TRANS LEASING INTERNATIONAL, INC.
3000 Dundee Road
Northbrook, Illinois 60062
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
October 20, 1995
The Annual Meeting of Shareholders of Trans Leasing International,
Inc. (the "Company") will be held on Thursday, November 16, 1995, at
10:00 a.m., at the Sheraton North Shore Hotel, 933 Skokie Boulevard,
Northbrook, Illinois 60062 for the purpose of considering and acting
upon the following:
(1) The election of six directors.
(2) Ratification of the appointment of Deloitte & Touche LLP as
the Company's independent auditors for the fiscal year ending
June 30, 1996.
(3) Such other matters as may properly come before the meeting.
The Board of Directors has fixed October 16, 1995, at the close of
business, as the record date for the determination of shareholders
entitled to vote at the meeting, and only holders of shares of Common
Stock of record at the close of business on that day will be entitled to
vote. The stock transfer books will not be closed. A copy of the list
of shareholders entitled to vote at this meeting will be available for
examination by any shareholder of record for any purpose germane to the
meeting during normal business hours at the Company's offices, 3000
Dundee Road, Northbrook, Illinois 60062, during the period preceding
this meeting. A copy of the Company's 1995 Annual Report is being
concurrently mailed to each person on such list.
Whether or not you expect to be present at the meeting, please date,
sign and return the enclosed proxy, which is solicited by the Board of
Directors. The proxy is revocable and will not affect your right to
vote in person, in the event you attend the meeting.
By Order of the Board of Directors
Terry Frey
Secretary
October 20, 1995
YOU ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT
PROMPTLY. THANK YOU.
<PAGE>
TRANS LEASING INTERNATIONAL, INC.
3000 Dundee Road
Northbrook, Illinois 60062
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Trans
Leasing International, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Shareholders to be held on November 16,
1995 and any adjournment thereof. Proxies in the accompanying form,
properly executed and received by the Secretary prior to the meeting and
not revoked, will be voted FOR the election of directors as set forth
herein (unless otherwise designated) and FOR the ratification of the
appointment of Deloitte & Touche LLP as independent auditors for the
fiscal year ending June 30, 1996. Any proxy may be revoked at any time
before it is exercised by giving notice to the Company prior to or at
the Annual Meeting. The approximate date of mailing of this Proxy
Statement is October 20, 1995. The cost of soliciting proxies will be
borne by the Company. In addition to solicitation by mail, directors,
officers and other employees of the Company may solicit proxies by
telephone, telex or in person.
Only holders of Common Stock, par value $.01 per share, of the Company
(the "Common Stock") of record on the books of the Company at the close
of business on October 16, 1995 will be entitled to vote at the Annual
Meeting. On that date there were 4,137,575 shares of Common Stock
outstanding, the holders of which are entitled to one vote per share. A
majority of the outstanding Common Stock of the Company will constitute
a quorum for the transaction of business at the Annual Meeting, but if a
quorum should not be present the Annual Meeting may be adjourned until a
quorum is obtained.
ELECTION OF DIRECTORS
The Board of Directors of the Company consists of six directors, all
of whom will be elected at the Annual Meeting. The directors to be
elected at the Annual Meeting shall hold office until the 1996 Annual
Meeting of Shareholders and until their successors shall have been
elected and qualified. If the accompanying form of proxy is properly
executed, the persons named as proxies therein will (unless otherwise
designated) vote the shares of Common Stock represented by such executed
proxy for the election of the six persons named below. In case any of
the nominees is not a candidate at the meeting, an event which the Board
of Directors does not anticipate, the enclosed proxy may be voted for a
substitute nominee and (unless otherwise designated) will be voted for
the other nominees named. Information supplied by the directors
concerning their ages, business experience, periods of service as
directors and the number of shares of Common Stock of the Company
beneficially owned as of October 3, 1995 is shown below.
