<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NATIONAL AUTO CREDIT
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NATIONAL AUTO CREDIT
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
NATIONAL AUTO CREDIT, INC.
30000 Aurora Road
Solon, Ohio 44139
November 28, 1995
Dear Stockholder:
You are cordially invited to attend a special meeting of
Stockholders of National Auto Credit, Inc. (the "Company") to be held on
December 27, 1995, at 10:00 a.m. (local time) (the "Special Meeting") at 30000
Aurora Road, Solon, Ohio 44139.
At the Special Meeting, holders of the common stock, $.05 par
value, of the Company (the "Common Stock") will be asked to consider and vote
upon a proposal to amend Article SIXTH of the Certificate of Incorporation of
the Company to eliminate the requirement of a stockholder vote in connection
with a merger or consolidation of the Company or disposition of assets by the
Company, except as required by the General Corporation Law of the State of
Delaware and except in connection with a "Business Combination" with an
"Interested Person" as such terms are defined in Article SIXTH.
Your Board of Directors believes that the proposal to amend and
restate Article SIXTH of the Certificate of Incorporation is in the best
interests of the Company's stockholders.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE PROPOSAL. TO APPROVE THE PROPOSED AMENDMENT, THE HOLDERS OF AT LEAST
TWO-THIRDS OF THE OUTSTANDING SHARES OF THE COMMON STOCK MUST APPROVE THE
PROPOSAL. AN ABSTENTION OR FAILURE TO VOTE HAS THE SAME EFFECT AS A VOTE
AGAINST THE PROPOSAL. IT IS, THEREFORE, IMPORTANT THAT YOU VOTE ON THE
PROPOSAL.
A Proxy is enclosed for your use. Please indicate your voting
instructions and sign, date and mail this Proxy promptly in the return envelope
provided. Whether or not you plan to attend the Special Meeting in person, it
is important to return the enclosed Proxy so that your shares of the Common
Stock will be voted.
Sincerely,
Sam J. Frankino
Chairman of the Board
<PAGE> 3
NATIONAL AUTO CREDIT, INC.
30000 Aurora Road
Solon, Ohio 44139
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 27, 1995
Notice is hereby given that a Special Meeting of Stockholders of
National Auto Credit, Inc. (the "Company"), will be held at the principal
executive offices of the Company, 30000 Aurora Road, Solon, Ohio 44139, on
December 27, 1995, at 10:00 a.m. (local time) (the "Special Meeting"), for the
following purposes:
1. To amend Article SIXTH of the Certificate of Incorporation of
the Company to eliminate the requirement of a stockholder vote
in connection with a merger or consolidation of the Company or
a disposition of assets by the Company, except as required by
the General Corporation Law of the State of Delaware and
except in connection with a "Business Combination" with an
"Interested Person" as such terms are defined in Article
SIXTH; and
2. To transact such other business as may properly come before
the meeting.
Only stockholders of record at the close of business on November 22,
1995, are entitled to notice of and to vote at the Special Meeting or any
adjournment or postponement thereof.
By order of the Board of Directors
Thomas J. Dostart
Vice President, General Counsel and Secretary
November 28, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED ENVELOPE.
ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY
AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL
MEETING.
<PAGE> 4
NATIONAL AUTO CREDIT, INC.
30000 Aurora Road
Solon, Ohio 44139
PROXY STATEMENT
This proxy statement is furnished to the holders of common stock, $.05
par value (the "Common Stock"), of National Auto Credit, Inc. (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of the
Company for use at a Special Meeting of the Company's stockholders to be held
on December 27, 1995, at the Company's principal executive offices, 30000
Aurora Road, Solon, Ohio 44139 and at any adjournments or postponements thereof
(the "Special Meeting").
The enclosed proxy, if completed and forwarded to the Company, will be
voted in accordance with the instructions contained therein. The proxy may be
revoked by the person giving it at any time before it is exercised. Such
revocation, to be effective, must be communicated to the Secretary of the
Company. The presence of a stockholder at the Special Meeting will not revoke
the proxy unless notice of revocation is given.
The Company will bear the cost of solicitation of proxies, including
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of Common Stock. In addition to the use of the
mails, proxies may be solicited in person, by telephone or by telegram through
the efforts of officers and regular employees of the Company, acting on its
behalf, and through ChemicalMellon Shareholder Services, L.L.C., which has been
retained by the Company for a fee of $4,500 plus an additional cost of $4.50
per stockholder solicited.
The close of business on November 22, 1995 (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, there were
[25,831,329] shares of Common Stock issued and outstanding. Record holders of
the Common Stock will be entitled to one vote per share. The Notice of Special
Meeting, this statement and the accompanying form of proxy are first being
mailed to stockholders on or about November 28, 1995.
The date of this Proxy Statement is November 28, 1995.
<PAGE> 5
SPECIAL MEETING OF STOCKHOLDERS
DATE, TIME AND PLACE
The Special Meeting will be held on December 27, 1995, commencing at
10:00 a.m. (local time), at the principal executive offices of the Company,
30000 Aurora Road, Solon, Ohio 44139.
PURPOSE OF THE MEETING
The purpose of the Special Meeting is to consider and vote upon a
proposal (the "Proposal") to amend Article SIXTH of the Certificate of
Incorporation of the Company to eliminate the requirement of a stockholder vote
in connection with a merger or consolidation of the Company or disposition of
assets of the Company, except as required by the General Corporation Law of the
State of Delaware ("DGCL") and except in connection with a "Business
Combination" transaction with or involving an "Interested Person" as such terms
are defined in Article SIXTH.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
The close of business on November 22, 1995 has been fixed by the Board
of Directors of the Company as the Record Date for the determination of holders
of shares of the Common Stock entitled to notice of and to vote at the Special
Meeting. As of November 22, 1995, there were approximately [25,831,329] shares
of Common Stock issued and outstanding, held by approximately _______
stockholders of record. Shares of Common Stock are the only outstanding voting
securities of the Company. Each holder of record is entitled to cast one vote
per share.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO ELIMINATE CERTAIN
STOCKHOLDER VOTING REQUIREMENTS
INTRODUCTION
The Board of Directors has unanimously approved and determined to
submit to the Company's stockholders the Proposal. Pursuant to the Proposal,
the Company would amend Article SIXTH of the Certificate of Incorporation of
the Company to eliminate the requirement of a stockholder vote in connection
with a merger or consolidation of the Company or disposition of assets of the
Company, except as required by the DGCL and except in connection with a
"Business Combination" with an "Interested Person" as such terms are defined in
Article SIXTH. Article SIXTH as presently in effect appears as Annex 1 hereto.
