<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
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)
Payment of filing fee (Check the appropriate box):
/ / $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: ---------------------
------------------------------------------------------
/X/ 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]
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 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 LOGO]
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 LOGO]
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 25,832,872
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.
1
<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 25,832,872 shares of
Common Stock issued and outstanding, held by approximately 1,409 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. Annex
2A is marked to show the changes proposed to the first paragraph of Article
SIXTH pursuant to the Proposal.
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 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
2
<PAGE> 6
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.
REASONS FOR AND 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.
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.
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.
3
<PAGE> 7
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 communicating such revocation to the Secretary of the Company prior
to exercise of the proxy. 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.
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>
Shares of
Common Stock Percent of
Name and Address Beneficially Class
of Beneficial Owner Owned 1 2 Outstanding
--------------------- ----------------- ----------------
<S> <C> <C>
Sam J. Frankino 14,501,275 55.88%
30000 Aurora Road
Solon, Ohio 44139
- ---------------
<FN>
1 Mr. Frankino has both voting and investment power with respect to the shares
listed. Of the shares shown above, 366,015 shares are held by the Samuel J.
and Connie M. Frankino Charitable Foundation, a qualified charitable
foundation, as to which Mr. and Mrs. Frankino share voting and investment
power. Mr. and Mrs. Frankino disclaim any beneficial interest in those shares.
2 Includes 117,400 shares which may be acquired within 60 days pursuant to the
Company's 1983 Stock Option Plan.
</TABLE>
4
<PAGE> 8
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:
<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
Edward A. Burkhart3 42,763 *
Joseph P. Henley3 2,000 *
Kelly W. Reagan3 0 *
David R. Thomson3 0 *
Peter T. Zackaroff3 4,024 *
All Officers and 14,631,539 56.21%
Directors as a Group (18)
</TABLE>
- ---------------
[FN]
1 Unless otherwise indicated, each person has sole voting and investment power
with respect to the shares shown as beneficially owned by such person. With
respect to Mr. Frankino's beneficial ownership, see note 1 to 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.
<TABLE>
<S> <C>
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
3 These individuals resigned from their positions subsequent to year end
(January 31, 1995).
* Less than 1.0%
</TABLE>
5
<PAGE> 9
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
6
<PAGE> 10
ANNEX 1
ARTICLE SIXTH
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL AUTO CREDIT, INC.
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 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
A-1
<PAGE> 11
(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 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 directors and prior to the consummation 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;
(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
Corporation (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
A-2
<PAGE> 12
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) 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.
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-3
<PAGE> 13
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 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
B-1
<PAGE> 14
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 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 directors and prior to the consummation 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;
(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
Corporation (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
B-2
<PAGE> 15
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) 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.
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-3
<PAGE> 16
ANNEX 2A
ARTICLE SIXTH
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL AUTO CREDIT, INC.
AS AMENDED BY THE PROPOSAL
AND MARKED TO SHOW CHANGES FROM CURRENT ARTICLE SIXTH
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.
- ---------------
*Indicates deletion.
CAPITAL LETTERS INDICATES ADDITIONS.
2A-1
<PAGE> 17
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 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.
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<PAGE> 18
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> 19
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 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
E-1
<PAGE> 20
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 certificate remain true immediately prior to such filing.
E-2
<PAGE> 21
NATIONAL AUTO CREDIT, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
DECEMBER 27, 1995 SPECIAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Robert J. Bronchetti and James E.
Smith, Jr., and each of them with full power of substitution and resubstitution
as proxies for the undersigned at the Special Meeting of Stockholders of
National Auto Credit, Inc., to be held at the Company's principal executive
offices, 30000 Aurora Road, Solon, Ohio 44139 at 10:00 A.M. (Eastern Standard
time) on December 27, 1995, and at any adjournment thereof, to vote and act
with respect to all shares of Common Stock of the Company which the undersigned
would be entitled to vote, with all the power the undersigned would possess if
present in person, as follows:
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.
If you have comments, use the following space:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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.
TO FOLLOW THE BOARD OF DIRECTOR'S RECOMMENDATION, SIGN, DATE AND MAIL THIS
PROXY IN THE ENCLOSED RETURN ENVELOPE.
(Over)
The Board of Directors recommends that you vote "FOR" the Proposal.
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.
For Against Abstain
[ ] [ ] [ ]
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.
Date
---------------------------------------
---------------------------------------
Signature
---------------------------------------
Signature (if jointly owned)
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES
