employment or service with the Company or a Subsidiary. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on the
reasons for termination.
4.7 Nontransferability of Stock Appreciation Rights. Except as otherwise provided in
a Participants Award Agreement at the time of grant or thereafter by the Committee, an SAR granted
under the Plan may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participants Award Agreement at the time of grant or thereafter by the
Committee, all SARs granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
4.8 Other Restrictions. Without limiting the generality of any other provision of
this Plan, the Committee may impose such other conditions and/or restrictions on any shares of
Stock received upon exercise of an SAR granted pursuant to the Plan, as it may deem advisable. This
includes, but is not limited to, requiring the Participant to hold the shares of Stock received
upon exercise of an SAR for a specified period of time.
SECTION 5. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
5.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may grant shares of
Restricted Stock and/or Restricted Stock Units to Participants in such amounts and upon such terms
as the Committee shall determine.
5.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the
Period(s) of Restriction, the number of shares of Restricted Stock or the number of Restricted
Stock Units granted, and any such other provisions as the Committee shall determine.
5.3 Nontransferability of Restricted Stock and Restricted Stock Units. Except as
otherwise provided in this Plan or the Award Agreement, the shares of Restricted Stock and/or
Restricted Stock Units granted herein may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction specified in the
Award Agreement (and in the case of Restricted Stock Units until the date of delivery or other
payment), or upon earlier satisfaction of any other conditions, as specified by the Committee in
its sole discretion and set forth in the Award Agreement at the time of grant or thereafter by the
Committee. All rights with respect to the Restricted Stock
10
and/or
Restricted Stock Units granted to a Participant under the Plan shall be available during his
or her lifetime only to such Participant, except as otherwise provided in the Award Agreement
at the time of grant or thereafter by the Committee.
5.4 Other Restrictions. The Committee shall impose, in the Award Agreement at the time
of grant or anytime thereafter, such other conditions and/or restrictions on any shares of
Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may deem advisable
including, without limitation, a requirement that Participants pay a stipulated purchase price for
each share of Restricted Stock or each Restricted Stock Unit, restrictions based upon the
achievement of specific performance criteria, time-based restrictions on vesting following the
attainment of the performance criteria, time-based restrictions, restrictions under applicable laws
or under the requirements of any stock exchange or market upon which such shares are listed or
traded, or holding requirements or sale restrictions placed on the shares by the Company upon
vesting of such Restricted Stock or Restricted Stock Units. To the extent deemed appropriate by the
Committee, the Company may retain the certificates representing shares of Restricted Stock, or
shares delivered in consideration of Restricted Stock Units, in the Companys possession until such
time as all conditions and/or restrictions applicable to such shares have been satisfied or lapse.
Except as otherwise provided in this Section 5, shares of Restricted Stock covered by each
Restricted Stock Award shall become freely transferable by the Participant after all conditions and
restrictions applicable to such shares have been satisfied or lapse, and Restricted Stock Units
shall be paid in cash, shares of Stock, or a combination of cash and shares of Stock as the
Committee, in its sole discretion shall determine.
5.5 Certificate Legend. Each certificate representing shares of Restricted Stock
granted pursuant to the Plan may bear a legend such as the following:
THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE,
WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE CENTRAL PARKING CORPORATION 2006
LONG-TERM INCENTIVE COMPENSATION PLAN, AND IN THE ASSOCIATED AWARD AGREEMENT. A COPY
OF THE PLAN AND SUCH AWARD AGREEMENT MAY BE OBTAINED FROM CENTRAL PARKING
CORPORATION.
5.6 Voting Rights. Except as otherwise determined by the Committee and set forth in
the related Award Agreement, Participants holding shares of Restricted Stock granted hereunder
shall be granted the right to exercise full voting rights with respect to those shares during the
Period of Restriction. A Participant shall have no voting rights with respect to any Restricted
Stock Units granted hereunder.
5.7 Dividends and Other Distributions. Each Award Agreement shall set forth the Participants rights to dividends paid with respect
to the shares of Stock underlying an Award of Restricted Stock during the Period of Restriction.
