<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AGENCY
RENT-A-CAR, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AGENCY RENT-A-CAR, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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:
(4) Proposed maximum aggregate value of transaction:
/ / 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:
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<PAGE> 2
[INSERT AGENCY RENT-A-CAR LOGO].
30000 AURORA ROAD
SOLON, OHIO 44139
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 22, 1994
Notice is hereby given that the Annual Meeting of Stockholders of Agency
Rent-A-Car, Inc., will be held at the Company's principal executive offices,
30000 Aurora Road, Solon, Ohio, on Wednesday, June 22, 1994, 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;
2. To consider and act upon a proposal to approve the Company's 1993 Equity
Incentive Plan;
3. To consider and act upon a proposal to change the Company's name; and
4. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on May 13, 1994 are
entitled to notice of and to vote at said meeting or any adjournment thereof.
By order of the Board of Directors.
PETER T. ZACKAROFF, EXECUTIVE VICE
PRESIDENT, CHIEF LEGAL OFFICER
AND SECRETARY
May 20, 1994
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
[INSERT AGENCY RENT-A-CAR LOGO].
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 Agency Rent-A-Car, Inc., a
Delaware corporation (the "Company"), to be held on June 22, 1994, at the
Company's principal executive offices, 30000 Aurora Road, Solon, Ohio, 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, 1994 ("fiscal 1994"), are first being mailed to
stockholders on or about May 24, 1994.
The close of business on May 13, 1994 (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
25,746,663 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 Articles and Bylaws, if a
quorum is present at the meeting, the nominees for Directors who receive a
plurality of votes cast for the election of Directors at the meeting by shares
present in person or by proxy and entitled to vote will be elected Directors.
Where a quorum is present, the vote of the holders of a majority of shares
present in person or by proxy and entitled to vote, will decide any other matter
voted upon. An abstention from voting any share with respect to the election of
any nominee for Director or other matter will have the practical effect of a
vote against that nominee or against any other matter to be voted upon. A broker
non-vote with respect to any share will not affect the election of Directors or
approval of any other matter to be voted upon since the share is not considered
present for voting purposes.
ELECTION OF DIRECTORS
The Board of Directors presently consists of eight members.(1) At the
meeting, the Common Stock represented by valid proxies appointed will be voted,
unless otherwise specified, for the election of Messrs.
- - ---------------
(1) At regularly scheduled meetings held June 30, 1993 and September
16, 1993 the Board of Directors appointed Messrs. Joseph P. Henley and
Robert J. Bronchetti, respectively, to the Board to serve until the 1996
Annual Meeting of Stockholders.
Messrs. Terry W. Holt and William S. Marshall resigned from the Board of
Directors. At a regularly scheduled meeting held April 14, 1994, the Board of
Directors appointed Mr. Edward A. Burkhart to fill Mr. Holt's unexpired term
and Mr. Edward N. Leszczynski to fill Mr. Marshall's unexpired term.
1
<PAGE> 4
Per E. Hoel, Edward N. Leszczynski and Kelly W. Reagan to serve a term of three
years and until their respective successors are duly 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. Hoel,
Leszczynski and Reagan, the nominees for election as Directors, and to Directors
of the Company whose terms of office will continue after the meeting:
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AT THE ANNUAL
MEETING
------------------------------------------
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME 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-68.
Edward N. Leszczynski Self-employed consultant to small 1994 1997
businesses in southeastern Michigan
regarding budgeting, profit planning,
acquisitions, mergers and reorganizations.
Teaches management analysis and planning
to Ford Motor Credit Company supervisors
and managers at Ford's training center in
Dearborn, Michigan. Since 1993, has done
consulting work for National Auto Credit,
Incorporated. Age-60.
Kelly W. Reagan Senior Vice President, Rental Operations 1991 1997
and Fleet, has been employed by the
Company since 1981 and was elected a
Director in May 1991. Mr. Reagan has held
numerous positions with the Company
including Office Manager, District
Manager, Regional Director and Regional
Vice President, Rental Operations, Vice
President and Senior Vice President, Fleet
prior to assuming his present duties in
March 1994. Age-33.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER
THE ANNUAL MEETING
------------------------------------------
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME AND OTHER INFORMATION SINCE TO EXPIRE
---- --------------------- -------- ---------
<S> <C> <C> <C>
Sam J. Frankino Chairman of the Board since the Company's 1969 1995
inception in 1969, founder and majority
stockholder. Mr. Frankino also served as
Chief Executive Officer from 1969 to 1992
and resumed the position in December 1993.
Age-69.
Noah T. Herndon Partner of Brown Brothers Harriman & Co., 1992 1995
investment bankers, since 1974. Mr.
Herndon is also a Director of Amoskeag
Company, Fieldcrest Cannon, Inc. and Watts
Industries, Inc. For more than five years
prior to 1974 Mr. Herndon had been a
manager and general manager for Brown
Brothers Harriman & Co. Age-62.
Robert J. Bronchetti President and Chief Financial Officer, has 1993 1996
been employed by the Company since May
1991 and was appointed a Director in
September 1993. Mr. Bronchetti held the
position of Executive Vice President and
Chief Financial Officer prior to assuming
his present duties in March 1994.
Previously, Mr. Bronchetti held the
positions of Vice President and Chief
Financial Officer and Vice President of
Finance and Treasurer. Prior to 1991, Mr.
Bronchetti held various financial man-
agement positions with Engelhard
Corporation and its wholly-owned
subsidiary, The Harshaw Chemical Company.
Age-46.
