<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MEDALLION FINANCIAL CORP.
(Name of Registrant as Specified In Its Charter)
................................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14-a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
......................................................................
2) Aggregate number of securities to which transaction applies:
......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
......................................................................
4) Proposed maximum aggregate value of transaction:
......................................................................
5) Total fee paid:
......................................................................
/1/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
......................................................................
2) Form, Schedule or Registration Statement No.:
......................................................................
3) Filing Party:
......................................................................
4) Date Filed:
<PAGE>
MEDALLION FINANCIAL CORP.
437 Madison Avenue, 38th Floor
New York, New York 10022
April 30, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Medallion Financial Corp. (the "Company") to be held on June 16, 1999, at
10:00 a.m., Eastern Standard Time, at the Cornell Club, 6 East 44th Street, New
York, New York. This year we are asking you to elect two Directors of the
Company to serve until the 2002 Annual Meeting of Stockholders, to approve the
renewal of the Company's Sub-Advisory Agreement with FMC Advisers, Inc., to
approve certain amendments to the 1996 Non-employee Director Stock Option Plan
and to ratify the Board of Directors' selection of independent auditors for the
year ending December 31, 1999. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE TWO NOMINEES AND THE PROPOSALS.
At the Annual Meeting, the Board of Directors will also report on the
Company's affairs and a discussion period will be provided for questions and
comments. The Board of Directors appreciates and encourages stockholder
participation.
Whether or not you plan to attend the Annual Meeting, it is important
that your shares be represented. Accordingly, we request that you complete,
sign, date and promptly return the enclosed proxy in the enclosed postage
prepaid envelope in order to make certain that your shares will be represented
at the Annual Meeting.
Thank you for your cooperation.
Sincerely,
[Specimen Signature]
ALVIN MURSTEIN
Chairman of the Board of Directors and
Chief Executive Officer
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<PAGE>
MEDALLION FINANCIAL CORP.
437 Madison Avenue, 38th Floor
New York, New York 10022
(212) 328-2100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 16, 1999
The Annual Meeting of Stockholders of Medallion Financial Corp. (the
"Company") will be held at the Cornell Club, 6 East 44th Street, New York, New
York on Thursday, June 16, 1999 at 10:00 a.m., Eastern Standard Time, to
consider and act upon the following matters:
1. To elect two directors to serve until the 2002 Annual Meeting of
Stockholders.
2. To approve certain amendments to the Company's 1996 Non-employee
Director Stock Option Plan.
3. To approve the renewal of the Sub-Advisory Agreement between the
Company and FMC Advisers, Inc., an investment advisory firm.
4. To ratify and approve the selection by the Board of Directors of
Arthur Andersen LLP as independent public accountants for the Company for the
current fiscal year ending December 31, 1999.
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on April 20, 1999 will be
entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
Marie Russo, Secretary
New York, New York
April 30, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED VOTER INSTRUCTION CARD AND MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE
AFFIXED IF THE VOTER INSTRUCTION CARD IS MAILED IN THE UNITED STATES.
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<PAGE>
MEDALLION FINANCIAL CORP.
437 Madison Avenue, 38th Floor
New York, New York 10022
(212) 328-2100
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
June 16, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Medallion Financial Corp. (the "Company")
for use at the Annual Meeting of Stockholders to be held on June 16, 1999 (the
"Annual Meeting") and at any adjournment of the Annual Meeting. All shares of
Common Stock will be voted in accordance with the stockholders' instructions.
Any proxy may be revoked by a stockholder at any time before its exercise by
delivery of a written revocation to American Stock Transfer & Trust Company, 40
Wall Street, 46th Floor, New York, New York 10005.
VOTING SECURITIES AND VOTES REQUIRED
On April 20, 1999, the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting, there were outstanding
and entitled to vote an aggregate of [____] shares of Common Stock of the
Company, $.01 par value per share (the "Common Stock"). Stockholders are
entitled to one vote per share.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the meeting shall be
necessary to constitute a quorum for the transaction of business. Abstentions
and "broker non-votes" will be considered as present for quorum purposes but
will not be counted as votes cast. Accordingly, abstentions and "broker non-
votes" will have no effect on the voting on a matter that requires the
affirmative vote of a certain percentage or a plurality of the votes cast or
shares voting on a matter.
The affirmative vote of the holders of a plurality of the shares of Common
Stock present or represented at the meeting is required for the election of
directors and the appointment of auditors.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 20, 1999, regarding
the ownership of the Company's Common Stock by (i) the persons known by the
Company to own more than five percent of the outstanding shares, (ii) all
directors and nominees of the Company, (iii) each of the executive officers of
the Company named in the Summary Compensation Table (the "Named Executive
Officers") and (iv) all directors and executive officers of the Company as a
group. The number of shares beneficially owned by each director or executive
officer is determined under rules of the Securities and Exchange Commission (the
"Commission") and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership
includes any shares as to which the individual has the sole or shared voting
power or investment power and also any shares which the individual has the right
to acquire within 60 days of April 20, 1999 through the exercise of any stock
option or other right. Unless otherwise indicated, each person has sole
investment and voting power (or shares such power with his or her spouse) with
respect to the
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<PAGE>
shares set forth in the following table. The inclusion herein of
any shares deemed beneficially owned does not constitute an admission of
beneficial ownership of such shares.
