<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ELECTRO RENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(5) Total fee paid:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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<PAGE> 2
ELECTRO RENT CORPORATION
6060 SEPULVEDA BOULEVARD
VAN NUYS, CALIFORNIA 91411-2512
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 7, 1999
DEAR SHAREHOLDERS:
You are cordially invited to attend the 1999 Annual Meeting of Shareholders
of ELECTRO RENT CORPORATION (the "Company") to be held on Thursday, October 7,
1999, at 10:00 o'clock A.M., at the office of the corporation, 6060 Sepulveda
Boulevard, Van Nuys, California 91411-2512. At the meeting we will:
1. Elect eight directors for the next year.
2. Vote to approve the selection of Arthur Andersen LLP as the Company's
independent public accountants.
3. Consider and act upon such other business as may properly come before
said meeting.
Shareholders of record at the close of business on August 9, 1999 are
entitled to vote at the Annual Meeting. We urge you to vote your shares promptly
by signing, dating and marking the enclosed proxy. You have the right to revoke
your proxy before it is exercised by giving written notice to the Company.
Steven Markheim
Secretary
DATED: August 23, 1999
<PAGE> 3
ELECTRO RENT CORPORATION
6060 SEPULVEDA BOULEVARD
VAN NUYS, CALIFORNIA 91411-2512
------------------------
PROXY STATEMENT
VOTING SHARES AND PROCEDURES
The Board of Directors (the "Board") requests your proxy for the annual
meeting of shareholders on October 7, 1999. If you sign and return the proxy you
authorize the persons named in the proxy to represent you and vote your shares
for the purposes mentioned in the notice of annual meeting.
If you come to the meeting you can vote in person if you wish. You can
revoke your proxy any time before it is voted by giving written notice to the
Company.
As of August 9, 1999, the record date, there were 24,480,813 shares of
common stock issued and outstanding. Each share is entitled to one vote.
If you sign and return your proxy but do not give voting instructions, your
shares will be voted as recommended by the Board.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of the record date the holdings of each
person who was known to the Company to own 5% or more of the Company's Common
Stock, and by all directors and officers as a group:
<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY PERCENT OF
NAME AND ADDRESS(1) OWNED CLASS(3)
------------------- ------------ ----------
<S> <C> <C>
Private Capital Management.................................. 4,761,580 19.45%
3003 Tamiami Trail North
Naples, Florida 33940
Daniel Greenberg............................................ 3,873,247(2) 15.94%
T. Rowe Price Associates, Inc............................... 3,224,600 13.17%
100 East Pratt Street
Baltimore, Maryland 21202
Phillip Greenberg........................................... 2,881,985 11.77%
Officers and Directors as a Group (18 Persons).............. 3,976,682(4) 19.24%
</TABLE>
- ---------------
(1) The address of each shareholder is 6060 Sepulveda Boulevard, Van Nuys,
California 91411-2512, unless otherwise set forth.
(2) The 3,873,247 shares do not include (a) 204,463 shares held by the Electro
Rent Corporation Employee Stock Ownership Plan (ESOP); and (b) 121,496
shares held by The Mayer Greenberg Foundation which Daniel Greenberg has the
right to vote.
(3) Any shares which are available under options which are currently exercisable
or which will become exercisable by October 7, 1999 have been considered to
be outstanding for the purpose of computing the percentage of outstanding
shares owned by such person, but are not considered outstanding for the
purpose of computing the percentage of shares owned by any other person.
(4) Does not include 795,504 shares underlying currently exercisable options
held by officers and directors or 417,503 shares held by the ESOP for such
officers and directors.
ELECTION OF DIRECTORS
The Board has nominated the following eight persons as directors to serve
until the next annual meeting and until their successors are elected and
qualify. Each of the nominees is now a director of the Company.
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<PAGE> 4
None of the nominees is related by blood, marriage or adoption to any other
nominee or any executive officer of the Company.
The schedule below sets forth with respect to each nominee for election as
a director the following:
- His or her age.
- When he or she first became a director.
- The number of shares of the Company he or she owned on the record date.
- His or her occupation and business experience during the past five years.
