<PAGE> 1
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
[x] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRANS LEASING INTERNATIONAL, INC.
(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):
[x] No fee required.
[ ] 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 of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transaction: ___
(5) Total fee paid: ___
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ___
(2) Form, Schedule or Registration Statement No.: ___
(3) Filing Party: ___
(4) Date Filed: ___
<PAGE> 2
TRANS LEASING INTERNATIONAL, INC.
3000 Dundee Road
Northbrook, Illinois 60062
-----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
May 1, 1997
A Special Meeting of Shareholders of Trans Leasing International, Inc.
(the "Company") will be held on May 1, 1997 at 9:00 a.m., at the Company's
offices at 3000 Dundee Road, Northbrook, Illinois 60062 for the purpose of
considering and acting upon the following:
(1) The approval of the Company's 1996 Stock Option Plan.
(2) The approval of warrants issued to members of the Board of Directors
of the Company.
(3) Such other matters as may properly come before the meeting.
The Board of Directors of the Company has fixed March 24, 1997, at the
close of business, as the record date for the determination of shareholders of
the Company 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 of the Company 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 at 3000 Dundee
Road, Northbrook, Illinois 60062 during the 10-day period preceding this
meeting.
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 of
the Company. 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
Michael J. Heyman
President, Chief Operating Officer
and Secretary
March 25, 1997
YOU ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT
PROMPTLY. THANK YOU.
<PAGE> 3
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 (hereinafter, the
"Company"), for use at a Special Meeting of Shareholders (hereinafter, the
"Special Meeting") to be held on May 1, 1997 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 approval
of the Company's 1996 Stock Option Plan and FOR the approval of the Director
Warrants (as defined below) issued to members of the Board of Directors of the
Company. Any proxy may be revoked at any time before it is exercised by giving
notice to the Company prior to or at the Special Meeting. The approximate date
of mailing of this Proxy Statement is April 1, 1997. The cost of soliciting
proxies will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by directors, officers and other employees of the
Company by telephone, telex, in person or otherwise.
Only holders of Common Stock, par value $.01 per share, of the Company
(hereinafter, the "Common Stock") of record on the books of the Company at the
close of business on March 24, 1997 will be entitled to vote at the Special
Meeting. As of March 24, 1997, there were 4,025,755 shares of Common Stock
outstanding, the holders of which are entitled to one vote per share. A
majority of the outstanding Common Stock will constitute a quorum for the
transaction of business at the Special Meeting, but if a quorum should not be
present, the Special Meeting may be adjourned until a quorum is obtained.
APPROVAL OF THE 1996 STOCK OPTION PLAN
The 1996 Stock Option Plan of the Company was adopted by the Compensation
Committee of the Board of Directors of the Company ("the Compensation
Committee") on November 7, 1996, and was amended by the Compensation Committee
at its meeting on March 1, 1997 to increase the aggregate number of shares of
Common Stock that may be issued thereunder from 500,000 to 1,000,000. The 1996
Stock Option Plan, as so amended (the "Plan"), was approved by the Board of
Directors of the Company (the "Board") at its meeting on March 1, 1997. The
purpose of the Plan is to provide a valuable incentive for the development and
maintenance of strong management. The Board believes that the Plan is in the
best interests of the Company and has directed that the Plan be submitted to
the shareholders of the Company for their consideration and approval.
The full text of the Plan is set forth at Exhibit A to this Proxy
Statement, and the following summary is qualified in its entirely by reference
to Exhibit A.
<PAGE> 4
The key provisions of the Plan are as follows:
NUMBER OF SHARES
The number of shares of Common Stock with respect to which options may be
granted under the Plan and which may be issued upon the exercise thereof shall
not exceed, in the aggregate, 1,000,000 shares; provided, however, that if any
options expire unexercised or unpaid or are canceled, terminated or forfeited
in any manner without the issuance of Common Stock or payment in any manner
with the issuance of Common Stock or payment thereunder, the shares with
respect to which such options were granted shall again be available for grant
under the Plan. No participant may be granted in the aggregate in any year
options relating to in excess of 200,000 shares of Common Stock (the "Award
Limit"). In the event of any stock split or similar change in the Common
Stock, the number of shares of Common Stock covered by the Plan and the Award
Limit shall automatically be adjusted proportionately.
ADMINISTRATION AND ELIGIBILITY
The Plan is administered by the Compensation Committee, or another
committee appointed by the Board (the "Committee"). The Committee has full
power to construe and interpret the Plan and options granted under the Plan, to
establish and amend rules for its administration, to grant options under the
Plan, and to correct any defect or omission or reconcile any inconsistency in
the Plan or in any option to the extent the Committee deems desirable to carry
the Plan or any option into effect. The Committee may, with the consent of the
person entitled to exercise any outstanding option, amend such option as it may
deem proper.
As of March 24, 1997, the Compensation Committee is serving as the
Committee. The names of its present members, each of whose address is the
Company's principal executive office, are as follows:
Mark C. Matthews, Chairman
John W. Stodder
Larry Bier
As of March 24, 1997, there are outstanding options to purchase an
aggregate of 409,000 shares of Common Stock, which the Committee has granted,
subject to approval of the Plan by the shareholders of the Company. The
following table sets forth the name of the option holder, the number of shares
of Common Stock subject to stock options, the exercise price and other related
information regarding such outstanding options.
- 2 -
<PAGE> 5
OUTSTANDING OPTIONS GRANTED UNDER THE PLAN SUBJECT TO SHAREHOLDER APPROVAL
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------------------------------------
Number of Percent of
Shares Total Options
Underlying Granted to Exercise
Options Employees Price Expiration Market Value
Option Holder (#) Under Plan ($/Sh) Date ($) (1)
- ------------------------------ -------------- ---------------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Larry S. Grossman 100,000 (2) 24.5% $4.375 11/7/01 $ 212,500
Chairman and Chief Executive 100,000 (2) 24.5 $5.50 2/21/02 100,000
------- -------
Officer 200,000 312,500
Michael J. Heyman 50,000 (2) 12.2 $4.375 11/7/01 106,250
President, Chief Operating 50,000 (2) 12.2 $5.50 2/21/92 50,000
-------- --------
Officer and Secretary 100,000 156,250
Joseph Rabito 10,000 (3) 2.4 $4.375 11/7/01 (4)
Executive Vice President 13,000 (2) 3.2 $4.375 11/7/01 27,625
------
23,000
All Executive Officers
as a Group (three) (5) 323,000 79.0
All Participants as a Group
excluding Executive Officers 86,000 (6) 21.0
</TABLE>
(1) The market value shown in this column was computed by multiplying the
number of shares by the difference between the last sale price of the
Common Stock on the NASDAQ Stock Market on March 24, 1997 ($6.50) and the
exercise price.
