SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
TRM COPY CENTERS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Set forth the amount on which
the filing fee is calculated and state how it was determined.
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[ ] 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.
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<PAGE>
TRM COPY CENTERS CORPORATION
Notice of Annual Meeting of Shareholders
October 28, 1997
To Our Shareholders:
The annual meeting of the shareholders of TRM Copy Centers Corporation, an
Oregon corporation (the "Company"), will be held on Tuesday, October 28, 1997 at
9 a.m. at the U.S. Bancorp Tower, 41st Floor, John Elorriaga Auditorium, 111
S.W. Fifth Avenue, Portland, Oregon 97204, for the following purposes:
1. To elect three members of the Board of Directors for three-year terms.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
All shareholders are invited to attend the meeting. Holders of record of
the Company's Common Stock at the close of business on September 10, 1997 are
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
Frederick O. Paulsell
Chairman of the Board
Portland, Oregon
September 12, 1997
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the annual
meeting, please promptly sign and date your enclosed proxy and return it in the
postage paid envelope.
A shareholder who completes and returns the proxy and subsequently attends
the meeting may elect to vote in person, since a proxy may be revoked at any
time before it is voted. Retention of the proxy is not necessary for admission
to the meeting.
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of TRM Copy
Centers Corporation (the "Company") for use at the annual meeting of
shareholders to be held on Tuesday, October 28, 1997 at 9 a.m. at the U.S.
Bancorp Tower, 41st Floor, John Elorriaga Auditorium, 111 S.W. Fifth Avenue,
Portland, Oregon 97204, and at any adjournments thereof.
The cost of soliciting proxies will be borne by the Company, including
expenses in connection with the preparation and mailing of the proxy statement,
form of proxy and any other material furnished to the shareholders by the
Company in connection with the annual meeting. In addition to the solicitation
of proxies by mail, employees of the Company may also solicit proxies by
telephone and personal contact. The Company has retained Corporate Investor
Communications, Inc. to assist in the solicitation of proxies from brokers and
other nominees at an estimated cost of $3,000. The Company's Annual Report to
Shareholders covering its fiscal year ended June 30, 1997, which includes
financial statements, is being mailed to shareholders together with these proxy
materials on or about September 17, 1997.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Secretary of the Company an instrument of revocation or a
duly executed proxy bearing a later date. The proxy may also be revoked by
affirmatively electing to vote in person while attending the meeting. However, a
shareholder who attends the meeting need not revoke the proxy and vote in person
unless he or she wishes to do so. All valid proxies will be voted at the meeting
in accordance with the instructions given. A shareholder may strike the names of
the persons designated as proxies on the enclosed proxy and insert names of his
or her own choosing. If no instructions are given, the proxies will be voted for
the election of the nominees for director. At the meeting, the presence in
person or by proxy of the holders of a majority of the shares issued and
outstanding will constitute a quorum for the transaction of business.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
Holders of record of the Company's Common Stock at the close of business on
September 10, 1997 will be entitled to vote on each matter presented at the
annual meeting. On that date, 6,940,041 shares of Common Stock were issued and
outstanding. Each share of Common Stock is entitled to one vote on every matter
submitted at the meeting. The Common Stock does not have cumulative voting
rights.
The following table shows the ownership of the Company's Common Stock on
June 30, 1997 by (i) each person who, to the knowledge of the Company,
beneficially owns more than 5 percent of the outstanding shares, (ii) each of
the Company's directors, (iii) each of the Company's named executive officers
and (iv) the Company's directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares
Beneficial Owner Address Beneficially Owned (1) Percent
---------------- ------- ------------------ -------
<S> <C> <C> <C>
Frederick O. Paulsell (2) c/o 5208 N.E. 122nd Avenue 912,092 13.0%
Portland, OR 97230-1074
Laifer Capital Management, 45 West 45th Street, 9th Floor 780,650 11.3%
Inc. (3) New York, NY 10036
T. Rowe Price Associates, 100 East Pratt Street 780,000 11.3%
Inc. (4) Baltimore, Maryland 21202
Edwin S. Chan (5) c/o 5208 N.E. 122nd Avenue 557,423 8.0%
Portland, OR 97230-1074
- --------------------------------
(footnotes on following page)
<PAGE>
Shares
Beneficial Owner Address Beneficially Owned (1) Percent
---------------- ------- ------------------ -------
<S> <C> <C> <C>
Wellington Management 75 State Street 554,500 8.0%
Company, LLP (6) Boston, MA 02109
Marcia W. Zech (7) 3041 60th Avenue, S.E. 480,430 6.9%
Mercer Island, WA 98040
Dimensional Fund 1299 Ocean Avenue, 11th Floor 361,600 5.2%
Advisors, Inc. (8) Santa Monica, CA 90401
Michael D. Simon 324,420 4.5%
Donald L. Van Maren (9) 163,069 2.3%
Sherman M. Coe 152,288 2.2%
Ralph R. Shaw 41,750 *
Robert A. Bruce 45,863 *
James W. Perris 31,148 *
Danial J. Tierney 22,641 *
Directors and executive 2,261,227 30.0%
officers as a group (9
persons)
* Represents less than 1 percent.