<TABLE>
<CAPTION>
DIRECTOR COMMON SHARES
NAME AND PRINCIPAL OCCUPATION AGE SINCE OWNED
----------------------------- --- -------- -------------
<S> <C> <C> <C>
Gerald D. Barrone(1).................................. 68 1987 3,000
Director of Coast Federal Bank
Nancy Y. Bekavac(2)................................... 52 1992 400
President, Scripps College
Daniel Greenberg...................................... 58 1976 3,873,247(3)
Chief Executive Officer and Chairman of the Board of
Directors of the Company for more than five years
Joseph J. Kearns(4)................................... 57 1988 1,766
President, Kearns Associates, an investment
consulting firm
S. Lee Kling(5)....................................... 70 1996 8,000
Chairman of the Board of Directors of Kling Rechter
& Co. for more than five years
Michael R. Peevey(6).................................. 61 1995 -0-
President, New Energy Ventures, LLC
Will Richeson, JR.(7)................................. 75 1989 800
Consultant
William Weitzman...................................... 60 1974 55,258(8)
President and Chief Operating Officer of the Company
for more than five years
</TABLE>
- ---------------
(1) From March 1987 to December 1991 Mr. Barrone was president, chief operating
officer and a director of Coast Federal Bank and Coast Savings Financial. He
remained a director after his retirement in 1991 until February 1998 when
the company was acquired. Prior to January 1987, he was president, chief
executive officer and a director of Fidelity Federal Savings and Loan
Association and Citadel Holding Corporation.
(2) Ms. Bekavac has been president of Scripps College since 1990. From 1988 to
1990 she was counselor to the president of Dartmouth College.
(3) See "Principal Shareholders."
(4) From 1982 to 1998 Mr. Kearns was Vice President and Chief Financial Officer
of the J. Paul Getty Trust. He is a trustee of MAS Funds and Southern
California Edison Nuclear Decommissioning Trust.
(5) Mr. Kling is a director of Bernard Chaus, Inc., Falcon Products, Inc.,
National Beverage Corp., Union Planters Corp., and Top Air Manufacturing
Co., Inc.
(6) From 1986 to 1990 Mr. Peevey was executive vice president, Southern
California Edison Company. From 1990 to 1993 he was president and a
director, Edison International and Southern California Edison Company. From
1993 to 1995 he was an independent energy consultant. Since 1995 he has been
President of New Energy, Inc., a national energy services company.
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<PAGE> 5
(7) From 1985 to 1988 Mr. Richeson was a partner of Riordan, Freeman & Spogli,
an investment banking firm. From 1977 to 1985 he was chairman, president and
chief executive officer of the corporate finance subsidiary of Security
Pacific Corporation.
(8) These shares are held in a revocable family trust.
EXECUTIVE OFFICERS
The schedule below sets forth the name, age and office or offices of each
executive officer of the Company. No executive officer is related by blood,
marriage or adoption to any other executive officer, director or nominee for
director. Each executive officer has been employed by the Company for more than
five years.
<TABLE>
<CAPTION>
HELD OFFICE OR
NAME AGE OFFICE OR OFFICES OFFICES SINCE
---- --- ----------------- --------------
<S> <C> <C> <C>
Daniel Greenberg..................... 58 Chairman of the Board of Directors and 1979
Chief Executive Officer
William Weitzman..................... 60 President and Chief Operating Officer 1982
Gary B. Phillips..................... 47 Senior Vice President 1983
Steven Markheim...................... 46 Vice President, Administration and 1987
Secretary
Craig R. Jones....................... 53 Vice President and Chief Financial 1990
Officer
Richard E. Bernosky.................. 43 Vice President, Product Management 1993
Dennis M. Clark...................... 45 Vice President, Sales -- Western Region 1994
Thomas A. Curtin..................... 46 Vice President, Sales -- Eastern Region 1994
Ronald J. Deming..................... 50 Vice President, Distribution and 1998
Technical Services
Craig R. Burgi....................... 46 Vice President, Sales -- Northwest 1998
Region
John Hart............................ 50 Vice President, Sales -- Southwest 1998
Region
Peter M. Shapiro..................... 55 Vice President, Human Resources 1998
</TABLE>
BOARD OF DIRECTORS AND COMMITTEES
The Board meets quarterly and also takes action as required by unanimous
written consent.
The Board has three standing committees described below.
Overall attendance at board and committee meetings exceeded 95%.
Audit Committee. The Audit Committee is generally responsible for:
- Making recommendations to the Board regarding the engagement of
independent public accountants for the Company.
- Approving:
- The Company's annual report to shareholders (except for portions not
required by Securities and Exchange Commission or NASDAQ rules).
- Certain non-audit services of the independent public accountants.
- Reviewing:
- The Company's quarterly report to the SEC.
- Proposed changes in major accounting policies.
- Scope of the annual audit.
