<PAGE> 1
===============================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NATIONAL AUTO CREDIT, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NATIONAL AUTO CREDIT, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):_____________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid:________________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________________
(2) Form, Schedule or Registration Statement No.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
===============================================================================
<PAGE> 2
[NATIONAL AUTO CREDIT LOGO]
NATIONAL AUTO CREDIT
30000 AURORA ROAD
SOLON, OHIO 44139
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 21, 1995
Notice is hereby given that the Annual Meeting of Stockholders of National
Auto Credit, Inc., will be held at the Company's principal executive offices,
30000 Aurora Road, Solon, Ohio 44139, on Wednesday, June 21, 1995, at 10:00 A.M.
(Eastern Daylight Savings time), for the following purposes:
1. To elect two directors to serve for a term of three years; and
2. To transact such other business as may properly come before the meeting.
Only stockholders of record at the close of business on May 12, 1995, are
entitled to notice of and to vote at said meeting or any adjournment thereof.
By order of the Board of Directors.
THOMAS J. DOSTART
Vice President, General Counsel and
Secretary
May 19, 1995
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
[NATIONAL AUTO CREDIT LOGO]
NATIONAL AUTO CREDIT
30000 AURORA ROAD
SOLON, OHIO 44139
PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies
for use at the Annual Meeting of Stockholders of National Auto Credit, Inc., a
Delaware corporation (the "Company"), to be held on June 21, 1995, at the
Company's principal executive offices, 30000 Aurora Road, Solon, Ohio 44139, and
at any adjournment thereof.
The Notice of Annual Meeting, this statement and the accompanying form of
proxy, together with the Company's Annual Report to Stockholders for the fiscal
year ended January 31, 1995 ("fiscal 1995"), are first being mailed to
stockholders on or about May 24, 1995.
The close of business on May 12, 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, the Company had outstanding
25,728,345 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 By-Laws, if a
quorum is present at the meeting, the nominees for Directors who receive the
greatest number of votes cast for the election of Directors at the meeting by
the shares present in person or by proxy and entitled to vote will be elected
Directors. An abstention from voting any share with respect to the election of
any nominee for Director will have the practical effect of a vote against that
nominee. A broker non-vote with respect to any share will not affect the
election of Directors since the share is not considered present for voting
purposes.
ELECTION OF DIRECTORS
The Board of Directors 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. Sam J. Frankino and Noah T.
Herndon each to serve a term of three years and until their respective
successors are elected and qualified.
If, by reason of death or other unexpected circumstance, the nominee(s)
should not be available for election, the proxies will be voted for the election
of such substitute nominee(s) as the Board of Directors may propose.
- ---------------
1 Effective January 31, 1995, Mr. Kelly W. Reagan resigned from the Board of
Directors. As of the date of this Proxy, the Board of Directors has not named
his successor.
1
<PAGE> 4
<TABLE>
Set forth below is certain information relating to Messrs. Frankino and
Herndon, the nominees for election as Directors, and to Directors of the Company
whose terms of office will continue after the meeting:
<CAPTION>
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
-------------------------------------------
DIRECTOR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION SINCE TO EXPIRE
---- ------------------------------------------ -------- ---------
<S> <C> <C> <C>
Sam J. Frankino Chairman of the Board since the Company's 1969 1998
inception in 1969, founder and majority
stockholder. Mr. Frankino also served as
Chief Executive Officer from 1969 to 1992
and from December 1993 until December
1994. Age 70.
Noah T. Herndon Partner of Brown Brothers Harriman & Co., 1992 1998
investment bankers, since 1974. Mr.
Herndon is also a Director of Amoskeag
Company, Fieldcrest Cannon, Inc. and Watts
Industries, Inc. Age 63.
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
------------------------------------------------------------
DIRECTOR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION SINCE TO EXPIRE
---- ------------------------------------------ -------- ---------
<S> <C> <C> <C>
Joseph P. Henley Retired May 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 Board Member and Secretary for Legend
Condo Assoc. Age 68.
Robert J. Bronchetti President and Chief Executive Officer, has 1993 1996
been employed by the Company since May
1991 and was appointed a Director in
September 1993. Mr. Bronchetti has held
the position of President since March 1994
and Chief Executive Officer since December
1994. Mr. Bronchetti previously held the
positions of Executive Vice President and
Chief Financial Officer, Vice President
and Chief Financial Officer, and Vice
President of Finance and Treasurer. Prior
to 1991, Mr. Bronchetti held various
financial management positions with
Engelhard Corporation and its wholly-owned
subsidiary, The Harshaw Chemical Company.
Age 47.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
------------------------------------------------------------
DIRECTOR TERM
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION SINCE TO EXPIRE
---- ------------------------------------------ -------- ---------
<S> <C> <C> <C>
Edward A. Burkhart Executive Vice President, has been 1994 1996
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 35.
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 69.
Edward N. Leszczynski Retired January 1986 from Ford Motor 1994 1997
Credit Company. Self-employed consultant
to various organizations, including the
Company. Teaches management analysis and
planning to Ford Motor Credit Company
supervisors and managers. Age 61.
</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 met three times during fiscal 1995.
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 two times during fiscal 1995.
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
one time in fiscal 1995.
Four quarterly meetings of the Board of Directors were held during fiscal
1995. 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.
3
<PAGE> 6
<TABLE>
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation earned for
services rendered by the Company's Chief Executive Officers and each of the four
other most highly compensated Executive Officers during the fiscal years ended
January 31, 1995, 1994 and 1993:
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------------------
------------------------------------------------ RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION AT FISCAL SALARY BONUS COMPENSATION1 AWARDS2 OPTIONS COMPENSATION3
JANUARY 31, 1995 YEAR ($) ($) ($) ($) (#) ($)
- ------------------------------- ------ ------- ------- ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sam J. Frankino4 1995 325,769 51,000 4,916 47,500 0 1,967
Chairman of the Board 1994 283,231 1,000 0 118,750 0 2,316
1993 400,000 100,000 0 0 0 2,294
Robert J. Bronchetti4 1995 176,154 1,000 6,756 62,938 0 3,192
President and Chief Executive 1994 144,039 21,000 0 11,875 0 1,744
Officer 1993 120,154 21,000 0 0 10,000 1,500
Peter T. Zackaroff5 1995 138,846 1,000 4,928 24,344 0 2,943
Executive Vice President, Chief 1994 130,000 21,000 0 11,875 0 1,620
Legal Officer and Secretary 1993 125,477 35,000 0 0 15,355 1,680
Edward A. Burkhart 1995 122,615 1,000 2,767 40,375 0 2,613
Executive Vice President 1994 82,365 16,000 0 8,906 0 1,103
1993 75,943 22,500 0 0 10,000 1,100
Kelly W. Reagan5 1995 108,846 1,000 2,471 9,500 10,000 2,402
Senior Vice President, Fleet 1994 100,000 21,000 0 11,875 0 1,326
1993 92,827 35,000 0 0 15,000 1,362
David R. Thomson6 1995 108,192 1,000 2,323 40,375 7,500 1,521
Executive Vice President, Sales 1994 68,538 6,000 0 5,938 0 156
and Marketing 1993 -- -- -- -- -- --
<FN>
- ---------------
1 Amounts included in this column are annual automobile allowance tax benefits.
Executive Officers who are Directors do not receive any additional
compensation for serving on the Board of Directors.
2 These awards are fully vested but may not be sold or transferred until such
time as the recipient directly owns and maintains Company stock equal to his
annual salary, including bonus, or the individual terminates employment with
the Company. Restricted stock holdings in excess of the required ownership
amounts may be disposed of provided that minimum ownership requirements are
maintained during the term of the individual's employment. The restricted
shares awarded are eligible for any dividends the Company may declare on its
Common Stock. There are no other shares of restricted stock held by these
Executive Officers.