<TABLE>
<CAPTION>
Shares of Common Percentage of Common
Stock Beneficially Stock Beneficially
Name and Address Owned Owned
- ---------------- -------------------- ---------------------
<S> <C> <C>
Alvin Murstein (1)............................................. 1,345,000 9.59%
Chairman, Chief Executive Officer and Director
437 Madison Avenue, 38th Floor
New York, NY 10022
Andrew M. Murstein (2)......................................... 1,255,000 8.95
President
437 Madison Avenue, 38th Floor
New York, NY 10022
Daniel F. Baker (3)............................................ 30,908 *
Treasurer and Chief Financial Officer
437 Madison Avenue, 38th Floor
New York, NY 10022
Allen S. Greene (4)............................................ 35,000 *
Senior Executive Vice President and
Chief Operating Officer
437 Madison Avenue, 38th Floor
New York, NY 10022
Michael J. Kowalsky (3)........................................ 45,456 *
Executive Vice President
437 Madison Avenue, 38th Floor
New York, NY 10022
Marie Russo (4)................................................ 14,364 *
Senior Vice President and Secretary
437 Madison Avenue, 38th Floor
New York, NY 10022
Jonathon G. Matuscak (3)....................................... 3,300 *
Vice President and Chief Accounting Officer
437 Madison Avenue, 38th Floor
New York, NY 10022
Frederick S. Hammer, Director (3).............................. 2,129 *
Inter-Atlantic Group
712 Fifth Avenue
New York, NY 10022
Mario M. Cuomo, Director (3)................................... 6,109 *
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Shares of Common Percentage of Common
Stock Beneficially Stock Beneficially
Name and Address Owned Owned
- ---------------- -------------------- ---------------------
<S> <C> <C>
Stanley Kreitman, Director (4)................................. 7,262 *
Manhattan Associates
375 Park Avenue, Suite 1606
New York, NY 10152
David L. Rudnick, Director (4)................................. 14,262 *
Century Properties, Inc.
365 West Passaic Street
Rochelle Park, NJ 07662
Benjamin Ward, Director (3).................................... 4,848 *
Brooklyn Law School
250 Joralemon Street
Brooklyn, NY 11201
All executive officers and directors as a group................ 2,763,668 19.52
(12 persons) (5)
AMVESCAP PLC (6)............................................... 858,400 6.13
1315 Peachtree Street, N.E.
Atlanta, GA 30309
Capital Guardian Trust Company (7)............................. 1,511,000 10.78
1100 Santa Monica Boulevard
Los Angeles, CA 90025
</TABLE>
____________________
* Less than 1.0%.
(1) Includes 1,250,000 shares owned by the Alvin Murstein Second Family Trust
of which Alvin Murstein is a trustee and beneficiary, and shares issuable
upon the exercise of outstanding options exercisable on or before June 19,
1999.
(2) Includes 1,250,000 shares owned by the Andrew Murstein Family Trust, of
which Andrew Murstein is a trustee and beneficiary, and shares issuable
upon the exercise of outstanding options exercisable on or before June 19,
1999.
(3) Consists of shares issuable upon the exercise of outstanding options
exercisable on or before June 19, 1999.
(4) Consists of shares owned by the reporting person and shares issuable upon
the exercise of outstanding options exercisable on or before June 19, 1999.
(5) Includes (i) 1,250,000 shares owned by the Andrew Murstein Family Trust,
(ii) 1,250,000 shares owned by the Alvin Murstein Family Trust, (iii)
90,000 shares owned by Alvin Murstein (the Alvin Murstein Family Trust and
Andrew Murstein Family Trust hereinafter referred to collectively as the
"Murstein Family Trusts").
(6) AMVESCAP PLC beneficially owns shares held by several affiliated investment
management companies that beneficially own 858,400 shares of Common Stock.
(7) The Capital Guardian Trust Company beneficially owns shares held by several
affiliated investment management companies that beneficially own 1,511,000
shares of Common Stock.
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<PAGE>
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation provides that the Board
of Directors is divided into three classes (Class I, Class II and Class III)
serving staggered terms of three years. The number of directors stands fixed at
seven for the coming year. Class II Directors were elected at the Annual
Meeting held on June 11, 1998 and stand for election in 2001. Class I Directors
will stand for election in 2000.
Elections for two Class III Directors will be held at the Annual Meeting.
The Board of Directors has nominated Alvin Murstein and Benjamin Ward for
election as Class III Directors. Messrs. Alvin Murstein and Ward each presently
serves as a director and has consented to being named in this Proxy Statement
and to serve if elected. THE PERSONS NAMED IN THE ENCLOSED PROXY CARD, ALVIN
MURSTEIN AND ANDREW MURSTEIN, WILL VOTE TO ELECT MESSRS. ALVIN MURSTEIN AND
BENJAMIN WARD AS DIRECTORS OF THE COMPANY UNLESS AUTHORITY TO VOTE FOR THE
ELECTION OF ANY OR ALL OF THE NOMINEES IS WITHHELD BY MARKING THE PROXY CARD TO
THAT EFFECT. If for any reason any nominee should become unavailable for
election prior to the Annual Meeting, the person acting under the proxy may vote
the proxy for the election of a substitute designated by the Board of Directors.
It is not presently expected that one or both of Messrs. Alvin Murstein and Ward
will be unavailable.
Approval of the nominees requires the affirmative vote of the holders of a
plurality of the shares of Common Stock present or represented by proxy at the
Annual Meeting, and entitled to vote thereon.
NOMINEES TO SERVE AS CLASS III DIRECTORS UNTIL
THE 2002 ANNUAL MEETING OF STOCKHOLDERS
Alvin Murstein is 64 years old and has been Chairman of the Board of
Directors of the Company since its founding and Chief Executive Officer of the
Company since February 1996. Mr. Murstein has also been Chairman of the Board
of Directors and Chief Executive Officer of Medallion Funding Corp. ("MFC"), a
wholly owned subsidiary of the Company, since its founding in 1979 and of
Medallion Media, Inc. ("Media"), a wholly owned subsidiary of the Company, since
its founding in 1994. Mr. Murstein has been Chairman of the Board of Directors
and Chief Executive Officer of Edwards Capital Corp. ("Edwards") and
Transportation Capital Corp. ("TCC"), also wholly owned subsidiaries of the
Company, since June 1996. Mr. Murstein served as Chairman of the Board of
Directors and Chief Executive Officer of Tri-Magna Corporation ("Tri-Magna")
from its founding in 1989 until its acquisition by the Company in May 1996. Mr.
Murstein served as a director of the Strober Organization, Inc., from 1988 to
1997. Mr. Murstein received a B.A. and an M.B.A. from New York University and
has been an executive in the taxicab industry for over 40 years. Alvin Murstein
is the father of Andrew Murstein.