Edward A. Burkhart Executive Vice President, Rental 1994 1996
Operations, has been employed by the
Company since 1982 and was appointed a
Director in April 1994. Mr. Burkhart has
held numerous positions with the Company
including Office Manager, District
Manager, Regional Director, Regional Vice
President and Senior Vice President,
Rental Operations prior to assuming his
present duties in March 1994. Age-34.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER
THE ANNUAL MEETING
------------------------------------------
PRINCIPAL OCCUPATION DIRECTOR TERM
NAME AND OTHER INFORMATION SINCE TO EXPIRE
---- --------------------- -------- ---------
<S> <C> <C> <C>
Joseph P. Henley Retired May 1, 1991 from Ford Motor Credit 1993 1996
Company. Mr. Henley serves as Secretary
for the Board of Trustees for Brighton
Hospital & Brighton Health Services Corp.;
and as part of a seven member management
committee over the operating development
entities of Shawty Creek/Schuss Mountain
Resort; Board Member and Treasurer of
Sunset Torch Condo Assoc.; Board Member
and Secretary for Legend Condo Assoc.
Age-67.
</TABLE>
Messrs. Frankino and Hoel are the 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 did not meet during fiscal 1994.
Messrs. Henley, 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 three times during fiscal 1994.
Messrs. Henley, 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 1994.
Four meetings of the Board of Directors were held during fiscal 1994. 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.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who 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.
DIRECTOR'S 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 $3,600 per year plus $500 and expenses for
attendance at each meeting of the Board.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation paid by the Company
and its subsidiaries for services rendered by its chief executive officer and
each of the four other most highly compensated executive officers for the fiscal
years ending January 31, 1992, 1993 and 1994:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------------------ SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION FISCAL SALARY BONUS(1) COMPENSATION OPTIONS COMPENSATION(2)
AT JANUARY 31, 1994 YEAR ($) ($) ($) (#) ($)
------------------- ------ ------- ------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sam J. Frankino 1994 283,231 119,750 -0- -0- 2,316
Chairman of the Board and 1993 400,000 100,000 -0- -0- 2,294
Chief Executive Officer 1992 395,673 90,000 -0- -0- 2,831
Terry W. Holt 1994 205,617 70,688 -0- -0- 2,316
President and Chief 1993 220,000 75,000 -0- -0- 2,294
Operating Officer 1992 201,634 65,000 -0- -0- 2,831
Peter T. Zackaroff 1994 130,000 32,875 -0- -0- 1,620
Executive Vice President, Chief 1993 125,477 35,000 -0- -0- 1,680
Legal Officer and Secretary 1992 105,192 30,000 -0- -0- 1,708
Robert J. Bronchetti 1994 144,039 32,875 -0- -0- 1,744
Executive Vice President and 1993 120,154 21,000 -0- -0- 1,500
Chief Financial Officer 1992(3) 64,923 3,000 -0- -0- 104
Kelly W. Reagan 1994 100,000 32,875 -0- -0- 1,326
Senior Vice President, Fleet 1993 92,827 35,000 -0- -0- 1,362
1992 83,077 27,500 -0- -0- 1,446
<FN>
- - ---------------
(1) On December 16, 1993, the following executive officers were awarded
a total of 15,500 shares of restricted Common Stock of the Company pursuant
to the 1993 Equity Incentive Plan. The number of shares awarded and the
dollar value at the date of award are as follows: Mr. Frankino--10,000,
$118,750; Mr. Holt--2,500, $29,688; Mr. Zackaroff--1,000, $11,875; Mr.
Bronchetti--1,000, $11,875; and Mr. Reagan--1,000, $11,875. Subject to
approval of the Plan by the Company's stockholders, 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 his annual salary,
including bonus, or the individual terminates employment with the Company.
Restricted stock holdings which are 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. The balance of the reported bonus was paid in
cash.
(2) In 1992, 1993 and 1994 Messrs. Frankino, Holt, Zackaroff,
Bronchetti and Reagan had their term life and accidental death and
disability ("AD&D") insurance premiums paid for by the Company. For each of
these three years the premiums were $120 for term life and $36 for AD&D.
In 1992, 1993 and 1994 the Company contributed to Messrs. Frankino's,
Holt's, Zackaroff's, Bronchetti's and Reagan's 401(k) Savings and
Retirement Plan and Trust Accounts in the following amounts: Mr. Frankino -
$1,586, $1,348 and $-0-; Mr. Holt - $1,586, $1,348 and $-0-; Mr. Zackaroff
- $920, $961 and $79; Mr. Bronchetti - $-0-, $847 and $96; and Mr. Reagan -
$765, $762 and $60.
In addition to the contributions noted above, in 1992, 1993 and 1994
Messrs. Frankino, Holt, Zackaroff, Bronchetti and Reagan received the
following additional allocations to their 401(k) Savings and Retirement
Plan and Trust Accounts: Mr. Frankino - $1,089, $790 and $2,160; Mr. Holt -
$1,089, $790 and $2,160; Mr. Zackaroff - $632, $563 and $1,385; Mr.
Bronchetti - $-0-, $497 and $1,492; and Mr. Reagan - $525, $444 and $1,110.
Executive officers who are Directors do not receive any additional
compensation for serving on the Board of Directors.
(3) These amounts reflect Mr. Bronchetti's compensation for fiscal year 1992
commencing with his date of employment, May 28, 1991.
</TABLE>
5
<PAGE> 8
STOCK PLANS
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 "Committee"), occupy a
professional or management position, were eligible to participate in the Agency
Rent-A-Car, Inc. 1983 Incentive 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 $.05 par value common stock ("Common Stock").
The 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 may be exercised, in whole or in part, prior to the expiration of
twelve (12) months following the date such option is granted. Twenty percent
(20%) of these options becomes exercisable one year after the grant date, and an
additional twenty percent (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 twelve (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.
During fiscal 1994, no options were granted to executive officers. The
Option Plan terminated on April 17, 1993.
For a discussion of the 1993 Equity Incentive Plan see Proposal to Adopt
the 1993 Equity Incentive Plan on page 12.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR-END AT YEAR-END
(#)(1) ($)
SHARES ACQUIRED VALUE --------------------- ----------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- - ---- --------------- -------- --------------------- ----------------
<S> <C> <C> <C <C>
Sam J. Frankino -0- $ -0- 102,150/15,250 $657,591/ 98,172
Terry W. Holt -0- -0- 125,940/50,250 765,433/225,047
Peter T. Zackaroff -0- -0- 27,924/23,575 159,199/102,639
Robert J. Bronchetti -0- -0- 8,000/17,000 34,750/ 72,125
Kelly W. Reagan 6,000 37,875 25,595/23,575 144,205/102,639
<FN>
- - ---------------
(1) Includes options with exercise prices ranging from $6.56 to $9.88.
</TABLE>
6
<PAGE> 9
BOARD'S COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
In evaluating the performance of all executive officers as a group, the
Company strives to achieve equitable compensation in a highly competitive
marketplace so as to retain and attract high caliber individuals, many of whom
are tenured professionals. Specific factors that the Executive Compensation
Committee evaluates include fleet utilization (the percentage of the Company's
fleet that is rented on a per diem basis), the aggregate fleet size and its
trending, net profit per car day, rental rates, the ratio of employees to fleet
size and the return on equity.
In addition, the Executive Compensation Committee has an opportunity to
frequently interface with all named executives in order to monitor and evaluate
their respective performance and contribution to the success of the Company.
Factors considered include initiative, innovation and the ability to meet the
overall objectives of the Company's business plan.
In reviewing and determining the compensation of Mr. Terry W. Holt, who was
President and Chief Executive Officer during the majority of fiscal 1994, and
Mr. Sam J. Frankino, Chairman of the Board and Chief Executive Officer at year
end, the Executive Compensation Committee applied all of the performance
criteria discussed above, as well as comparable market surveys for chief
executive officer's pay based on businesses in the Company's revenue size and
where available, data on competitive car rental industry salaries. This
comparison did not necessarily include any of the companies listed in the market
capitalization group listed in footnote 2 to the Stock Performance Graph on page
9.
The Executive Compensation Committee also sought to establish compensation
levels for Messrs. Frankino and Holt, as well as all executive officers which
reflected the Company's transition into the alternative financing market through
its wholly-owned subsidiary, National Auto Credit. In keeping with this cost
reduction transition strategy, the compensation of Messrs. Frankino and Holt
were reduced from last fiscal year. The remaining executives' compensation were
modestly increased in recognition of their leadership and success in
simultaneously downsizing the Company's rental operations while aggressively
growing National Auto Credit's market share.
Messrs. Frankino and Holt, as well as executive management as a group,
successfully met the objectives of the Company's business plan, which included
the downsizing of the Company's rental operations through the reduction of
fleet, office facilities and personnel. In addition, they simultaneously
increased the number of enrolled member dealers and finance receivables, as well
as their creation and implementation of numerous member dealer services.
The Company's Executive Compensation Committee also recommended to the
Board of Directors the adoption of the 1993 Equity Incentive Plan, which
provides in part for the award of restricted stock to certain key employees of
the Company. The terms and conditions of the Plan are more fully described at
page 12.
The recommendation to adopt the 1993 Equity Incentive Plan was based, at
least in part, on the Executive Compensation Committee's determination that it
is in the best interest of the Company and its stockholders to require executive
management to directly own and maintain an ownership interest in Company stock
in an amount not less than their annual salary, including bonus. As an initial
step in reaching this goal, the Executive Compensation Committee awarded
restricted stock to all executive officers in amounts ranging from 750 shares to
10,000 shares, as is more fully disclosed under the Summary Compensation Table.
These awards were based on the individual effort of each executive based upon
the factors listed above.
7
<PAGE> 10
The restrictions upon disposition of this stock lapse when each individual
has satisfied and maintained the stock ownership requirements stated above, or
has terminated his employment with the Company. Restricted stock holdings which
are 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. Each officer's cash bonus was reduced in light of the
award of restricted stock and no executive officer was awarded stock options.
On June 30, 1993, the Board of Directors appointed Mr. Joseph P. Henley to
the Compensation Committee.
Respectfully submitted,
Noah T. Herndon, Chairman
Per E. Hoel
Joseph P. Henley
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The graph provided below compares the Company's cumulative stockholder
return with that of the NASDAQ Market Index (U.S. only) and all thirty-eight
(38) companies of a sub-group of the Russell 2000 Consumer Discretionary and
Services Group for a period of five (5) fiscal years commencing January 31, 1989
and ending January 31, 1994.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN(1) (3)
AGENCY RENT-A-CAR, INC., NASDAQ MARKET
INDEX (U.S. ONLY), AND MARKET CAPITALIZATION GROUP(2)
<TABLE>
<CAPTION>
AGENCY
MEASUREMENT PERIOD RENT-A-CAR, MARKET CAP. NASDAQ STOCK
(FISCAL YEAR COVERED) INC. GROUP MRKT - U.S.
<S> <C> <C> <C>
1/89 100 100 100
1/90 70 111 105
1/91 58 109 108
1/92 84 134 166
1/93 56 141 187
1/94 96 171 214
<FN>
- - ---------------
(1) The above graph assumes an investment of $100 on January 31, 1989,
including reinvestment of all dividends, and indicates the appreciation of
or depreciation of each investment over a five (5) year period. The
historical stock performance depicted on the graph is not necessarily
indicative of future performance.
(2) The Company believes it is unique and that there are no published
industry or line of business indexes available for comparison purposes and
that no other company exists which the Company can, in good faith, utilize
as comparator. Consistent with last year all companies of the Russell 2000
Consumer Discretionary and Services Group (sub-classification
"miscellaneous services") were selected as a result of their similar
average market capitalization of $197 million. The Company believes that
this group yields the most similar comparison in evaluating the Company's
stock inasmuch as it is comprised of companies whose core business is
service oriented and subject to similar market influences.