(2) Options are vested and immediately exercisable.
(3) Options vest November 7, 1997 and are exercisable immediately thereafter.
(4) The market value of the options is not ascertainable until vesting occurs.
(5) Messrs. Grossman, Heyman and Rabito are the Company's only executive
officers as of March 24, 1997.
(6) Consists of options granted to four employees. Exercise prices range from
$4.375 to $6.25. Expiration dates range from 11/7/01 to 2/17/02. Options
representing 26,000 shares of Common Stock are vested and immediately
exercisable and have a market value of $55,250; the remainder of the
options vest one-third on each of the first, second and third
anniversaries of their respective grant dates.
OPTIONS
The Plan authorizes the Committee to grant options to purchase Common
Stock to directors and key employees of the Company at an exercise price which
(subject to amendment as discussed in "Termination of Plan; Amendment and
Adjustment") may not be less than 100% of the fair market value of a share of
Common Stock on the date of grant. In the case of an option granted to any
person owning 10 percent or more of the Common Stock, the option price fixed by
the Committee may not be less than 110 percent of the fair market value of a
share of Common Stock on the date of grant.
The Plan permits optionees to pay the option price in cash, by delivery of
Common Stock, including the withholding from issuance of Common Stock issuable
upon the exercise of such option, in each case valued at the highest closing
price during the 30-day period prior to the date of exercise, or, with the
approval of the Committee, by delivery of the optionee's promissory note or by
delivery of a combination of the foregoing. Cash received upon exercise will
constitute general funds of the Company and shares of Common Stock received
will constitute treasury stock.
Options to be granted under the Plan may be incentive stock options
(within the meaning of Section 422 of the Code, hereinafter "ISOs") or in such
other form, consistent with the Plan, as the
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<PAGE> 6
Committee may determine. The principal difference between ISOs and other
non-ISO options is their tax treatment. See "Federal Income Tax Consequences."
SUPPLEMENTAL CASH PAYMENTS
Subject to the Committee's discretion, a non-ISO option may, in certain
circumstances, require the Company to make a cash payment to the holder thereof
in an amount equal to the excess of the fair market value of a share of the
Common Stock on the date the holder recognizes taxable income over the option
price multiplied by the number of shares as to which the option is being
exercised. The purpose of such cash payments will be to assist the person
exercising the non-ISO option to pay federal income taxes resulting from the
exercise.
TERM AND EXERCISE PERIODS OF GRANTS
Options may be granted for terms of not more than five years from the date
of grant (subject to amendment as discussed in "Termination of Plan; Amendment
and Adjustment").
Options will be exercisable only during the period of the holder's service
as a director of or employment by the Company, except that in the discretion of
the Committee, an option may be made exercisable for up to three months after
the date the directorship or employment is terminated for any reason other than
death or retirement and for up to two years after the date an optionee's
directorship or employment is terminated by death or such retirement. Options
granted under the Plan will not be transferable, except by will and the laws of
descent and distribution.
TERMINATION OF PLAN; AMENDMENT AND ADJUSTMENT
No option may be granted under the Plan after November 6, 2006. The Plan
provides that the Board or the Committee may at any time suspend or terminate
the Plan or make such additions or amendments as it deems advisable, except
that neither the Board nor the Committee may, without approval of a majority of
the shareholders of the Company, amend the Plan to (i) increase the maximum
amount of stock subject to the Plan (other than pursuant to the adjustment
provisions discussed below), (ii) change the method of determining the minimum
price per share specified in an option (other than pursuant to the adjustment
and other provisions discussed below), (iii) extend the term of the Plan or
(iv) change the class of persons to whom options may be granted under the Plan.
An outstanding option may be amended or canceled by the Committee at any
time with the consent of the holder. Permissible amendments include reducing
the exercise price of the option to not less than the fair market value of the
Common Stock at the time of the amendment and extending the term of the grant
to no more than five years from the date of the amendment.
The Plan provides that in the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation or
other change in the shares of the Common Stock, appropriate changes to prevent
dilution or enlargement of options will be made by the
- 4 -
<PAGE> 7
Committee in the number or type of shares authorized by the Plan and covered by
outstanding options and the price thereof.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary, and it reflects
only the Federal income tax consequences. Tax laws and regulations governing
stock options are highly technical, and such laws are subject to change in the
future. Optionees should consult with their own tax advisers with respect to
the tax consequences (including those under state and local tax laws)
associated with ISO and non-ISO stock options.
Non-ISO Options. Upon the grant of a non-ISO option, for Federal income
tax purposes, the optionee will not recognize any taxable income and the
Company will not be entitled to a deduction. Upon the exercise of such an
option the excess of the fair market value of the shares acquired on the
exercise of the option over the option price will constitute compensation
taxable to the optionee as ordinary income. In determining the amount of such
excess, the fair market value of the Common Stock on the date of exercise is
used, except that in the case of an optionee subject to six month short-swing
profit liability under Section 16(b) of the Exchange Act (executive officers,
directors and major shareholders of the Company, hereinafter "16(b) Persons")
such fair market value will be determined six months after the grant date if
the option is exercised before such six-month period expires, unless such
optionee elects to be taxed on the fair market value of the Common Stock at the
date of exercise by filing an appropriate election with the Internal Revenue
Service within thirty (30) days after the exercise. An optionee's basis in the
stock received will be equal to such stock's fair market value on the date of
exercise (or six months after the grant date, if later, and if the optionee is
a 16(b) Person and makes no election). The Company will generally be entitled
to a deduction in computing its Federal income taxes in an amount equal to the
taxable income recognized by the optionee.