3 Messrs. Frankino, Bronchetti, Zackaroff, Burkhart, Reagan and Thomson had
their term life and accidental death and disability ("AD&D") insurance
premiums paid for by the Company. For fiscal years 1994 and 1993 the premiums
were $120 for term life and $36 for AD&D. For fiscal year 1995, the premiums
were $372 for term life and $48 for AD&D.
In fiscal years 1995, 1994 and 1993 the Company contributed to Messrs.
Frankino's, Bronchetti's, Zackaroff's, Burkhart's, Reagan's and Thomson's
401(k) Savings and Retirement Plan and Trust Accounts in the following
amounts: Mr. Frankino -- $0, $0, and $1,348; Mr. Bronchetti -- $1,225, $96 and
$847; Mr. Zackaroff -- $1,085, $79, and $961; Mr. Burkhart -- $949, $53, and
$595; Mr. Reagan -- $851, $60 and $762; and Mr. Thomson -- $0, $0, and $0. In
addition to the contributions noted above, in fiscal years 1995, 1994 and 1993
Messrs. Frankino, Bronchetti, Zackaroff, Burkhart, Reagan and Thomson received
the following additional allocations to their 401(k) Savings and Retirement
Plan and Trust Accounts: Mr. Frankino -- $1,547, $2,160, and $790; Mr.
Bronchetti -- $1,547, $1,492, and $497; Mr. Zackaroff -- $1,438, $1,385, and
$563; Mr. Burkhart -- $1,244, $894, and $349; Mr. Reagan -- $1,131, $1,110,
and $444; and Mr. Thomson -- $1,101, $0, and $0.
4 Mr. Frankino served as Chief Executive Officer from 1969 to 1992 and from
December 1993 until December 1994 at which time Mr. Bronchetti assumed the
position of Chief Executive Officer.
5 Messrs. Zackaroff and Reagan resigned from their positions in February 1995.
6 These amounts reflect Mr. Thomson's compensation commencing with his date of
employment, February 1, 1993.
</TABLE>
4
<PAGE> 7
STOCK PLANS
1983 STOCK OPTION PLAN:
The Executive Officers referred to in the cash compensation table, as well
as salaried employees of the Company or any of its subsidiary corporations who,
in the judgment of the Stock Option Committee (the "Option Committee"), occupy a
professional or management position, were eligible to participate in the
Company's 1983 Stock Option Plan (the "Option Plan"). The Option Plan provided
for the granting of options for up to 2,710,651 shares of the Company's Common
Stock, $.05 par value (the "Common Stock").
The Option Committee determined to whom options were granted, the number of
shares subject to option, and the terms of the option. No incentive or
non-qualified stock options may be exercised, in whole or in part, prior to the
expiration of 12 months following the date such option is granted. Twenty
percent of these options becomes exercisable one year after the grant date, and
an additional 20% becomes exercisable each year thereafter. Both the incentive
and non-qualified stock options granted under the Option Plan terminate on the
10th anniversary of the date upon which they were granted and shall not be
exercisable on or after such date. In the event an employee who has been granted
options under the Option Plan leaves the Company, those vested options are
exercisable within 90 days of the date of separation from employment (but in no
event later than the end of the fixed term of such option). If an employee or
former employee who was granted an incentive or non-qualified option dies, and
at the time of his death was entitled to exercise any such option granted under
the Option Plan, such option may be exercised within 12 months after the date of
death (but no later than the end of the fixed term of such option) by his
estate, or by a person who acquired the right to exercise such option by bequest
or inheritance. Such option may be exercised only as to the number of shares of
stock for which it could have been exercised at the date of death.
The Option Plan was terminated on April 17, 1993.
1993 EQUITY INCENTIVE PLAN:
The Company's 1993 Equity Incentive Plan (the "Plan") provides for the
granting of incentive options, non-qualified options, stock appreciation rights,
restricted stock appreciation rights, restricted stock and Common Stock (all of
which are sometimes collectively referred to as "Awards") to the Executive
Officers referred to in the cash compensation table as well as to other
employees of the Company and its subsidiaries and any former employee of the
Company eligible to receive an assumed or replacement award or award settlement.