The Committee may designate in the Award Agreement that a Participant holding Restricted Stock
Units may be entitled to dividend equivalents, the terms of which shall be determined by the
Committee in its sole
11
discretion. The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion,
may determine the form of payment of dividends or dividend equivalents, including cash, shares of
Stock, Restricted Stock, or Restricted Stock Units.
5.8 Termination of Employment and Agency. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to retain Restricted Stock and/or Restricted
Stock Units following termination of the Participants employment or service with the Company.
Such provisions shall be determined in the sole discretion of the Committee, shall be included in
the Award Agreement entered into with each Participant, need not be uniform among all shares of
Restricted Stock or Restricted Stock Units issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
5.9 Payment in Consideration of Restricted Stock Units. When and if Restricted Stock
Units become payable, a Participant having received the grant of such units shall be entitled to
receive payment from the Company in cash, shares of Stock with an equivalent value, in some
combination thereof, or in any other form determined by the Committee in its sole discretion. The
Committees determination regarding the form of payment shall be set forth or reserved for later
determination in the Award Agreement pertaining to the grant of the Restricted Stock Unit.
SECTION 6. PERFORMANCE SHARES AND PERFORMANCE UNITS
6.1 Grant of Performance Shares and Performance Units. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may grant Performance
Shares and/or Performance Units to Participants in such amounts and upon such terms as the
Committee shall determine.
6.2 Value of Performance Shares and Performance Units. Each Performance Share shall
have an initial value equal to the Fair Market Value of a share of Stock on the date of grant.
Each Performance Unit shall have an initial value that is established by the Committee at the time
of grant, which may be less than, equal to, or greater than the Fair Market Value of a share of
Stock. The Committee shall set performance criteria for a Performance Period in its discretion
which, depending on the extent to which they are met, will determine, in the manner determined by
the Committee and set forth in the Award Agreement, the value and/or number of each Performance
Share or Performance Unit that will be paid to the Participant.
6.3 Earning of Performance Shares and Performance Units. Subject to the terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Shares or Performance Units shall be entitled to receive payout on the value
and number of Performance Shares or Performance Units determined as a function of the extent to
which the corresponding performance criteria have been achieved. Notwithstanding the foregoing,
the Company has the ability to require the Participant to hold the shares of Stock received
pursuant to such Award for a specified period of time.
12
6.4 Form and Timing of Payment of Performance Shares and Performance Units. Payment
of earned Performance Shares or Performance Units shall be as determined by the Committee and as
evidenced in the Award Agreement. Subject to the terms of the Plan, the Committee, in its sole
discretion, may pay earned Performance Shares or Performance Units in the form of cash or in shares
of Stock (or in a combination thereof) equal to the value of the earned Performance Shares or
Performance Units at the close of the applicable Performance Period. Any shares of Stock may be
granted subject to any restrictions deemed appropriate by the Committee. The determination of the
Committee with respect to the form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award or reserved for later determination.
6.5 Dividends and Other Distributions. The Committee may set forth in the applicable
Award Agreement that Participants holding Performance Shares will receive dividend equivalents with
respect to dividends declared with respect to the Performance Shares. Such dividends may be subject
to the accrual, forfeiture, or payout restrictions as determined by the Committee in its sole
discretion.
6.6 Termination of Employment or Service. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to retain Performance Shares or Performance
Units following termination of the Participants employment or Agency with the Company or an
affiliate. Such provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be uniform among all
Awards of Performance Shares or Performance Units issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
6.7 Nontransferability of Performance Shares and Performance Units. Except as
otherwise provided in a Participants Award Agreement at the time of grant or thereafter by the
Committee, Performance Shares or Performance Units may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participants Award Agreement or otherwise
by the Committee at any time, a Participants rights under the Plan shall inure during his or her
lifetime only to such Participant.
SECTION 7. CASH-BASED AWARDS AND STOCK-BASED AWARDS.
7.1 Grant of Cash-Based Awards. Subject to the terms and provisions of this Plan, the
Committee, at any time and from time and time, may grant Cash-Based Awards to Participants in such
amounts and upon such terms as the Committee may determine.