<TABLE>
NOMINEES FOR ELECTION AT THE 1995 ANNUAL MEETING:
<CAPTION>
Served as Shares
Business Experience and a Director Beneficially
Name Age Other Information Since Owned
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard Grossman 43 Chairman of the Board of Directors and 1972 1,952,000
President and Chief Executive Officer
of the Company since 1982;
Executive Vice-President of the
Company from 1981 to 1982; Vice-
President of the Company, with
primary responsibility for sales, marketing
and promotion of the Company's leasing
services and secondary responsibility for
developing and maintaining the Company's
1
<PAGE>
Served as Shares
Business Experience and a Director Beneficially
Name Age Other Information Since Owned
- ----------------------------------------------------------------------------------------------------------------
sources of financing from 1972 to 1981.
During this period, Richard Grossman
created, developed and implemented the
Company's LeaseCard program. Richard
Grossman is the brother of Mr. Larry S.
Grossman, a director of the Company.
Clifford V. Brokaw, III (a) 67 President and Chief Executive Officer of June 1992 150,000
Invail Energy, Inc. (an Oklahoma based oil and
gas production company) since 1977. Prior to
that time, he was a general partner of Eastman
Dillon, Union Securities & Co., an investment
banking firm based in New York City.
Larry S. Grossman (a) 46 Chairman and Chief Executive Officer August 1991 39,000
of FluoroScan Imaging Systems, Inc.
(the manufacturer of the FluoroScan Imaging
System, a fluoroscopic device) from 1982
to 1986 and from 1989 to present; Chief
Operating Officer and Director of Pain
Prevention Labs, Inc. (a manufacturer of an
electronic dental anesthesia device) from 1986
to 1989; President, Chief Executive Officer
and Director of the Company from 1981 to 1982
and Vice President and Director of the Company
from 1972 to 1981. Larry S. Grossman is the
brother of Mr. Richard Grossman.
Michael J. Heyman (b)(c) 42 President of MOKSHA Worldwide, Inc. August 1991 39,000
(an international marketing and merchandising
concern in the apparel industry) since 1994;
Senior Vice President of Heyman Corporation
(an international marketing and merchandising
concern in the apparel industry) from 1982 to 1994.
Mark C. Matthews (d) 43 Partner with the Argent Group (a August 1991 35,000
developer of commercial and residential
real estate) since 1985.
John W. Stodder (b) 72 Independent corporate finance and February 1986- 70,000
acquisition consultant since 1987; August 1991
Director and Vice-Chairman of Jostens, and since
Inc. (a manufacturer of educational, June 1992
recognition and technical products and
2
<PAGE>
Served as Shares
Business Experience and a Director Beneficially
Name Age Other Information Since Owned
- ----------------------------------------------------------------------------------------------------------------
services for schools and businesses)
since 1978; Director of Talley
Industries, Inc. (a manufacturer of
industrial and defense products and
developer of real estate) since 1970;
Director of Stevens Graphics Corp.,
(a manufacturer of high volume
packaging and printing machinery and
equipment) since 1992.
</TABLE>
(a) Member of the Audit Committee of the Board of Directors.
(b) Member of the Compensation Committee of the Board of Directors.
(c) Chairman of the Audit Committee of the Board of Directors.
(d) Chairman of the Compensation Committee of the Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company provides health and life insurance policies for the
parents of Richard Grossman and Larry S. Grossman. The cost to the
Company of these policies did not exceed $25,000 for the year ended June
30, 1995.
The Company leases three automobiles and certain equipment to Mark C.
Matthews, a director of the Company, and his affiliates. The remaining
required lease payments on such leases at October 3, 1995, were
approximately $55,000 in the aggregate.
The Company leases an automobile and office equipment to MOKSHA
Worldwide, Inc., of which Michael J. Heyman, a director of the Company,
is President. The remaining required lease payments on these leases at
October 3, 1995, were approximately $38,000 in the aggregate.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors held four meetings during fiscal 1995. Each
director attended at least three of the four meetings of the Board of
Directors and all of the meetings for the Board Committees on which such
director served.