(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission (the "SEC"), and includes voting power
and dispositive power with respect to shares. Shares are held with sole
voting and dispositive power unless otherwise indicated. Shares of Common
Stock subject to options currently exercisable or exercisable within 60 days
are deemed outstanding for computing the percentage for the person holding
such options, but are not deemed outstanding for computing the percentage
for any other person. The numbers of shares that may be obtained upon
exercise of options that are currently exercisable or exercisable within 60
days of June 30, 1997 are as follows: Mr. Paulsell, 85,000 shares; Mr. Chan,
5,000 shares; Mr. Simon, 318,336 shares; Mr. Van Maren, 26,000 shares; Mr.
Coe, 41,500 shares; Mr. Shaw, 41,750 shares; Mr. Bruce, 40,000 shares; Mr.
Perris, 30,000 shares; Mr. Tierney, 22,000 shares; and all executive
officers and directors as a group, 615,419 shares.
(2) The information excludes shares owned by Mr. Paulsell's children, all of
whom are adults. The information also excludes 480,430 shares owned by Mr.
Paulsell's former wife, Marcia W. Zech. Mr. Paulsell disclaims beneficial
ownership of all such shares.
(3) This information is based upon a Schedule 13D filed with the Securities and
Exchange Commission (the "SEC") on June 4, 1997, reporting that Laifer
Capital Management, Inc. ("Laifer") had (i) sole voting power with respect
to 534,450 shares and shared voting power with respect to no shares and (ii)
sole dispositive power with respect to 534,450 shares and shared dispositive
power with respect to 246,200 shares. The shares beneficially owned by
Laifer include 410,850 shares beneficially owned by Laifer in its capacity
as general partner of and investment adviser to Hilltop Partners, L.P. and
369,800 shares beneficially owned by Laifer in its capacity as investment
adviser to various other clients.
(4) This information is based upon a Schedule 13G dated February 14, 1997 and
filed with the SEC, reporting that T. Rowe Price Associates, Inc. had (i)
sole voting power with respect to 355,000 shares and shared voting power
with respect to no shares and (ii) sole dispositive power with respect to
780,000 shares and shared dispositive power with respect to no shares.
(5) The information provided includes 30,641 shares owned by Mr. Chan's wife and
minor children.
(6) This information is based upon a Schedule 13G dated January 24, 1997 and
filed with the SEC, reporting that Wellington Management Company, LLP had
(i) sole voting power with respect to no shares and shared voting power with
respect to 299,000 shares and (ii) sole dispositive power with respect to no
shares and shared dispositive power with respect to all 554,500 shares.
(7) This information is based upon a Schedule 13G dated February 11, 1997 and
filed with the SEC, reporting that Marcia W. Zech had (i) sole voting power
with respect to 480,430 shares and shared voting power with respect to no
shares and (ii) sole dispositive power with respect to 480,430 shares and
shared dispositive power with respect to no shares. The information provided
excludes shares owned by Mrs. Zech's children and other relatives, all of
whom are adults. The information also excludes 912,092 shares beneficially
owned by her former husband, Frederick O. Paulsell. Mrs. Zech disclaims
beneficial ownership of all such shares.
(8) This information is based upon a Schedule 13G dated February 5, 1997 and
filed with the SEC, reporting that Dimensional Fund Advisors, Inc. had (i)
sole voting power with respect to 258,600 shares and shared voting power
with respect to 103,000 shares and (ii) sole dispositive power with respect
to all 361,600 shares.