The Proposal would be effected by amending the first paragraph of Article SIXTH
as provided in Annex 2.
DISCUSSION
Article SIXTH of the Company's Certificate of Incorporation presently
requires an affirmative vote of the holders of two-thirds of the Common Stock
to authorize any merger or consolidation of the Company with or into any other
corporation, or any sale, lease, exchange or other disposition of all or
substantially all of the property or assets of the Company to or with
<PAGE> 6
any other corporation, person or entity. The Company is organized under the
DGCL which, in addition to the Company's Certificate of Incorporation, governs
the stockholder authorization necessary to effect such transactions. Pursuant
to the Proposal, Article SIXTH would be amended so that the DGCL alone would
determine those transactions, in addition to "Business Combinations" with
"Interested Persons," with respect to which stockholder approval is required.
The voting threshold required under Article SIXTH to authorize any transaction
upon which stockholder approval is required would continue to be the
affirmative vote of the holders of at least two-thirds of each class of stock
outstanding and entitled to vote at any meeting of stockholders.
With certain exceptions, the DGCL requires stockholder authorization
of any merger or consolidation of the Company with or into any other
corporation or entity. Those exceptions include (i) mergers of the Company
with a 90% or more owned subsidiary of the Company in accordance with Section
253 of the DGCL which is attached as Annex 3 hereto, (ii) certain mergers in
which the Company would be the surviving corporation and in which 20% or less
of the Company's authorized Common Stock would be issued or delivered in
accordance with Section 251(f) of the DGCL which is attached as Annex 4 hereto
and (iii) mergers effected to reorganize the Company into a holding company
structure by merging the Company with or into a direct or indirect wholly owned
subsidiary of the Company in accordance with Section 251(g) of the DGCL which
is attached as Annex 5 hereto. The DGCL requires stockholder authorization of
any sale, lease, exchange or other disposition of all or substantially all of
the property or assets of the Company to or with any other corporation, person
or entity.
EFFECTS OF AMENDMENT
The Proposal would eliminate the requirement of stockholder approval
under Article SIXTH with respect to certain classes of mergers described under
"Discussion" above which do not require stockholder authorization under the
DGCL. The Board of Directors of the Company believes that eliminating the
requirement of a stockholder vote in circumstances not required by law will
benefit the Company through increased administrative convenience and
flexibility with respect to those transactions which do not require a
stockholder vote under the DGCL.
Immediately following approval of the Proposal, the Company presently
intends to effect a merger pursuant to Section 251(g) of the DGCL in order to
create a holding company structure in which stockholders of the Company would
become stockholders of a holding company which owns all of the issued and
outstanding capital stock of the Company. The holding company transaction
should have no significant effect on the rights of any stockholders under the
DGCL. Following the holding company transaction, stockholders of the holding
company will be entitled to vote upon any transaction upon which stockholders
of the Company were entitled to vote prior to the holding company transaction.
The holding company transaction is anticipated to result in
substantial tax savings to the Company. The Company has been advised by its
tax advisor that stockholders will not recognize any gain or loss on the
holding company transaction. A vote in favor of the Proposal will not
constitute a ratification of or a vote in favor of the holding company
transaction and will not require the Company to effect any such transaction.
Even if the Proposal is approved by stockholders, the Company may choose not to
effect the holding company transaction.
3
<PAGE> 7
FORM OF AMENDMENT TO ARTICLE SIXTH
It is proposed that the first paragraph of Article SIXTH of the
Certificate of Incorporation of the Company, as set forth in Annex 1, be
amended as provided in Annex 2 and that the balance of Article SIXTH shall
remain in full force and effect. Annex 2A is marked to show the changes
proposed to the first paragraph of Article SIXTH pursuant to the Proposal.
VOTE REQUIRED; BOARD RECOMMENDATION
The affirmative vote of the holders of two-thirds of the shares of
Common Stock outstanding on the Record Date is required to approve the
Proposal. Abstentions and broker non-votes will have the same practical effect
as votes against the Proposal. As of October 31, 1995, the Company's directors
and executive officers and their affiliates beneficially owned 14,631,539 share
of Common Stock, which represents 56.21% of the outstanding Common Stock
entitled to vote at the Special Meeting. It is anticipated that the directors
and officers of the Company will vote their shares FOR the Proposal.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PROPOSAL AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST THE
PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
VOTING; SOLICITATION AND REVOCATION OF PROXIES
A holder of Common Stock may use the enclosed proxy to vote such
stockholder's shares if such stockholder is unable to attend the Special
Meeting in person or wishes to have those shares voted by proxy even if such
stockholder does attend the meeting. Any proxy given pursuant to this
solicitation may be revoked by such person appearing at the Special Meeting and
voting in person. All proxies validly submitted and not revoked will be voted
in the manner specified therein. If no specification is made, the proxies will
be voted in favor of the adoption of the Proposals.
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, whose Notice of Special Meeting is attached to this
Proxy Statement, and the entire cost of such solicitation will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors, officers and employees
of the Company. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation
material to the beneficial owners of stock held of record by such persons, and
the Company will reimburse them for reasonable expenses incurred by them in
connection therewith. The Company has engaged ChemicalMellon Shareholder
Services, L.L.C. to aid it in the solicitation of proxies. The costs of such
services are estimated at $4,500 plus an additional cost of $4.50 per
stockholder solicited.
APPRAISAL RIGHTS
Appraisal rights will not be available to holders of Common Stock in
connection with the Proposal.