7.2 Value of Cash-Based Awards. Each Cash-Based Award shall have a value as may be
determined by the Committee. For each Cash-Based Award, the Committee may establish performance
criteria in its discretion. If the Committee exercises its discretion to establish such performance
criteria, the number and/or value of Cash-Based Awards that will be paid out to the Participant
will be determined, in the manner determined by the Committee, the extent to which the performance
criteria are met.
13
7.3 Payment in Consideration of Cash-Based Awards. Subject to the terms of this Plan,
the holder of a Cash-Based Award shall be entitled to receive payout on the value of Cash-Based
Award determined as a function of the extent to which the corresponding performance criteria, if
any, have been achieved.
7.4 Form and Timing of Payment of Cash-Based Awards. Payment of earned Cash-Based
Awards shall be as determined by the Committee and evidenced in the Award Agreement. Subject to
the terms of the Plan, the Committee, in its sole discretion, may pay earned Cash-Based Awards in
the form of cash or in shares of Stock (or in a combination thereof) that have an aggregate Fair
Market Value equal to the value of the earned Cash-Based Awards (the applicable date regarding
which aggregate Fair Market Value shall be determined by the Committee). Such shares of Stock may
be granted subject to any restrictions deemed appropriate by the Committee. The determination of
the Committee with respect to the form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award.
7.5 Stock-Based Awards. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan (including the grant or
offer for sale of unrestricted shares of Stock) in such amounts and subject to such terms and
conditions including, but not limited to being subject to performance criteria, or in satisfaction
of such obligations, as the Committee shall determine. Such Awards may entail the transfer of
actual shares of Stock to Participants, or payment in cash or otherwise of amounts based on the
value of shares of Stock.
7.6 Termination of Employment or Agency. Each Award Agreement shall set forth the extent to which the Participant shall have the
right to receive Cash-Based Awards and Stock-Based Awards following termination of the
Participants employment or Agency with the Company or Affiliates. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the applicable Award
Agreement, need not be uniform among all Awards of Cash-Based Awards and Stock-Based Awards issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination.
7.7 Nontransferability of Cash-Based Awards and Stock-Based Awards. Except as
otherwise provided in a Participants Award Agreement at the time of grant or thereafter by the
Committee, Cash-Based Awards and Stock-Based Awards may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participants Award Agreement at the time
of grant or thereafter by the Committee, a Participants rights under the Plan shall be exercisable
during the Participants lifetime only by the Participant.
SECTION 8. PERFORMANCE MEASURES
8.1 Performance Based Compensation. Notwithstanding any other terms of this Plan, the
vesting, payment, or value (as determined by the Committee) of each Award other than an Option or
SAR that, at the time of grant, the Committee intends to be Performance-Based Compensation shall be
determined by the attainment of one or more Performance Goals as determined by the Committee in
conformity with Code Section 162(m). The Committee shall
14
specify in writing, by resolution or
otherwise, the Participants eligible to receive such an Award (which may be expressed in terms of a
class of individuals) and the Performance Goal(s) applicable to such Awards within ninety (90) days
after the commencement of the period to which the Performance Goal(s) relate(s) or such earlier
time as required to comply with Code Section 162(m). No such Award shall be payable unless the
Committee certifies in writing, by resolution or otherwise, that the Performance Goal(s) applicable
to the Award were satisfied. In no case may the Committee increase the value of an Award of
Performance-Based Compensation above the maximum value determined under the performance formula by
the attainment of the applicable Performance Goal(s), but the Committee may retain the discretion
to reduce the value below such maximum.