</TABLE>
9
<PAGE> 12
This group includes Adia Services Inc., Advo Inc., Agency Rent-A-Car
Inc., American Building Maintenance Industries Inc., Anthem Electronics
Inc., Arch Communications Group, Barefoot Inc., Bolt Beranek & Newman Inc.,
Borg-Warner Security Corporation, CDI Corporation, CPI Corporation, CRSS
Inc., Corrections Corporation of America, Education Alternatives Inc.,
Enterra Corporation, Executive Telecard Ltd., Fair Issac & Company, Foote
Cone & Belding, Franklin Quest Company, G & K Services Inc., GRC
International Inc., Gilbert Associates Inc., Greiner Engineering Inc., Grey
Advertising Inc., Healthcare Services Group Inc., Merrill Corporation, PCA
International Inc., Pinkertons Inc., Roto Rooter Inc., Safecard Services
Inc., Stone & Webster Inc., Supercuts Inc., TRM Copy Centers Corporation,
Unifirst Corporation, Vallen Corporation, Volt Information Sciences Inc.,
WD-40 Company and Wackenhut Corporation.
(3) Notwithstanding anything to the contrary contained in any document
filed by the Company with the Securities and Exchange Commission or
elsewhere, this graph 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 or the Exchange Act, except to the
extent the Company specifically incorporates this graph.
10
<PAGE> 13
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 May 13, 1994, 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 OWNED(1) (2) OUTSTANDING
- - --------------------- ----------------- ----------------
<S> <C> <C>
Sam J. Frankino 14,276,010 54.50%
30000 Aurora Road
Solon, Ohio 44139
<FN>
- - ---------------
(1) Mr. Frankino has both sole voting and investment power with respect
to the shares listed. In addition, 208,015 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 102,150 shares which may be acquired pursuant to the
Company's 1983 Incentive Stock Option Plan (see Stock Plans on page 6).
</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 May 13, 1994 by all Directors,
by the nominees for election as Director of the Company, by each of the five
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...................... 14,276,010(2) 54.50%
Robert J. Bronchetti................. 9,200(2) *
Edward A. Burkhart................... 28,526(2) *
Terry W. Holt........................ 130,814(2)(3) *
Kelly W. Reagan...................... 32,091(2) *
Peter T. Zackaroff................... 30,352(2) *
Per E. Hoel.......................... 2,000 *
Joseph P. Henley..................... 1,000 *
Noah T. Herndon...................... 2,000 *
Edward N. Leszczynski................ 2,000 *
All Officers and
Directors as a
Group (15)........................... 14,557,975(2) 55.58%
<FN>
- - ---------------
* less than 1.0%
</TABLE>
11
<PAGE> 14
(1) Unless otherwise indicated, each person has sole voting and
investment power with respect to the shares shown as beneficially owned by
such person.
(2) Includes shares which may be acquired pursuant to the Company's
1983 Incentive Stock Option Plan (see Stock Plans on page 6).
<TABLE>
<S> <C>
Mr. Frankino.................................................... 102,150
Mr. Bronchetti.................................................. 8,000
Mr. Burkhart.................................................... 27,102
Mr. Holt........................................................ 125,940
Mr. Reagan...................................................... 25,595
Mr. Zackaroff................................................... 27,924
The fifteen executive officers
and Directors as a group........................................ 356,136
<FN>
(3) Mr. Terry W. Holt resigned from the Board of Directors and as
President and Chief Operating Officer in March 1994.
</TABLE>
PROPOSAL TO ADOPT THE 1993 EQUITY INCENTIVE PLAN
The Board of Directors recommends that the stockholders approve the
adoption of the 1993 Equity Incentive Plan ("Plan") and the reservation of two
million (2,000,000) shares of the Company's Common Stock for use under the Plan.
This Plan would replace the 1983 Stock Option Plan, which expired on April 17,
1993. A copy of the 1993 Equity Incentive Plan is attached as Exhibit "A" to
this Proxy Statement, and the following summary of the Plan is qualified in its
entirety by reference thereto.
The Company believes that stock ownership by the officers and employees of
the Company contributes to the development and maintenance of strong management
as well as assists the Company in attracting and retaining persons of the
highest caliber.
At the Annual Meeting of Stockholders held in June, 1984, the stockholders
approved the 1983 Stock Option Plan ("1983 Plan") which permitted the grant of
stock options. As of May 13, 1994, 881,105 shares were covered by outstanding
options under the 1983 Plan. Presently, no stock options may be granted under
the 1983 Plan. Options which were outstanding on April 17, 1993 will continue in
effect in accordance with their terms.
With the expiration of the 1983 Plan, the Board of Directors believes that
it would be in the Company's best interests to adopt a new Equity Incentive
Plan. The Plan generally provides for the granting of the following types of
awards to certain key employees of the Company: Incentive Stock Options
("ISOs"), Non-Qualified Stock Options ("NQSOs") (ISOs and NQSOs are sometimes
referred to herein collectively as "Stock Options"), Stock Appreciation Rights
("SARs"), Common Stock ("Stock Awards"), and Restricted Common Stock
("Restricted Stock Awards") (all of which are sometimes referred to herein
collectively as "Awards"). 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 1983 Plan or the plan of any
acquired entity. The Plan became effective as of December 9, 1993, the date of
its adoption by the Board of Directors of the Company, subject to the subsequent
approval by the stockholders of the Company. No award made prior to stockholder
approval of the Plan is enforceable until such stockholder approval has been
obtained.
12
<PAGE> 15
The Plan provides that not more than two million (2,000,000) shares of the
Company's Common Stock, par value $.05 per share, 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. In the event of a stock split,
stock dividend or other relevant change in capitalization, the maximum number of
shares issuable under the Plan, as well as the number of shares subject to any
grant theretofore made, would be appropriately adjusted to give effect to such
change. Shares awarded pursuant to grants which, by reason of the expiration,
cancellation or other termination of the grants prior to issuance, are not
issued, shall again be available for future grants.