If the optionee sells the shares acquired pursuant to the exercise of a
non-ISO option, such optionee will recognize capital gain or loss equal to the
difference between the selling price of the shares and the optionee's basis in
those shares. Such capital gain or loss will be long or short-term, depending
on the holding period of the stock (not including the holding period of the
stock option). No deduction is allowed to the Company with respect to such
excess.
ISOs. For Federal income tax purposes, an optionee does not recognize
taxable income on the grant or exercise of an ISO. However, the excess of the
stock's fair market value at the time of exercise over its exercise price will
be treated as an item of tax preference which may subject the optionee to an
alternative minimum tax in the year of exercise. Such alternative minimum tax
may be payable even though the optionee receives no cash upon the exercise of
his ISO with which to pay such tax. Upon the disposition of shares of Common
Stock acquired pursuant to the exercise of an ISO after the later of (a) two
years from the date of grant of the option or (b) one year after exercise of
the option (the "Required Holding Periods"), the optionee will recognize
long-term capital gain or loss, as the case may be, measured by the difference
between the stock's selling price and the exercise price. The Company is not
entitled to any tax deduction by reason of grant or exercise of an ISO, or of
such a disposition of stock received upon exercise of an ISO. An employer
- 5 -
<PAGE> 8
may not grant an employee ISOs to the extent that the fair market value
(determined as of the date the ISOs are granted) of all stock that may be
acquired upon the exercise of ISOs granted to such employee that are first
exercisable in any calendar year exceeds $100,000.
If the optionee disposes of the shares of stock acquired pursuant to the
exercise of an ISO before the expiration of the Required Holding Periods (a
"Disqualifying Disposition"), the difference between the exercise price of such
shares and the lesser of (i) the fair market value of the shares upon the date
of exercise (the fair market value at a later date may govern in the case of a
16(b) Person), or (ii) the selling price, will constitute compensation taxable
to the optionee as ordinary income. The Company will generally be allowed a
corresponding tax deduction. If the selling price of the stock exceeds such
fair market value as determined as of the date the ISO is exercised, the excess
is taxable to the optionee as capital gain (long or short-term, depending upon
whether the optionee held the stock for more than six months). No tax
deduction is allowed to the Company by reason of any such capital gain
recognized by the optionee.
Use of Stock to Pay Option Price. If an optionee delivers
previously-acquired Common Stock of the Company in payment of all or part of
the option price of an option, any appreciation or depreciation in the value of
the previously-acquired Common Stock subsequent to its acquisition date will
not be recognized as a result of such delivery. Where such stock in used to
exercise a non-ISO option, the optionee's tax basis in, and holding period for,
the previously-acquired stock surrendered carry over to the option shares
received on a share-for-share basis. The fair market value of the shares
received in excess of the shares surrendered will constitute compensation
taxable to the optionee as ordinary income. Such fair market value is
determined on the date of exercise, with the exception of 16(b) Persons
discussed above. The tax basis for such shares will equal their fair market
value as so determined, and such shares' holding period will begin on the date
on which the fair market value of such shares is determined. The Company will
generally be entitled to a tax deduction equal to the taxable income recognized
by the optionee.
Where the Company's stock is used to pay the exercise price on an ISO,
the optionee's tax basis in, and holding period for, the previously-acquired
stock surrendered carry over to the option shares received on a share-for-share
basis. However, the use of Common Stock acquired pursuant to the exercise of
an ISO as part or all of the exercise price of another ISO will be treated as a
Disqualifying Disposition, if such previously-acquired stock has not been held
for the Required Holding Periods at the time the ISO is exercised. (The tax
consequences of a Disqualifying Disposition are discussed above.) Shares
received in excess of the shares surrendered will have a tax basis equal to the
amount paid (if any) in excess of the previously-acquired shares used to pay
the exercise price, and such shares' holding period will begin on the date of
exercise (with the possible exception of 16(b) Persons). Proposed regulations
provide that where an ISO is exercised using previously-acquired stock, a later
Disqualifying Disposition of the shares received upon exercise will be deemed
to have been a disposition of the shares received with the lowest basis.
Supplemental Cash Payments. The amount of supplemental cash payments
will constitute compensation taxable to the optionee as ordinary income and the
Company generally will be entitled to a deduction in an amount equal to the
cash paid to the optionee. Under current individual tax rates, this payment
from the Company should provide the optionee with sufficient funds to pay the
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<PAGE> 9
Federal income tax arising from both the exercise of a non-qualified option and
his receipt of such payment. Under current corporate tax rates, the Company's
cash payment to the optionee (assuming that it in deductible in full as
reasonable compensation) may be partially offset by the Company's tax savings
arising from the deductions to which the Company is entitled because of such
exercise and payment.
$1 Million Deduction Limitation for Certain Compensation. In general,
a publicly held corporation may not deduct compensation paid to a "covered
employee" in a taxable year of the corporation to the extent such compensation
exceeds $1 million. A "covered employee" is defined as the corporation's chief
executive officer and each of the 4 highest compensated officers for the
taxable year (other then the chief executive officer). In addition to any
other applicable remuneration paid to such covered employee, all compensation
paid to a covered employee under the Plan (whether in the form of cash or
shares of Common Stock) is subject to this limitation, including, without
limitation, compensation attributable to the exercise of options and payments
made with respect to supplemental cash payments.
OTHER CONSIDERATIONS
The Plan is not qualified under Section 401(a) of the Code and, based
upon current law and published interpretations, the Company believes the Plan
is not subject to the provisions of the Employee Retirement Income Security Act
of 1974.
The present members of the Board and the Company's officers may
benefit from the approval of the Plan to the extent they are entitled to
receive options thereunder. Larry S. Grossman, Chief Executive Officer and
Director, Michael J. Heyman, President, Chief Operating Officer, Secretary and
Director, and Joseph Rabito, Executive Vice President, have been granted
options under the Plan and therefore have an interest in and will benefit from
the approval of the Plan. The Board believes that the advantages of having
qualified individuals serve on the Board and as officers of the Company justify
the benefit that may be derived by these individuals.
THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN.
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<PAGE> 10
APPROVAL OF THE DIRECTOR WARRANTS
Since November 1995, members of the Board who, due to their membership
on the Board, were not entitled to options under the Company's prior existing
stock option plans have been granted warrants to purchase Common Stock. The
purpose of the Director Warrants is to provide valuable incentives for the
development of a strong Board. The Board believes that the Director Warrants
are in the best interest of the Company and has directed that the Director
Warrants be submitted to the shareholders of the Company for approval.
On November 21, 1995, the Compensation Committee granted (i) Larry S.
Grossman, Michael J. Heyman and Mark C. Matthews immediately exercisable
warrants entitling each of them to purchase 10,000 shares of Common Stock at an
exercise price of $3.50, (ii) John W. Stodder immediately exercisable warrants
entitling him to purchase 65,000 shares of Common Stock at an exercise price of
$3.50 and (iii) Clifford V. Brokaw, III immediately exercisable warrants
entitling him to purchase 35,000 shares of Common Stock at an exercise price of
$3.50. These warrants (the "1995 Replacement Warrants") replaced an equal
number of existing warrants at exercise prices ranging between $4.25 and $6.00
previously granted to each of the individuals.
On May 30, 1996, the Compensation Committee granted to Larry S.
Grossman, Michael J. Heyman and Mark C. Matthews, subject to the approval of
the shareholders of the Company, immediately exercisable warrants entitling
each of them to purchase 25,000 shares of Common Stock at an exercise price of
$3.50. These warrants (the "1996 Replacement Warrants") replaced an equal
numbers of existing warrants at exercise prices of $3.25 previously granted to
each of the individuals at the time they became member of the Board.
On November 7, 1996, the Compensation Committee granted to each of
Larry Bier, Clifford V. Brokaw, III, Mark C. Matthews and John W. Stodder,
subject to the approval of the shareholders of the Company, immediately
exercisable warrants (the "1996 New Warrants") entitling each of them to
purchase 10,000 shares of Common Stock at an exercise price of $4.375.
On February 21, 1997, the Compensation Committee, granted to each of
Larry Bier, Clifford V. Brokers, III, Mark C. Matthews and John W. Stodder,
subject to the approval of the shareholders of the Company, immediately
exercisable warrants (the "1997 New Warrants" and, together with the 1995
Replacement Warrants, the 1996 Replacement Warrants and the 1996 New Warrants,
the "Director Warrants") entitling each of them to purchase 10,000 shares of
Common Stock at an exercise price of $5.50.
The following table summarizes the information set forth above
regarding the Director Warrants, including the name of each holder, the number
of shares of Common Stock subject to Director Warrants, the exercise price and
other related information.
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<PAGE> 11
OUTSTANDING DIRECTOR WARRANTS SUBJECT TO SHAREHOLDER APPROVAL
<TABLE>
<CAPTION>
Individual Grants
- --------------------------------------------------------------------------------------------------------------
Number of
Shares
Underlying Percent of
Director Total Warrants Exercise
Warrants Granted to Price Expiration Market Value
Warrant Holder (#) Directors ($/Sh) Date ($) (1)
- ----------------------------- -------------- --------------- ---------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John W. Stodder 65,000 22.8% $3.50 11/21/00 $195,000
Director 10,000 3.5 $4.375 11/07/01 21,250
10,000 3.5 $5.50 2/21/02 10,000
------ ----- --------
85,000 29.8 226,250
Clifford V. Brokaw, III 35,000 12.3 $3.50 11/21/00 105,000
Director 10,000 3.5 $4.375 11/07/01 21,250
10,000 3.5 $5.50 2/21/02 10,000
------ ----- --------
55,000 19.3 136,250
Mark C. Matthews 10,000 3.5 $3.50 11/21/00 30,000
Director 25,000 8.8 $3.50 5/30/01 75,000
10,000 3.5 $4.375 11/07/01 21,250
10,000 3.5 $5.50 2/21/02 10,000
------ ----- --------
55,000 19.3 136,250
Larry S. Grossman 10,000 3.5 $3.50 11/21/00 30,000
Director, Chairman and Chief 25,000 8.8 $3.50 5/30/01 75,000
------ ----- --------
Executive Officer 35,000 12.3 105,000
Michael J. Heyman 10,000 3.5 $3.50 11/21/00 30,000
Director, President, Chief
Operating 25,000 8.8 $3.50 5/30/01 75,000
------ ----- --------
Officer and Secretary 35,000 12.3 105,000
Larry Bier 10,000 3.5 $4.375 11/7/01 21,250
Director 10,000 3.5 $5.50 2/21/02 10,000
------ ----- ------
20,000 7.0 31,250
Total Director Warrants
Granted 285,000 100.0
</TABLE>
(1) The market value shown in this column was computed by multiplying the
number of shares by the difference between the last sale price of the
Common Stock on the NASDAQ Stock Market on March 24, 1997 ($6.50) and
the exercise price.
The form of the Director Warrants is set forth in Exhibit B to this
Proxy Statement. The following summary is qualified in its entirely by
reference to Exhibit B.
The Director Warrants are exercisable, in whole or in part, at the
exercise price set forth in each respective warrant agreement (the "Warrant
Price") until the fifth anniversary of the issuance of such warrant. Each of
the Director Warrants permit warrant holders to pay the Warrant Price in cash,
by delivery of Common Stock (valued at the fair market value on the date of
exercise), or by delivery of a combination of the foregoing. The Warrant Price
will be adjusted (i) upon the sale or issuance of Common Stock or issuance of
options or securities convertible into Common Stock at prices below the Warrant
Price and (ii) in the event of a reclassification, recapitalization, stock
split or combination in the shares of the Common Stock, to prevent dilution or
enlargement of the Director Warrants. Notwithstanding the clause (i) of the
previous sentence, no such adjustments can be made to the Warrant Price (A)
unless such adjustment would require an increase or decrease in
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<PAGE> 12
such price of at least $.05, (B) in the case of all Director Warrants, upon the
issuance of Common Stock pursuant to the exercise of any warrants previously
issued to members of the Board and options granted under the Company's 1986
Employee Stock Option and Performance Unit Plan and the 1992 Executive
Management Group Stock Option Plan or (C) in the case of the 1996 Replacement
Warrants and the New Warrants, upon the issuance of Common Stock pursuant to
the exercise of options granted under the Plan. In addition, the Director
Warrants provide that in the event of a reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or other
voluntary action, appropriate actions will be taken by the Company to prevent
dilution or other impairment of the Director Warrants.