4
<PAGE> 8
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 October 31, 1995,
of more than 5% of the outstanding Common Stock:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHARES OF COMMON STOCK PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIALLY OWNED1 2 OUTSTANDING
- ------------------ ---------------------- -----------------
<S> <C> <C>
Sam J. Frankino 14,501,275 55.88%
30000 Aurora Road
Solon, Ohio 44139
</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 October 31, 1995 by all
Directors, by each of the most highly compensated Executive Officers at the end
of the last fiscal year, certain current Executive Officers and by all officers
and Directors of the Company as a group:
__________________________________
1 Mr. Frankino has both voting and investment power with respect to the
shares listed. Of the shares shown above, 366,015 shares are held by the
Samuel J. and Connie M. Frankino Charitable Foundation, a qualified charitable
foundation, as to which Mr. and Mrs. Frankino share voting and investment
power. Mr. and Mrs. Frankino disclaim any beneficial interest in those shares.
2 Includes 117,400 shares which may be acquired within 60 days pursuant
to the Company's 1983 Stock Option Plan.
5
<PAGE> 9
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME AND COMMON STOCK CLASS
PRINCIPAL POSITION BENEFICIALLY OWNED1 2 OUTSTANDING
- ------------------ ------------------ -----------
<S> <C> <C>
Sam J. Frankino 14,501,275 55.88%
Chairman of the Board
Robert J. Bronchetti 28,700 *
President, Chief Executive
Officer and Director
Edward T. Anderson 3,681 *
Executive Vice President, Sales
Thomas J. Dostart 1,000 *
Vice President, General Counsel
and Secretary
Davida S. Howard 18,606 *
Vice President-Finance and
Controller
James E. Smith, Jr. 3,858 *
Vice President, Operations
and Director
Noah T. Herndon 4,000 *
Director
Per E. Hoel 2,000 *
Director
Edward N. Leszczynski 2,000 *
Director
</TABLE>
__________________________________
1 Unless otherwise indicated, each person has sole voting and investment
power with respect to the shares shown as beneficially owned by such person.
With respect to Mr. Frankino's beneficial ownership, see note 1 to the Security
Ownership of Certain Beneficial Owners and Management table.
2 Includes shares which may be acquired within 60 days pursuant to the
Company's 1983 Stock Option Plan and 1993 Equity Incentive Plan.
Mr. Frankino....................... 117,400
Mr. Bronchetti..................... 18,000
Mr. Anderson....................... 2,100
Ms. Howard......................... 14,100
Mr. Smith........................... 1,000
Mr. Burkhart....................... 35,677
The eighteen Executive Officers
and Directors as a group........... 197,477
* Less than 1.0%
6
<PAGE> 10
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAME AND COMMON STOCK CLASS
PRINCIPAL POSITION BENEFICIALLY OWNED OUTSTANDING
- ------------------ ------------------ -----------
<S> <C> <C>
Edward A. Burkhart3 42,763 *
Joseph P. Henley3 2,000 *
Kelly W. Reagan3 0 *
David R. Thompson3 0 *
Peter T. Zackaroff3 4,024 *
All Officers and
Directors as a
Group (18) 14,631,539 56.21%
</TABLE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be in the proxy statement for the
1996 annual meeting of stockholders must be received by The Company at its
principal executive offices not later than January 22, 1996. The Company will
not be required to include in its proxy statement or form of proxy a
stockholder proposal which is received after that date or which otherwise fails
to meet requirements for stockholder proposals established by regulations of
the Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented at the Special Meeting. Should any other matter requiring the vote
of the stockholders arise at the Special Meeting, the enclosed proxy confers on
proxy holders discretionary authority to vote the same in respect to the
resolution of such other matters as they, in their best judgment, believe to be
in the interest of the Company.
By Order of the Board of Directors
Thomas J. Dostart
Vice President, General Counsel and Secretary
November 28, 1995
__________________________________
3 These individuals resigned from their positions subsequent to year end
(January 31, 1995).
7
<PAGE> 11
ANNEX 1
ARTICLE SIXTH
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL AUTO CREDIT, INC.
A-1
<PAGE> 12
Any merger or consolidation of the Corporation with or into any other
corporation, or any sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Corporation to or with any
other corporation, person or other entity, shall require the affirmative
vote of the holders of at least two-thirds of each class of stock outstanding
and entitled to vote at any meeting of the stockholders. Such affirmative vote
shall be required notwithstanding the fact that no vote may be required, or
that some lesser percentage may be specified by Law or otherwise. This Article
SIXTH may not be altered, added to, amended or repealed except by the
affirmative vote of two-thirds in interest of each class of stock outstanding
entitled to vote at a meeting called for said purpose, provided notice of the
proposed alteration, addition, amendment or repeal shall have been given in the
notice of such meeting of stockholders.