(9) Mr. Van Maren's shares are held jointly with his wife.
</TABLE>
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes serving staggered
three-year terms. The terms of office of Messrs. Coe and Shaw expire in 1999.
The terms of office of Messrs. Simon and Van Maren expire in 1998. The terms of
office of Messrs. Paulsell, Stockton and Chan expire in 1997.
Messrs. Paulsell, Stockton and Chan are nominated for three-year terms.
Descriptions of the three nominees for election follow. For a description of the
continuing directors, see "Background Information About Continuing Directors and
Executive Officers."
Frederick O. Paulsell, 58, has served as a director since 1984 and was
elected Chairman of the Board in 1985. Since January 1995, Mr. Paulsell has been
a partner at Olympic Capital Partners, P.L.L.C., a Seattle-based investment
banking firm. From 1992 to 1994, he served as President of Paulsell & Reed, a
Seattle investment firm. From 1987 to 1991, Mr. Paulsell served as President of
Foster, Paulsell & Baker, Inc., also a Seattle investment firm. Mr. Paulsell
serves on the Board of Directors of Costco Companies, Inc. and several privately
held companies. He was Chairman of the Board of Ballard Computer, Inc., a
Seattle-based computer hardware and software retailer that filed for bankruptcy
in March 1995. Ballard is not affiliated in any way with the Company.
Frederic P. Stockton, 45, was appointed President, Chief Executive Officer
and a director in August 1997. Prior to joining TRM and since 1985, Mr. Stockton
was employed by The Estey Corporation, a privately-held company with six
business groups including vending, equipment distribution, food distribution,
mobile catering, recreational properties and food service. Most recently and
since 1994, he served as President and Chief Executive Officer. From 1985 to
1994, Mr. Stockton served as President of The Estey Corporation's Equipment
Distribution Group. From 1978 to 1985, he was employed by Omark Industries (now
The Oregon Cutting Systems Division of Blount, Inc.) in positions of increasing
responsibility. Mr. Stockton holds a B.A. degree from the University of
Washington.
Edwin S. Chan, 65, has been a director of the Company since 1985, and was
elected Vice Chairman in February 1995. He served as President and Chief
Executive Officer of the Company from 1985 until retiring as an executive
officer and becoming Vice Chairman. He also served as the Company's Chief
Financial Officer from 1984 until becoming President.
It is the intention of the persons named in the accompanying form of proxy
to vote for the three nominees, unless other instructions are given. Proxies
cannot be voted for more than three nominees. Directors are elected by the vote
of a plurality of the shares cast in person or by proxy at the meeting.
Accordingly, the three nominees receiving the most votes at the meeting will be
elected director to serve for three-year terms. Abstentions and broker non-votes
will have no effect on the results of the vote. If any nominee is unable to
stand for election for any reason, proxies will be voted for the election of a
substitute proposed by the Board of Directors.
3
<PAGE>
BACKGROUND INFORMATION ABOUT
CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Sherman M. Coe, 54, has served as a director since 1985. He has been
President of Advanced Training Center, Inc., a vocational school, since 1977;
Vice President of Gene Juarez Salons, Inc., a chain of beauty salons, since
1983; Vice President of Gene Juarez Beauty Academy, Inc., a vocational school,
since 1987; and President of Charter Leasing Corporation and Financial Leasing
Corporation, two vehicle and equipment leasing companies, since 1993.
Ralph R. Shaw, 59, was elected to the Board of Directors in 1991. He
previously served as a director of the Company from 1985 through 1986. Since
February 1997, Mr. Shaw has been Chairman of Shaw Ventures, L.L.C., a venture
capital firm. From March 1995 until February 1997, Mr. Shaw was Co-Chairman of
Shaw, Glasgow & Co., L.L.C., a venture capital firm. Prior to that and since
1980, he served as President of Shaw Management Company, an investment
counseling firm. Mr. Shaw is also the general partner of three venture capital
firms: Shaw Venture Partners, formed in 1983; Shaw Venture Partners II, formed
in 1987; and Shaw Venture Partners III, formed in 1994. He also serves on the
Board of Directors of Schnitzer Steel Industries, Inc. During fiscal 1993, Mr.