The Audit Committee of the Board of Directors meets with management
of the Company and the Company's independent auditors to discuss the
scope and the results of the annual audit by the independent auditors,
the fees for the services to be performed by the independent auditors
and the Company's internal control structure. The Audit Committee met
once in fiscal 1995. No officers of the Company serve on the Audit
Committee.
The Compensation Committee of the Board of Directors reviews and
recommends salaries and other forms of compensation of elected Company
officers, grants options under the Company's 1986 Employees Stock Option
and Performance Unit Plan and administers such plan, and reviews other
personnel and compensation matters with the Company's management. The
Compensation Committee grants options under the 1992 Executive
Management Group Stock Option Plan and administers such plan. The
Compensation Committee met once in fiscal 1995. No officers of the
Company serve on the Compensation Committee.
The Board of Directors does not have a nominating committee.
3
<PAGE>
Each director who is not an officer of the Company received a fee of
$12,000 per year and is reimbursed for out-of-pocket expenditures
incurred to attend Board and Committee meetings. The Company's directors
have also been granted warrants to purchase shares of Common Stock. See
"Directors' Warrants".
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers, directors and persons who beneficially
own more than ten percent of a registered class of the Company's equity
securities to file reports of securities ownership and changes in such
ownership with the Securities and Exchange Commission (the "SEC").
Officers, directors and greater than ten percent beneficial owners also
are required, by rules promulgated by the SEC, to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of such Forms furnished to the
Company, or written representations that no Form 5 filings were required,
the Company believes that during fiscal 1995 all of its officers,
directors and greater than ten percent beneficial owners complied with
Section 16(a) filing requirements applicable to them.
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of October 3, 1995
(a) by each person known by the Company to own beneficially more than
five percent of such outstanding Common Stock, (b) by each executive
officer and director of the Company and (c) by all executive officers and
directors of the Company as a group. Each of such shareholders has sole
voting and investment power as to shares shown unless otherwise noted.
<TABLE>
<CAPTION>
Shares Owned Percent
Name (1) Beneficially (2) of Class (3)
- ---------------------------------------------------------------------------------
<S> <C> <C>
Richard Grossman . . . . . . . . . . . . . . . . . 1,952,000 47%
Norman Smagley . . . . . . . . . . . . . . . . . . 10,000 *
Joseph Rabito. . . . . . . . . . . . . . . . . . . 28,425 *
Brian Cascarano (4). . . . . . . . . . . . . . . . 1,500 *
Clifford V. Brokaw, III. . . . . . . . . . . . . . 150,000 4%
Larry S. Grossman. . . . . . . . . . . . . . . . . 39,000 *
Michael J. Heyman. . . . . . . . . . . . . . . . . 39,000 *
Mark C. Matthews . . . . . . . . . . . . . . . . . 35,000 *
John W. Stodder. . . . . . . . . . . . . . . . . . 70,000 2%
All Directors and Officers as a Group (9 Persons). 2,324,925 53%
</TABLE>
* Indicates less than 1% of outstanding shares.
(1) The address of Richard Grossman, whose beneficial ownership
exceeds five percent, is in care of the Company at 3000 Dundee
Road, Northbrook, Illinois 60062.
(2) These figures include shares covered by options or warrants
as follows: Richard Grossman - 25,000; Norman Smagley - 10,000;
Joseph Rabito-26,156; Clifford V. Brokaw, III-35,000; Larry S.
Grossman-35,000; Michael J. Heyman-35,000; Mark C. Matthews-35,000;
John W. Stodder-65,000; and all officers and directors as
a group-266,156.
(3) Percentages are rounded to the nearest whole percentage
point.