The grants under the Plan may be made to officers and other employees of
the Company and its subsidiaries as well as any former employee of the Company
eligible to receive an assumed or replacement award or award settlement as
contemplated by the Plan. The Plan is to be administered by the Executive
Compensation Committee of the Board of Directors which is comprised of two or
more non-employee Directors, all of whom must be "disinterested persons" as
defined under the Plan ("Committee"). The Committee consists of Messrs. Henley,
Herndon and Hoel. Such committee will select the employees to whom grants are to
be made and determine the form of the grant.
The Board of Directors may amend or terminate the Plan in any respect
except that no amendment may be made without stockholder approval, if such
amendment would increase the maximum number of shares available for issuance
under the Plan or cause transactions under the Plan to cease to qualify as
exempt transactions under either the Securities and Exchange Act of 1934 or
Internal Revenue Code of 1986, as amended ("Code").
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.
The three part program is as follows:
1) STOCK OPTIONS -- Options to purchase shares of common stock of the
Company may be granted to eligible employees. The exercise period of
Stock Options as either ISOs or NQSOs may be set by the Committee, but
cannot be more than ten years and one day from the date of grant, unless
the grant is to a person who owns more than ten percent (10%) of the
Company's combined voting power, in which case such option must be
exercised within five years from the date of the grant. In no event may
the aggregate fair market value of shares of Common Stock for which an
employee may first exercise ISOs in any calendar year exceed $100,000 or
such other limit as may be imposed under the Code. With respect to the
grant of stock options under the Plan which are intended to qualify as
"incentive stock options" under Section 422(A) of the Code, the option
price shall be 100% of the fair market value of the Company's Common
Stock on the date of the grant of the Stock Option. Non-Qualified Stock
Options must have an option price which is not less than the amount
allowed by applicable law, which option price may be less than the Fair
Market Value on the day of grant. In the case of a stock option granted
retroactively in tandem with or as a substitution for another award, the
exercise price may not be lower than the Fair Market Value on the date
of grant.
For Incentive Stock Options granted to a person who owns, directly or
indirectly, more than ten percent (10%) of the Common Stock of the
Company, the option price shall be at least one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock subject to the
option.
13
<PAGE> 16
Regardless of the type of option, upon exercise, (1) the option price
may be paid in cash; (2) in shares of Common Stock of the Company having
a fair market value equal to the option price; (3) surrendering a stock
award at fair market value on the date of surrender; (4) authorizing a
third party to sell Common Stock acquired upon exercise of a stock
option and assigning the delivery to the Company of a sufficient amount
of the sale proceeds to pay for the Common Stock acquired through such
exercise; or (5) any combination of the above. Options will not be
transferable except in the event of the death of an optionee or pursuant
to a qualified domestic relations order.
2) STOCK APPRECIATION RIGHTS -- The Committee may award SARs on such terms
and conditions as it deems appropriate. A SAR is a right to receive a
payment, in cash and/or Common Stock (as determined by the Committee),
equal to an amount by which the fair market value of the number of
shares of Common Stock granted in the award agreement on the date of
exercise exceeds the fair market value of those shares on the date the
SAR is granted. If a SAR is granted retroactively in tandem with or as a
substitution for another award, the exercise or designated price may be
no lower than the fair market value of a share of Common Stock on the
date such other award was granted.
3) STOCK AWARDS -- The Committee may award Stock Awards and Restricted Stock
Awards. Stock Awards are awards made or denominated in shares of Common
Stock or units equivalent in value to shares of Common Stock. Restricted
Stock Awards are awards made or denominated in shares of Common Stock or
units equivalent in value to shares of Common Stock, which are subject to
conditions and restrictions established by the Committee, and set forth
in the award agreement. Such restrictions may include, without
limitation, continuous service with the Company, achievement of specific
business objectives and other measurements of individual, business unit
or Company performance and stock price objective.
Under Delaware law, if a quorum is present at the meeting, the affirmative
vote of a majority of the shares present in person or by proxy and entitled to
vote is required to approve the Plan. Mr. Frankino, the majority stockholder of
the Company, intends to vote for the approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL
TO APPROVE THE 1993 EQUITY INCENTIVE PLAN.
PROPOSAL TO CHANGE THE COMPANY'S NAME
The Board of Directors recommends that the stockholders approve the
amendment of the Company's Restated Articles of Incorporation changing the name
of the Company from Agency Rent-A-Car, Inc. (AGNC) to National Auto Credit, Inc.
(NACC).
The Company believes that the proposed name change is representative of its
commitment to develop National Auto Credit to its fullest potential and signals
the completion of the Company's strategic diversification plan. The Board of
Directors also believes that the Company's ability to engage and sustain
financial coverage of the Company's progress by analysts and investors, both
institutional and individual, will be greatly enhanced.
The name National Auto Credit, Inc. has been reserved nationally to
accommodate the change. Additionally, the new stock symbol "NACC" has been
reserved with NASDAQ National Market System to reflect the new Company name.
14
<PAGE> 17
The Board of Directors reserves the right to abandon the change in name,
whether before or after stockholder approval has been obtained, if circumstances
arise, which in the opinion of the Board of Directors, render proceeding with
the name change inadvisable.
The name change will not affect the validity or transferability of stock
certificates presently outstanding, the capital structure of the Company or the
listing of any of its securities on any national securities exchange. The
Company's stockholders will not be required to surrender for exchange any
certificates presently held by them. The Company's stockholders desiring to
exchange Agency Rent-A-Car stock certificates for National Auto Credit stock
certificates may do so, however, by mailing their Agency Rent-A-Car stock
certificates with an appropriate written request to the Company's transfer
agent, at the following address: Chemical Bank, JAF Building, P. O. Box 3068,
New York, NY 10116-3068.
Under Delaware law, if a quorum is present at the meeting, the affirmative
vote of a majority of the shares present in person or by proxy and entitled to
vote is required to approve the amendment. Mr. Frankino, the majority
stockholder of the Company, intends to vote for the approval of the amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL
TO CHANGE THE COMPANY'S NAME.