Benjamin Ward is 72 years old and has served as a director of the Company
since February 1996. Mr. Ward served as a Director of Tri-Magna from 1992 until
May 1996. Mr. Ward served as Police Commissioner of New York City from 1984
until 1989. Mr. Ward received a B.A. in sociology, magna cum laude, from
Brooklyn College and a J.D. from Brooklyn Law School.
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<PAGE>
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE
2000 ANNUAL MEETING OF STOCKHOLDERS
Stanley Kreitman is 67 years old and has served as a director of the
Company since February 1996. Mr. Kreitman serves as Vice Chairman of Manhattan
Associates, an investment banking company. Mr. Kreitman served as a Director of
Tri-Magna from 1991 until May 1996. Mr. Kreitman served as President of the
United States Banknote Corporation, a securities printing company, from 1975
until his retirement in 1994. Mr. Kreitman is Chairman of the Board of Trustees
of the New York Institute of Technology and serves as a member of the Boards of
Directors of Porta Systems, Inc. and CCA Industries. Mr. Kreitman received an
A.B. from New York University and an M.B.A. from New York University Graduate
School of Business.
David L. Rudnick is 58 years old and has served as a director of the
Company since February 1996. Mr. Rudnick serves as President of Rudco
Properties, Inc. and served as President of Century Properties, Inc., a national
commercial real estate concern, from 1987 until 1997. Mr. Rudnick joined
Century Properties, Inc. in 1966. Mr. Rudnick was a director of West Side
Federal Savings & Loan Association. Mr. Rudnick received an A.B. in economics
from Harvard University and an M.B.A. from Columbia University Graduate School
of Business. Mr. Rudnick is Andrew Murstein's father-in-law.
CLASS II DIRECTORS WHOSE TERMS EXPIRE AT THE
2001 ANNUAL MEETING OF STOCKHOLDERS
Mario M. Cuomo is 66 years old and has served as a director of the Company
since February 1996. Mr. Cuomo served as Governor of the State of New York from
January 1983 through 1994. Mr. Cuomo has been a partner in the law firm of
Willkie Farr & Gallagher since February 1995. Willkie Farr & Gallagher serves
as counsel to the Company on various legal matters. Mr. Cuomo received a B.A.,
summa cum laude, from St. John's University and a J.D., magna cum laude, from
St. John's University School of Law.
Frederick S. Hammer is 62 years old and has served as a director of the
Company since his appointment by the Board of Directors on October 10, 1997.
Mr. Hammer has served as Vice-Chairman and Director of Inter-Atlantic Securities
Corp., a boutique investment bank, since 1995. From 1993 to 1994, Mr. Hammer
was President and Chief Executive Officer of Mutual of America Capital
Management Corporation. Mr. Hammer is a graduate of Colgate University (A.B.,
Mathematics, magna cum laude) and received his M.S. and Ph.D. from Carnegie-
Mellon University (Economics). Mr. Hammer is Chairman of the Board of National
Media Corporation, and is a member of the Boards of Directors of IKON Office
Solutions, Inc., Provident American Corporation, Annuity & Life Re, Ltd. and
several privately held companies. Mr. Hammer also serves as Trustee of the
Madison Square Boys and Girls Club.
Andrew M. Murstein is 34 years old and has served as President of the
Company since its inception in 1995, Chief Operating Officer of the Company from
February 1996 until August 1997 and President of Media from its inception. Mr.
Murstein has served two tenures as a Director of the Company, MFC, Edwards and
TCC, from May 1996 until April 1997 and since October 10, 1997. Mr. Murstein
has served as a director of Media since its inception. Mr. Murstein served as
Tri-Magna's Director of New Business Development from 1991 until the acquisition
of Tri-Magna by the Company in May 1996. Mr. Murstein received a B.A. in
economics, cum laude, from Tufts University and an M.B.A. in finance from New
York University. Mr. Murstein serves on the New
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<PAGE>
York City Private Industry Council. Andrew Murstein is the son of Alvin Murstein
and the son-in-law of Mr. Rudnick, and is the third generation of his family to
be active in the taxicab industry.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF MESSRS. ALVIN MURSTEIN AND WARD.
PROPOSAL NUMBER TWO
AMENDMENTS TO THE 1996 STOCK OPTION PLAN
On February 24, 1999, the Board of Directors amended and restated the
Medallion Financial Corp. 1996 Non-employee Director Stock Option Plan (the
"Plan") (as amended and restated, the "Amended Plan") subject to stockholder
approval, in order to adjust the calculation of the number of shares of the
Company's Common Stock issuable under options ("Options") to be granted to a
Non-employee Director upon his or her re-election. Whereas under the prior plan
the number of options granted was obtained by dividing $100,000 into the current
market price for the Common Stock, the Amended Plan calls for the grant of
options to acquire 9,000 shares of Common Stock upon election of a non-employee
director.
The Company is seeking stockholder approval of the Amended Plan in order to
comply with the requirements of Section 61 of the Investment Company Act of
1940, as amended (the "1940 Act"). The following summary of the Amended Plan is
qualified in its entirety by express reference to the text of the Amended Plan
as filed with the Commission.
Purpose And Eligibility
The Company believes that the options to be granted to its Non-employee
directors ("Eligible Directors") will provide significant incentives to the
Company's Eligible Directors to remain on the Company's Board and to devote
their best efforts to the success of the Company's business and the enhancement
of stockholder value in the future. The options will also provide a means for
the Company's Eligible Directors to increase their ownership interests in the
Company, thereby ensuring close identification of their interests with those of
the Company and its stockholders. The options granted pursuant to the Amended
Plan will have no value unless the price of the Company's Stock exceeds the
exercise price of such options. Thus, Eligible Directors will benefit from them
only to the extent that the Company's business succeeds and the market value of
its Common Stock increases and remains above the exercise price of the options.
