<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
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 /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NATIONAL AUTO CREDIT, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NATIONAL AUTO CREDIT, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
[ LOGO ]
NATIONAL AUTO CREDIT
30000 AURORA ROAD
SOLON, OHIO 44139
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 1996
Notice is hereby given that the Annual Meeting of Stockholders of National
Auto Credit, Inc. (the "Company"), will be held at the principal executive
offices of the Company, 30000 Aurora Road, Solon, Ohio 44139, on Thursday, June
6, 1996, at 10:00 A.M. (Eastern Daylight Savings time), for the following
purposes:
1. To elect three directors to serve for a term of three years; and
2. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on April 15, 1996, are
entitled to notice of and to vote at said meeting or any adjournment thereof.
By Order of the Board of Directors.
THOMAS J. DOSTART
Vice President, General Counsel and
Secretary
April 25, 1996
STOCKHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY
REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY.
<PAGE> 3
[ LOGO ]
NATIONAL AUTO CREDIT
30000 AURORA ROAD
SOLON, OHIO 44139
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies
for use at the Annual Meeting of Stockholders of National Auto Credit, Inc., a
Delaware corporation (the "Company"), to be held on June 6, 1996, at the
Company's principal executive offices, 30000 Aurora Road, Solon, Ohio 44139, and
at any adjournment thereof.
The Notice of Annual Meeting, this statement and the accompanying form of
proxy, together with the Company's Annual Report to Stockholders for the fiscal
year ended January 31, 1996 ("fiscal 1996"), are first being mailed to
stockholders on or about April 26, 1996.
The close of business on April 15, 1996 (the "Record Date"), has been fixed
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting. On the Record Date, the Company had outstanding
25,892,354 shares of Common Stock, $.05 par value. Each of the outstanding
shares is entitled to one vote. The holders of Common Stock of the Company have
no cumulative voting rights in the election of Directors.
Under Delaware law and the Company's Restated Certificate of Incorporation
and Bylaws, if a quorum is present at the meeting, the nominees for Directors
who receive the greatest number of votes cast for the election of Directors at
the meeting by the shares present in person or by proxy and entitled to vote
will be elected Directors. An abstention from voting any share with respect to
the election of any nominee for Director will have the practical effect of a
vote against that nominee. A broker non-vote with respect to any share will not
affect the election of Directors since the share is not considered present for
voting purposes.
1
<PAGE> 4
ELECTION OF DIRECTORS
The Board of Directors consists of seven members. At the meeting, the
Common Stock represented by valid proxies appointed will be voted, unless
otherwise specified, for the election of Messrs. Robert J. Bronchetti, J. Hunter
Brown and James E. Smith, Jr. each to serve a term of three years and until
their respective successors are elected and qualified.
If, by reason of death or other unexpected circumstance, the nominee(s)
should not be available for election, the proxies will be voted for the election
of such substitute nominee(s) as the Board of Directors may propose.
Set forth below is certain information relating to Messrs. Bronchetti,
Brown and Smith, the nominees for election as Directors, and the Directors of
the Company whose terms of office will continue after the meeting:
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
-------------------------------------------
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION SINCE TO EXPIRE
---- ------------------------------------------ -------- ---------
<S> <C> <C> <C>
Robert J. Bronchetti....... President and Chief Executive Officer, has 1993 1999
been employed by the Company since May
1991 and was appointed a Director in
September 1993. Mr. Bronchetti has held
the position of President since March 1994
and Chief Executive Officer since December
1994. Mr. Bronchetti previously held the
positions of Executive Vice President and
Chief Financial Officer, Vice President
and Chief Financial Officer, and Vice
President of Finance and Treasurer. Prior
to 1991, Mr. Bronchetti held various
financial management positions with
Engelhard Corporation and its wholly-owned
subsidiary, The Harshaw Chemical Company.
Age 48.
J. Hunter Brown............ Vice President, J.P. Morgan Securities, 1996 1999
Inc., investment bankers, since 1993. Mr.
Brown previously served as Director,
Toronto Dominion Securities (USA) Inc.
from 1991 to 1993. From 1987 to 1991, Mr.
Brown served as Director, Corporate
Accounts for Toronto Dominion Bank. Age
42.
James E. Smith, Jr. ....... Vice President of Operations, has been 1995 1999
employed by the Company since May 1993 and
was appointed a Director in November 1995.