Shaw entered into a Settlement Agreement with the Securities and Exchange
Commission relating to alleged violations of Section 16(a) of the Securities
Exchange Act of 1934 and rules thereunder due to failure to report transactions
in the common stock of two issuers other than the Company on a timely basis. As
part of the Settlement Agreement, Mr. Shaw must permanently cease and desist
from any further violations of such provisions.
Michael D. Simon, 53, was elected President and Chief Executive Officer in
February 1995 and served until his retirement as an executive officer in August
1997. From July 1994 until becoming President, he served the Company as a
consultant. Prior to joining TRM and beginning in 1986, Mr. Simon was employed
by Sequent Computer Systems, Inc., a high-performance computer company. His
responsibilities over time at Sequent included executive responsibilities in
marketing, sales, service, legal, corporate development and strategic planning.
Most recently, he was a Senior Vice President at Sequent. Mr. Simon holds a B.S.
degree from Pratt Institute and a Masters degree from Columbia University, both
in electrical engineering.
Donald L. Van Maren, 63, has served as a director of the Company since
1983. Mr. Van Maren is a private investor and has been President of Gems
International, Inc., a gem broker, since 1979. Mr. Van Maren was self-employed
as an optometrist through 1983.
James W. Perris, 40, was elected Chief Operating Officer and Vice President
of Operations of the Company in April 1995. Prior to joining TRM and since 1991,
Mr. Perris was General Manager of Calbag Metals Co., a privately-held
manufacturer and broker of nonferrous metals. From 1984 through 1991, he was
employed at First Interstate Bank of Oregon in positions of growing
responsibility. Mr. Perris holds a B.A. degree from Stanford University and an
M.B.A. from the University of Oregon.
Danial J. Tierney, 41, was named Vice President of Corporate Sales of the
Company in July 1996. Prior to that and since January 1995, Mr. Tierney served
the Company as Vice President of Sales and Marketing. For 16 years prior to
joining TRM, Mr. Tierney was employed by Spectra Physics Scanning Systems, Inc.
and its affiliates in various locations and in positions of increasing
responsibility, most recently in Eugene, Oregon, as Director of Marketing. He
holds a B.S. degree from the University of California, Berkeley, and an M.B.A.
from the University of Santa Clara.
4
<PAGE>
CORPORATE GOVERNANCE
The Board of Directors has an Executive Committee, a Nominating Committee,
an Audit Committee and a Compensation Committee. Messrs. Paulsell, Shaw, Simon
and Stockton currently serve on the Executive Committee. The function of the
Executive Committee is to act on an interim basis for the full Board. Messrs.
Chan, as chairman, Paulsell and Simon currently serve on the Nominating
Committee. The Nominating Committee was established during fiscal 1996 to
assist, as needed, with finding qualified candidates to serve on the Company's
Board of Directors. The Nominating Committee will consider nominations submitted
by shareholders. Nominations should be submitted to the Corporate Secretary.
Messrs. Coe, as chairman, and Van Maren currently serve on the Audit Committee.
The Audit Committee has the responsibility of recommending the Company's
independent auditors, reviewing the scope and results of audits, and overseeing
such other matters relating to the integrity of the Company's finances and
financial statements, as the Committee may consider appropriate. Messrs. Shaw,
as chairman, and Paulsell currently serve on the Compensation Committee. The
functions of the Compensation Committee are to approve the executive officers'
compensation and to administer the Company's 1996 Stock Option Plan, when the
full Board is not administering such Plan, and its Employee Stock Purchase Plan.
The Board of Directors held six meetings during fiscal 1997. The Executive
Committee met four times during fiscal 1997. The Nominating Committee did not
meet. The Audit Committee met twice and the Compensation Committee met four
times. During fiscal 1997, each incumbent director attended at least 75 percent
of all meetings of the Board and Committees on which the director served.
Directors who are not employees of the Company are paid fees of $2,000 per
year plus $500 for each Board or Committee meeting attended. Members of the
Executive Committee who are not employees receive an additional annual fee of
$2,000. If Board and Committee meetings are held on the same day, only one
attendance fee is paid. Pursuant to the Company's 1996 Stock Option Plan, each
nonemployee director is automatically granted a nonstatutory stock option for
5,000 shares of the Company's Common Stock on the date of each annual
shareholders meeting held during the time he or she serves as a nonemployee
director. Each nonemployee director who is serving on the Executive Committee of
the Board automatically is granted an additional nonstatutory stock option for
2,500 shares on the date of each annual shareholder meeting held during the time
the director serves as a member of the Executive Committee. The exercise price
for all options granted to nonemployee directors under the Plan is the fair
market value of the Company's Common Stock on the date of grant. Each such
option has a 10-year term and becomes fully exercisable on the first anniversary
of the option grant, provided the director is then serving on the Board and, if
applicable, on the Executive Committee.