By providing incentives in the form of such stock options to its Eligible
Directors, the Company will be better able to maintain continuity in the
membership of its Board of Directors and to attract, when necessary, and to
retain as Eligible Directors the highly experienced, successful and motivated
business and professional people that are critical to the Company's success as a
business development company. The Amended Plan provides for a set number of
option shares to be issued, rather than the dollar value set forth in the prior
plan. Because an increase in the value of the Company's Common Stock decreases
the number of option shares granted to each Eligible Director under the prior
plan, the Company believes that the Amended Plan's calculation of a fixed number
of option shares provides a stronger incentive to the Eligible Directors than
the prior plan's calculation.
Administration
The Amended Plan, as with the prior plan, is self-executing. It provides
for an automatic grant of options to purchase 9,000 shares of the Company's
Common Stock to an Eligible Director upon
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<PAGE>
election to the Board, with an adjustment for directors who are elected to serve
less than a full term. A total of 100,000 shares of the Company's Common Stock
is issuable under the Amended Plan.
Eligible Directors of the Company will be eligible to receive grants of
options only under the Amended Plan and such grants will be subject to the
following limitations: (1) the exercise price of such options shall be
determined by the members of the Board of Directors not eligible to participate
in the Amended Plan, provided that such price shall not be less than the current
market value of the Company's Common Stock on the Nasdaq Stock Market on the
date of grant; (2) the options shall expire within five years from the date of
grant; (3) the options shall vest in annual installments commencing on the first
anniversary of the date of grant, and such options may be exercised at any time
after they become exercisable until the fifth anniversary of the date of grant
(subject to (5) and (6) below); (4) the options may not be assigned or
transferred other than by will or the laws of descent and distribution; (5) in
the event of the death of an Eligible Director during such director's service as
an Eligible Director, those entitled to do so under the directors' will or the
laws of the descent and distribution shall have the right, at any time within 12
months after the date of death, to exercise in whole or in part any rights which
were available to the director at the time of his or her death; (6) any Eligible
Director holding exercisable options under the Amended Plan who ceases to be an
Eligible Director for any reason, other than death, may exercise the right he or
she had under such options at the time he or she ceased to be an Eligible
Director for three months following the date on which such director ceased to be
an Eligible Director; and (7) the option exercise price may be paid in cash, by
a note or in installments or with shares of the Company's Common Stock, or such
other lawful consideration as the non-eligible directors determine. Options
that may be awarded to Eligible Directors under the Amended Plan also must meet
all applicable requirements of the 1940 Act, including the requirement of
Commission approval.
The Amended Plan will expire ten years after the approval date of the prior
plan and each option will expire five years from the date of grant. The Board
of Directors will continue to have limited authority to amend the Amended Plan.
Amendments required to be approved by the stockholders or the Commission under
the laws of Delaware, the rules of The Nasdaq Stock Market, and the applicable
requirements under the 1940 Act (including Section 61) will not be effective
until so approved.
Shares Subject To The Amended Plan
The Amended Plan allows for the grant of an aggregate of 100,000 shares of
Common Stock.
New Plan Benefits
The grant of Options under the Amended Plan is entirely automatic and
extends to all Non-employee Directors of the Company. Information with respect
to compensation paid and other benefits, including Options, granted in respect
of the 1998 fiscal year to the named executive officers is set forth in the
Summary Compensation Table. The following table sets forth the amounts of
options that could potentially be granted to each of the Class I, II and III
directors, on their dates of re-election as members of such class:
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<TABLE>
<CAPTION>
1996 Non-employee Director Stock Option Plan
---------------------------------------------------------------------------------------------------------------
Name of Director(1) Dollar Value ($)(2) Number of Units(3)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Benjamin Ward -- 9,000
David L. Rudnick -- 9,000
Stanley Kreitman -- 9,000
Mario M. Cuomo -- 9,000
Frederick S. Hammer -- 9,000
</TABLE>
_______________________
(1) Upon approval of the Amended Plan by both the Company's stockholders and the
Commission, Benjamin Ward (if elected at the Annual Meeting) will receive
Options under the Amended Plan. Messrs. Kreitman and Rudnick, and Messrs.
Cuomo and Hammer will receive Options under the Amended Plan on the dates of
the 2000 and 2001 annual meetings, respectively, if elected.
(2) The Options are not expected to have any dollar value on their respective
dates of grant as they will be issued at the current market value per share
of the Company's Common Stock on such dates and will not begin to vest until
one year from such dates.
(3) Each unit represents an option to acquire one share of the Company's Common
Stock.
Approval By Stockholders
The effectiveness of the Amended Plan and any Option granted thereunder is
subject to approval by an affirmative vote of a majority of the shares of Common
Stock present at the Annual Meeting, in person or by proxy, and entitled to vote
thereon. In the event such approval is not obtained, the plan shall not be
amended and shall continue in operation as it existed prior to its amendment and
restatement.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO
THE 1996 NON-EMPLOYEE STOCK OPTION PLAN
PROPOSAL NUMBER THREE
RENEWAL OF THE COMPANY'S SUB-ADVISORY AGREEMENT
In May 1996, the Company entered into a sub-advisory agreement (the "Sub-
Advisory Agreement") with FMC Advisers, Inc. ("FMC") in which FMC provides
advisory services to the Company. Upon the request of the officers of the
Company, FMC consults with respect to strategic decisions concerning
originations, credit quality assurance, development of financial products,
leverage, funding, geographic and product diversification, the repurchase of
participations, acquisitions, regulatory compliance and marketing.
Term
The Sub-Advisory Agreement provides that it will be renewed for successive
one-year periods, if approved annually by (i) a majority of the Company's
noninterested directors and (ii) the Board of Directors, or by a majority of the
Company's outstanding voting securities, as defined in the Investment Company
Act of 1940, as amended. On February 24, 1999, after considering various
matters, the Board of Directors voted to extend the Sub-Advisory Agreement with
FMC until May 2000 under provisions of the renewal in the agreement.
The Sub-Advisory Agreement will be terminable without penalty to the
Company on 60 days' written notice by either party or by vote of a majority of
the outstanding voting securities of the Company, and will terminate if assigned
by FMC.