In addition to any approval of the board of directors or any
stockholder vote or consent required by the Laws of the State of Delaware or
any other provisions of the Corporation's Certificate of Incorporation or
By-Laws or otherwise, whether now or hereafter in effect, there shall be
required for the approval, adoption or authorization of any Business
Combination (as defined herein) with an Interested person (as defined herein),
or an affiliate or associate of an Interested Person, the affirmative vote of
the holders of at least two-thirds of each class of shares of stock of the
Corporation entitled to vote in elections of directors, considered separately,
which are not owned, directly or indirectly, by such Interested Person, unless
such Business Combination has been approved by a majority of the Continuing
Directors (as defined herein) or unless all of the following conditions are
satisfied:
(1) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation is payable in cash in
an amount not less than the highest price per share (including the highest per
share
A-2
<PAGE> 13
brokerage commission, transfer tax and soliciting dealers' fees) paid by such
Interested Person in acquiring any shares of each respective class or series of
the Corporation's stock, plus an amount per share equal to the per share
equivalent of the Corporation's Excess Current Assets. As used herein, "Excess
Current Assets" shall mean the total current assets of the Corporation reduced
by two times the total current liabilities of the Corporation. For purposes of
the foregoing, Excess Current Assets shall be the highest amount shown on the
audited balance sheets of the Corporation as of the close of all fiscal years
ending during the period commencing on the date such Interested Person first
acquired any shares of stock of the Corporation and terminating on the
fifteenth day prior to the date on which the proxy statement referred to in
subparagraph 6 below is mailed to all stockholders of the Corporation;
provided, however, that if no such fiscal year ends during said period, the
date for determination of Excess Current Assets shall be the end of the fiscal
year immediately preceding the date of the initial purchase by such Interested
Person of shares of stock of the Corporation. For purposes of this provision,
current assets and current liabilities of the Corporation shall be determined
on a consolidated basis as shown on the audited financial statement of the
Corporation and all of its subsidiaries for the applicable fiscal year; and
(2) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation is payable in cash in
an amount not less than the aggregate of the earnings per share of Common Stock
of the Corporation for the four full consecutive fiscal quarters, or the last
fiscal year reported, whichever is higher, immediately preceding the record
date for solicitation of votes with respect to such Business Combination,
multiplied by the then price/earnings ratio (if any) of such Interested Person
as customarily computed and reported to the financial community; and
(3) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation bears at least the
same or a greater percentage relationship to the market price of the
Corporation's Common Stock immediately prior to the announcement of such
Business Combination as the highest per share price (including the highest per
share brokerage commission, transfer tax and soliciting dealers' fees) which
such Interested Person has theretofore paid for any of the shares of stock of
the Corporation already owned by it bears to the market price of
A-3
<PAGE> 14
the Corporation's Common Stock immediately preceding the first acquisition of
any stock of the Corporation by such Interested Person; and
(4) From and after the time such Interested Person became the beneficial
owner of twenty percent (20%) or more of the stock of the Corporation entitled
to vote in the election of drrectors and prior to the conummation of such
Business Combination (i) such Interested Person shall have taken all steps
within its power, including without limitation the voting of its stock in the
Corporation, to insure that the Corporation's board of directors includes at
all times representation by Continuing Director(s) (as defined herein) at least
proportionate to the stock holdings of the Corporation's stockholders not
affiliated with such Interested Person (with a Continuing Director to occupy
any resulting fractional board position); (ii) such Interested Person shall not
have acquired any newly issued shares of stock or treasury stock, directly or
indirectly, from the Corporation (except upon conversion of convertible
securities acquired by it prior to obtaining a 20% interest in the stock of the
Corporation or as a result of a pro rata stock dividend or stock split); (iii)
such Interested Person shall not have acquired any additional shares of the
Corporation's outstanding stock or securities convertible into stock of the
Corporation except as part of the transaction which results in such Interested
Person acquiring its 20% interest; and (iv) there shall have been no
reduction in the dividends paid on the Corporation's stock which would result
in a quarterly dividend per share which is less than the most recent quarterly
dividend per share which has been declared by the board of directors of the
Corporation and approved by a majority of the Continuing Directors. For
purposes of this subparagraph 4, the term "dividend" shall not include extra
dividends; the most recently quarterly dividend per share shall be adjusted for
any subsequent increase or decrease in the outstanding stock of the
Corporation; and if the board of directors shall fail to authorize any quarterly
dividend, the dividend per share shall be considered zero; and
(5) At any time prior to the consummation of such Business Combination,
such Interested Person shall not have (i) made any major change in the
Corporation's equity capital structure or business without the approval of a
majority of the Continuing Directors and/or (ii) received the benefit, directly
or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or tax credits
provided by the Corporation;
A-4
<PAGE> 15
(6) A proxy statement complying with the requirements of the Securities
Exchange Act of 1934, as amended, shall be mailed to all stockholders of the
Corporation for the purpose of soliciting stockholder approval of such
Business Combination and shall contain at the front thereof, in a prominent
place, any recommendations as to the advisability (or inadvisability) of such
Business Combination which the Continuing Directors, or any of them, may choose
to state and, if deemed necessary or desirable by a majority of the Continuing
Directors, an opinion of a reputable investment banking firm as to the fairness
(or lack thereof) of the terms of such Business Combination from the point of
view of stockholders of the Corporation who are not affiliated with such
Interested Person (such investment banking firm to be selected by a majority of
the Continuing Directors and to be paid a reasonable fee for its services by
the Corporation upon receipt of such opinion).
For the purposes of this Article SIXTH:
(1) "Affiliate" and "associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.
(2) A person shall be the "owner" and "owns" shares of stock of the
Corpration (other than shares of the Corporation's stock held in its treasury):
(i) which such person and its affiliates and associates own beneficially,
directly or indirectly, whether of record or not; (ii) which such person or any
of its affiliates or associates has the right to acquire, pursuant to any
agreement upon the exercise of conversion rights, warrants or options, or
otherwise; (iii) which such person or any of its affiliates or associates has
the right to sell or vote pursuant to any agreement, or (iv) which are owned,
directly or indirectly, by any other person with which such first mentioned
person, its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
securities of the Corporation.
(3) "Business Combination" means:
(a) Any merger or consolidation of the Corporation or any
subsidiary of the Corporation with or into any Interested Person
(regardless of the identity of the surviving corporation);
A-5
<PAGE> 16
(b) Any sale, lease, or other disposition of all or any
substantial part of the assets of the Corporation or any subsidiary
of the Corporation to any Interested Person for cash or securities
or both;
(c) Any issuance or delivery of securities of the Corporation
or a subsidiary of the Corporation (which the owner shall have the
right to vote, or to vote upon exercise, conversion or by contract) to
an Interested Person in consideration for or in exchange of any
securities or other property (including cash) or both.
(4) "Interested Person" is any person, together with its affiliates and
associates, which (i) as of the record date for the determination of
stockholders entitled to notice of any proposed Business Combination or any
amendment to this Article SIXTH, and to vote thereon or consent thereto, or
as of the date of any such vote or consent, or immediately prior to the
consummation of any Business Combination, owns, directly or indirectly,
twenty percent (20%) or more of the shares of stock of the Corporation entitled
to vote in elections of directors; or (ii) as of any of the dates specified in
clause (i) of this Paragraph (4) is an affiliate of the Corporation and at any
time prior thereto owned 20 percent or more of the shares of stock of the
Corporation entitled to vote in elections of directors.
(5) "Person" is an individual, partnership, corporation, trust or other
entity.
(6) "Subsidiary of the Corporation" is any corporation of which fifty
percent (50%) or more of any class of stock is beneficially owned, directly or
indirectly, by the Corporation.