Each of the Director Warrants are non-transferable except to a person
or entity under common control with the person which such warrant was
originally issued. Holders of Director Warrants have the right, under certain
circumstances, to have the Director Warrants and the Common Stock issuable
thereunder included in registrations of the Common Stock. The Company has the
right, in lieu of such registration, to purchase the Director Warrants at a
price determine in a manner set forth in the warrant agreement. Each Director
Warrant may be amended only by a written amendment signed by holders of such
Director Warrant and the Company.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of the Director Warrants is identical to that of
Non-ISO options in all material respects. See discussion entitled "Federal
Income Tax Consequences; Non-ISO Options" under the section of this Proxy
Statement discussing the Plan.
OTHER CONSIDERATIONS
Each of the current members of the Board has been granted Director
Warrants and therefore has an interest in, and will benefit from the approval
of the Director Warrants. The Board believes that the advantages of having
qualified individuals serve on the Board justify the benefit that may be
derived by these individuals. The 1995 Replacement Warrants are not, by their
terms, subject to the approval of the shareholders of the Company. However,
for the shares of Common Stock issued upon exercise of such Director Warrants
to be listed on the NASDAQ stock exchange, shareholder approval must be
obtained.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE DIRECTOR WARRANTS.
- 10 -
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth the total annual compensation paid or
accrued by the Company during fiscal years 1994, 1995 and 1996 to the Company's
then Chief Executive Officer and to each of the Company's Executive Officers
other than the Chief Executive Officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
----------------------------------------------- -------------- All Other
Name and Salary Bonus Other Annual Awards-Options Compensation
Principal Position (1) Year ($) ($) Compensation /SARs (#) ($)
- ------------------------- -------- --------- ----------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard Grossman 1996 $286,000 $36,000 $11,000 25,000 $ --
President, Chief 1995 272,000 34,000 35,000 -- --
Executive Officer 1994 259,000 -- 20,000 -- 23,000
Chairman (2)
Norman Smagley 1996 120,000 15,000 1,000 10,000 5,000
Vice President, Finance 1995 116,000 14,000 -- -- 2,000
Chief Financial Officer(3) 1994 (4) 30,000 -- -- 10,000(5) --
Joseph Rabito 1996 130,000 17,000 7,000 50,657 3,000
Vice President, 1995 116,000 14,000 2,000 1,156(7) --
Operations (6) 1994 110,000 -- 2,000 10,000(5) 2,000
</TABLE>
(1) Larry S. Grossman became Chairman and Chief Executive Officer on October
10, 1996, has a salary of $150,000 per year and has been granted 200,000
options to date in fiscal 1997, subject to shareholder approval. Michael
J. Heyman became President and Chief Operating Officer on October 24, 1996,
has a salary of $225,000 per year and has been granted 100,000 options to
date in fiscal 1997. See "Approval of the 1996 Stock Option Plan."
(2) Richard Grossman passed away in October 1996.
(3) Norman Smagley terminated his employment with the Company on February 4,
1997.
(4) Norman Smagley became Vice President, Finance and Chief Financial Officer
in March 1994. His annualized salary for fiscal 1994 was $110,000.
(5) These options were canceled in connection with the issuance of options in
fiscal 1996.
(6) Joseph Rabito became Executive Vice President on October 24, 1996, and has
been granted 23,000 options to date in fiscal 1997, subject to shareholder
approval. See "Approval of the 1996 Stock Option Plan."
(7) 657 of these options were canceled in connection with the issuance of
options in fiscal 1996.
Some of the persons included in the preceding table received certain
non-cash compensation during fiscal 1996. 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 provided Richard Grossman with the use of an automobile and paid 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 1996
did not exceed $125,000. These policies provide that in the event of the death
of the insured, the Company will receive from the death benefits payable under
the policy the amount of the premiums previously paid by the Company. The cash
surrender value of these policies, up to the cumulative amount of the premiums
paid by the Company, is assigned to the Company. Annual increases in cash
surrender value have exceeded premiums paid by the Company in each of the past
three fiscal years. In October 1996, Richard Grossman passed away and the
Company received from the death benefits payable under his life insurance
policy the amount of the premiums previously paid by the Company with respect
to that policy.
- 11 -
<PAGE> 14
The following table sets forth the number of shares of Common Stock
subject to stock options granted to the individuals listed in the Summary
Compensation Table during fiscal 1996 pursuant to the 1992 Executive Management
Group Stock Option Plan and the 1986 Employees Stock Option and Performance
Unit Plan, together with related information.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------------------
Potential realizable
Percent of value at assumed annual
total options Exercise rates of stock prices
Options granted to or base appreciation for option term
granted employees in price Expiration ----------------------------
Name (1) (#) (2) fiscal year ($/Sh) date 5% ($) 10% ($)
----------------------- ----------- -------------- ------------ ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Richard Grossman (3) 25,000 11.9% $3.50 11/21/00 $22,180 $50,903
Norman Smagley (4) 10,000 4.7 3.50 11/21/00 8,872 20,361
Joseph Rabito (5) 5,657 2.7 3.50 11/21/00 2,712 6,083
25,000 11.9 3.25 11/02/00 28,430 57,153
20,000 9.5 3.50 11/21/00 17,744 40,723
</TABLE>
(1) Larry S. Grossman, the current Chairman and Chief Executive Officer, and
Michael J. Heyman, the current President and Chief Operating Officer, have
been granted 200,000 and 100,000 options, respectively, to date in fiscal
1997, subject to shareholder approval. See "Approval of the 1996 Stock
Option Plan."