During fiscal 1997, nonemployee directors received the fees and automatic
stock option grants described in the preceding paragraph. For serving as
Chairman of the Board and as a member of the Executive Committee, Mr. Paulsell
also received $3,000 a month during fiscal 1997, except for the months of
November and December during which no fees were received. Also, during the year,
Olympic Capital Partners, P.L.L.C., with whom Mr. Paulsell is a partner,
provided investment banking services to the Company. Mr. Shaw also received
$2,500 a month for serving as a member of the Executive Committee, except for
the months of December and January during which no fees were received.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table sets forth compensation paid during fiscal 1997 to the Chief
Executive Officer and to certain other executive officers of the Company.
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
---------------------- ---------------------
Name and Securities Underlying Other
Principal Position Year Salary Bonus Options (#) Compensation (1)
------------------ ---- ------ ----- ----------- ------------
<S> <C> <C> <C> <C> <C>
Michael D. Simon 1997 $290,000 -- 59,000 $5,184
Former President and 1996 $300,000 $138,258 116,000 $3,640
Chief Executive 1995 $267,500 (3) -- 300,000 --
Officer (2)
James W. Perris 1997 $118,983 $ 35,000 20,000 $4,576
Chief Operating Officer 1996 $110,000 $ 22,500 -- $1,456
and Vice President of 1995 $ 18,333 $ 5,000 75,000 --
Operations
Robert A. Bruce 1997 $108,167 $ 29,250 10,000 $4,180
Former Chief Financial 1996 $100,000 $ 23,750 25,000 $3,640
Officer and Vice 1995 $ 88,500 $ 14,063 50,000 $3,754
President of Finance (4)
Danial J. Tierney 1997 $108,167 $ 30,000 -- $4,064
Vice President of 1996 $110,000 $ 12,000 -- $2,438
Corporate Sales 1995 $ 55,000 $ 7,500 75,000 --
(1) Reflects contributions by the Company to the Company's Profit Sharing
Retirement Plan.
(2) Mr. Simon retired as an officer effective August 25, 1997.
(3) Includes consulting fees paid from July 1994 until January 31, 1995 and
salary after Mr. Simon was elected President and Chief Executive Officer on
February 1, 1995.
(4) Mr. Bruce resigned from the Company effective August 22, 1997.
</TABLE>
6
<PAGE>
Stock Option Grants in Last Fiscal Year
- ---------------------------------------
The following table provides information regarding stock options granted to
certain executive officers in 1997.
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------------------
Percent of
Total Potential Realizable Value
Numbers of Options at Assumed Annual Rates
Shares Granted to of Stock Price Appreciation
Underlying Employees in Exercise for Option Term (2)
Options Fiscal Price per Expiration --------------------------------
Name Granted (1) Year Share Date 5% 10%
---- ----------- ------------ ------------ ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael D. Simon 59,000 (3) 40.3% $10.375 10/22/06 $ 384,962 $ 975,570
Robert A. Bruce 10,000 (4) 6.8% $10.375 10/22/06 $ 65,248 $ 165,351
James W. Perris 20,000 (4) 13.7% $ 9.875 12/17/06 $ 124,207 $ 314,764
(1) Under terms of the option agreements, the options are subject to accelerated
vesting in the event of a future change in control of the Company.
(2) In accordance with rules of the Securities and Exchange Commission, these
amounts are the hypothetical gains or "option spreads" that would exist for
the respective options based on assumed rates of annual compound stock price
appreciation of 5% and 10% from the date the options were granted over the
full option term.
(3) The option vests 40% after the first year, 30% after the second year, 20%
after the third year and 5% after the fourth and fifth years and the option
vests in full on termination without cause, death, disability, or a
significant change in job responsibilities.
(4) The option vests 20% a year over five years from the date of grant.