8.2 Performance Measures. Unless and until the Committee proposes for Shareholder
vote and the Shareholders approve a change in the general Performance Measures set forth in this
SECTION 8, the Performance Goal(s) upon which the payment or vesting of an Award to an Insider
that is intended to qualify as Performance-Based Compensation shall be limited to the following
Performance Measures:
|
(a) |
|
Net earnings or net income (before or after
taxes); |
|
|
(b) |
|
Earnings per share; |
|
|
(c) |
|
Net sales growth; |
|
|
(d) |
|
Net operating profit; |
|
|
(e) |
|
Operating earnings; |
|
|
(f) |
|
Operating earnings per share; |
|
|
(g) |
|
Return measures (including, but not limited to,
return on assets, capital, equity, or sales); |
|
|
(h) |
|
Cash flow (including, but not limited to,
operating cash flow, free cash flow, and cash flow return on capital); |
|
|
(i) |
|
Earnings before or after taxes, interest,
depreciation, and/or amortization and including/excluding capital gains
and losses; |
|
|
(j) |
|
Gross or operating margins; |
|
|
(k) |
|
Productivity ratios; |
|
|
(l) |
|
Share price (including, but not limited to,
growth measures and total Shareholder return); |
|
|
(m) |
|
Expense targets; |
|
|
(n) |
|
Margins;
|
15
|
(o) |
|
Operating efficiency; |
|
|
(p) |
|
Customer satisfaction; |
|
|
(q) |
|
Employee and/or service provider satisfaction; |
|
|
(r) |
|
Working capital targets; |
|
|
(s) |
|
Economic value added; |
|
|
(t) |
|
Revenue growth; |
|
|
(u) |
|
Assets under management growth; and |
|
|
(v) |
|
Rating Agencies ratings. |
Any Performance Measure(s) may be used to measure the performance of the Company as a whole or any
business unit of the Company or any combination thereof, as the Committee may deem appropriate, or
any of the above Performance Measures as compared to the performance of a group of comparator
companies, or published or special index that the Committee, in its sole discretion, deems
appropriate. In the Award Agreement, the Committee also has the authority to
provide for accelerated vesting of any Award based on the achievement of Performance Goal(s). The
Committee may provide in any Award Agreement that any evaluation of attainment of a Performance
Goal may include or exclude any of the following events that occurs during the relevant period: (a)
asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in
tax laws, accounting principles, or other laws or provisions affecting reported results; (d) any
reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 and/or in managements discussion and analysis of
financial condition and results of operations appearing in the Companys annual report to
Shareholders for the applicable year; (f) acquisitions or divestitures; and (g) foreign exchange
gains and losses. To the extent such inclusions or exclusions affect Awards, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.
8.3 Modification of Performance Measures. In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing Performance Measures
without obtaining Shareholder approval of such changes, the Committee shall have sole discretion to
make such changes without obtaining Shareholder approval. In addition, in the event that the
Committee determines that it is advisable to grant Awards to Insiders that shall not qualify as
Performance-Based Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m).
SECTION 9. OPERATION AND ADMINISTRATION
9.1 Effective Date. Subject to the approval of the Shareholders, the Plan shall be
effective as of the Effective Date; provided, however, that to the extent that Awards are granted
under the Plan prior to its approval by the Shareholders, the Awards shall be contingent on
approval of the Plan by the Shareholders within twelve months before or after the Effective
16
Date and consistent with the requirements for Shareholder approval of matters requiring shareholder
approval under the Companys organizational documents and under applicable corporate law and the
rules of any exchange on which the Companys stock is listed. The Plan shall be unlimited in
duration and, in the event of Plan termination, shall remain in effect as long as any Awards under
it are outstanding; provided, however, that no Awards may be granted under the Plan after the ten
(10) year anniversary of the Effective Date.
9.2 Shares Subject to Plan. The shares of Stock for which Awards may be granted under
the Plan shall be subject to the following:
(a) The shares of Stock with respect to which Awards may be made under the Plan shall
be shares currently authorized but unissued or currently held or subsequently acquired by
the Company as treasury shares, including shares purchased in the open market or in private
transactions.
(b) Subject to the other provisions of this Section 9.2, the maximum number of shares
of Stock that may be delivered to Participants and their beneficiaries under the Plan shall
be equal to the sum of 1,500,000 shares of Stock.
(c) Notwithstanding anything in this Plan to the contrary, any Award (as applicable)
may be settled in cash rather than Stock (i) to the extent provided by the Committee and
(ii) to the extent such right to settle an Award in cash would not result in the recognition
of income or the imposition of interest or a penalty under Section 409A of the Code. To the
extent any shares of Stock covered by an Award are not delivered to a Participant or
beneficiary because the Award is forfeited or canceled, or the shares of Stock are not
delivered because the Award is settled in cash or used to satisfy the applicable tax
withholding obligation, such shares shall not be deemed to have been delivered for purposes
of determining the maximum number of shares of Stock available for delivery under the Plan.