Mr. Smith held the positions of Regional
Director and Regional Vice President,
Operations prior to assuming his present
position in July 1994. From 1987 to May
1993, Mr. Smith was Branch Operations
Manager for Chrysler Credit Corporation.
Age 41.
</TABLE>
2
<PAGE> 5
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
------------------------------------------------------------
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION SINCE TO EXPIRE
---- ------------------------------------------ --------- ---------
<S> <C> <C> <C>
Per E. Hoel................ Chairman of the Board and President of 1984 1997
Uni-Per, Inc., a management consulting
firm specializing in marketing and
finance, since 1976. Age 70.
Edward N. Leszczynski ..... Retired January 1986 from Ford Motor 1994 1997
Credit Company. Self-employed consultant
to various organizations, including the
Company. Teaches management analysis and
planning to Ford Motor Credit Company
supervisors and managers. Age 62.
Sam J. Frankino ........... Chairman of the Board since the Company's 1969 1998
inception in 1969, founder and majority
stockholder. Mr. Frankino also served as
Chief Executive Officer from 1969 to 1992
and from December 1993 until December
1994. Age 71.
Noah T. Herndon ........... Partner of Brown Brothers Harriman & Co., 1992 1998
investment bankers, since 1974. Mr.
Herndon is also a Director of Amoskeag
Company, Fieldcrest Cannon, Inc., Watts
Industries, Inc. and Zoll Medical
Corporation. Age 64.
</TABLE>
Messrs. Frankino and Hoel are members of the Board's Executive Committee,
which exercises all of the power and authority of the Board in the management of
the business and affairs of the Company during intervals between Board meetings.
The Executive Committee met ten times during fiscal 1996.
Messrs. Herndon and Hoel are members of the Board's Audit Committee, which
reviews the services provided by the independent auditors retained by the
Company, monitors the adequacy of the Company's internal accounting controls and
reviews the annual financial statements of the Company. The Audit Committee met
twice during fiscal 1996.
Messrs. Herndon and Hoel are members of the Board's Executive Compensation
Committee, which reviews the cash and non-cash compensation received by officers
and key employees. The Executive Compensation Committee met twice during fiscal
1996.
Four quarterly meetings and one special meeting of the Board of Directors
were held during fiscal 1996. The Board of Directors does not have a Nominating
Committee.
Each incumbent Director and each member of the above Committees attended
75% or more of the meetings held by the Board of Directors and such Committees,
respectively.
DIRECTORS FEES AND COMPENSATION
Each member of the Board who is not an employee of the Company is paid a
Director's fee at the rate of $10,000 per year plus $500 and expenses for
attendance at each meeting of the Board. In addition, Mr. Edward N. Leszczynski
was paid $12,500 for consulting services rendered to the Company during fiscal
1996. Certain additional information is set forth under the heading Certain
Transactions on page 11.
3
<PAGE> 6
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation earned for
services rendered by the Company's Chief Executive Officer and each of the five
other most highly compensated Executive Officers during the fiscal years ended
January 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------------------
----------------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION AT FISCAL SALARY BONUS COMPENSATION1 AWARDS2 OPTIONS COMPENSATION3
JANUARY 31, 1996 YEAR ($) ($) ($) ($) (#) ($)
- ------------------------------- ------ ------- ------ ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sam J. Frankino................ 1996 350,000 51,000 4,499 76,250 0 420
Chairman of the Board 1995 325,769 51,000 4,916 47,500 0 1,967
1994 283,231 1,000 0 118,750 0 2,316
Robert J. Bronchetti........... 1996 200,000 51,000 6,213 130,250 0 1,802
President and 1995 176,154 1,000 6,756 62,938 0 3,192
Chief Executive Officer 1994 144,039 21,000 0 11,875 0 1,744
James E. Smith, Jr.4........... 1996 94,423 1,000 1,547 42,250 0 1,046
Vice President, 1995 62,500 1,000 1,840 7,125 5,000 1,299
Operations 1994 38,269 1,000 0 0 0 156
Davida S. Howard............... 1996 98,731 1,000 2,241 35,500 0 1,289
Vice President - 1995 82,400 1,000 1,970 7,125 7,500 1,921
Finance and Controller 1994 76,650 10,500 0 0 0 998
Edward T. Anderson............. 1996 82,804 1,000 1,206 35,500 0 1,154
Executive Vice President, 1995 56,558 3,000 0 0 0 1,471
Sales and Wholesale Operations 1994 50,000 1,000 0 0 0 653
Edward A. Burkhart5............ 1996 94,173 25,000 2,864 27,000 0 1,110
Executive Vice President 1995 122,615 1,000 2,767 40,375 0 2,613
1994 82,365 16,000 0 8,906 0 1,103
---------------
<FN>
1 Amounts included in this column are tax reimbursements relating to the imputed
value for use of Company automobiles. Executive officers who are Directors do
not receive any additional compensation for serving on the Board of Directors.