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<PAGE>
Fees and Other Arrangements
Under the Sub-Advisory Agreement, the Company pays FMC a monthly fee for
services rendered of $18,750. Two trusts affiliated with two officers,
directors and shareholders of the Company (the "Murstein Trusts") have agreed to
personally assure FMC of payment for the first 48 months of service under the
Sub-Advisory Agreement pursuant to an escrow arrangement under which they have
maintained in escrow common stock of the Company worth 200% of the advisory fees
remaining to be paid by the Company to FMC during the first 48 months of service
under the Sub-Advisory Agreement, thereby assuring FMC of the payment of
$900,000 in advisory fees. In the event that the Company or its stockholders
terminate or do not renew the Sub-Advisory Agreement during this period for any
reason other than (i) breach of the Sub-Advisory Agreement by FMC or (ii) FMC's
willful malfeasance, bad faith or gross negligence, the escrow agent will assign
to FMC Common Stock in escrow equal in value to the amount of the fees payable
over the balance of the 48-month period. If the value of the Common Stock
required to be deposited in escrow is less than the value of the fees payable,
FMC will have no further recourse against the Murstein Trusts. Under the Sub-
Advisory Agreement, FMC will not be liable for any loss suffered by the Company,
except a loss resulting from FMC's willful malfeasance, bad faith or gross
negligence.
Information About FMC
FMC's principal office is located at 190 Dudley Street, Brookline,
Massachusetts 02146.
Myron Cohen, Robert Fanger and Michael Miller control FMC, in their
capacities as officers, directors and stockholders of FMC, and will provide the
advisory services to the Company on behalf of FMC. They had served as directors
and executive officers of Tri-Magna and MFC since inception and, along with
Alvin Murstein, comprised Tri-Magna's Executive Committee. Messrs. Cohen, Fanger
and Miller ceased to hold their offices with Tri-Magna and MFC in May 1996.
Advisory fees incurred during the years ended December 31, 1998 and
December 31, 1997 were $225,000 per year. The renewal of the Sub-Advisory
Agreement, if approved by the stockholders of the Company, would not increase
the fees received by FMC thereunder.
Approval of the renewal of the Sub-Advisory Agreement requires the
affirmative vote of the holders of a majority of the shares of Common Stock
present at the Annual Meeting, in person or by proxy, and entitled to vote
thereon.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RENEWAL OF THE
SUB-ADVISORY AGREEMENT.
PROPOSAL NUMBER FOUR
RATIFICATION OF APPOINTMENT OF AUDITORS
Upon the recommendation of the Audit Committee, the Board of Directors of
the Company has appointed Arthur Andersen LLP, independent accountants for the
Company. Arthur Andersen LLP will audit the Company's consolidated financial
statements for the fiscal year ending December 31, 1999, perform audit-related
services and act as consultants in connection with various accounting and
financial reporting matters. Arthur Andersen LLP provided those services to the
Company for the fiscal year ended December 31, 1998 and recommends that
stockholders vote for ratification of such appointment.
-12-
<PAGE>
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR
THE FISCAL YEAR ENDING DECEMBER 31, 1999.
OTHER MATTERS OF BUSINESS
The Company is not aware of any business to be acted upon at the Annual
Meeting other than that which is set forth in this Proxy Statement. In the
event that any other business requiring the vote of stockholders is properly
presented at the Annual Meeting, the holders of the proxies will vote your
shares in accordance with their best judgment.
Board and Committee Meetings
The Company has a standing Audit Committee of the Board of Directors, which
reviews the results and scope of the audit and other services provided by the
Company's independent public accountants. The Audit Committee met four times
during fiscal 1998 to review (i) the effectiveness of the public accountants
during the fiscal 1998 audit, (ii) the adequacy of the fiscal 1998 financial
statement disclosures, (iii) the Company's internal control policies and
procedures, and (iv) the selection of the Company's independent public
accountants. The members of the Audit Committee are Messrs. Kreitman, Rudnick
and Ward.
The Company also has a standing Compensation Committee of the Board of
Directors, whose members made recommendations concerning compensation of the
directors and executive officers of the Company including (i) all incentive or
stock option plans or arrangements established by the Company for officers and
employees, including the grant of stock options to employees, (ii) adoption and
amendment of all employee stock option and other employee benefit plans and
(iii) arrangements and the engagement of, terms of any employment agreements and
arrangements with, and termination of, all officers of the Company. The members
of the Compensation Committee are Messrs. Kreitman, Alvin Murstein* and Ward.
See "Report of the Board of Directors as to Compensation Matters."
The Board of Directors does not have a standing nominating committee. The
Board of Directors held four formal and two telephonic meetings during fiscal
1998. Each director attended at least 85% of the meetings of the Board of
Directors and all committees of the Board on which he served.
Directors' Compensation
The eligible members of the Company's Board of Directors receive (i)
$10,000 as a retainer for each year they serve, (ii) $2,000 for the first board
meeting held per quarter and $1,000 for any additional board meetings held in
such quarter, (iii) $250 for each telephonic meeting of the board, (iv) $1,000
for the first committee meeting held per quarter and for any committee meetings
held on a date
- -----------------------
* Mr. Alvin Murstein is an "interested person" as such term is defined in
Section 2(a)(19) of the Investment Company Act of 1940, as amended (the "1940
Act").
-13-
<PAGE>
when there is not also a board meeting and (v) $500 for all other
committee meetings and for each telephonic meeting in which they participate and
they are reimbursed for expenses relating thereto. Eligible Directors are
entitled to participate in the Company's 1996 Non-employee Stock Option Plan.
The directors receive no other compensation for their services to the Company.
Employee directors of the Company are eligible to participate in the
Company's 401(k) Investment Plan. More information concerning the Company's
401(k) Investment Plan can be found under "Report of the Board of Directors as
to Compensation Matters." The Company does not provide any other pension or
retirement plan with respect to its directors or employees.
Information with respect to the aggregate compensation paid to directors of
the Company, including options to purchase shares of the Company's Common Stock
under the Director Plan, appears under "Compensation of Directors and Executive
Officers."