(4) Effective August 31, 1995, Mr. Cascarano ceased to be
employed by the Company. All of his outstanding options were
forfeited effective August 31, 1995.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the total annual compensation
paid or accrued by the Company during fiscal years 1993, 1994 and
1995 to the Company's Chief Executive Officer and to each of the
Company's three most highly compensated Executive Officers other
than the Chief Executive Officer.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------------------- --------------
All Other
Name and Year Salary Bonus Other Annual Awards-Options Compensation
Principal Position ($) ($) Compensation /SARs (#) ($)
- ------------------------- ------ -------- ------------ ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Richard Grossman, 1995 $272,000 $34,000 $35,000 - $ -
President, Chief 1994 259,000 - 20,000 - 23,000
Executive Officer, 1993 247,000 - 24,000 25,000 24,000
& Chairman of the
Board of Directors
Norman Smagley, 1995 116,000 14,000 - - 2,000
Vice President, Finance 1994(1) 30,000 - - 10,000 -
& Chief Financial Officer
Joseph Rabito, 1995 116,000 14,000 2,000 1,156 -
Vice President, 1994 110,000 - 2,000 10,000 2,000
Operations 1993 105,000 - - 5,000 2,000
Brian F. Cascarano (2), 1995 116,000 14,000 2,000 1,156 -
Vice President, 1994 110,000 - 2,000 10,000 -
Sales & Marketing 1993 105,000 - - 5,000 -
</TABLE>
(1) Norman Smagley became Vice President, Finance and Chief
Financial Officer in March 1994. His annualized salary for fiscal
1994 was $110,000.
(2) Effective August 31, 1995, Mr. Cascarano ceased to be employed
by the Company. All of his outstanding options were forfeited
effective August 31, 1995.
Some of the persons included in the preceding table received
certain non-cash compensation during fiscal 1995. Except in the
case of Richard Grossman, such compensation did not exceed, in the
case of any named individual 10 percent of the cash compensation of
such individual or, in the case of the group, 10 percent of the
cash compensation for the group. The Company provides Richard
Grossman with the use of an automobile and pays the premiums for
split dollar life insurance policies with a face value of
$5,474,000 for Richard Grossman, $500,000 for his former wife, and
$100,000 for each of his three children. The premiums paid on
these policies in fiscal 1995 did not exceed $125,000. These
policies provide that in the event of the death of the insured, the
Company will receive from the death benefits payable under the
policy the amount of the premiums previously paid by the Company.
The cash surrender value of these policies, up to the cumulative
amount of the premiums paid by the Company, is assigned to the
Company. Annual increases in cash surrender value have exceeded
premiums paid by the Company in each of the past three fiscal
years.
5
<PAGE>
The following table sets forth the number of shares of
the Company's Common Stock subject to stock options granted to the
individuals listed in the Summary Compensation Table during fiscal
1995 pursuant to the 1992 Executive Management Group Stock Option
Plan, together with related information.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------------- Potential realizable
value at assumed
annual rates of
Percent of stock price
total options Exercise appreciation for
Options granted or base option term
granted to employees price Expiration -------------------
Name (#) (1) in fiscal year (2) ($/Sh) date 5% ($) 10% ($)
- ----------------------- --------- ------------------ -------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard Grossman - - % $ - $ - -
Norman Smagley - - - - -
Joseph Rabito 499 14.4 3.50 8/11/97 269 559
657 18.9 5.25 8/11/97 355 736
Brian F. Cascarano (3) 499 14.4 3.50 8/11/97 269 559
657 18.9 5.25 8/11/97 355 736
</TABLE>
(1) Options are immediately exercisable.
(2) The remaining 33.3 % of options were granted to an individual who
resigned during the fiscal year. These options were cancelled on the
date of resignation.
(3) Effective August 31, 1995, Mr. Cascarano ceased to be employed by
the Company. All of his outstanding options were forfeited effective
August 31, 1995.