</TABLE>
Option Exercises and Holdings
- -----------------------------
The following table indicates (i) stock options exercised by the executive
officers during the last fiscal year, (ii) the number of shares subject to
exercisable (vested) and unexercisable (unvested) stock options as of June 30,
1997 and (iii) the fiscal year-end value of "in-the-money" unexercised options.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at Fiscal In-The-Money Options
Year End (#) at Fiscal Year End (2)
----------------------------- ------------------------------
Shares
Acquired
on Value
Name Exercise (#) Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael D. Simon 40,000 $236,650 312,504 122,496 $ 1,724,689 $ 30,624
James W. Perris -- -- 30,000 65,000 $ 127,500 $ 206,250
Robert A. Bruce -- -- 40,000 45,000 $ 206,250 $ 71,250
Danial J. Tierney -- -- 22,000 45,000 $ 143,000 $ 292,500
(1) Aggregate market value of the shares covered by the option, less the
aggregate price paid by the executive.
(2) Based on the fair market value of the Company's stock as of June 30, 1997.
Values are stated on a pretax basis.
</TABLE>
7
<PAGE>
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
Compensation Committee
- ----------------------
All of the actions regarding compensation of executive officers of the
Company in fiscal 1997 were taken by the Compensation Committee of the Board of
Directors (the "Committee"), which is composed of two outside directors.
Pursuant to authority delegated by the Board, the Committee makes determinations
concerning compensation to be paid to the Chief Executive Officer and each of
the other executive officers of the Company and is responsible for developing
and making recommendations to the Board of Directors with respect to the
Company's executive compensation policies. During fiscal 1997, the Committee
also administered the Company's 1996 Stock Option Plan and the Company's
Restated 1986 Stock Incentive Plan.
Chief Executive Officer Compensation
- ------------------------------------
In January 1995, Michael D. Simon and the Company entered into an
employment letter agreement whereby Mr. Simon was appointed President and Chief
Executive Officer of the Company for the period from February 1, 1995 to
September 30, 1996. In May 1996, Mr. Simon's employment letter agreement was
revised to extend Mr. Simon's employment. The revised agreement provided that
Mr. Simon's base compensation would continue at $300,000 per year and any cash
bonuses for periods beginning after February 1, 1997 would be at the discretion
of the Board of Directors. The terms of the revised employment agreement
reflected negotiations between the Company and Mr. Simon and the Committee's
evaluation of Mr. Simon's performance as Chief Executive Officer, including his
efforts to enhance long-term shareholder value and his contributions to
improving profits and revenues and the long-term growth prospects for the
Company. The number of option shares granted to Mr. Simon during fiscal 1997 was
based on negotiations between the Company and Mr. Simon and the directors'
subjective determination of the number of shares needed to adequately compensate
Mr. Simon and to provide a significant incentive for him to exert his best
efforts on the Company's behalf and to continue with the Company on a
longer-term basis.
8
<PAGE>
Executive Officer Compensation
- ------------------------------
The Company's executive compensation program consists of base salary,
annual cash incentive compensation in the form of discretionary bonuses and
discretionary long-term incentive compensation in the form of stock options.
This program is designed to reflect pay for performance that is tied to the
Company's, as well as individual performance.
The fiscal 1997 salaries established for executive officers other than the
Chief Executive Officer were determined by the Committee after considering the
Company's size and complexities relative to other public companies. In
determining salaries, the Committee took into account job responsibilities,
individual experience and individual performance.
Discretionary bonuses were paid to each executive officer other than the
Chief Executive Officer for fiscal 1997 based on Company and individual
performance.
The Company has a stock option plan in which key employees of the Company,
including executive officers, are eligible to participate. The Board of
Directors believes that the availability of stock incentives is an important
factor in the Company's ability to attract and retain key employees, to provide
an incentive for them to exert their best efforts on behalf of the Company and
to further align their interests with shareholders. Stock option grants to
certain executive officers during fiscal 1997 are reflected in the Summary
Compensation Table and the stock option tables.
Section 162(m) of the Internal Revenue Code of 1986 limits to $1,000,000
per person the amount that the Company may deduct for compensation paid to any
of its most highly compensated officers in any year after 1993. It is
anticipated that the levels of salary and bonus to be paid by the Company will
not exceed that limit.