Certain Relationships
Mario M. Cuomo is a director of the Company and a partner in the law firm
of Willkie Farr & Gallagher, which serves as counsel to the Company in
connection with various legal matters.
Compensation of Directors and Executive Officers
Summary Compensation Table. The table below sets forth certain
compensation information for the Company's (i) Chief Executive Officer, (ii)
directors and (iii) each of the Company's four most highly compensated executive
officers other than the Company's Chief Executive Officer, for the fiscal year
ended December 31, 1998 (the "Period") (collectively, the "Compensated
Persons").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Compensation for the Period Awards
--------------------------- ------------------
Other Period Securities Underlying
Name and Principal Position Salary($) Bonus($) Compensation(1) Options(#)
------------------------------------------ ------------ ---------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Alvin Murstein................................. 285,000 --- 1,055 25,000
Chairman and Chief Executive Officer
Andrew Murstein................................ 198,750 75,000 --- 25,000
President
Allen S. Greene................................ 233,334 100,000 3,200 25,000
Chief Operating Officer
Daniel F. Baker................................ 150,000 50,000 --- ---
Treasurer and Chief Financial Officer
Michael J. Kowalsky............................ 158,000 40,000 1,067 ---
Executive Vice President
</TABLE>
-14-
<PAGE>
<TABLE>
<CAPTION>
Long-Term
Compensation (2)
-------------------
Securities Underlying
Director Fees($) Options(#)
----------------- ---------------------
<S> <C> <C>
Mario M. Cuomo, Director....................................................... $16,500 3,783(3)
Stanley Kreitman, Director..................................................... 22,000 0
David L. Rudnick, Director..................................................... 21,000 0
Benjamin Ward, Director........................................................ 20,500 0
Frederick S. Hammer, Director.................................................. 16,500 3,783(3)
</TABLE>
___________
(1) Amounts received pursuant to the matching program under the Company's
401(k) Plan.
(2) Options granted under the Non-employee Director Plan.
(3) These shares vest in three equal installments of 1,261 shares on the date
of the Annual Meeting, the 2000 annual meeting of the Company's
stockholders and the 2001 annual meeting of the Company's stockholders,
respectively.
The following table sets forth certain information regarding options
granted during the Period by the Company to the following Named Executive
Officers:
<TABLE>
<CAPTION>
Option Grants
Individual Grants
-----------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual Rates of Stock
Securities Total Options Price Appreciation for Option
Underlying Granted to Exercise or Base Term(2)
Options Price Expiration -----------------------------
Name Granted(#) Employees ($/share)(1) Date 5%($) 10%($)
- ------------------------ ---------- --------- ------------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alvin Murstein.................. 25,000 6.93% 29.25 5/6/03 202,031 446,435
Andrew Murstein................. 25,000 6.93% 29.25 5/6/08 459,879 1,165,424
Allen S. Greene................. 25,000 6.93% 13.75 9/8/08 216,182 547,849
Daniel F. Baker................. --- --- --- --- --- ---
Michael J. Kowalsky............. --- --- --- --- --- ---
</TABLE>
___________
(1) The exercise price of these options is equal to the fair market value of
the Company's Common Stock on the date of grant, as determined by the
Company's Board of Directors.
(2) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Commission and, therefore, are not intended
to forecast possible future appreciation, if any, in the price of the
underlying Common Stock. No gain to the optionees is possible without an
increase in price of the underlying Common Stock, which will benefit all
stockholders proportionately.
-15-
<PAGE>
The following table sets forth certain information concerning exercisable
and unexercisable stock options held by the following Named Executive Officers
in the Period:
Aggregated Option Exercises In the Period and
Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options at
Year-End Year-End
------------------------------- -----------------------
Value
Shares Acquired Realized
On Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------ ---------- --------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Alvin Murstein................ 0 25,000 $0 $ 0(1)
Andrew M. Murstein............ 0 25,000 0 0(1)
Allen S. Greene............... 25,000 125,000 0 14,063(2)
Daniel F. Baker............... 6,500 31,688 7,136 40,908 23,638 135,508(3)
Michael J. Kowalsky........... 37,880 7,576 125,478 25,096(3)
</TABLE>
___________
(1) Based on the difference between closing price of the underlying shares of
Common Stock on December 31, 1998 as reported by the NASDAQ National Market
($14.3125) and the option exercise price ($29.25).
(2) Based on the difference between closing price of the underlying shares of
Common Stock on December 31, 1998 as reported by the NASDAQ National Market
($14.3125) and the option exercise price ($19.50) with respect to 125,000
options (25,000 of which are exercisable at year end) and ($13.75) with
respect to 25,000 options (none of which are exercisable at the year end).
(3) Based on the difference between closing price of the underlying shares of
Common Stock on December 31, 1998 as reported by the NASDAQ National Market
($14.3125) and the option exercise price ($11.00).
Employment Agreements
In May 1996, Alvin Murstein and Andrew M. Murstein entered into employment
agreements with the Company, which were subsequently amended in May 1998. The
agreements automatically renew annually for a five-year term unless either party
terminates the agreement. The agreements contain non-competition covenants in
favor of the Company. In August 1997, Allen S. Greene entered into an
employment agreement with the Company, which was subsequently amended in August
1998, providing for a three-year term with additional one-year automatic renewal
periods. Mr. Greene's employment agreement contains certain non-competition
covenants in favor of the Company. Michael J. Kowalsky entered into an
employment agreement with the Company which became effective in May 1996.
Report of the Board of Directors as to Compensation Matters
The Board of Directors of the Company has delegated the authority to
establish compensation policies with respect to the Company's executive officers
to the Compensation Committee of the Company's Board of Directors and the
Company anticipates that this program will be administered by the Compensation
Committee in the near future.