Awards may be granted singly, in combination or in tandem. In addition Awards
may be made in combination, or in tandem with, in replacement of, or as the
payment for grants or rights under any other compensation plan of the Company,
including the Option Plan or the plan of any acquired entity.
The Plan provides that not more than two million (2,000,000) shares of the
Company's Common Stock may be issued pursuant to the Plan. The shares to be
issued under the Plan may be authorized and unissued shares, treasury shares or
a combination thereof.
The Executive Compensation Committee (the "Committee") administers the
Plan. The Committee is comprised of three non-employee Directors, all of whom
must be "disinterested persons" as defined under the Plan. The Committee
consists of Messrs. Henley, Herndon and Hoel. Such Committee selects the
employees to whom grants are to be made and determines the form of the Award.
Any compensation income realized by a participant with respect to any Award
granted under the Plan shall be subject to withholding by the Company of income,
employment or other taxes required by federal,
5
<PAGE> 8
state, local or foreign law. The Committee may in its discretion satisfy the
withholding requirement by causing the entity or subsidiary employing the
participant to withhold the appropriate amount of any and all of such taxes from
any other compensation otherwise payable to such participant.
During fiscal 1995 options were granted to the following named Executive
Officers: Kelly W. Reagan and David R. Thomson, as well as other Executive
Officers.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- --------------------------------------------------------------------------------------------------- ANNUAL RATES OF STOCK
SECURITIES % OF TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS/SARS FOR OPTION TERM
OPTIONS/ GRANTED TO EXERCISE OR GRANT DATE (10 YEARS)1
SARS EMPLOYEES IN BASE PRICE MARKET PRICE EXPIRATION -------------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) OF STOCK ($) DATE 5% ($) 10% ($)
- -------------------- ----------- ------------ ----------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Kelly W. Reagan 10,000 16.7% 11.00 11.00 8/01/04 69,190 175,340
David R. Thomson2 7,500 12.5% 6.56 13.13 4/14/04 111,192 206,184
<FN>
- ---------------
1 The 5% and 10% assumed rates of appreciation are stipulated by the Securities
and Exchange Commission and do not represent the Company's estimate or
projection of the future price of its Common Stock. There is no assurance
provided to any named Executive Officer or any other holder of the Company's
securities that the actual stock price appreciation over the option term will
be at the assumed levels or at any other defined level.
2 The potential realizable value assuming no stock price appreciation for the
option term for the options granted to Mr. Thomson is $49,275.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON OPTIONS/SARS AT YEAR-END(#)1 AT YEAR-END ($)2
EXERCISE VALUE ----------------------------- -----------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sam J. Frankino 0 0 112,400 5,000 $ 470,675 $20,938
Robert J. Bronchetti 0 0 13,000 12,000 $ 26,875 $23,750
Peter T. Zackaroff 0 0 36,499 15,000 $ 118,340 $27,625
Edward A. Burkhart 0 0 33,677 10,500 $ 116,366 $19,406
Kelly W. Reagan 0 0 34,170 25,000 $ 108,587 $27,625
David R. Thomson 0 0 7,500 0 $ 31,406 $ 0
<FN>
- ---------------
1 Includes options with exercise prices ranging from $6.56 to $11.00.
2 Values are calculated using the January 31, 1995, Common Stock closing price
of $10.75 per share as reported on the NASDAQ Stock Market.
</TABLE>
6
<PAGE> 9
BOARD'S COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Executive Compensation Committee (the "Committee") is comprised of
three non-employee Directors. The Committee regularly reviews the executive
compensation policies and practices of the Company and establishes the salaries
of Executive Officers. The Committee also administers the Company's 1993 Equity
Incentive Plan. Committee members during fiscal 1995 were Mr. Noah T. Herndon
(Chairman), Mr. Per E. Hoel and Mr. Joseph P. Henley.
The Company's primary objective is to maximize stockholder value. To aid in
accomplishing this goal, the Committee is guided by two principles in
determining executive compensation policies: first, to attract, develop, reward
and retain highly talented individuals; and second, to motivate Executive
Officers to perform to the best of their abilities and to achieve both
short-term and long-term Company objectives that will contribute to the overall
goal of enhancing stockholder value.