2 These awards are fully vested but may not be sold or transferred until such
time as the recipient directly owns and maintains Company stock equal to the
individual's annual salary, including bonus, or the individual terminates
employment with the Company. Restricted stock holdings in excess of the
required ownership amounts may be disposed of provided that minimum ownership
requirements are maintained during the term of the individual's employment.
The restricted shares awarded are eligible for any dividends the Company may
declare on its Common Stock. There are no other shares of restricted stock
held by these executive officers.
3 Messrs. Frankino, Bronchetti, Smith, Ms. Howard and Messrs. Anderson and
Burkhart had their term life and accidental death and disability ("AD&D")
insurance premiums paid for by the Company. For fiscal years 1996 and 1995,
the premiums were $372 for term life and $48 for AD&D. For fiscal year 1994,
the premiums were $120 for term life and $36 for AD&D.
In fiscal years 1996, 1995 and 1994, the Company contributed to Messrs.
Frankino's, Bronchetti's, Smith's, Ms. Howard's and Messrs. Anderson's and
Burkhart's 401(k) Savings and Retirement Plan and Trust Accounts in the
following amounts: Mr. Frankino - $0, $0 and $0; Mr. Bronchetti - $1,382,
$1,225 and $96; Mr. Smith - $626, $228 and $0; Ms. Howard - $869, $638 and
$47; Mr. Anderson - $734, $439 and $30; and Mr. Burkhart - $690, $949 and $53.
In addition to the contributions noted above, in fiscal years 1996, 1995 and
1994, Messrs. Frankino, Bronchetti, Smith, Ms. Howard and Messrs. Anderson and
Burkhart received the following additional allocations to their 401(k) Savings
and Retirement Plan and Trust Accounts; Mr. Frankino - $0, $1,547 and $2,160;
Mr. Bronchetti - $0, $1,547 and $1,492; Mr. Smith - $0, $651 and $0; Ms.
Howard - $0, $863 and $795; Mr. Anderson - $0, $612 and $467; and Mr. Burkhart
- $0, $1,244 and $894.
4 These amounts reflect Mr. Smith's compensation commencing with his date of
employment, May 3, 1993.
5 Mr. Edward A. Burkhart terminated his employment in September 1995, and
resigned from the Board of Directors in November 1995.
</TABLE>
4
<PAGE> 7
STOCK PLANS
1983 STOCK OPTION PLAN:
The Executive Officers referred to in the cash compensation table, as well
as salaried employees of the Company or any of its subsidiary corporations who,
in the judgment of the Stock Option Committee (the "Option Committee"), occupy a
professional or management position, were eligible to participate in the
Company's 1983 Stock Option Plan (the "Option Plan"). The Option Plan provided
for the granting of options for up to 2,710,651 shares of the Company's Common
Stock $.05 par value (the "Common Stock").
The Option Committee determined to whom options were granted, the number of
shares subject to option, and the terms of the option. No incentive or
non-qualified stock options could be exercised, in whole or in part, prior to
the expiration of 12 months following the date such option was granted. Twenty
percent of these options becomes exercisable one year after the grant date, and
an additional 20% becomes exercisable each year thereafter. Both the incentive
and non-qualified stock options granted under the Option Plan terminate on the
10th anniversary of the date upon which they were granted and shall not be
exercisable on or after such date. In the event an employee who has been granted
options under the Option Plan leaves the Company, those vested options are
exercisable within 90 days of the date of separation from employment (but in no
event later than the end of the fixed term of such option). If an employee or
former employee who was granted an incentive or non-qualified option dies, and
at the time of his death was entitled to exercise any such option granted under
the Option Plan, such option may be exercised within 12 months after the date of
death (but no later than the end of the fixed term of such option) by his
estate, or by a person who acquired the right to exercise such option by bequest
or inheritance. Such option may be exercised only as to the number of shares of
stock for which it could have been exercised at the date of death.
The Option Plan was terminated on April 17, 1993.
1993 EQUITY INCENTIVE PLAN:
The Company's 1993 Equity Incentive Plan (the "Plan") provides for the
granting of incentive options, non-qualified options, stock appreciation rights,
restricted stock appreciation rights, restricted stock and Common Stock (all of
which are sometimes collectively referred to as "Awards") to the Executive
Officers referred to in the cash compensation table as well as to other
employees of the Company and its subsidiaries and any former employee of the
Company eligible to receive an assumed or replacement award or award settlement.
Awards may be granted singly, in combination or in tandem. In addition Awards
may be made in combination, or in tandem with, in replacement of, or as the
payment for grants or rights under any other compensation plan of the Company,
including the Option Plan or the plan of any acquired entity.
The Plan provides that not more than two million (2,000,000) shares of the
Company's Common Stock may be issued pursuant to the Plan. The shares to be
issued under the Plan may be authorized and unissued shares, treasury shares or
a combination thereof.
The Executive Compensation Committee of the Board of Directors (the
"Committee") administers the Plan. The Committee is comprised of two
non-employee Directors, each of whom must be a "disinterested person" as defined
under the Plan. The Committee consists of Messrs. Herndon and Hoel. Such
Committee selects the employees to whom grants are to be made and determines the
form of the Award.
Any compensation income realized by a participant with respect to any Award
granted under the Plan shall be subject to withholding by the Company of income,
employment or other taxes required by federal, state, local or foreign law. The
Committee may in its discretion satisfy the withholding requirement by causing
the entity or subsidiary employing the participant to withhold the appropriate
amount of any and all of such taxes from any other compensation otherwise
payable to such participant.
During fiscal 1996, the Committee did not award any options to the named
Executive Officers but did award options to other select Executive Officers.
5
<PAGE> 8
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON OPTIONS/SARS AT YEAR-END(#)1 AT YEAR-END ($)2
EXERCISE VALUE ----------------------------- -----------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sam J. Frankino 0 0 117,400 0 $ 667,713 $ 0
Robert J. Bronchetti 0 0 18,000 7,000 $ 64,000 $24,125
James E. Smith, Jr. 0 0 1,000 4,000 $ 1,250 $ 5,000
Davida S. Howard 0 0 14,100 9,400 $ 51,513 $10,175
Edward T. Anderson 2,651 $ 11,598 2,100 800 $ 7,100 $ 2,425
Edward A. Burkhart 35,677 $300,481 0 0 $ 0 $ 0
<FN>
- ---------------
1 Includes options with exercise prices ranging from $6.56 to $11.00.
2 Values are calculated using the January 31, 1996, Common Stock closing price
of $12.25 per share as reported on the New York Stock Exchange.
</TABLE>
BOARD'S COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the "Committee") is comprised of two
non-employee directors. The Committee regularly reviews the executive
compensation policies and practices of the Company and establishes the salaries
of Executive Officers. The Committee also administers the Company's 1993 Equity
Incentive Plan. Messrs. Noah T. Herndon (Chairman) and Per E. Hoel were
Committee members during fiscal 1996.
The Company's primary objective is to maximize stockholder value. To aid in
accomplishing this goal, the Committee is guided by two principles in
determining executive compensation policies: first, to attract, develop, reward
and retain highly talented individuals; and second, to motivate Executive
Officers to perform to the best of their abilities and to achieve both
short-term and long-term Company objectives that will contribute to the overall
goal of enhancing stockholder value.
The Company's executive compensation program consists of two main elements:
- Annual compensation, which is comprised of base salary and bonus, and
- Long-term incentives that provide a financial opportunity through grants
of restricted stock and other forms of stock-based awards. The
compensation that may be realized by executives through these incentives
is tied directly to the value of the Company's Common Stock in the
future.
The Committee believes that the Company's executive compensation program
reflects the fundamental principles described above and provides strong
incentives to executives to maximize Company performance.
In establishing total compensation, the Committee considers a variety of
measures of historical and projected Company performance. This review includes
such measures as net income, return on equity, sales, and total market value.
This information forms the basis for the Committee's assessment of the overall
performance of its executives and is the cornerstone for establishing their
compensation. The Committee also compares the Company's total compensation
package (and, to the extent possible, the compensation of individual Executive
Officers) with companies of comparable size and stature. The compensation
comparison groups are not necessarily the same peer group companies used in the
stock performance graph included in this proxy statement. In addition,
consideration is given to the specific functional responsibilities of each
executive's position.
Mr. Robert J. Bronchetti served as Chief Executive Officer of the Company
during fiscal 1996. The total compensation received by Mr. Bronchetti was
increased for fiscal 1996. In establishing his level of
6
<PAGE> 9
compensation, the Committee reviewed the Company's financial and business
performance for fiscal 1995. The review was based on all of the performance
criteria discussed above. The Committee did not assign relative weights to each
of these criteria but rather made a subjective determination based on a
consideration of all such factors collectively. The Committee also took note of
the significant strategic actions and restructuring initiated by Mr. Bronchetti
including the downsizing and subsequent sale of the Company's rental operations
and the restructuring of the Company to better position it to compete in the
challenging used car financing environment.
The Committee also awarded restricted stock to Executive Officers in
amounts ranging from 1,000 to 9,000 shares, as well as awarding stock options to
select Executive Officers. These awards were based on the individual effort of
each executive based upon the factors listed above.
The Committee is continuing to review the qualifying compensation
regulations issued by the Internal Revenue Service which provide that no
deduction is allowed for applicable employee compensation paid by a publicly
held corporation to a covered employee to the extent that compensation paid to
the employee exceeds $1 million for the applicable taxable year, unless certain
conditions are met. Currently, compensation to any employee is not expected to
exceed $1 million and thus should not be affected by the qualifying compensation
regulations.
Respectfully submitted,
Noah T. Herndon, Chairman
Per E. Hoel
7
<PAGE> 10
STOCK PERFORMANCE GRAPHS
The graphs provided below compare the Company's cumulative stockholder
return with that of the S&P SmallCap 600 Index and the approximately 120
companies which comprise the Dow Jones Complete Financial Sector Index Group
(Peer Group Index). The periods presented include the five fiscal years
commencing January 31, 1991 and ending January 31, 1996 and the three fiscal
years commencing January 31, 1993 and ending January 31, 1996. The Company began
the expansion of its financial services business around January 31, 1993.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN1 3
NATIONAL AUTO CREDIT, INC., S&P SMALLCAP 600 INDEX2
AND DOW JONES COMPLETE FINANCIAL SECTOR INDEX
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
1/91 1/92 1/93 1/94 1/95 1/96
- ---------------------------------------------------------------------------------------------------------
NATIONAL AUTO CREDIT, INC. 100 144 97 165 137 156
- ---------------------------------------------------------------------------------------------------------
S&P SMALLCAP 600 100 149 172 204 187 247
- ---------------------------------------------------------------------------------------------------------
DOW JONES COMPLETE FINANCIAL SECTOR 100 140 180 201 195 298
- ---------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
COMPARISON OF 3-YEAR CUMULATIVE TOTAL RETURN1 3
NATIONAL AUTO CREDIT, INC., S&P SMALLCAP 600 INDEX2
AND DOW JONES COMPLETE FINANCIAL SECTOR INDEX
[GRAPH]
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
1/93 1/94 1/95 1/96
- -------------------------------------------------------------------------------------------------------
NATIONAL AUTO CREDIT, INC. 100 170 141 161
- -------------------------------------------------------------------------------------------------------
S&P SMALLCAP 600 100 118 109 143
- -------------------------------------------------------------------------------------------------------
DOW JONES COMPLETE FINANCIAL SECTOR 100 111 108 165
- -------------------------------------------------------------------------------------------------------
<FN>
- ---------------
1 The above graphs assume an investment of $100 on January 31, 1991, and January
31, 1993, respectively, including reinvestment of all dividends, and indicate
the appreciation of or depreciation of each investment over a five year and
three year period. The historical performance depicted on the graphs is not
necessarily indicative of future performance.
2 In prior years the Company selected the NASDAQ Stock Market Index (U.S. Only)
as its major market index. In August 1995 the Company moved to the New York
Stock Exchange. Accordingly, the Company is no longer able to use the NASDAQ
index. The Company is a member of and has chosen the S&P SmallCap 600 index as
its major market index. The Company believes that this index is appropriate
based on the similar market capitalizations of the Company and the S&P
SmallCap 600 companies.