The objectives of the Company's executive compensation program are to
establish compensation levels designed to enable the Company to attract, retain
and reward executive officers who contribute to the long-term success of the
Company so as to enhance stockholder value. The
-16-
<PAGE>
Board of Directors or the Compensation Committee, as appropriate, will make
decisions each year regarding executive compensation, including annual base
salaries and bonus awards, and a special subcommittee of the Compensation
Committee, consisting of non-interested directors Messrs. Kreitman and Ward,
will make decisions each year regarding stock option grants. Option grants are
key components of the executive compensation program and are intended to provide
executives with an equity interest in the Company so as to link a meaningful
portion of the compensation of the Company's executives with the performance of
the Company's Common Stock. This report is submitted by the full Board of
Directors and addresses the compensation policies for fiscal 1998 as they
affected Alvin Murstein, in his capacity as the Chief Executive Officer of the
Company, as well as each of the Company's other officers.
Compensation Philosophy
The Company's executive compensation philosophy is based on the belief that
competitive compensation is essential to attract, motivate and retain highly
qualified and industrious employees. The Company's policy is to provide total
compensation that is competitive for comparable work and comparable corporate
performance. The compensation program includes both motivational and retention-
related compensation components. Bonuses are included to encourage effective
performance relative to current plans and objectives. Stock options are
included to help retain productive people and to more closely align their
interests with those of stockholders.
In executing its compensation policy, the Company seeks to relate
compensation with the Company's financial performance and business objectives,
reward high levels of individual performance and tie a significant portion of
total executive compensation to both the annual and long-term performance of the
Company. While compensation survey data are useful guides for comparative
purposes, the Company believes that a successful compensation program also
requires the application of judgment and subjective determinations of individual
performance, and to that extent the Board of Directors applies judgment in
reconciling the program's objectives with the realities of retaining valued
employees.
Executive Compensation Program
Annual compensation for the Company's executives consists of three
principal elements: base salary, cash bonus and stock options.
Base Salary and Cash Bonus
In setting the annual base salaries for the Company's executives, the Board
of Directors reviews the aggregate salary and bonus compensation for individuals
in comparable positions with other companies, including competitors of the
Company, and adjusts such amounts to reflect individual performance. Many of
these companies are specialty finance companies. The Company also regularly
compares the salary levels of its executive officers with other leading
companies.
Increases in annual base salary are based on a review and evaluation of the
performance of the activity for which the executive has responsibility, the
impact of that activity on the Company and the skills and experience required
for the job, coupled with a comparison of these elements with similar elements
for other executives both inside and outside the Company.
-17-
<PAGE>
Cash bonuses are tied directly to the Company's financial performance and
the contribution of the executive to such performance.
Equity Ownership
Executive officer compensation also includes long-term incentives afforded
by options to purchase shares of Common Stock. The purposes of the Company's
stock ownership program are to (i) highlight and reinforce the mutuality of
long-term interests between employees and the stockholders and (ii) to assist in
the attraction and retention of critically important key executives, managers
and individual contributors who are essential to the Company's growth and
development.
The Company's stock programs include long vesting periods to optimize the
retention value of these options and to orient the Company's executive officers
to longer term success. Generally, stock options vest in equal annual
installments over three to five years commencing on the first anniversary of the
date of grant, and, if employees leave the Company before these vesting periods,
they forfeit the unvested portions of these awards. The Company also makes
annual grants of options which vest in one year.
Except for executives with substantial holdings of the Company's stock, the
number of shares of Common Stock subject to option grants is generally intended
to reflect the significance of the executive's current and anticipated
contributions to the Company. The exercise price of options granted by the
Company is required under the 1940 Act to equal not less than 100% of the fair
market value per share on the date of grant. Prior to determining the 1998
option grants to the Company's executives, the Board of Directors considered the
equity compensation policies of competitors and other companies, both privately
held and publicly traded, with comparable capitalizations. The value realizable
from exercisable options is dependent upon the extent to which the Company's
performance is reflected in the price of the Company's Common Stock at any
particular point in time. However, the decision as to whether such value will
be realized through the exercise of an option in any particular year is
primarily determined by each individual within the limits of the vesting
schedule and not by the Board of Directors.
401(k) Plan
Since 1996, the Company has been a participating employer in the Medallion
Funding Corp. 401(k) Investment Plan (the "401(k) Plan") which covers all full
and part-time employees of the Company who have attained the age of 21 and have
a minimum of one year of service. Under the 401(k) Plan, an employee may elect
to defer not less than 1.0% and no more than 15.0% of the total annual
compensation that would otherwise be paid to the employee, provided, however,
that employees' contributions may not exceed certain maximum amounts determined
under Section 402(g) of the Code. Employee contributions are invested in
various mutual funds, according to the direction of the employee. On September
1, 1998, the Company elected to match employee contributions to the 401(k) Plan
in an amount per employee up to one-third of such employee's contribution but in
no event greater than 2.0% of the portion of such employee's annual salary
eligible for 401(k) Plan benefits.
Alvin Murstein's 1998 Compensation
The Board of Directors has set Alvin Murstein's total annual compensation
at a level it believes to be competitive with the chief executive officers of
similarly capitalized specialty finance
-18-
<PAGE>
companies. Alvin Murstein, in his capacity as Chief Executive Officer, is
eligible to participate in the same executive compensation program available to
the Company's other senior executives.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Code, enacted in 1993, generally disallows a tax
deduction to public companies for compensation over $1 million paid to its chief
executive officer and its four other most highly compensated executive officers.
However, qualifying performance-based compensation will not be subject to the
deduction limit if certain requirements are met. The Company currently intends
to structure its stock options grants to executive officers in a manner that
complies with these performance-based requirements.
Board of Directors
Alvin Murstein
Andrew M. Murstein
Mario M. Cuomo
Frederick S. Hammer
Stanley Kreitman
David L. Rudnick
Benjamin Ward
Compensation Committee and Interlocks and Insider Participation
The members of the Compensation Committee are Messrs. Alvin Murstein,
Kreitman and Ward. Mr. Alvin Murstein, Chairman and Chief Executive Officer of
the Company, is a member of the Compensation Committee and is an "interested
person" as such term is defined in Section 2(a)(19) of the 1940 Act.