CERTAIN TRANSACTIONS
Adverama, Inc. provides the Company with placement of Yellow Pages
directory advertising, printing services, and promotional items. These
transactions amounted to $6,221,000 during fiscal 1994. 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 which are as favorable as could be obtained from
unaffiliated vendors. The amount payable to Adverama, Inc. was $918,000 at
January 31, 1994. The Company plans to continue to utilize Adverama's services.
The Company has a Mortgage Assistance Plan (the "Mortgage Plan") whereby an
officer or key management employee of the Company who is required by the Company
to relocate from his or her present location to a new work site, which
relocation involves a distance between the employee's present location and the
new work site of more than 50 miles, is eligible for a loan under the Mortgage
Plan. Loans under the Mortgage Plan are only for the purchase of the eligible
employee's first personal residence following relocation and are secured by a
mortgage on such residence. The interest rate on all loans under the Mortgage
Plan is at a fixed annual market rate of 7.5% of the outstanding principal
balance. The following employees are indebted to the Company under the Mortgage
Plan for their personal residences as of May 13, 1994: Mr. Holt and one other
employee for $161,400 and $85,500, respectively. In addition, the Company loaned
Mr. Reagan a total of $76,104 at an interest rate of 7.5% per annum for a six
month duration during the construction of his personal residence. Repayment of
the loan was extended to June 30, 1994. The loan is secured by Company stock
owned by Mr. Reagan and remains outstanding as of May 13, 1994.
The highest amounts owed to the Company since the beginning of fiscal 1994
by Mr. Holt, Mr. Reagan and the other employee were $351,000, $223,000 and
$133,000, respectively.
INDEPENDENT AUDITORS
Deloitte & Touche has been selected to serve as the independent auditors of
the Company and its subsidiaries for the fiscal year ending January 31, 1995.
Representatives of Deloitte & Touche are expected to
15
<PAGE> 18
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.
STOCKHOLDER PROPOSAL
Any stockholder who intends to present a proposal at the 1995 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 January 3, 1995. 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.
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 incurred 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 three nominees as set forth under "ELECTION OF DIRECTORS," for the
1993 Equity Incentive Plan and for the Company's name change.
The presence of any stockholder at the meeting will not operate to revoke
his 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.
PETER T. ZACKAROFF, EXECUTIVE VICE
PRESIDENT, CHIEF LEGAL OFFICER
AND SECRETARY
May 20, 1994
16
<PAGE> 19
EXHIBIT A
AGENCY RENT-A-CAR INC.
1993 EQUITY INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN. Agency Rent-A-Car,
Inc., a Delaware corporation, and its subsidiaries ("Company"), hereby
establishes the "Agency Rent-A-Car, Inc. 1993 Equity Incentive Plan" ("Plan")
for key employees of the Company. The Plan permits the grant of qualified stock
options, non-qualified stock options, stock appreciation rights, and stock
awards.
2. PURPOSE. The purpose of the Plan is to promote the long-term success of
the Company and thereby enhance shareholder value, by providing officers and
other employees of the Company with incentive awards, tied to the equity of the
Company, which reward performance and continued service with the Company. Both
by encouraging such employees to become owners of the $.05 par value Common
Stock ("Common Shares") of the Company and by providing actual ownership through
Plan awards, it is intended that Plan participants will view the Company from an
ownership perspective. Additionally, the Company believes the Plan will assist
in attracting and retaining persons of the highest caliber.
3. EFFECTIVE DATE. The Plan shall become effective as of December 9, 1993,
the date of its adoption by the Board of Directors of the Company, subject to
the subsequent approval by the necessary number of shareholders of the Company.
No award made prior to shareholder approval of the Plan shall be enforceable
until such approval has been obtained. Nothing herein shall be construed as
limiting the rights of the Committee to grant awards prior to the approval of
the shareholders.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee (the "Committee"), appointed by the Board, subject to the provisions
of the Plan. The Committee shall be comprised of two or more non-employee
members of the Board who shall qualify to administer the Plan as contemplated by
(a) both Rule 16b-3 and Item 402(i) under the Securities and Exchange Act of
1934 (the "1934 Act") or any successor rule and (b) Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Committee shall have
full and exclusive authority to interpret the Plan and to adopt such rules,
regulations and guidelines for carrying out the Plan as it may deem necessary or
proper to execute in the best interests of the Company and in keeping with the
objectives of the Plan. This authority includes, but is not limited to,
selecting award recipients, establishing all award terms, conditions and
restrictions and determining the number of Common Shares covered by each award.
The Committee may also grant awards as may be necessary to comply with
provisions of the laws and applicable regulatory rulings of countries in which
the Company operates in order to assure the viability of awards granted under
the Plan and to enable participants employed in such countries to receive
advantages and benefits intended under the Plan and such laws and rulings. The
Committee shall also prescribe the forms of the instruments evidencing any
awards granted; adopt, amend and rescind rules and regulations for the
administration of the Plan; construe and interpret the Plan, the rules and
regulations and the instruments; and make all other determinations necessary or
desirable for the administration of the Plan.
5. ELIGIBILITY. Any employee of the Company may be eligible to receive one
or more awards under the Plan. "Employee" shall also include any former employee
of the Company eligible to receive an assumed or replacement award or award
settlements as contemplated in Sections 8 and 10 of the Plan, and "Company"
includes any entity that is directly or indirectly controlled by the Company or
any entity in which the Company has a significant equity interest, as determined
by the Committee.
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<PAGE> 20
6. COMMON SHARES AVAILABLE FOR AWARDS. Subject to the provisions of
Section 10, the aggregate number of Common Shares that may be issued or
transferred under this Plan shall be 2,000,000 shares. Common Shares subject to
an award under the Plan which expires, terminates or is cancelled without
exercise or vesting shall thereafter be available for the grant of other awards.