(7) "Stock of the Corporation" shall mean shares of any class or series
of Capital Stock of the Corporation.
(8) "Continuing Director" shall mean a person (i) who is a member of
the board of directors of the Corporation elected prior to the time that an
Interested Person became the beneficial owner of fifteen percent of the stock
of the Corporation entitled to vote in the election of directors, or (ii) if
there is no Interested Person, a member of the board of directors, or (iii) a
member of the board of directors who was recommended or elected to succeed a
Continuing Director by a majority of the other Continuing Directors.
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<PAGE> 17
A majority of the Continuing Directors shall have the sole and
exclusive power and duty to determine for the purposes of this Article SIXTH,
on the basis of information known to them, whether (i) any person beneficially
owns more than 20 percent of the shares of stock of the Corporation entitled to
vote in elections of directors, (ii) any person is an affiliate or associate of
another, and (iii) any person has an agreement arrangement or understanding
with another.
Nothing contained in this Article Sixth shall be construed to relieve
any Interested Person from any obligations or duties otherwise required by law.
No amendment to these Articles of Incorporation shall amend, alter,
change or repeal any of the provisions of this Article SIXTH, unless such
amendment, in addition to receiving any stockholder vote or consent required
by the laws of the State of Delaware or any other provision of the Articles of
Incorporation in effect at the time, shall receive the affirmative vote or
consent of the holders of at least two-thirds of the shares of stock of the
Corporation entitled to vote in elections of directors which are not owned,
directly or indirectly, by an Interested Person if the vote or consent on
such amendment were a vote or consent on a Business Combination.
A-7
<PAGE> 18
Annex 2
ARTICLE SIXTH
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL AUTO CREDIT, INC.
AS AMENDED BY THE PROPOSAL
Any merger or consolidation of the Corporation with or into any other
corporation, or any sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Corporation to or with any
other corporation, person or other entity, with respect to which any
stockholder vote or consent is required by Law, shall require the affirmative
vote of the holders of at least two-thirds of each class of stock outstanding
and entitled to vote at any meeting of the stockholders. Such affirmative vote
shall be required notwithstanding the fact that some lesser percentage vote may
be specified by Law or otherwise. This Article SIXTH may not be altered, added
to, amended or repealed except by the affirmative vote of the holders of
two-thirds in interest of each class of stock outstanding entitled to vote at a
meeting called for said purpose, provided notice of the proposed alteration,
addition, amendment or repeal shall have been given in the notice of such
meeting of stockholders.
In addition to any approval of the board of directors or any
stockholder vote or consent required by the Laws of the State of Delaware or
any other provisions of the Corporation's Certificate of Incorporation or
By-Laws or otherwise, whether now or hereafter in effect, there shall be
required for the approval, adoption or authorization of any Business
Combination (as defined herein) with an Interested person (as defined herein),
or an affiliate or associate of an Interested Person, the affirmative vote of
the holders of at least two-thirds of each class of shares of stock of the
Corporation entitled to vote in elections of directors, considered separately,
which are not owned, directly or indirectly, by such Interested Person, unless
such Business Combination has been approved by a majority of the Continuing
Directors (as defined herein) or unless all of the following conditions are
satisfied:
(1) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation is payable in cash in
an amount not less than the highest price per share (including the highest per
share
B-1
<PAGE> 19
brokerage commission, transfer tax and soliciting dealers' fees) paid by such
Interested Person in acquiring any shares of each respective class or series of
the Corporation's stock, plus an amount per share equal to the per share
equivalent of the Corporation's Excess Current Assets. As used herein, "Excess
Current Assets" shall mean the total current assets of the Corporation reduced
by two times the total current liabilities of the Corporation. For purposes of
the foregoing, Excess Current Assets shall be the highest amount shown on the
audited balance sheets of the Corporation as of the close of all fiscal years
ending during the period commencing on the date such Interested Person first
acquired any shares of stock of the Corporation and terminating on the
fifteenth day prior to the date on which the proxy statement referred to in
subparagraph 6 below is mailed to all stockholders of the Corporation;
provided, however, that if no such fiscal year ends during said period, the
date for determination of Excess Current Assets shall be the end of the fiscal
year immediately preceding the date of the initial purchase by such Interested
Person of shares of stock of the Corporation. For purposes of this provision,
current assets and current liabilities of the Corporation shall be determined
on a consolidated basis as shown on the audited financial statement of the
Corporation and all of its subsidiaries for the applicable fiscal year; and
(2) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation is payable in cash in
an amount not less than the aggregate of the earnings per share of Common Stock
of the Corporation for the four full consecutive fiscal quarters, or the last
fiscal year reported, whichever is higher, immediately preceding the record
date for solicitation of votes with respect to such Business Combination,
multiplied by the then price/earnings ratio (if any) of such Interested Person
as customarily computed and reported to the financial community; and
(3) The consideration to be received per share in such Business
Combination by holders of the stock of the Corporation bears at least the
same or a greater percentage relationship to the market price of the
Corporation's Common Stock immediately prior to the announcement of such
Business Combination as the highest per share price (including the highest per
share brokerage commission, transfer tax and soliciting dealers' fees) which
such Interested Person has theretofore paid for any of the shares of stock of
the Corporation already owned by it bears to the market price of
B-2
<PAGE> 20
the Corporation's Common Stock immediately preceding the first acquisition of
any stock of the Corporation by such Interested Person; and
(4) From and after the time such Interested Person became the beneficial
owner of twenty percent (20%) or more of the stock of the Corporation entitled
to vote in the election of drrectors and prior to the conummation of such
Business Combination (i) such Interested Person shall have taken all steps
within its power, including without limitation the voting of its stock in the
Corporation, to insure that the Corporation's board of directors includes at
all times representation by Continuing Director(s) (as defined herein) at least
proportionate to the stock holdings of the Corporation's stockholders not