Compensation Committee Report Submitted By:
Ralph R. Shaw, Chairman
Frederick O. Paulsell
9
<PAGE>
Stock Performance Graph
The following graph provides a comparison of the cumulative total
shareholder return for the period June 30, 1992 through June 30, 1997 for (i)
the Company's Common Stock, (ii) the Nasdaq Stock Market (US) and (iii) the
Nasdaq Retail Trade Index, in each case assuming the investment of $100 on June
30, 1992 and the reinvestment of any dividends.
[Graphic line chart depicting stock performance]
<TABLE>
<CAPTION>
6/30/92 12/31/92 6/30/93 12/31/93 6/30/94 12/31/94 6/30/95 12/31/95 6/30/96 12/31/96 6/30/97
--------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TRM 100.000 98.113 90.566 84.906 43.396 39.623 49.057 79.245 83.962 73.585 80.189
- --------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Nasdaq (US) 100.000 121.120 125.761 139.038 126.968 135.912 169.477 192.207 217.593 236.402 264.614
- --------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Nasdaq Retail 100.000 113.710 106.259 119.988 105.780 109.317 119.113 120.428 144.768 143.574 154.383
- --------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
10
<PAGE>
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as independent
auditors for the Company for the fiscal year ending June 30, 1998. This firm has
served as the Company's auditors since 1987. The decision of the Board of
Directors is based on the recommendation of the Audit Committee. Representatives
of KPMG Peat Marwick LLP are expected to be present at the annual meeting, will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Reports of all transactions in the Company's Common Stock by insiders are
required to be filed with the SEC pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). One stock transaction
relating to stock owned by Mr. Paulsell's former wife and minor stepson was
reported late on one Form 4 for fiscal 1997.
SHAREHOLDER PROPOSALS
A proposal by a shareholder for inclusion in the Company's proxy statement
and form of proxy for the 1998 annual meeting of shareholders must be received
by the Company at 5208 N.E. 122nd Avenue, Portland, Oregon 97230 on or before
May 20, 1998 in order to be eligible for such inclusion.
OTHER MATTERS
The notice of annual meeting of shareholders provides for transaction of
such other business as may properly come before the meeting. As of the date of
this proxy statement, the Board of Directors has been advised of no matters to
be presented for discussion at the meeting. However, the enclosed proxy gives
discretionary authority to the persons named in the proxy in the event that any
other matters should be properly presented to the shareholders.
Portland, Oregon
September 12, 1997
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----- PLEASE MARK VOTES REVOCABLE PROXY With- For All
| X | AS IN THIS EXAMPLE TRM COPY CENTERS CORPORATION For hold Except
- ----- ----- ----- -----
ELECTION OF DIRECTORS | | | | | |
----- ----- -----
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR Frederick O. Paulsell, Frederic P. Stockton and
THE 1997 ANNUAL MEETING OF SHAREHOLDERS -- Edwin S. Chan to serve for three-year terms;
OCTOBER 28, 1997
INSTRUCTION: To withhold authority to vote for any
The undersigned hereby appoints Frederick O. Paulsell individual nominee, mark "For All Except" and write
and Michael D. Simon, and each of them, as proxies with that nominee's name in the space provided below.
full power of substitution, and authorizes them to
represent and to vote on behalf of the undersigned all ------------------------------------------------------
shares which the undersigned would be entitled to vote
if personally present at the 1997 Annual Meeting of Either or both of the proxies (or substitutes)
Shareholders of TRM COPY CENTERS CORPORATION to be held present at the meeting may exercise all powers granted
on October 28, 1997, and any adjournments thereof, with hereby.
respect to the following:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF DIRECTORS. IN ADDITION,
THE PROXIES MAY VOTE AT THEIR DISCRETION ON SUCH OTHER
---------------------- MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
| Date |
Please be sure to sign and date | | Please date and sign below exactly as your name
this Proxy in the box below. | | or names appear hereon. If more than one name appears,
- ------------------------------------------------------------ all should sign. Joint owners should each sign
| | personally. Corporate proxies should be signed in full
| | corporate name by an authorized officer and attested.
| | Persons signing in a fiduciary capacity should indicate
- ---Shareholder sign above---Co-holder (if any) sign above--- their full title and authority.
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
TRM COPY CENTERS CORPORATION
5208 N.E. 122nd Avenue - Portland, Oregon 97230
- -------------------------------------------------------------------------------------------------------------------------
| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