Any Common Shares tendered, either actually or by attestation, by a person as
full or partial payment made to the Company on or after the effective date of
the Plan in connection with any exercise of a stock option or receipt of Common
Shares under the Plan shall again be available for grants under the Plan.
Further, in instances where a SAR or other award is settled in cash or a form
other than shares, the Common Shares covered by such settlements shall not be
deemed issued and shall remain available for issuance under the Plan. Likewise
the payment of cash dividends and dividend equivalents in conjunction with
outstanding awards shall not be counted against the Common Shares available for
issuance. Any Common Shares that are issued by the Company, and any awards that
are granted by, or become obligations of, the Company, through the assumption by
the Company or an affiliate of, or in substitution for, outstanding awards
previously granted by an acquired company shall not, except in the case of
awards granted to employees who are subject to Section 16 of the 1934 Act or
Section 162(m) of the Code, be counted against the Common Shares available for
issuance under the Plan.
Any shares issued under the Plan may consist in whole or in part of
authorized and unissued shares or treasury shares, and no fractional shares
shall be issued under the Plan. Cash may be paid in lieu of any fractional
shares in settlements of awards under the Plan.
7. FAIR MARKET VALUE. "Fair Market Value" for all purposes under the Plan
shall mean the closing price of a Common Share as reported by the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ") on the date of grant. If no sales of shares were made on such date,
the closing price of a share as reported for the preceding day on which sales of
Common Shares were made shall be used. If the Common Stock ceases to be listed
on the NASDAQ, the Committee shall designate an alternative method of
determining the Fair Market Value of the Common Stock.
8. AWARDS. The Committee shall determine the type or types of award(s) to
be made to each participant. Awards may be granted singly, in combination or in
tandem. Subject to Section 4 of the Plan, awards also may be made in combination
or in tandem with, in replacement of, as alternatives to, or as the payment form
for grants or rights under any other employee or compensation plan of the
Company, including the Company's 1983 Stock Option Plan (the "Prior Plan") or
the plan of any acquired entity. The Committee may establish performance
contingencies for the vesting of stock options and stock appreciation rights
("SARs"), as well as stock awards, granted under Plan. In addition, Common
Shares acquired by a Plan participant may be subject to forfeiture and/or
nontransferability restrictions. The types of awards that may be granted under
the Plan are:
(a) Stock Options -- A grant of a right to purchase a specified number of
Common Shares during a specified period as determined by the Committee. A stock
option may be in the form of an incentive stock option within the meaning of
Code Section 422A ("ISO"), or a nonqualified stock option whose grant is
intended not to fall within the provisions of Section 422A ("NQSO"). However, in
no event shall the aggregate Fair Market Value (determined at the date of grant)
of the stock of which incentive stock options are first exercisable in a
particular calendar year exceed $100,000, or such other limit as may be required
by the Code. Nothing in this Section shall be deemed to prevent the grant of
NQSOs in excess of the maximum established by Section 422A of the Code.
Stock Options granted as ISOs shall have an Option Price that is equal to
the Fair Market Value of the Common Stock on the date the Option is granted. An
ISO, however, shall only be granted to a person who owns, directly or
indirectly, Common Stock possessing more than ten percent (10%) of the total
combined
A-2
<PAGE> 21
voting power of all classes of Common Stock of the Company, if the price of any
such Option is at least one hundred and ten percent (110%) of the Fair Market
Value of the Common Stock subject to the Option. NQSOs granted as Stock Options
must have an option price which is not less than the amount allowed by
applicable law, which Option Price may be less than the Fair Market Value on the
day of grant. Notwithstanding the foregoing, in the case of a stock option
granted retroactively in tandem with or as a substitution for another award, the
exercise or designated price may be no lower than the Fair Market Value of a
share on the date such other award was granted.
The price at which a Common Share may be purchased under a stock option
shall be paid in full at the time of the exercise in cash or such other method
permitted by the Committee, including (i) tendering (either actually or by
attestation) shares; (ii) surrendering a stock award valued at Fair Market Value
on the date of surrender; (iii) authorizing a third party to sell the Common
Shares (or a sufficient portion thereof) acquired upon exercise of a stock
option and assigning the delivery to the Company of a sufficient amount of the
sale proceeds to pay for all the Common Shares acquired through such exercise;
or (iv) any combination of the above. The Committee may grant stock options that
provide for the award of a new stock option when the exercise price has been
paid for by tendering Common Shares to the Company. This new stock option grant
would cover the number of shares tendered with the stock option purchase price
set at the then-current Fair Market Value and would not extend beyond the
remaining term of the originally exercised option.
The exercise period of stock options as either ISOs or NQSOs may be set by
the Committee, but cannot be more than ten years and one day from the date of
grant, unless the grant is to a person who owns more than ten percent (10%) of
the Company's combined voting power, in which case such option must be exercised
within five years from the date of grant. If a participant's employment is
terminated due to resignation, retirement, death or disability, stock options
awarded to the participant which have vested will remain exercisable for the
earlier of the remainder of the option term or a period of time as follows,
whichever is less: if due to resignation or retirement, three months; if due to
disability (as determined by the Committee), twelve months; and if due to death,
six months. The Committee has the discretion to allow the participant to
exercise more than the amount then vested. If a participant's employment is
terminated for any reason other than resignation, retirement, death or
disability, all stock options granted but not vested under the Plan will be
cancelled immediately and the vested portion will be exercisable the earlier of
the remainder of the option term or three months. A participant will not be
considered terminated if placed by the Company on military leave, sick leave or
other bona fide leave of absence.
(b) SARS -- A right to receive a payment, in cash and/or Common Shares,
equal to the excess of the Fair Market Value of a specified number of Common
Shares on the date the SAR is exercised over the Fair Market Value on the date
the SAR was granted as set forth in the applicable award agreement, except that,
in the case of a SAR granted retroactively in tandem with or as a substitute for
another award, the exercise or designated price may be no lower than the Fair
Market Value of a Common Share on the date such other award was granted.