affiliated with such Interested Person (with a Continuing Director to occupy
any resulting fractional board position); (ii) such Interested Person shall not
have acquired any newly issued shares of stock or treasury stock, directly or
indirectly, from the Corporation (except upon conversion of convertible
securities acquired by it prior to obtaining a 20% interest in the stock of the
Corporation or as a result of a pro rata stock dividend or stock split); (iii)
such Interested Person shall not have acquired any additional shares of the
Corporation's outstanding stock or securities convertible into stock of the
Corporation except as part of the transaction which results in such Interested
Person acquiring its 20% interest; and (iv) there shall have been no
reduction in the dividends paid on the Corporation's stock which would result
in a quarterly dividend per share which is less than the most recent quarterly
dividend per share which has been declared by the board of directors of the
Corporation and approved by a majority of the Continuing Directors. For
purposes of this subparagraph 4, the term "dividend" shall not include extra
dividends; the most recently quarterly dividend per share shall be adjusted for
any subsequent increase or decrease in the outstanding stock of the
Corporation; and if the board of directors shall fail to authorize any quarterly
dividend, the dividend per share shall be considered zero; and
(5) At any time prior to the consummation of such Business Combination,
such Interested Person shall not have (i) made any major change in the
Corporation's equity capital structure or business without the approval of a
majority of the Continuing Directors and/or (ii) received the benefit, directly
or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance or tax credits
provided by the Corporation;
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(6) A proxy statement complying with the requirements of the Securities
Exchange Act of 1934, as amended, shall be mailed to all stockholders of the
Corporation for the purpose of soliciting stockholder approval of such
Business Combination and shall contain at the front thereof, in a prominent
place, any recommendations as to the advisability (or inadvisability) of such
Business Combination which the Continuing Directors, or any of them, may choose
to state and, if deemed necessary or desirable by a majority of the Continuing
Directors, an opinion of a reputable investment banking firm as to the fairness
(or lack thereof) of the terms of such Business Combination from the point of
view of stockholders of the Corporation who are not affiliated with such
Interested Person (such investment banking firm to be selected by a majority of
the Continuing Directors and to be paid a reasonable fee for its services by
the Corporation upon receipt of such opinion).
For the purposes of this Article SIXTH:
(1) "Affiliate" and "associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.
(2) A person shall be the "owner" and "owns" shares of stock of the
Corpration (other than shares of the Corporation's stock held in its treasury):
(i) which such person and its affiliates and associates own beneficially,
directly or indirectly, whether of record or not; (ii) which such person or any
of its affiliates or associates has the right to acquire, pursuant to any
agreement upon the exercise of conversion rights, warrants or options, or
otherwise; (iii) which such person or any of its affiliates or associates has
the right to sell or vote pursuant to any agreement, or (iv) which are owned,
directly or indirectly, by any other person with which such first mentioned
person, its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
securities of the Corporation.
(3) "Business Combination" means:
(a) Any merger or consolidation of the Corporation or any
subsidiary of the Corporation with or into any Interested Person
(regardless of the identity of the surviving corporation);
B-4
<PAGE> 22
(b) Any sale, lease, or other disposition of all or any
substantial part of the assets of the Corporation or any subsidiary
of the Corporation to any Interested Person for cash or securities
or both;
(c) Any issuance or delivery of securities of the Corporation
or a subsidiary of the Corporation (which the owner shall have the
right to vote, or to vote upon exercise, conversion or by contract) to
an Interested Person in consideration for or in exchange of any
securities or other property (including cash) or both.
(4) "Interested Person" is any person, together with its affiliates and
associates, which (i) as of the record date for the determination of
stockholders entitled to notice of any proposed Business Combination or any
amendment to this Article SIXTH, and to vote thereon or consent thereto, or
as of the date of any such vote or consent, or immediately prior to the
consummation of any Business Combination, owns, directly or indirectly,
twenty percent (20%) or more of the shares of stock of the Corporation entitled
to vote in elections of directors; or (ii) as of any of the dates specified in
clause (i) of this Paragraph (4) is an affiliate of the Corporation and at any
time prior thereto owned 20 percent or more of the shares of stock of the
Corporation entitled to vote in elections of directors.
(5) "Person" is an individual, partnership, corporation, trust or other
entity.
(6) "Subsidiary of the Corporation" is any corporation of which fifty
percent (50%) or more of any class of stock is beneficially owned, directly or
indirectly, by the Corporation.
(7) "Stock of the Corporation" shall mean shares of any class or series
of Capital Stock of the Corporation.
(8) "Continuing Director" shall mean a person (i) who is a member of
the board of directors of the Corporation elected prior to the time that an
Interested Person became the beneficial owner of fifteen percent of the stock
of the Corporation entitled to vote in the election of directors, or (ii) if
there is no Interested Person, a member of the board of directors, or (iii) a
member of the board of directors who was recommended or elected to succeed a
Continuing Director by a majority of the other Continuing Directors.
B-5
<PAGE> 23
A majority of the Continuing Directors shall have the sole and
exclusive power and duty to determine for the purposes of this Article SIXTH,
on the basis of information known to them, whether (i) any person beneficially
owns more than 20 percent of the shares of stock of the Corporation entitled to
vote in elections of directors, (ii) any person is an affiliate or associate of
another, and (iii) any person has an agreement arrangement or understanding
with another.
Nothing contained in this Article Sixth shall be construed to relieve
any Interested Person from any obligations or duties otherwise required by law.
No amendment to these Articles of Incorporation shall amend, alter,
change or repeal any of the provisions of this Article SIXTH, unless such
amendment, in addition to receiving any stockholder vote or consent required
by the laws of the State of Delaware or any other provision of the Articles of
Incorporation in effect at the time, shall receive the affirmative vote or
consent of the holders of at least two-thirds of the shares of stock of the
Corporation entitled to vote in elections of directors which are not owned,
directly or indirectly, by an Interested Person if the vote or consent on
such amendment were a vote or consent on a Business Combination.