3 Notwithstanding anything to the contrary contained in any document filed by
the Company with the Securities and Exchange Commission or elsewhere, these
graphs shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates them.
</TABLE>
9
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to the only person known
to the Company to be the beneficial owner, as of April 15, 1996, of more than 5%
of the Company's outstanding Common Stock:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS BENEFICIALLY CLASS
OF BENEFICIAL OWNER OWNED1 2 OUTSTANDING
- ------------------- ----------------- ----------------
<S> <C> <C>
Sam J. Frankino 14,502,375 55.76%
30000 Aurora Road
Solon, Ohio 44139
<FN>
- ---------------
1 Mr. Frankino has both voting and investment power with respect to the shares
listed. Of the shares shown above, 366,015 shares are held by the Samuel J.
and Connie M. Frankino Charitable Foundation, a qualified charitable
foundation, as to which Mr. and Mrs. Frankino share voting and investment
power. Mr. and Mrs. Frankino disclaim any beneficial interest in those shares.
2 Includes 117,400 shares which may be acquired within 60 days pursuant to the
Company's 1983 Stock Option Plan (see Stock Plans on page 5).
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information is set forth with respect to shares of the Company's
Common Stock beneficially owned, as of April 15, 1996 by all Directors, the
nominees for election as Directors of the Company, by each of the six most
highly compensated Executive Officers, and by all officers and Directors of the
Company as a group:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY CLASS
NAME OWNED(1) OUTSTANDING
- ------------------------------------------------- ------------ ----------
<S> <C> <C>
Sam J. Frankino.................................. 14,502,375(2) 55.76%
Robert J. Bronchetti............................. 33,700(2) *
James E. Smith, Jr............................... 4,858(2) *
Davida S. Howard................................. 19,693(2) *
Edward T. Anderson............................... 4,681(2) *
Edward A. Burkhart3.............................. 0 *
J. Hunter Brown.................................. 500 *
Noah T. Herndon.................................. 4,000 *
Per E. Hoel...................................... 2,000 *
Edward N. Leszczynski............................ 2,000 *
All Officers and Directors as a Group (15)....... 14,592,507(2) 56.01%
<FN>
- ---------------
1 Unless otherwise indicated, each person has sole voting and investment power
with respect to the shares shown as beneficially owned by such person. With
respect to Mr. Frankino's beneficial ownership, see note 1 to Security
Ownership of Certain Beneficial Owners above.
2 Includes shares which may be acquired within 60 days pursuant to the Company's
1983 Stock Option Plan and 1993 Equity Incentive Plan (see Stock Plans on page
5).
Mr. Frankino......................... 117,400
Mr. Bronchetti....................... 18,000
Mr. Smith............................ 1,000
Ms. Howard........................... 14,100
Mr. Anderson......................... 2,100
The fifteen Executive Officers and
Directors as a group............... 161,800
3 Mr. Edward A. Burkhart terminated his employment in September 1995, and
resigned from the Board of Directors in November 1995.
* Less than 1.0%
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10
<PAGE> 13
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who beneficially own more than 10%
of a registered class of the Company's equity securities, to file reports of
initial ownership and changes in ownership of such equity securities with the
Securities and Exchange Commission and to furnish the Company with copies of all
Section 16(a) forms they file. To the Company's knowledge, based solely on a
review of the copies of such forms furnished to the Company or written
representations that no Forms 5 were required, the Company believes that its
Directors, officers and greater than 10% beneficial owners complied with all
Section 16(a) filing requirements.
CERTAIN TRANSACTIONS
Mr. Noah T. Herndon, Director, is a partner in the investment banking firm
of Brown Brothers Harriman & Co. ("Brown Brothers"). In accordance with its
engagement with the Company, Brown Brothers was instrumental in the lease of its
fleet of rental automobiles and the sale of certain other assets to a subsidiary
of Avis, Inc. Brown Brothers was paid a fee of $950,000 for its services. Mr.
Per E. Hoel, Director, received a fee of $237,500 from Brown Brothers for
services rendered by him in conjunction with this transaction.
Adverama, Inc. provided the Company with placement of Yellow Pages
directory advertising, printing services, and promotional items. These
transactions amounted to $1,577,000 during fiscal 1996. Adverama, Inc. is
beneficially owned by the daughter of the Company's Chairman of the Board of
Directors and majority stockholder. All services purchased from Adverama, Inc.
were at rates and upon terms competitive with those that could be obtained from
unaffiliated vendors. There were no amounts payable to Adverama, Inc. at January
31, 1996.