The Company's executive compensation program consists of two main elements:
- Annual compensation, which is comprised of base salary and bonus, and
- Long-term incentives that provide a financial opportunity through grants
of restricted stock and other forms of stock-based awards. The
compensation that may be realized by executives through these incentives
is tied directly to the value of the Company's Common Stock in the
future.
The Committee believes that the Company's executive compensation program
reflects the fundamental principles described above and provides strong
incentives to executives to maximize Company performance.
In establishing total compensation, the Committee considers a variety of
measures of historical and projected Company performance. This review includes
such measures as net income, return on equity, sales, and total market value.
This information forms the basis for the Committee's assessment of the overall
performance of its executives and is the cornerstone for establishing their
compensation. The Committee also compares the Company's total compensation
package (and, to the extent possible, the compensation of individual Executive
Officers) with companies of comparable size and stature. The compensation
comparison groups are not necessarily the same peer group companies used in the
stock performance graph included in this Proxy statement. In addition,
consideration is given to the specific functional responsibilities of each
executive's position.
Messrs. Frankino and Bronchetti each served as Chief Executive Officer of
the Company during a portion of fiscal 1995. The total compensation received by
each of Messrs. Frankino and Bronchetti was increased for fiscal 1995. In
establishing their level of compensation, the Committee reviewed the Company's
financial and business performance for fiscal 1994. The review was based on all
of the performance criteria discussed above. The Committee did not assign
relative weights to each of these criteria but rather made a subjective
determination based on a consideration of all such factors collectively. The
Committee also took note of the significant strategic actions and restructuring
initiated by Messrs. Frankino and Bronchetti including the downsizing of the
Company's rental operations and the restructuring of the Company to better
position it to compete in the challenging used car financing environment.
7
<PAGE> 10
The Committee also awarded restricted stock to all Executive Officers in
amounts ranging from 500 to 5,500 shares, as well as awarding stock options to
select Executive Officers 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.
The Committee is continuing to review the qualifying compensation
regulations issued by the Internal Revenue Service which provide that no
deduction is allowed for applicable employee compensation paid by a publicly
held corporation to a covered employee to the extent that compensation paid to
the employee exceeds $1 million for the applicable taxable year, unless certain
conditions are met. Currently, compensation to any employee is not expected to
exceed $1 million and thus should not be affected by the qualifying compensation
regulations.
Respectfully submitted,
Noah T. Herndon, Chairman
Per E. Hoel
Joseph P. Henley
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 $10,000 per year plus $500 and expenses for
attendance at each meeting of the Board. In addition, Mr. Edward N. Leszczynski
was paid $11,250 for consulting services rendered to the Company during fiscal
1995.
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The graph provided below compares the Company's cumulative stockholder
return with that of the NASDAQ Stock Market Index (U.S. only) and the
approximately 120 companies which comprise the Dow Jones Complete Financial
Sector Index Group (Peer Group Index) for a period of five fiscal years
commencing January 31, 1990 and ending January 31, 1995.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN1 3
NATIONAL AUTO CREDIT, INC., NASDAQ STOCK MARKET
INDEX (U.S. ONLY), AND DOW JONES COMPLETE
FINANCIAL SECTOR INDEX2
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
1/90 1/91 1/92 1/93 1/94 1/95
- ---------------------------------------------------------------------------------------------------------
NATIONAL AUTO CREDIT, INC. 100 83 119 80 137 113
- ---------------------------------------------------------------------------------------------------------
DOW JONES COMPLETE FINANCIAL SECTOR 100 94 132 170 189 184
- ---------------------------------------------------------------------------------------------------------
NASDAQ STOCK MARKET -- U.S. 100 103 158 179 204 195
- ---------------------------------------------------------------------------------------------------------
<FN>
- ---------------
1 The above graph assumes an investment of $100 on January 31, 1990, including
reinvestment of all dividends, and indicates the appreciation of or
depreciation of each investment over a five year period. The historical
performance depicted on the graph is not necessarily indicative of future
performance.