Stock Performance Graph
The Commission requires the Company to present a graph comparing the
cumulative total stockholder return on its Common Stock with the cumulative
total stockholder return (a) of a broad equity market index and (b) of a
published industry index on peer group. The following graph commences as of May
23, 1996, the date of the Company's initial public offering, and compares the
Company's Common Stock with the cumulative total return for the Nasdaq (U.S.)
Index and the Nasdaq Financial Index. Furthermore, the following graph assumes
the investment of $100 on May 23, 1996 in each of the Company's Common Stock,
the stocks comprising the Nasdaq (U.S.) Index and the Nasdaq Financial Index and
assumes dividends are reinvested.
CUMULATIVE TOTAL RETURN
Based on Initial Invest of $100 on May 23, 1996
with dividends reinvested
- --------------------------------------------------------------------------------
5/96 6/96 9/96 12/96 3/97
Medallion Financial Corp. 100.00 113.64 131.82 142.71 169.62
- --------------------------------------------------------------------------------
Nasdaq (US) Index 100.00 95.07 98.44 103.28 97.68
- --------------------------------------------------------------------------------
Nasdaq Financial Index 100.00 100.19 108.58 120.62 125.84
- --------------------------------------------------------------------------------
6/97 9/97 12/97 3/98
Medallion Financial Corp. 181.19 208.48 216.00 266.31
- --------------------------------------------------------------------------------
Nasdaq (US) Index 115.58 135.13 126.71 148.25
- --------------------------------------------------------------------------------
Nasdaq Financial Index 146.79 170.99 184.27 195.27
- --------------------------------------------------------------------------------
6/98 9/98 12/98
Medallion Financial Corp. 272.79 158.67 150.56
- --------------------------------------------------------------------------------
Nasdaq (US) Index 152.55 138.10 178.12
- --------------------------------------------------------------------------------
Nasdaq Financial Index 190.27 158.08 178.29
- --------------------------------------------------------------------------------
-19-
<PAGE>
OTHER INFORMATION
All costs of solicitations of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews. Brokers, custodians and fiduciaries will be
requested to forward proxy soliciting material to the owners of stock held in
their names, and the Company will reimburse them for their out-of-pocket
expenses in this connection.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act and the disclosure requirements of Item
405 of Regulation S-K require the directors and executive officers of the
Company, and any persons holding more than 10% of any class of equity securities
of the Company, to report their ownership of such equity securities and any
subsequent changes in that ownership to the Securities and Exchange Commission,
the NASDAQ National Market and the Company. Based solely on a review of the
written statements and copies of such reports furnished to the Company, the
Company believes that during fiscal 1998 all Section 16(a) filing requirements
applicable to such persons were timely satisfied.
Deadline for Submission of Stockholder Proposals
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Company at its principal office
in New York, New York not later than January 3, 1999 for inclusion in the proxy
statement for that meeting. Such proposals must also meet the requirements of
Rule 14a-8 of the Commission relating to stockholder's proposals. A stockholder
proposal outside the processes of Rule 14a-8 will be considered untimely if
received by the Company after March 15, 2000.
By Order of the Board of Directors,
[specimen signature]
MARIE RUSSO
Secretary
April 30, 1999
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY OR VOTING INSTRUCTION CARD IN THE ACCOMPANYING ENVELOPE. PROMPT
RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR
COOPERATION WILL BE APPRECIATED.
-20-
<PAGE>
MEDALLION FINANCIAL CORP.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND SHOULD BE RETURNED AS SOON AS POSSIBLE TO AMERICAN STOCK
TRANSFER & TRUST COMPANY, 40 WALL STREET, 46TH FLOOR, NEW YORK, NEW YORK 10005
The undersigned having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies hereby appoint(s) Alvin
Murstein and Andrew Murstein, each of them, attorneys or attorney of the
undersigned (with full power of substitution in them and each of them) for and
in the name(s) of the undersigned to attend the Annual Meeting of Stockholders
of MEDALLION FINANCIAL CORP. (the "Company") to be held at the Cornell Club, 6
East 44th Street, New York, New York on Wednesday, June 16, 1999 at 10:00 a.m.,
Eastern Standard Time, and any adjourned sessions thereof, and there to vote and
act upon the following matters in respect of all shares of stock of the Company
which the undersigned will be entitled to vote or act upon, with all the powers
the undersigned will be entitled to vote or act upon with all the powers the
undersigned would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DESCRIBED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT TO
ANY PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH PROPOSAL. Attendance of the
undersigned at the meeting or any adjournment thereof will not be deemed to
revoke this proxy unless the undersigned shall revoke this proxy in writing.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.
<PAGE>
Please Detach and Mail in the Envelope Provided
- --------------------------------------------------------------------------------
Please mark your
[X] votes as in this
example.
This proxy will be voted FOR the following proposals unless otherwise
indicated.
FOR All AGAINST all
Nominees (except as nominees
indicated below)
<TABLE>
<CAPTION>
<S> <C>
1. To elect the
following [ ] [ ] Nominees:
Directors Alvin Murstein
(except as marked below). Benjamin Ward
</TABLE>
(Instruction: To vote against an individual nomi-
nee, write the name of such nominee(s) in the
space provided below)
- --------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To approve certain amendments to the 1996
Non-employee Director Stock Option Plan.
3. To approve the renewal of the Sub-Advisory [ ] [ ] [ ]
Agreement with FMC, Advisors, Inc.
4. To ratify and approve the selection by the Board
of Directors of Arthur Anderson LLP as indepen- [ ] [ ] [ ]
dent public accountants for the Company for the
current fiscal year ending December 31, 1999
5. To transact such other business as may properly come before the meeting or
any adjournment therof.
</TABLE>
MARK HERE MARK HERE IF
- ------------------------ FOR ADDRESS [ ] YOU PLAN TO [ ]
- ------------------------ CHANGE AND ATTEND THE
- ------------------------ NOTE AT LEFT MEETING
<TABLE>
<CAPTION>
<S> <C> <C> <C>
___________________________________ Dated:______________,1999 _______________________________ Dated:________________, 1999
SIGNATURE IF HELD JOINTLY
</TABLE>
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
OWNERS BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER
AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.