(c) Stock Awards -- An award made or denominated in Common Shares or units
equivalent in value to Common Shares. All or part of any stock award may be
subject to conditions and restrictions established by the Committee and set
forth in the award agreement, which may include, but are not limited to,
continuous service with the Company, achievement of specific business objectives
and other measurements of individual, business unit or Company performance and
stock price objectives.
9. DIVIDENDS AND DIVIDEND EQUIVALENTS. The Committee may provide that any
awards under the Plan earn dividends or dividend equivalents equal to dividends
paid to holders of Common Shares of the Company.
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<PAGE> 22
Such dividends or dividend equivalents may be paid currently or may be credited
to a participant's account. Any crediting of dividends or dividend equivalents
may be subject to such restrictions and conditions as the Committee may
establish, including reinvestment in additional Common Shares or share
equivalents which are also subject to award contingencies.
10. SETTLEMENTS AND DEFERRALS. Payment of awards may be in the form of
cash, Common Shares, other awards, or combinations thereof, as the Committee
shall determine, and any such payment may be subject to terms, conditions and
restrictions as the Committee may impose. The Committee also may require or
permit participants to elect to defer the issuance of Common Shares or the
settlement of awards in cash under such rules and procedures as it may establish
under the Plan. It also may provide that deferred settlements include the
payment or crediting of interest on the deferral amounts, or the payment or
crediting of dividend equivalents where the deferral amounts are denominated in
shares.
11. NON-TRANSFERABILITY. Awards granted under the Plan shall be
non-transferable and non-assignable except by will or the laws of descent and
distribution, or pursuant to a qualified domestic relations order (as defined by
the Code).
12. NO RIGHTS TO EMPLOYMENT. Neither the Plan nor any award granted under
it shall alter the terms of employment for any participant or the right of the
Company to terminate the employment of any participant.
13. ADJUSTMENTS. The Committee may make or provide for such adjustments in
the price and in the number of Common Shares covered by outstanding awards as
the Committee in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of
participants that would otherwise result from (a) any stock dividend, stock
split, combination of shares, issuance of rights or warrants to purchase stock,
recapitalization of other change in the capital structure of the Company; (b)
any merger, consolidation, separation, reorganization, or partial or complete
liquidation; or (c) any other corporate transaction, including a spin-off, or
event having an effect similar to any of the foregoing.
14. TAX WITHHOLDING. Any compensation income realized or recognized 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 require that the
participant pay such withholding amount in cash directly to the Company or
subsidiary. The Committee shall have the right to retain, rather than issue or
transfer to the participant, the number of shares having a Fair Market Value
equal to the required withholding amount. In a situation where Common Shares are
issued in a participant's name, but held by the Company until vesting, the
Committee shall have the right to retain the number of shares with a Fair Market
Value equal to the required tax withholding amount due upon vesting. In any
case, the Committee may in its discretion satisfy the withholding requirement by
causing the entity or a subsidiary employing the officer or other key employees
to withhold the appropriate amount of any and all of such taxes from any other
compensation otherwise payable to the officer or other employee.
15. AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors may at
any time amend or terminate the Plan, provided that approval by the shareholders
of the Company shall be required for any amendment which would (a) in the
absence of such shareholder approval, cause transactions under the Plan to cease
to qualify as exempt transactions under either Rule 16b-3 of the 1934 Act, or
any successor rule, or Section 162(m) of the Code, or (b) increase the maximum
number of shares subject to the Plan.
16. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Unless otherwise
specifically determined by the Committee, settlements of awards received by
participants under the Plan shall not be deemed a part of a participant's
regular, recurring compensation for purposes of calculating payments or benefits
from any
A-4
<PAGE> 23
Company benefit plan, severance program, or severance pay law of any country.
Further, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.
17. UNFUNDED PLAN. Unless otherwise determined by the Board, the Plan shall
be unfunded and shall not create (or be construed to create) a trust or a
separate fund or funds. The Plan shall not establish any fiduciary relationship
between the Company and any participant or other person. To the extent any
person holds any rights by virtue of an award granted under the Plan, such
rights (unless otherwise determined by the Committee) shall be no greater than
the rights of an unsecured general creditor of the Company.
A-5
<PAGE> 24
AGENCY RENT-A-CAR, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
JUNE 22, 1994 ANNUAL MEETING OF STOCKHOLDERS
P
The undersigned hereby appoints Robert J. Bronchetti and
R Noah T. Herndon, and each of them with full power of
substitution and resubstitution as proxies for the undersigned
O to attend the Annual Meeting of Stockholders of Agency
Rent-A-Car, Inc., to be held at the Company's principal
X executive offices, 30000 Aurora Road, Solon, Ohio at
10:00 A.M. (Eastern Daylight Savings time) on June 22, 1994,
Y and thereat, and at 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:
Date: ______________________, 1994
Signature(s) of Stockholder(s): __________
__________________________________________
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.
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.
(OVER)
<PAGE> 25
<TABLE>
<CAPTION>
<S> <C>
X PLEASE MARK
EACH VOTE
LIKE THIS
</TABLE>
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 AND FOR ITEMS 2 AND 3 BELOW.
<TABLE>
<CAPTION>
FOR WITHHOLD
ALL FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. ELECTION OF DIRECTORS: PER E. HOEL, / / / / 2. Proposal to approve the / / / / / /
EDWARD N. LESZCZYNSKI AND Company's 1993 Equity In-
KELLY W. REAGAN centive Plan.
FOR AGAINST ABSTAIN
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR
ANY INDIVIDUAL NOMINEE, WRITE THE NOMINEE'S NAME ON 3. Proposal to approve the / / / / / /
THE SPACE PROVIDED BELOW.) Company's name change to
NATIONAL AUTO CREDIT,
_________________________________________________________ INC.
4. In their discretion, to vote
upon such other business
as may properly come
before the meeting.
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 name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
</TABLE>