</TABLE>
9
<PAGE> 12
2 In prior years the Company selected a subclassification of the Russell 2000
Consumer Discretionary and Services Group (Miscellaneous Services) as its peer
group index based upon their similar average market capitalization. In June
1994 this Miscellaneous Services group was disbanded and each company was
classified into other categories. Accordingly, since the Company is no longer
able to use this peer group, the Company has selected the Dow Jones Complete
Financial Sector as an appropriate industry index. The Company believes this
new group is a reasonable line of business or industry index for evaluating
the Company's Common Stock.
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 of 1933 or the Securities Exchange Act of 1934,
except to the extent the Company specifically incorporates this graph.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who beneficially own more than 10%
of a registered class of the Company's equity securities, to file reports of
initial ownership and changes in ownership of such equity securities with the
Securities and Exchange Commission and to furnish the Company with copies of all
Section 16(a) forms they file. 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 with the
following exceptions: (1) Mr. Kelly W. Reagan, Ms. Davida S. Howard and Mr. Gary
J. Mooney failed to report on Form 5 for the fiscal year ended January 31, 1995
the receipt of employee stock options granted during the fiscal year; and (2)
Mr. Joseph P. Henley (who disclaims beneficial ownership) failed to file when
due a Form 4 to report the acquisition by a trust for his spouse of a beneficial
interest in shares of the Company's Common Stock. These filing deficiencies have
been corrected.
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 12, 1995, of more
than 5% of the Company's outstanding Common Stock:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS BENEFICIALLY CLASS
OF BENEFICIAL OWNER OWNED1 2 OUTSTANDING
- --------------------- ----------------- ----------------
<S> <C> <C>
Sam J. Frankino 14,496,275 56.10%
30000 Aurora Road
Solon, Ohio 44139
<FN>
- ---------------
1 Mr. Frankino has both voting and investment power with respect to the shares
listed. Of the shares shown above, 366,015 shares are held by the Samuel J.
and Connie M. Frankino Charitable Foundation, a qualified charitable
foundation, as to which Mr. and Mrs. Frankino share voting and investment
power. Mr. and Mrs. Frankino disclaim any beneficial interest in those shares.
2 Includes 112,400 shares which may be acquired within 60 days pursuant to the
Company's 1983 Stock Option Plan (see Stock Plans on page 5).
</TABLE>
<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 12, 1995 by all Directors,
by the nominees for election as Directors of the Company, by each of the six
most highly compensated Executive Officers, and by all officers and Directors of
the Company as a group:
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY CLASS
NAME OWNED1 OUTSTANDING
- ------------------------------------- ------------ ----------
<S> <C> <C>
Sam J. Frankino...................... 14,496,2752 56.10%
Robert J. Bronchetti................. 19,7002 *
Peter T. Zackaroff................... 26,0232 *
Edward A. Burkhart................... 38,7192 *
Kelly W. Reagan...................... 6,4362 *
David R. Thomson..................... 11,5002 *
Noah T. Herndon...................... 4,000 *
Joseph P. Henley..................... 2,000 *
Per E. Hoel.......................... 2,000 *
Edward N. Leszczynski................ 2,000 *
All Officers and Directors
as a Group (14).................... 14,635,3612 56.43%
</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. With
respect to Mr. Frankino's beneficial ownership, see note 1 to the Security
Ownership of Certain Beneficial Owners and Management table on page 11. Mr.
Henley disclaims beneficial ownership of all 2,000 shares, which are held in
trust for his spouse and over which he has neither voting nor investment
power.
2 Includes shares which may be acquired within 60 days pursuant to the Company's
1983 Stock Option Plan and 1993 Equity Incentive Plan (see Stock Plans on page
5).