- Reports of compliance of management and operating personnel with the
Company's code of ethics.
- Adequacy of the Company's system of internal accounting controls.
- Other factors affecting the integrity of published financial reports.
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<PAGE> 6
- Members: All of the Board members except Messrs. Greenberg and Weitzman
serve as members of the Audit Committee.
- Meetings: The Audit Committee met twice during the past fiscal year.
Compensation Committee. The Compensation Committee is generally responsible
for:
- Reviewing the compensation of officers and key employees.
- Making recommendations to the Board regarding amounts of or changes in
compensation including:
- Bonuses.
- Stock Options.
- Other management incentives.
- Members: All of the Board members except Messrs. Greenberg and Weitzman
serve as members of the Compensation Committee.
- Meetings: The Compensation Committee met twice during the past fiscal
year.
1996 Stock Option Committee. The Stock Option Committee grants options
under the Company's 1996 stock option plan.
- Members: The members of the Stock Option Committee are Messrs. Barrone,
Kearns and Kling, and Ms. Bekavac.
- Meetings: The 1996 Stock Option Committee met once during the past fiscal
year.
- Options under the 1996 Director Option Plan are granted to outside
directors by a Committee composed of Messrs. Greenberg and Weitzman who
are ineligible to receive options under the 1996 Director Option Plan.
Director Compensation. Directors who are not employees are paid each year:
- A cash retainer of $20,000.
- $1,000 for each board meeting which he or she attends.
- $1,000 for each meeting of the Compensation and Audit Committees which he
or she attends.
Directors who are employees receive no additional compensation for their
services as directors.
Under the 1996 Director Option Plan non-employee directors may elect to
defer all or a portion of their annual retainer and receive nonqualified options
equivalent to the amount of the deferred director's fees divided by 75% of the
fair market value per share on the date of grant. Upon exercise of the options,
the director pays 25% of the fair market value per share on the date of grant.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934.
The Company reports that based solely upon a review of prescribed forms
furnished to it, no director, officer or 10 percent shareholder of the Company
has failed to file on a timely basis the filings called for by Section 16(a) of
the Securities Exchange Act of 1934.
TRANSACTIONS WITH MANAGEMENT
Mr. Greenberg, individually, rents approximately 600 square feet of space
in the Company's building at rates comparable to those paid by other third party
tenants.
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<PAGE> 7
EXECUTIVE COMPENSATION AND RELATED MATTERS
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning annual and long-term
compensation paid by the Company to its chief executive officer and to each of
the other four most highly compensated executive officers (the Named Executive
Officers) for their services to the Company and its subsidiaries in all
capacities for the fiscal years ended May 31, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------- ------------------------ PAYOUTS
OTHER RESTRICTED ---------- ALL OTHER
ANNUAL COMPEN- STOCK LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($)(1) AWARD(S)($) OPTIONS(#) PAYOUTS($) SATION($)(2)
- --------------------------- ---- --------- -------- -------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daniel Greenberg............ 1999 $385,000 $290,000 0 0 0 0 $27,174
Chairman of the Board and 1998 355,000 375,000 0 0 70,000 0 24,593
Chief Executive Officer 1997 340,000 300,000 0 0 0 0 23,925
William Weitzman............ 1999 $335,000 $265,000 0 0 0 0 $12,584
President and 1998 305,000 350,000 0 0 70,000 0 18,733
Chief Operating Officer 1997 290,000 275,000 0 0 0 0 23,180
Gary B. Phillips............ 1999 $210,000 $150,000 0 0 0 0 $15,413
Senior Vice President 1998 192,500 190,000 0 0 40,000 0 14,073
1997 185,000 150,000 0 0 30,000 0 13,317
Steven Markheim............. 1999 $185,000 $110,000 0 0 0 0 $12,735
Vice President and 1998 170,000 135,000 0 0 40,000 0 11,084
Secretary 1997 160,000 100,000 0 0 20,000 0 10,084
Craig R. Jones.............. 1999 $145,000 $ 40,000 0 0 0 0 $10,053
Vice President and 1998 135,000 48,000 0 0 15,000 0 9,512
Chief Financial Officer 1997 130,000 35,000 0 0 0 0 9,528
</TABLE>
- ---------------
(1) The value of perquisites and other personal benefits has not been included
for fiscal years 1999, 1998 and 1997 since the value of such benefits did
not exceed the lesser of either $50,000 or 10% of the total annual salary
and bonus reported for any individual named.