The following table sets forth the number of shares of the Company's
Common Stock subject to stock options exercised by the individuals
listed in the Summary Compensation Table during fiscal 1995, together
with related information, and the value of the unexercised options.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FY-END OPTION VALUES
------------------------------------------------
<CAPTION>
Value of
Number of unexercised
Shares unexercised in-the-money
acquired options options
on Value at FY-end (#) at FY-end ($)
Name excercise realized (exercisable/ (exercisable/
(#) ($) unexercisable) unexercisable)
- --------------------- --------- ---------- --------------- ----------------
<S> <C> <C> <C> <C>
Richard Grossman - $ - 25,000 / 0 $ - / $ 0
Norman Smagley - - 10,000 / 0 - / 0
Joseph Rabito - - 26,156 / 0 - / 0
Brian F. Cascarano (1) - - 41,156 / 0 - / 0
</TABLE>
(1) Effective August 31, 1995, Mr. Cascarano ceased to be employed by
the Company. All of his outstanding options were forfeited
effective August 31, 1995.
DIRECTORS' WARRANTS
The Company has granted to each of its directors, other than Richard
Grossman, immediately exercisable warrants entitling them to purchase
shares of Common Stock. Larry S. Grossman, Michael J. Heyman and Mark
C. Matthews each have warrants to purchase 25,000 shares at an exercise
price of $3.25 and 10,000 shares at an exercise price of $6.00; Clifford
V. Brokaw, III has warrants to purchase 25,000 shares at an exercise
price of $5.25 and 10,000 shares at an exercise price of $6.00; and John
W. Stodder has warrants to
6
<PAGE>
purchase 25,000 shares at an exercise price of $5.25, 30,000 shares at
an exercise price of $4.25 and 10,000 shares at an exercise price of
$6.00. The exercise prices of such warrants are subject to adjustment
in certain events and the warrant holders have the right, under certain
circumstances, to have the warrants and shares issuable thereunder
included in registrations of the Company's Common Stock.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee"), is comprised of three
out of six of the Company's directors: Michael J. Heyman, Mark C.
Matthews, and John W. Stodder. Mark C. Matthews serves as Chairman of
the Committee. The Committee reviews and approves the compensation of
each of the executive officers of the Company ("Officers"). The
Committee also administers employee stock option plans and other benefit
plans.
The Company's compensation program for Officers is designed to reward
such officers for their individual performance and contribution to the
Company while at the same time being tied directly to the Company's
overall performance. The Committee and the Board of Directors (the
"Board") believe that a direct relationship between Officers'
compensation and the Company's performance is a very important factor in
achieving the Company's objective of maximizing shareholder value.
The Company's executive compensation program consists of a base salary
and participation in the Officers Bonus Plan (the "Bonus Plan") and the
1992 Executive Management Group Stock Option Plan (the "1992 Plan").
The Officers may also participate in the Trans Leasing International,
Inc. Savings Plan (the "Savings Plan") and the 1986 Employees Stock
Option and Performance Unit Plan (the "1986 Plan") with the other
salaried employees.
In 1995, the Officers' base salaries were increased for a cost-of-
living adjustment only. The Committee has decided to increase the
Officers' base salaries in fiscal 1996 in the same manner. It is the
Committee's belief that the potential to earn incremental compensation
in the future should be tied directly to the Company's performance and
this is accomplished through the other components of executive
compensation program discussed below.
The financial goals in the 1995 Bonus Plan were not met in fiscal 1995
and therefore no cash payments were made under that portion of the Plan.
Bonuses for individual performance were awarded to the Officers in
accordance with the 1995 Bonus Plan. The 1996 Bonus Plan is designed to
provide incentive to the Officers in the form of a cash payment at the
end of the fiscal year if the Company achieves certain financial
performance targets relating to return on equity and net income.