(d) In the event of a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off,
combination or exchange of shares), the Committee may adjust Awards to preserve the benefits or potential benefits of
the Awards. Action by the Committee may include: (i) adjustment of the number and kind of
shares which may be delivered under the Plan; (ii) adjustment of the number and kind of
shares subject to outstanding Awards (as applicable); (iii) adjustment of the Exercise Price
of outstanding Awards; and (iv) any other adjustments that the Committee determines to be
equitable. All determinations made by the Committee pursuant to this Paragraph 9.2(d) shall
be final and binding on the Participants.
(e) Unless and until the Committee determines that an Award shall not be designed to
qualify as Performance-Based Compensation, the following limits shall apply to grants of
Awards under the Plan:
17
(i) The maximum aggregate number of shares of Stock that may be granted in
the form of Options or Stock Appreciation Rights pursuant to any Award
granted in any one calendar year to any one Participant shall be 300,000.
(ii) The maximum aggregate grant with respect to Awards of Restricted Stock
or Restricted Stock Units granted in any one calendar year to any one
Participant shall be 300,000.
(iii) The maximum aggregate Award of Performance Shares or Performance Units
that a Participant may receive in any one calendar year shall be 300,000
shares of Stock, or equal to the value of 300,000 shares of Stock determined
as of the date of vesting or payout, as applicable.
(iv) The maximum aggregate amount awarded or credited with respect to Cash
Based Awards to any one Participant in any one calendar year
may not exceed $2,000,000 determined as of the date of vesting or payout, as
applicable.
(v) The maximum aggregate grant with respect to Awards of Stock Based Awards
in any one calendar year to any one Participant shall be 300,000.
9.3 General Restrictions. Delivery of shares of Stock or other amounts under the Plan
shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other distribution of
benefits under the Plan unless such delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the Securities Act of
1933), and the applicable requirements of any securities exchange or similar entity.
(b) Unless the shares of Stock to be issued pursuant to an Award are covered by a then
current registration statement or a notification under Regulation A under the Securities Act
of 1933, the Committee may require an acknowledgment from a Participant as a condition to
the issuance of such shares, in form and substance satisfactory to the Company, that: (i)
such shares are being purchased for investment and not for distribution or resale (other
than a distribution or resale which, in the opinion of counsel satisfactory to the Company,
may be made without violating the registration provisions of the Securities Act of 1933);
(ii) the Participant has been advised and understands that such shares have not been
registered under the Securities Act of 1933 and are restricted securities within the
meaning of Rule 144 under the Securities Act of 1933 and are subject to restrictions on
transfer, and the Company is under no obligation to register such shares under the
Securities Act of 1933 or to take any action which would make available to the Participant
any exemption from such registration; (iii) such shares may not be transferred without
compliance with all applicable federal and state securities
18
laws; and (iv) an appropriate
legend referring to the foregoing restrictions on transfer and any other restrictions
imposed under the applicable Award Agreement may be endorsed on the certificates.
(c) To the extent that the Plan provides for issuance of certificates to reflect the
issuance of shares of Stock, the issuance may be effected on a non-certificated basis, to
the extent not prohibited by applicable law or the applicable rules of any stock exchange.
If any shares of Stock to be issued pursuant to the Plan are subject to forfeiture
restrictions set forth in the applicable Incentive Agreement or the Plan, the Committee may
require that any such shares of Stock be held in escrow until such restrictions lapse.
9.4 Tax Withholding. All distributions under the Plan are subject to withholding of all applicable taxes and the
Committee may condition the delivery of any shares or other benefits under the Plan on satisfaction
of the applicable withholding obligations. The Committee, in its discretion and subject to such
requirements as the Committee may impose prior to the occurrence of such withholding, may permit
such withholding obligations to be satisfied through cash payment by the Participant, through the
surrender of shares of Stock which the Participant already owns, or through the surrender of shares
of Stock to which the Participant is otherwise entitled under the Plan. Unless otherwise determined
by the Committee, amounts to be withheld pursuant to this Subsection shall be calculated based on
the minimum required tax rate.