(2) All Other Compensation for fiscal year 1999 includes the following for
Messrs. Greenberg, Weitzman, Phillips, Markheim and Jones, (i) Company
matching contributions to the 401(k) Savings Plan of $8,136; $8,136; $8,136;
$7,541 and $7,878 for each Named Executive Officer, respectively, (ii)
Company contributions to the Supplemental Executive Retirement Plan of
$15,228; $-0-; $6,561; $4,495 and $1,102 on behalf of each of the Named
Executive Officers, respectively, to match a portion of 1999 pretax elective
deferral contributions (included under salary) made by each person to such
plans, and (iii) Company payments of term life insurance premiums of $3,810;
$4,448; $716; $699 and $1,073 on behalf of each of the Named Executive
Officers, respectively.
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted to any of the Named Executive Officers under the
Company's 1996 Stock Option Plan during the fiscal year ended May 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table summarizes for each of the Named Executive Officers the
number of stock options exercised during the fiscal year ended May 31, 1999, and
the aggregate dollar value realized upon exercise, the total number of
unexercised options held at May 31, 1999, and the aggregate dollar value of
in-the-money, unexercised options held at May 31, 1999. Value realized upon
exercise is the difference between the fair market value of the underlying stock
on the exercise date and the exercise or base price of the option. Value of
unexercised, in-the-money options at fiscal year-end is the difference between
its exercise or base price and the fair market value of the underlying stock on
May 31, 1999, which was $12.44 per share. These values,
5
<PAGE> 8
unlike the amounts set forth in the column headed "Value Realized," have not
been, and may never be, realized. The underlying options have not been, and may
not be, exercised; actual gains, if any, on exercise will depend on the value of
the Company's stock on the date of exercise. There can be no assurance that
these values will be realized.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel Greenberg......... 0 $ 0 17,500 52,500 $ 0 $ 0
William Weitzman......... 29,000 $283,910 269,750 52,500 $2,397,528 $ 0
Gary B. Phillips......... 7,000 $ 68,950 123,928 46,622 $ 828,847 $64,493
Steven Markheim.......... 16,500 $166,363 79,338 40,662 $ 479,831 $41,369
Craig R. Jones........... 13,000 $131,550 43,000 11,250 $ 369,858 $ 0
</TABLE>
- ---------------
(1) In-the-Money Options are those where the fair market value of the underlying
securities exceeds the exercise or base price of the option.
6
<PAGE> 9
COMPARISON OF TOTAL SHAREHOLDER RETURN
This graph compares the Company's total shareholder return with (1) the
NASDAQ(US) Index, (2) the S & P Technology Sector Index, (3) the Russell 2000
Index, and (4) the composite prices of the companies listed by Value Line, Inc.
in its Industrial Services Group ("Peer Group"). Since the Company is listed in
both the Russell 2000 Index and the Industrial Services Group, they have been
added for a relevant comparison. The S & P Technology Sector Index will be
eliminated in fiscal 2000 since it provides a less relevant industry comparison
than the Industrial Services Group. The comparison is over a five year period,
beginning May 31, 1994 and ending May 31, 1999. The total shareholder return
assumes $100 invested at the beginning of the period in the Company's common
stock and in each index. It also assumes reinvestment of all dividends.
CUMULATIVE FIVE YEAR TOTAL RETURN
VALUE OF $100 INVESTED ON MAY 31, 1994
FISCAL YEARS ENDED MAY 31
<TABLE>
<CAPTION>
ELECTRO RENT S & P TECHNOLOGY NASDAQ STOCK VALUE LINE
CORPORATION SECTOR MARKET - US RUSSELL 2000 INDUSTRIAL SERVICES
------------ ---------------- ------------ ------------ -------------------
<S> <C> <C> <C> <C> <C>
'1994' 100 100 100 100 100
'1995' 159 144 119 110 124
'1996' 268 191 173 150 216
'1997' 249 277 195 160 275
'1998' 516 346 247 198 377
'1999' 269 561 347 192 288
</TABLE>
CEO COMPENSATION
CEO Daniel Greenberg is employed pursuant to a written contract which
provides for the following:
- A rolling three year term.
- Base salary of not less than $300,000.
- Annual adjustments based on the consumer price index.
- Increases, bonuses and incentive compensation authorized by the Board.
- Employee benefits comparable to those given by the Company to its other
senior executives.
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<PAGE> 10
- Certain payments and benefits in the event of involuntary termination
including such termination following a change of control.
For the fiscal year ended May 31, 1999 the CEO was paid:
- Base salary of $385,000.
- Bonus of $290,000.
- Fringe benefits comparable to those received by salaried employees
generally (not exceeding in the aggregate 10% of his base salary).
During the May 31, 1999 fiscal year the CEO exercised no stock options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee or the Stock Option Committee is or
was an officer or employee of the Company, or is related to any other member of
the Committee, of any member of the Board, or any executive officer of the
Company by blood, marriage or adoption.
REPORT OF THE COMPENSATION COMMITTEE
AND THE STOCK OPTION COMMITTEE
The Compensation Committee makes recommendations to the Board respecting
compensation for the Company's executives including the Chief Executive Officer
and the President. It also makes recommendations to the Stock Option Committee
respecting the grant of stock options to the executives.
COMPENSATION PHILOSOPHY
In designing its compensation programs, the Company follows its belief that
compensation should reflect the value created for shareholders while supporting
the Company's strategic goals. In doing so, the compensation programs reflect
the following principles:
- Compensation should be meaningfully related to the value created for
shareholders.
- Compensation programs should support the short- and long-term strategic
goals and objectives of the Company.
- Compensation programs should reflect and promote the Company's values,
and reward individuals for outstanding contributions to the Company's
success.
- Short- and long-term compensation play a critical role in attracting and
retaining well-qualified executives.
Executive compensation has consisted of three parts: base compensation,
bonuses and stock options.
In recommending base compensation the Compensation Committee has
periodically called upon compensation consultants to submit compensation data
from comparable companies. The Committee has recommended bonus awards on an
annual basis taking into consideration all relevant factors including the
performance of the particular executive and the success of management generally
in carrying out the objectives of the Company. For example, during the past
fiscal year (a) the Company's personnel worked diligently and extensively in
completing the integration of the Technology Management Services Division of
General Electric Capital Corporation; and (b) the Company achieved a net income
margin of 9% and a 13% return on equity in spite of very adverse market
conditions. The Committee regarded these efforts as creditable performances on
the part of management justifying appropriate bonuses.
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<PAGE> 11
COMPENSATION PROCEDURE
In the first quarter of each fiscal year the Compensation Committee meets
to review executive compensation and to make recommendations for executive
bonuses for the fiscal year ended the preceding May 31st and base compensation
for the then current fiscal year.
The Chief Executive Officer and the President give the Compensation
Committee a report and recommendation respecting each of the executives other
than themselves. They also supply the Compensation Committee with whatever
information the Compensation Committee requests concerning their own performance
and any other aspects of the Company's operations which might be relevant in
fixing or recommending compensation for the Chief Executive Officer and the
President.
The Compensation Committee makes its recommendations to the Board. The
Board fixes the compensation by appropriate resolutions. In most instances the
Board follows the recommendations of the Compensation Committee. The Chief
Executive Officer and the President, both of whom are members of the Board, do
not participate in the Board's consideration of their compensation and absent
themselves when their compensation is being considered and voted upon.
THE CHIEF EXECUTIVE OFFICER AND THE PRESIDENT
In 1986 the Company entered into written Executive Employment Agreements
with Daniel Greenberg, the Chief Executive Officer, and with William Weitzman,
the President. The Agreements were amended in November 1988 and were further
amended and restated in July 1992.
In their present form the Agreements provide for a three year rolling term
at a base salary of not less than $300,000 for the Chief Executive Officer and
not less than $250,000 for the President. Base salary is adjusted annually based
upon the consumer price index and may be increased at any time by the Board or
its Compensation Committee.
The Agreements provide that the Executive shall be entitled to receive
bonuses and incentive compensation each year in addition to his base salary. In
determining the amount of such bonus and incentive compensation, consideration
is to be given to all pertinent factors including, but not limited to, the
following:
". . . historic policies and practices, business revenues, business
profits, the quality of the Executive's performance and the value of his
contributions to the Company, the prevailing compensation levels for
comparable executive officers in businesses of size, complexity and/or
character similar to those of the Company."
The Executives are also entitled to receive employee benefits comparable to
those provided to its senior executives; and to certain payments and benefits in
case of the Executive's involuntary termination including such termination
following a change of control.
No other executive officer of the Company is employed pursuant to a formal
written employment agreement.
STOCK OPTION PLANS
The Company's current stock option plan is the 1996 Stock Option Plan.
Options under the 1990 Stock Option Plan are all granted. However, options
granted under the prior Plans which have not expired or been forfeited, are
valid and exercisable according to the terms of the respective option grants.