The Committee may also grant to the Officers stock options under the
1986 Plan based on the Committee's evaluation of each Officer's
performance. The Committee believes that by providing the opportunity
for compensation through equity ownership, management will be more
focused on maximizing shareholder value. All options are granted at the
then current market value; thus, compensation is earned only on future
stock appreciation.
7
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the total return of the Company's Common
Stock with the Center for Research in Securities Prices ("CRSP") Total
Return Index for the NASDAQ Stock Market (U.S. Companies) and the CRSP
Total Return Index for NASDAQ Financial Stocks. The increase in value
of an initial $100 investment over the indicated time periods is plotted
on the graph below.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE
RETURN AMONG TRANS LEASING INTERNATIONAL, INC.,
NASDAQ U.S. COMPANIES, AND NASDAQ FINANCIALS
<CAPTION>
Measurement Period
- ---------------------
Trans Leasing NASDAQ NASDAQ
(Fiscal Year Covered) International, Inc. U.S. Companies Financials
- --------------------- -------------------- --------------- -----------
<S> <C> <C> <C>
Measurement Pt-6/30/90 100 100 100
FYE 6/30/91 79 106 110
FYE 6/30/92 158 127 153
FYE 6/30/93 138 160 201
FYE 6/30/94 117 162 226
FYE 6/30/95 125 215 259
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation by the Audit Committee, the Board has appointed
Deloitte & Touche LLP as independent auditors for the Company's fiscal
year ending June 30, 1996. The Company has been advised that Deloitte &
Touche LLP has no relationship with the Company or its subsidiaries
other than arising from the firm's employment as auditors.
Representatives of Deloitte & Touche LLP are expected to be present at
the 1995 Annual Meeting with the opportunity to make a statement if they
so desire and to be available to respond to appropriate questions
relating to that firm's examination of the Company's financial
statements for fiscal 1995.
8
<PAGE>
DISCRETIONARY VOTING OF PROXIES IN OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters that are to be presented for action at the meeting. Should any
other matter come before the meeting, however, the persons named in the
enclosed proxy will have discretionary authority to vote all proxies
with respect to such matter in accordance with their judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals of shareholders intended to be presented at the 1996
Annual Meeting of Shareholders must be received by the Company at its
executive offices no later than the close of business on June 20, 1996
for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.
VOTING PROCEDURES
Under Delaware law and the Company's Certificate of Incorporation and
By-laws, if a majority of the shares entitled to vote is present at the
meeting in person or by proxy (i) the six nominees for election as
directors who receive the greatest number of votes cast for the election
of directors at the meeting by the shares present in person or by proxy
and entitled to vote shall be elected directors and (ii) proposal 2 and
any other matters submitted to a vote of the shareholders must be
approved by the affirmative vote of the majority of shares present in
person or by proxy and entitled to vote on the matter. In the election
of directors, any action other than a vote for a nominee will have the
practical effect of voting against the nominee. Abstention from voting
will have the practical effect of voting against any of the other
matters since it is one less vote for approval. Broker nonvotes on one
or more matters will have no impact on such matters since they are not
considered "shares present" for voting purposes.
ADDITIONAL INFORMATION
This solicitation is being made by the Company. All expenses of the
Company in connection with solicitation will be borne by the Company.
In addition to the solicitation by mail, proxies may be solicited by
directors, officers and other employees of the Company by telephone,
telex, in person or otherwise, without additional compensation. The
Company will request brokerage firms, nominees, custodians and
fiduciaries to forward proxy materials to the beneficial owners of
shares held of record by such persons and will reimburse such persons
and the Company's transfer agent for their reasonable out-of-pocket
expenses in forwarding such materials.
The Company will furnish without charge to each person whose proxy is
being solicited, upon the written request of any such person, a copy of
the Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1995 as filed with the Securities and Exchange Commission, including
the financial statements contained therein. Requests for copies of such
Annual Report on Form 10-K should be directed to the Secretary of the
Company.
By Order of the Board of Directors
Terry Frey
Secretary
October 20, 1995
9