9.5 Grant and Use of Awards. In the discretion of the Committee, a Participant may be
granted any Awards permitted under the provisions of the Plan, and more than one Award may be
granted to a Participant. Awards may be granted as alternatives to or replacement of Awards granted
or outstanding under the Plan, or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of which is acquired by
the Company or a Subsidiary). Subject to the overall limitation on the number of shares of Stock
that may be delivered under the Plan, the Committee may use available shares of Stock as the form
of payment for compensation, grants or rights earned or due under any other compensation plans or
arrangements of the Company or a Subsidiary, including the plans and arrangements of the Company or
a Subsidiary assumed in business combinations.
9.6 Form and Time of Elections. Unless otherwise specified herein, each election
required or permitted to be made by any Participant or other person entitled to benefits under the
Plan, and any permitted modification, or revocation thereof, shall be in writing filed with the
Committee at such times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.
9.7 Action by Company or Subsidiary. Any action required or permitted to be taken by
the Company or any Subsidiary shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly authorized to act for the
Board, or (except to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of the Company or a Subsidiary.
19
9.8 Gender and Number. Where the context admits, words in any gender shall include
any other gender, words in the singular shall include the plural and the plural shall include the
singular.
9.9 Limitation of Implied Rights.
(a) Neither a Participant nor any other person shall, by reason of participation in the
Plan, acquire any right in or title to any assets, funds or property of the Company or any
Subsidiary whatsoever, including, without limitation, any specific funds, assets, or other
property which the Company or any Subsidiary, in its sole discretion, may set aside in
anticipation of a liability under the Plan. A Participant shall have only a contractual
right to the Stock or amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan shall constitute a
guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any
benefits to any person.
(b) The Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee or other individual the right to be
retained in the employ of the Company or any Subsidiary or the right to continue to provide
services to the Company or any Subsidiary, nor any right or claim to any benefit under the
Plan, unless such right or claim has specifically accrued under the terms of the Plan.
Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the
holder thereof any rights as a Shareholder of the Company prior to the date on which the
individual fulfills all conditions for receipt of such rights.
9.10 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information that the person acting on it considers pertinent and
reliable, and signed, made or presented by the proper party or parties.
9.11 Applicable Law. All questions pertaining to the validity, construction and
administration of the Plan and any Awards granted hereunder shall be determined in conformity with
the laws of the State of Delaware, without regard to the conflict of laws provisions of any
jurisdiction.
SECTION 10. CHANGE IN CONTROL
Except as otherwise provided in the Plan, the Committee may specify in an Award Agreement that
upon the occurrence of a Change in Control, such Award will immediately vest and become fully
exercisable, the restrictions as to transferability of shares subject to the Award will be waived,
and any and all forfeiture risks or other contingencies will lapse.
SECTION 11. COMMITTEE
11.1 Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in the Committee in accordance with this Section 11.
20
11.2 Powers of Committee. The Committees administration of the Plan shall be subject to the following:
(a) Subject to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Employees those persons who shall receive
Awards, to determine the time or times of receipt, to determine the types of Awards and the
number of shares covered by the Awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such Awards, and (subject to the
restrictions imposed by Section 12) to cancel or suspend Awards.
(b) The Committee will have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan, to determine
the terms and provisions of any Award Agreement made pursuant to the Plan, and to make all
other determinations that may be necessary or advisable for the administration of the Plan.
(c) Any interpretation of the Plan by the Committee and any decision made by it under
the Plan are final and binding on all persons.
(d) In controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the articles and by-laws of the
Company, and applicable corporate law.
11.3 Information to be Furnished to Committee. The Company and Subsidiaries shall
furnish the Committee with such data and information as it determines may be required for it to
discharge its duties. The records of the Company and Subsidiaries as to an Eligible Employees or
Participants employment (or other provision of services), termination of employment (or cessation
of the provision of services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons entitled to
benefits under the Plan must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of the Plan.