B-6
<PAGE> 24
Annex 3
Section 253, Title 8, Delaware Code
(a) In any case in which at least 90% of the outstanding shares of
each class of the stock of a corporation or corporations is owned by another
corporation and 1 of the corporations is a corporation of this State and the
other or others are corporations of this State, or any other state or states,
or the District of Columbia and the laws of the other state or states, or the
District permit a corporation of such jurisdiction to merge with a corporation
of another jurisdiction, the corporation having such stock ownership may either
merge the other corporation or corporations into itself and assume all of its
or their obligations, or merge itself, or itself and 1 or more of such other
corporations, into 1 of the other corporations by executing, acknowledging and
filing, in accordance with Section 103 of this title, a certificate of such
ownership and merger setting forth a copy of the resolution of its board of
directors to so merge and the date of the adoption; provided, however, that in
case the parent corporation shall not own all the outstanding stock of all the
subsidiary corporations, parties to a merger as aforesaid, the resolution of
the board of directors of the parent corporation shall state the terms and
conditions of the merger, including the securities, cash, property, or rights
to be issued, paid, delivered or granted by the surviving corporation upon
surrender of each share of the subsidiary corporation or corporations not owned
by the parent corporation. If the parent corporation be not the surviving
corporation, the resolution shall include provision for the pro rata issuance
of stock of the surviving corporation to the holders of the stock of the parent
corporation on surrender of any certificates therefor, and the certificate of
ownership and merger shall state that the proposed merger has been approved by
a majority of the outstanding stock of the parent corporation entitled to vote
thereon at a meeting duly called and held after 20 days' notice of the purpose
of the meeting mailed to each such stockholder at his address as it appears on
the records of the corporation if the parent corporation is a corporation of
this State or state that the proposed merger has been adopted, approved,
certified, executed and acknowledged by the parent corporation in accordance
with the laws under which it is organized if the parent corporation is not a
corporation of this State. A certified copy of the certificate shall be
recorded in the office of the recorder of the county in this State in which the
registered office of each constituent corporation which is a corporation of
this State is located. If the surviving corporation exists under the laws of
the District of Columbia or any state or jurisdiction other than this State,
subsection (d) of Section 252 of this title shall also apply to a merger under
this section.
(b) If the surviving corporation is a Delaware corporation, it may
change its corporate name by the inclusion of a provision to that effect in the
resolution of merger adopted by the directors of the parent corporation and set
forth in the certificate of ownership and merger, and upon the effective date
of the merger, the name of the corporation shall be so changed.
(c) Subsection (d) of Section 251 of this title shall apply to a
merger under this section, and subsection (e) of Section 251 of this title
shall apply to a merger under this section in which the surviving corporation
is the subsidiary corporation and is a corporation of this State. References
to "agreement of merger" in subsections (d) and (e) of Section 251 of this
title shall mean for purposes of this subsection the resolution of merger
adopted by the board of directors of the parent corporation. Any merger which
effects any changes other than those authorized by this section or made
applicable by this subsection shall be accomplished under Section 251 or
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<PAGE> 25
Section 252 of this title. Section 262 of this title shall not apply to any
merger effected under this section, except as provided in subsection (d) of
this section.
(d) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under this section is not owned by the parent
corporation immediately prior to the merger, the stockholders of the subsidiary
Delaware corporation party to the merger shall have appraisal rights as set
forth in Section 262 of this title.
(e) A merger may be effected under this section although 1 or more of
the corporations parties to the merger is a corporation organized under the
laws of a jurisdiction other than 1 of the United States; provided that the
laws of such jurisdiction permit a corporation of such jurisdiction to merge
with a corporation of another jurisdiction.
C-2
<PAGE> 26
Annex 4
Section 251(f), Title 8, Delaware Code
Notwithstanding the requirements of subsection (c) of this section,
unless required by its certificate of incorporation, no vote of stockholders of
a constituent corporation surviving a merger shall be necessary to authorize a
merger if (1) the agreement of merger does not amend in any respect the
certificate of incorporation of such constituent corporation, (2) each share of
stock of such constituent corporation outstanding immediately prior to the
effective date of the merger is to be an identical outstanding or treasury
share of the surviving corporation after the effective date of the merger, and
(3) either no shares of common stock of the surviving corporation and no
shares, securities or obligations convertible into such stock are to be issued
or delivered under the plan of merger, or the authorized unissued shares or the
treasury shares of common stock of the surviving corporation to be issued or
delivered under the plan of merger plus those initially issuable upon
conversion of any other shares, securities or obligations to be issued or
delivered under such plan do not exceed 20% of the shares of common stock of
such constituent corporation outstanding immediately prior to the effective
date of the merger. No vote of stockholders of a constituent corporation shall
be necessary to authorize a merger or consolidation if no shares of the stock
of such corporation shall have been issued prior to the adoption by the board
of directors of the resolution approving the agreement of merger or
consolidation. If an agreement of merger is adopted by the constituent
corporation surviving the merger, by action of its board of directors and
without any vote of its stockholders pursuant to this subsection, the secretary
or assistant secretary of that corporation shall certify on the agreement that
the agreement has been adopted pursuant to this subsection and, (1) if it has
been adopted pursuant to the first sentence of this subsection, that the
conditions specified in that sentence have been satisfied, or (2) if it has
been adopted pursuant to the second sentence of this subsection, that no shares
of stock of such corporation were issued prior to the adoption by the board of
directors of the resolution approving the agreement of merger or consolidation.
The agreement so adopted and certified shall then be filed and shall become
effective, in accordance with Section 103 of this title. Such filing shall
constitute a representation by the person who executes the agreement that the
facts stated in the certificate remain true immediately prior to such filing.