(2) Options are immediately exercisable.
(3) Richard Grossman passed away in October 1996. All of his outstanding
options were automatically forfeited upon his death.
(4) Norman Smagley terminated his employment with the Company on February 4,
1997.
(5) Joseph Rabito has been granted 23,000 options to date in fiscal 1997,
subject to shareholder approval. See "Approval of the 1996 Stock Option
Plan."
The following table sets forth the number of shares of Common Stock
subject to stock options exercised by the individuals listed in the Summary
Compensation Table during fiscal 1996, together with related information, and
the value of the unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of unexercised
Shares unexercised options in-the-money options
acquired on Value at fiscal year-end (#) at fiscal year-end ($)
Name (1) exercise (#) realized ($) (exercisable/unexercisable) (exercisable/unexercisable)
- ------------------------ ------------- ------------- --------------------------- ----------------------------
<S> <C> <C> <C> <C>
Richard Grossman (2) -- $ -- 25,000 / 0 $ -- / $ 0
Norman Smagley (3) -- -- 10,000 / 0 -- / 0
Joseph Rabito (4) -- -- 51,156 / 0 4,750 / 0
</TABLE>
(1) Larry S. Grossman, the current Chairman and Chief Executive Officer, and
Michael J. Heyman, the current President and Chief Operating Officer, have
been granted 200,000 and 100,000 options, respectively, to date in fiscal
1997, subject to shareholder approval. See "Approval of the 1996 Stock
Option Plan."
(2) Richard Grossman passed away in October 1996. All of his outstanding
options were automatically forfeited upon his death.
(4) Norman Smagley terminated his employment with the Company on February 4,
1997.
(5) Joseph Rabito has been granted 23,000 options to date in fiscal 1997,
subject to shareholder approval. See "Approval of the 1996 Stock Option
Plan."
EXECUTIVE AGREEMENTS
The Company has entered into severance agreements with each of Larry
S. Grossman and Joseph Rabito. Mr. Grossman's agreement provides that if
either (i) the Company terminates his
- 12 -
<PAGE> 15
employment without cause (e.g., the commission of a felony or gross negligence)
other than upon death, disability or resignation, or (ii) Mr. Grossman
terminates his employment for good reason (e.g., a reduction in salary or
reassignment of duties without his approval), the Company will pay him a
one-time cash severance payment equal to three times his annual base salary
then in effect. Joseph Rabito's agreement provides that if either (i) during a
one-year period after a change of control of the Company, the Company
terminates his employment without cause other than upon death, disability or
resignation or (ii) Mr. Rabito terminates his employment for good reason, the
Company will pay him a one-time cash severance payment equal to two times his
annual base salary then in effect. In addition, each of the severance
agreements requires the Company to cover outplacement service expenses not to
exceed 20% of the executive's base salary.
The Company is presently negotiating an employment agreement with
Michael J. Heyman, which is expected to provide for, among other things, a base
salary of $225,000 per year, a term of three years and, if Mr. Heyman's
employment is terminated without cause other than upon death, disability or
resignation, severance payments equal to (i) his base salary then in effect,
payable over a one-year period, if his employment is terminated in the first
year, (ii) two times his base salary then in effect, payable over a two-year
period, if his employment is terminated in the second year, and (iii) three
times his base salary then in effect, payable over a three-year period, if his
employment is terminated after the second year.
DIRECTORS' WARRANTS
During fiscal 1996, the Company granted to certain of its current
directors warrants entitling them to purchase shares of Common Stock. Each of
Larry S. Grossman, Michael J. Heyman, Mark C. Matthews, and Clifford V. Brokaw,
III were granted warrants to purchase 35,000 shares of Common Stock at an
exercise price of $3.50 per share; and John W. Stodder was granted warrants to
purchase 65,000 shares of Common Stock at an exercise price of $3.50 per share.
In connection with such grants, warrants to purchase 25,000 and 10,000 shares
of Common Stock at exercise prices of $3.25 and $6.00 per share, respectively,
held by each of Larry S. Grossman, Michael J. Heyman, and Mark C. Matthews were
canceled; warrants to purchase 10,000 and 25,000 shares of Common Stock at
exercise prices of $6.00 and $5.25 per share, respectively, held by Clifford V.
Brokaw, III were canceled; and warrants to purchase 10,000, 25,000 and 30,000
shares of Common Stock at exercise prices of $6.00, $5.25, and $4.25,
respectively, held by John W. Stodder were canceled. 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 Common Stock. To
date in fiscal 1997, the Company has granted to each of Mark C. Matthews,
Clifford V. Brokaw, III, John W. Stodder and Larry Bier on November 7, 1996,
warrants entitling them to purchase 10,000 shares of Common Stock at an
exercise price of $4.375 and on February 21, 1997, warrants entitling them to
purchase 10,000 shares of Common Stock at an exercise price of $5.50. See
"Approval of the Director Warrants."
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of March 24, 1997 (a) by each
person known by the Company to own beneficially
- 13 -
<PAGE> 16
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 of
Name Beneficially Class
--------------------------------------------------------- ------------ ----------
<S> <C> <C>
Larry S. Grossman (1) . . . . . . . . . . . . . . . . . . 1,941,000 48.1%
Estate of Richard Grossman . . . . . . . . . . . . . . . 1,927,000 47.9%
Clifford V. Brokaw, III (2) . . . . . . . . . . . . . . . 150,000 3.7%
John W. Stodder (3) . . . . . . . . . . . . . . . . . . . 70,000 1.7%
Joseph Rabito (4) . . . . . . . . . . . . . . . . . . . . 53,548 1.3%
Michael J. Heyman (5) . . . . . . . . . . . . . . . . . . 14,000 *
Mark C. Matthews (6) . . . . . . . . . . . . . . . . . . 10,000 *
All Directors and Officers as a Group (7 Persons) (7) . . 2,238,548 53.2%
</TABLE>
* Indicates less than 1% of outstanding shares.