SECTION 12. AMENDMENT AND TERMINATION
The Board may, at any time, amend or terminate the Plan, provided that no amendment or
termination may, in the absence of written consent to the change by the affected Participant (or,
if the Participant is not then living, the affected beneficiary), adversely affect the rights of
any Participant or beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; and further provided that adjustments pursuant to Paragraph
9.2(d) shall not be subject to the foregoing limitations of this Section 12.
SECTION 13. CANCELLATION AND RESCISSION OF AWARDS
13.1. Effect of Detrimental Activity on Incentive. Unless the Award Agreement
specifies otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise limit or
restrict any unexpired, unpaid, or deferred Award at any
time if the Participant is not in compliance with all applicable provisions of the Award
Agreement and the Plan, or if the Participant engages in any Detrimental Activity.
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13.2 Certificates of Compliance and Rescission upon Detrimental Activity. Upon
exercise, payment or delivery pursuant to an Award, the Participant shall certify in a manner
acceptable to the Company that he or she is in compliance with the terms and conditions of the Plan
and his or her Award Agreement and is not engaged in any Detrimental Activity. In the event a
Participant engages in any Detrimental Activity prior to, or during the six (6) months after, any
exercise, payment or delivery pursuant to an Award Agreement, such exercise, payment or delivery
may be rescinded within two (2) years thereafter. In the event of any such rescission, the
Participant shall pay to the Company the amount of any gain realized or payment received as a
result of the rescinded exercise, payment or delivery, in such manner and on such terms and
conditions as may be required, and the Company shall be entitled to set-off against the amount of
any such gain any amount owed to the Participant by the Company.
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ANNUAL MEETING OF SHAREHOLDERS
February 21, 2006
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Monroe J. Carell, Jr. and Edward G. Nelson, or either of them, as
proxies, with power of substitution, to vote all shares of the undersigned at the Annual Meeting of
Shareholders of Central Parking Corporation, to be held on Tuesday, February 21, 2006, at 10:00
a.m. Central Standard Time, at the Companys headquarters located at 2401 21st Avenue South, Third
Floor, Nashville, Tennessee, upon the matters described in the accompanying Notice of Annual
Meeting of Shareholders and the accompanying Proxy Statement, receipt of which is acknowledged by
the undersigned, and upon any other business that may properly come before the meeting or any
adjournments or postponements thereof.
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Date: , 2006 |
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Signature |
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Signature |
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Signatures of shareholder(s) should correspond
exactly with the names printed hereon. Joint owners
should each sign personally. Executors,
administrators, trustees, etc., should give full title
and authority.
PLEASE SIGN AND DATE AND RETURN PROMPTLY.
CENTRAL PARKING CORPORATION PROXY
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE
SHARES WILL BE VOTED FOR THE NOMINEES IN THE ELECTION OF DIRECTORS, FOR THE ADOPTION OF THE 2006
LONG-TERM INCENTIVE PLAN AND IN THE DISCRETION OF THE PROXIES ON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
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ELECTION OF DIRECTORS: |
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o FOR all nominees listed below
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o WITHHOLD AUTHORITY
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(except as marked to the contrary) to vote for all nominees listed below) |
(INSTRUCTION: To withhold authority to vote for any individual
nominee check the box to vote FOR all nominees
and strike a line through the nominees name in the list
below.)
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(1) Monroe J. Carell, Jr.
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(2) Raymond T. Baker
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(3) Claude Blankenship
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(4) Kathryn Carell Brown |
(5) Emanuel J. Eads
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(6) Lewis Katz
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(7) Edward G. Nelson
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(8) Owen G. Shell, Jr. |
(9) William B. Smith |
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TO APPROVE THE ADOPTION OF THE CENTRAL PARKING CORPORATION 2006 LONG-TERM INCENTIVE
PLAN |
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o FOR
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o AGAINST
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o ABSTAIN |
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IN THEIR DISCRETION ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING: |
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o FOR DISCRETION
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o AGAINST DISCRETION
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o ABSTAIN |
(Continued on reverse side)