D-1
<PAGE> 27
Annex 5
Section 251(g), Title 8, Delaware Code
Notwithstanding the requirements of subsection (c) of this section,
unless expressly required by its certificate of incorporation, no vote of
stockholders of a constituent corporation shall be necessary to authorize a
merger with or into a single direct or indirect wholly-owned subsidiary of such
constituent corporation if: (1) such constituent corporation and the direct or
indirect wholly-owned subsidiary of such constituent corporation are the only
constituent corporations to the merger; (2) each share or fraction of a share
of the capital stock of the constituent corporation outstanding immediately
prior to the effective time of the merger is converted in the merger into a
share or equal fraction of share of capital stock of a holding company having
the same designations, rights, powers and preferences, and the qualifications,
limitations and restrictions thereof, as the share of stock of the constituent
corporation being converted in the merger; (3) the holding company and each of
the constituent corporations to the merger are corporations of this State; (4)
the certificate of incorporation and by-laws of the holding company immediately
following the effective time of the merger contain provisions identical to the
certificate of incorporation and by-laws of the constituent corporation
immediately prior to the effective time of the merger (other than provisions,
if any, regarding the incorporator or incorporators, the corporate name, the
registered office and agent, the initial board of directors and the initial
subscribers for shares and such provisions contained in any amendment to the
certificate of incorporation as were necessary to effect a change, exchange,
reclassification or cancellation of stock, if such change, exchange,
reclassification or cancellation has become effective); (5) as a result of the
merger the constituent corporation or its successor corporation becomes or
remains a direct or indirect wholly-owned subsidiary of the holding company;
(6) the directors of the constituent corporation become or remain the directors
of the holding company upon the effective time of the merger; (7) the
certificate of incorporation of the surviving corporation immediately following
the effective time of the merger is identical to the certificate of
incorporation of the constituent corporation immediately prior to the effective
time of the merger (other than provisions, if any, regarding the incorporator
or incorporators, the corporate name, the registered office and agent, the
initial board of directors and the initial subscribers for shares and such
provisions contained in any amendment to the certificate of incorporation as
were necessary to effect a change, exchange, reclassification or cancellation
of stock, if such change, exchange, reclassification or cancellation has become
effective); provided, however, that (i) the certificate of incorporation of the
surviving corporation shall be amended in the merger to contain a provision
requiring that any act or transaction by or involving the surviving corporation
that requires for its adoption under this Chapter or its certificate of
incorporation the approval of the stockholders of the surviving corporation
shall, by specific reference to this subsection, require, in addition, the
approval of the stockholders of the holding company (or any successor by
merger), by the same vote as is required by this Chapter and/or by the
certificate of incorporation of the surviving corporation, and (ii) the
certificate of incorporation of the surviving corporation may be amended in the
merger to reduce the number of classes and shares of capital stock that the
surviving corporation is authorized to issue; and (8) the stockholders of the
constituent corporation do not recognize gain or loss for United States federal
income tax purposes as determined by the board of directors of the constituent
corporation. As used in this subsection only, the term "holding company" means
a corporation which, from its incorporation until consummation of a merger
governed by this subsection, was at all times a direct or indirect
E-1
<PAGE> 28
wholly-owned subsidiary of the constituent corporation and whose capital stock
is issued in such merger. From and after the effective time of a merger
adopted by a constituent corporation by action of its board of directors and
without any vote of stockholders pursuant to this subsection: (i) to the extent
the restrictions of Section 203 of this Chapter applied to the constituent
corporation and its stockholders at the effective time of the merger, such
restrictions shall apply to the holding company and its stockholders
immediately after the effective time of the merger as though it were the
constituent corporation, and all shares of stock of the holding company
acquired in the merger shall for purposes of Section 203 be deemed to have been
acquired at the time that the shares of stock of the constituent corporation
converted in the merger were acquired, and provided further that any
stockholder who immediately prior to the effective time of the merger was not
an interested stockholder within the meaning of Section 203 shall not solely by
reason of the merger become an interested stockholder of the holding company,
and (ii) if the corporate name of the holding company immediately following the
effective time of the merger is the same as the corporate name of the
constituent corporation immediately prior to the effective time of the merger,
the shares of capital stock of the holding company into which the shares of
capital stock of the constituent corporation are converted in the merger shall
be represented by the stock certificates that previously represented shares of
capital stock of the constituent corporation. If an agreement of merger is
adopted by a constituent corporation by action of its board of directors and
without any vote of stockholders pursuant to this subsection, the secretary or
assistant secretary of the constituent corporation shall certify on the
agreement that the agreement has been adopted pursuant to this subsection and
that the conditions specified in the first sentence of this subsection have
been satisfied. The agreement so adopted and certified shall then be filed and
become effective, in accordance with Section 103 of this title. Such filing
shall constitute a representation by the person who executes the agreement that
the facts stated in the ucertificate remain true immediately prior to such
filing.
E-2
<PAGE> 29
PLEASE TEAR OFF AT PERFORATION AND RETURN SIGNED PORTION AS SOON AS POSSIBLE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF NATIONAL AUTO CREDIT, INC.
PROXY VOTING INSTRUCTIONS Please mark choices [x] in blue or black ink
NATIONAL AUTO CREDIT, INC. - SPECIAL MEETING
DECEMBER 27, 1995
The Board of Directors recommends that you vote
"FOR" the Proposal. For Against Abstain
[ ] [ ] [ ]
PROPOSAL TO AMEND ARTICLE SIXTH OF THE CERTIFICATE OF INCORPORATION OF
THE COMPANY TO ELIMINATE THE REQUIREMENT OF A STOCKHOLDER VOTE IN
CONNECTION WITH A MERGER OR CONSOLIDATION OF THE COMPANY OR A
DISPOSITION OF ASSETS BY THE COMPANY, EXCEPT AS REQUIRED BY THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE AND EXCEPT IN
CONNECTION WITH A "BUSINESS COMBINATION" WITH AN "INTERESTED PERSON"
AS SUCH TERMS ARE DEFINED IN ARTICLE SIXTH.
Your shares will be voted as directed herein.
If signed and no direction is given for any
item, it will be voted as recommended above.
___________________________________________
Signature Date
___________________________________________
Signature (if jointly owned) Date
<PAGE> 30
If you have comments, use the following space:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
INSTRUCTIONS:
1. Use the reverse side to specify your voting instructions for each proposal.
2. Sign and date the form.
3. Tear off at perforation and return this portion of the form only.
PLEASE NOTE: WHEN PLACING THIS FORM IN THE BUSINESS REPLY ENVELOPE, PLEASE BE
SURE THE ADDRESS BELOW APPEARS THROUGH THE WINDOW.
PROXY SERVICES
P.O. BOX
[City],[State][Zip]
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. BY
RETURNING YOUR VOTING INSTRUCTIONS PROMPTLY, YOU CAN AVOID THE INCONVENIENCE OF
RECEIVING FOLLOW-UP MAILINGS PLUS HELP TO AVOID THE EXPENSES ASSOCIATED WITH
SUCH ADDITIONAL MAILINGS.