(1) Includes 1,927,000 shares of Common Stock held in the Estate of
Richard Grossman over which Larry S. Grossman, as administrator,
has investment and voting control. Also includes 10,000 shares of
Common Stock issuable upon the exercise of warrants not subject to
shareholder approval (although shareholder approval is being
sought), but excludes 200,000 and 25,000 shares of Common Stock
issuable upon the exercise of options and warrants, respectively,
subject to shareholder approval.
(2) Includes 35,000 shares of Common Stock issuable upon the exercise
of warrants not subject to shareholder approval (although
shareholder approval is being sought), but excludes 20,000 shares
of Common Stock issuable upon the exercise of warrants subject to
shareholder approval.
(3) Includes 65,000 shares of Common Stock issuable upon the exercise
of warrants not subject to shareholder approval (although
shareholder approval is being sought), but excludes 20,000 shares
of Common Stock issuable upon the exercise of warrants subject to
shareholder approval.
(4) Includes 51,156 shares of Common Stock issuable upon the exercise
of options that are currently exercisable, but excludes 23,000
shares of Common Stock issuable upon the exercise of options
subject to shareholder approval and vesting.
(5) Includes 10,000 shares of Common Stock issuable upon the exercise
of warrants not subject to shareholder approval (although
shareholder approval is being sought), but excludes 100,000 and
25,000 shares of Common Stock issuable upon the exercise of
options and warrants, respectively, subject to shareholder
approval.
(6) Includes 10,000 shares of Common Stock issuable upon the exercise
of warrants not subject to shareholder approval (although
shareholder approval is being sought), but excludes 45,000 shares
of Common Stock issuable upon the exercise of warrants subject to
shareholder approval.
(7) In addition to the shares of Common Stock described in footnotes
(1) through (6), excludes 20,000 shares of Common Stock issuable
to Larry Bier upon the exercise of warrants subject to shareholder
approval.
CHANGE IN CONTROL
As a result of the passing away of Richard Grossman in October 1996,
Larry S. Grossman, the current Chairman of the Board and Chief Executive
Officer of the Company, acquired beneficial ownership of 1,927,000 shares of
Common Stock upon his qualification on October 21, 1996, as administrator of
Richard Grossman's estate. As a result, Larry S. Grossman beneficially owns
48.1% of the Common Stock as of March 24, 1997. See "Certain Beneficial
Owners." Larry S. Grossman, as administrator of Richard Grossman's estate, has
voting and investment control over the Common Stock in Richard Grossman's
estate and may pledge or sell a portion of such Common Stock to cover the
estate's expenses, including any taxes. It is expected that any shares of
Common Stock remaining in the estate will be distributed to the heirs of
Richard Grossman.
- 14 -
<PAGE> 17
DISCRETIONARY VOTING OF PROXIES IN OTHER MATTERS
The Board does not know of any other matters that are to be presented
for action at the Special Meeting. Should any other matter come before the
Special 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.
VOTING PROCEDURES
Under Delaware law and the Company's Certificate of Incorporation and
By-laws, approval of the Plan, the Director Warrants and any other matters
submitted to a vote of the shareholders of the Company must be approved by the
affirmative vote of the holders of a majority of shares having voting power
present in person or represented by proxy at the meeting. For purposes of the
vote on the Plan or the Director Warrants, abstentions from voting will have
the same effect as votes against such matters since they will not be votes for
approval, and broker non-voters will have no impact on such matters since they
are not considered "shares present" for voting purposes. Abstentions from
voting and broker non-votes will count toward the presence of a quorum.
SUBMISSION OF SHAREHOLDER PROPOSALS
All proposals of shareholders intended to be presented at the 1997
Annual Meeting of Shareholders must be received by the Company at its executive
offices no later than the close of business on July 25, 1997 for inclusion in
the Company's Proxy Statement and form of proxy relating to that meeting.
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 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.
- 15 -
<PAGE> 18
Exhibit A
TRANS LEASING INTERNATIONAL, INC.
1996 STOCK OPTION PLAN
1. Plan. Options to purchase shares of the Company's Common Stock may
be granted to such directors and key employees of the Company (and its
Subsidiaries, if any) as may be selected by the Compensation Committee of the
Board of Directors or another committee appointed by the Board to administer
the Plan (the "Committee").
2. Limitation on Aggregate Shares. The number of shares of Common
Stock with respect to which options may be granted under this Plan and which
may be issued upon the exercise thereof shall not exceed, in the aggregate,
1,000,000 shares; provided, however, that if any options expire unexercised or
are cancelled, terminated or forfeited in any manner without the issuance of
Common Stock or benefit therefrom, the shares with respect to which such
options were granted shall again be available for grant under this Plan. Such
1,000,000 shares of Common Stock may be either authorized and unissued shares,
treasury shares, or a combination thereof, as the Committee shall determine.
Notwithstanding anything herein to the contrary no participant may be granted
in the aggregate in any year options relating to in excess of 200,000 shares of
Common Stock. In the event of any stock split or similar change in the Common
Stock, the number of shares of Common Stock referenced in this paragraph shall
automatically be adjusted proportionately.
3. Options. Options to be granted under this Plan may be incentive
stock options (within the meaning of Section 422 of the Code), if granted to
employees, or in such other form, consistent with this Plan, as the Committee
may determine. Subject to the terms of this Plan, the Committee shall
determine and designate the recipients of options, the dates options are
granted, the number of shares of Common Stock subject to option, the option
prices, and the duration of options. No option granted under this Plan which
states that it is an incentive stock option shall, together with all other
incentive stock options granted to the same person, cover shares of Common
Stock having a fair market value greater than permitted under Section 422(d) of
the Code (or any successor provision). Options granted under this Plan shall
be subject to such terms and conditions and evidenced by agreements in such
form as shall be determined from time to time by the Committee and shall in any
event be subject to the terms and conditions set forth below and in paragraph
4:
(a) Option Price. The option price per share of Common Stock shall
be fixed by the Committee at not less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant. However, in the case of an option
granted to any person owning 10 percent or more of the Common Stock of the
Company, the option price fixed by the Committee shall not be less than 110
percent of the Fair Market Value of a share of Common Stock on the date of
grant.