The 1996 Plan provides for Incentive Stock Options which may only be
granted to employees, and for Nonstatutory Stock Options which may be granted to
non-employee directors and consultants.
The Stock Option Committee grants Incentive Stock Options to key employees
of the Company, including Company Executives, to encourage proprietary interest
in the Company, to encourage such key employees to remain in the employ of the
Company and to attract new employees with outstanding qualifications.
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<PAGE> 12
In granting stock options, the Stock Option Committee confers with senior
management and with the Compensation Committee.
During the fiscal year ended May 31, 1999, no stock options were granted to
the Chief Executive Officer or any of the other four of the five highest paid
executives.
Directors are granted Nonstatutory Stock Options based upon an amendment to
the 1996 Plan adopted November 1, 1996 setting forth a formula pursuant to Rule
16b-3 of the General Rules and Regulations under the Securities Exchange Act of
1934 whereby each non-employee director receives 6,000 options the first year of
service and 4,000 options the second year of service.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
---------------------- ----------------------
<S> <C>
Will Richeson, Jr., Chairman Gerald D. Barrone, Chairman
Gerald D. Barrone Nancy Y. Bekavac
Nancy Y. Bekavac Joseph J. Kearns
Joseph J. Kearns S. Lee Kling
S. Lee Kling
Michael R. Peevey
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board on the recommendation of the Audit Committee has appointed Arthur
Andersen LLP to audit the books and records of the Company for the fiscal year
beginning June 1, 1999.
Representatives of the firm are expected to be at the meeting to respond to
appropriate questions and to make a statement if they wish.
Notwithstanding the ratification by the shareholders of the appointment of
Arthur Andersen LLP, the Board or the Audit Committee may, if the circumstances
warrant, appoint other independent public accountants.
A resolution will be offered at the annual meeting to approve the
appointment of Arthur Andersen LLP as the independent public accountants of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR SUCH PROPOSAL AND YOUR PROXY
WILL BE SO VOTED UNLESS OTHERWISE SPECIFIED.
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR
PRESENTATION AT 2000 ANNUAL MEETING
Any proposal which a shareholder wishes to have presented for consideration
at the 2000 annual meeting must be received at the Company's principal office,
attention: Steven Markheim, Secretary, no later than May 31, 2000.
OTHER MATTERS
As of the date of this proxy statement the Board does not intend to
present, and has not been informed that any other person intends to present, any
other matter for action at this meeting. If any other matter properly comes
before the meeting, the holders of the proxies will act in each instance in
accordance with their best judgment.
In addition to the solicitation of proxies by mail, certain employees of
the Company, without extra remuneration, may solicit proxies. The Company also
will request brokerage houses, nominees, custodians and fiduciaries to forward
soliciting material to the beneficial owners of stock held of record and will
reimburse such persons for the cost of forwarding the material. The cost of
solicitation will be borne by the Company.
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<PAGE> 13
Copies of the 1999 annual report of the Company are being mailed to
shareholders. Additional copies and additional information, including the annual
report (Form 10-K) filed with the Securities and Exchange Commission may be
obtained by any shareholder without charge. Requests should be addressed to the
Company's principal office, attention: Steven Markheim, Secretary.
By order of the Board of Directors
Steven Markheim
Secretary
Van Nuys, California
August 23, 1999
11
<PAGE> 14
ELECTRO
RENT
CORPORATION
6060 SEPULVEDA BOULEVARD
VAN NUYS, CALIFORNIA 91411-2512
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS.
The undersigned hereby appoints Daniel Greenberg, William Weitzman and Joseph J.
Kearns as Proxies, each with the power to
appoint his substitute, and hereby authorizes
them to represent and to vote, as designated
below, all the shares of common stock of Electro
Rent Corporation held of record by the
undersigned on August 9, 1999 at the annual
meeting of shareholders to be held on October 7,
1999, or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the (to vote for all nominees listed
contrary below) [ ] below) [ ]
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name on the list below.)
G. D. Barrone, N. Y. Bekavac, D. Greenberg,
J. J. Kearns, S. L. Kling, M. R. Peevey,
W. Richeson, Jr., W. Weitzman
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP as the independent
public accountants of the corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 15
This proxy, when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for the eight nominees for directors and for proposals 2 and 3.
PLEASE SIGN EXACTLY AS NAME APPEARS OF RECORD ON YOUR STOCK CERTIFICATES.
WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN.
DATED:............, 1999
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Signature
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Signature, if held
jointly
When signing as
attorney, as 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.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