<TABLE>
<S> <C>
Mr. Frankino.................................................... 112,400
Mr. Bronchetti.................................................. 13,000
Mr. Zackaroff................................................... 21,499
Mr. Burkhart.................................................... 33,677
Mr. Reagan...................................................... 0
Mr. Thomson..................................................... 7,500
The fourteen Executive Officers and Directors as a group........ 207,276
<FN>
* Less than 1.0%
</TABLE>
CERTAIN TRANSACTIONS
Mr. Noah T. Herndon, Director, is a partner in the investment banking firm
of Brown Brothers Harriman & Co. ("Brown Brothers"). As announced March 1, 1995,
the Company has engaged the services of Brown Brothers to solicit offers to
purchase its fleet of rental automobiles and certain related assets and to act
as financial advisor in connection with any such transaction. In addition, Brown
Brothers will pay to Mr. Per E. Hoel, Director, twenty-five percent of any fees
it receives in connection with any such transaction.
Adverama, Inc. provides the Company with placement of Yellow Pages
directory advertising, printing services, and promotional items. These
transactions amounted to $3,401,000 during fiscal 1995. Adverama, Inc. is
beneficially owned by the daughter of the Company's Chairman of the Board of
Directors and majority stockholder. All services purchased from Adverama, Inc.
were at rates and upon terms competitive with those that could be obtained from
unaffiliated vendors. The amount payable to Adverama, Inc. was $373,000 at
January 31, 1995. 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 Company loaned Mr. Reagan a total of $76,104 at an interest rate of
10% per annum for a six month duration during the construction of his personal
residence. Repayment of the loan was extended to June 30, 1995. The loan is
secured by Company stock owned by Mr. Reagan.
12
<PAGE> 15
INDEPENDENT AUDITORS
Deloitte & Touche LLP has been selected to serve as the independent
auditors of the Company and its subsidiaries for the fiscal year ending January
31, 1996. Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting of Stockholders with the opportunity to make a statement
about the Company's financial condition, if they desire to do so, and to respond
to appropriate questions.
STOCKHOLDERS PROPOSAL
Any stockholder who intends to present a proposal at the 1996 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 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
This solicitation of proxies is made by and on behalf of the Board of
Directors. In addition to mailing copies of this statement and the accompanying
notice and form of proxy to all stockholders of record on the Record Date, the
Company will request brokers, custodians, nominees and other fiduciaries to
forward copies of this material to persons for whom they hold shares of Common
Stock of the Company in order that such shares may be voted. Solicitation may
also be made by the Company's officers and regular employees personally or by
telephone or telegraph. The cost of the solicitation will be borne by the
Company.
If the accompanying form of proxy is executed and returned, the shares
represented thereby will be voted in accordance with any specifications made by
the stockholder. In the absence of any such specifications, they will be voted
to elect the nominees as set forth under "ELECTION OF DIRECTORS".
The presence of any stockholder at the meeting will not operate to revoke
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.
THOMAS J. DOSTART
Vice President, General Counsel and
Secretary
May 19, 1995
13
<PAGE> 16
NATIONAL AUTO CREDIT, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
JUNE 21, 1995 ANNUAL MEETING OF STOCKHOLDERS
P
The undersigned hereby appoints Robert J. Bronchetti and Per E.
Hoel, and each of them with full power of substitution and
R resubstitution as proxies for the undersigned to attend the Annual
Meeting of Stockholders of National Auto Credit, Inc., to be held
at the Company's principal executive offices, 30000 Aurora Road,
O Solon, Ohio 44139 at 10:00 A.M. (Eastern Daylight Savings time) on
June 21, 1995, and thereat, and at any adjournment thereof, to vote
and act with respect to all shares of Common Stock of the Company
X which the undersigned would be entitled to vote, with all the power
the undersigned would possess if present in person, as follows:
Y
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> 17
/ X / PLEASE
MARK
EACH VOTE
LIKE THIS
----------------
Common
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 BELOW.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR WITHHOLD
ALL FOR ALL
1. ELECTION OF DIRECTORS: SAM J. FRANKINO 2. In their discretion, to vote
NOAH T. HERNDON / / / / upon such other business
as may properly come
before the meeting.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
----------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE
Please mark this box if you have / /
written comments/address change
on the reverse side.
Signature(s) of Stockholder(s)_______________________________________________ Date __________________
<FN>
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>