INDEPENDENT AUDITORS
Deloitte & Touche LLP has been selected to serve as the independent
auditors of the Company and its subsidiaries for the fiscal year ending January
31, 1997. Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting of Stockholders with the opportunity to make a statement
about the Company's financial condition, if they desire to do so, and to respond
to appropriate questions.
STOCKHOLDERS PROPOSAL
Any stockholder who intends to present a proposal at the 1997 Annual
Meeting of Stockholders for inclusion in the proxy statement and form of proxy
relating to that meeting is advised that the proposal must be received by the
Company at its principal executive offices not later than December 20, 1996. The
Company will not be required to include in its proxy statement or form of proxy
a stockholder proposal which is received after that date or which otherwise
fails to meet requirements for stockholder proposals established by regulations
of the Securities and Exchange Commission.
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<PAGE> 14
OTHER MATTERS
This solicitation of proxies is made by and on behalf of the Board of
Directors. In addition to mailing copies of this statement and the accompanying
notice and form of proxy to all stockholders of record on the Record Date, the
Company will request brokers, custodians, nominees and other fiduciaries to
forward copies of this material to persons for whom they hold shares of Common
Stock of the Company in order that such shares may be voted. Solicitation may
also be made by the Company's officers and regular employees personally or by
telephone or telegraph. The cost of the solicitation will be borne by the
Company.
If the accompanying form of proxy is executed and returned, the shares
represented thereby will be voted in accordance with any specifications made by
the stockholder. In the absence of any such specifications, they will be voted
to elect the nominees as set forth under "ELECTION OF DIRECTORS".
The presence of any stockholder at the meeting will not operate to revoke
such person's proxy. A proxy may be revoked at any time before it is exercised,
by a later appointment received by the secretary of the meeting, or by giving
notice of a revocation to the secretary of the meeting in writing or in open
meeting.
If any other matters shall properly come before the meeting, the persons
named in the proxy, or their substitutes, will vote thereon in accordance with
their judgment. The Board of Directors does not know of any other matters which
will be presented for action at the meeting.
By Order of the Board of Directors.
THOMAS J. DOSTART
Vice President, General Counsel and
Secretary
April 25, 1996
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<PAGE> 15
NATIONAL AUTO CREDIT, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
JUNE 6, 1996 ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Noah T. Herndon and Per
E. Hoel, and each of them with full power of substitution and
resubstitution as proxies for the undersigned to attend the
P Annual Meeting of Stockholders of National Auto Credit, Inc.,
R to be held at the Company's principal executive offices,
O 30000 Aurora Road, Solon, Ohio 44139 at 10:00 A.M. (Eastern
X Daylight Savings time) on June 6, 1996, and thereat, and at
Y any adjournment thereof, to vote and act with respect to all
shares of Common Stock of the Company which the undersigned
would be entitled to vote, with all the power the undersigned
would possess if present in person, as follows:
TO FOLLOW THE BOARD OF DIRECTORS' RECOMMENDATIONS, SIGN,
DATE AND MAIL THIS PROXY IN THE ENCLOSED RETURN ENVELOPE. THE
REVERSE SIDE NEED NOT BE COMPLETED.
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FOLD AND DETACH CARD
<PAGE> 16
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<S> <C>
PLEASE MARK
EACH VOTE [X]
LIKE THIS
The Board of Directors recommends that you vote "FOR" each of the nominees for election as Directors.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED BY THE STOCKHOLDER. IF NO SPECIFICATIONS ARE MADE, THE PROXY WILL
BE VOTED TO ELECT THE NOMINEES AS DESCRIBED IN ITEM 1 ABOVE.
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR WITHHELD
ALL FOR ALL
1. ELECTION OF DIRECTORS: ROBERT J. BRONCHETTI, [ ] [ ] 2. In their discretion, to
J. HUNTER BROWN, vote upon such other
JAMES E. SMITH, JR. business as may properly
come before the meeting.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
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______
|
|
COMMENTS/ADDRESS CHANGE
Please mark this box if you have [ ]
written comments/address change
on the reverse side.
Signature(s) of Stockholder(s) Date
----------------------------------------------- -------------------
NOTE: Please sign as your name appears hereon. If shares are held jointly, all holders must sign. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
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FOLD AND DETACH HERE
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