(b) Term of Options. Except as otherwise provided in paragraph 5,
no option shall be exercisable more than five years after the date of grant.
- A1 -
<PAGE> 19
(c) Exercise of Options. Options shall be exercised by written
notice to the Company (to the attention of the Corporate Secretary) accompanied
by payment in full of the option price. Unless otherwise specified in the
applicable option agreement, payment of the option price may be made (i) in
cash (including check, bank draft, or money order), (ii) by delivery of Common
Stock, including the withholding from issuance of Common Stock issuable upon
the exercise of such option, in each case valued at the Exchange Value thereof
on the date of exercise, (iii) with the approval of the Committee, by delivery
of the optionee's promissory note (provided that at least the par value of the
Shares as to which exercise is made shall be paid in cash), or (iv) by delivery
of a combination of the items set forth in clauses (i) through (iii).
4. Additional Provisions.
(a) Conditions and Limitations on Exercise. Options may be made
exercisable in one or more installments, upon the happening of certain events,
upon the passage of a specified period of time, or upon the fulfillment of a
condition, as the Committee shall decide in each case when the option is
granted. Unless specifically provided in an option agreement, the
exercisability of options shall not accelerate upon a change in control of the
Company.
(b) Termination of Employment. Any option shall be exercisable
only during the period of the holder's service as a director of or employment
by the Company or a Subsidiary, except that in the Committee's discretion an
option may be exercisable for a period of up to two years after retirement or
death while a director or employee of the Company or a Subsidiary, and up to
three months after the termination of such directorship or employment for any
other reason. An option may be exercised after the termination of a holders'
directorship or employment with the Company or a Subsidiary (i) only to the
extent the holder was entitled to do so on the date of termination (except that
the Committee may in its discretion include in any option an acceleration of
such option in the event of the holder's death or retirement), and (ii) only to
the extent that the option would not have expired had the holder continued to
serve as a director of or be employed by the Company or a Subsidiary (except
that the Committee may, in its discretion, permit an option to be exercisable
within three months after a holder's death where the holder died prior to its
expiration). The Committee may, in its discretion, determine that an
authorized leave of absence shall be deemed to satisfy this Plan's
employment/service requirements.
(c) Listing, Registration and Compliance With Laws and Regulations
(i) Each option shall be subject to the requirement that if at any
time the Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares subject to the option upon
any securities exchange or under any state or federal securities or other
law or regulation, or the consent or approval of any governmental
regulatory body, is necessary as a condition to or in connection with the
exercising of such option, no such option may be exercised, in whole or
in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained, and the holder of the
option will supply the Company with such certificates, representations,
and information as the Company shall reasonably request
- A2 -
<PAGE> 20
and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval. In the case
of officers and other persons subject to Section 16(b) of the Exchange
Act, the Committee may at any time impose any limitations upon the
exercise of an option or the transfer of any Common Stock received upon
the exercise of an option which, in the Committee's discretion, are
necessary in order to comply with Section 16(b) of the Exchange Act and
the rules and regulations thereunder.
(ii) Notwithstanding the terms of this paragraph 4(c), no holder of
any option shall have the right to require the Company to register, list
or qualify said option or any of the stock underlying such option.
(d) Cash Payments. Options which are not incentive stock options
(as defined in Section 422 of the Code) may, in the Committee's discretion,
provide that the holder thereof, promptly after computation thereof, will
receive a cash payment equal to the excess of the Fair Market Value of a share
of Common Stock (on the date the holder recognizes taxable income) over the
option price multiplied by the number of shares as to which the option is
exercised.
(e) Nontransferability. Options may not be transferred other than
by will or the laws of descent and distribution and, during the lifetime of the
person to whom they are granted, may be exercised only by such person (or his
guardian or legal representative).
(f) Adjustment for Change in Common Stock. In order to prevent the
dilution or enlargement of rights under options in the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation or other change in the Common Stock, the
Committee shall make appropriate changes in the number and type of shares
authorized by this Plan and the number and type of shares covered by,
outstanding options and the prices specified therein.
(g) Taxes. The Company shall be entitled, if necessary to withhold
(or secure payment from the Plan participant in lieu of withholding) the amount
of any withholding or other tax due with respect to the participant in
connection with shares issuable under this Plan, and the Company may defer such
issuance unless indemnified to its satisfaction.
5. Administration. The Committee shall have full power to construe and
interpret this Plan and options granted under this Plan, to establish and amend
rules for its administration, to grant options under this Plan and to correct
any defect or omission or reconcile any inconsistency in this Plan or in any
option to the extent the Committee deems necessary to carry this Plan or any
option into effect. The Committee may, with the consent of the person entitled
to exercise any outstanding option, amend such option, including reducing the
exercise price of any option to not less than the Fair Market Value of the
Common Stock at the time of the amendment and extending the duration thereof so
long as it is not more than five years from the time of the amendment.
- A3 -
<PAGE> 21
The Committee may act by a majority of a quorum present at a meeting or
by an instrument executed by all of its members. All actions taken and
decisions made by the Board of Directors or the Committee pursuant to this Plan
shall be binding and conclusive on all persons interested in this Plan. The
Committee may from time to time authorize the Chairman of the Board, the Chief
Executive Officer or the President of the Company to determine the dates on
which options shall be granted to persons designated by the Committee for such
number of shares as the Committee shall have designated, at prices determined
by or in a manner specified by the Committee.
6. Definitions. "Common Stock" means shares of the Common Stock, par
value $.0l per share, of the Company, or such other shares as are substituted
pursuant to paragraph 4(f). The "Company" means Trans Leasing International,
Inc. "Subsidiary" means any corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power.
The "Fair Market Value" of the Common Stock on any given date means (a) the
last sale price reported on such date on the New York Stock Exchange-Composite
Transactions Tape (or, if not so reported, on any domestic stock exchanges on
which the Common Stock is then listed); or (b) if the Common Stock is not
listed on any domestic stock exchange, the last sale price reported on such
date on the National Association of Securities Dealers Automated Quotation
System (or, if not so reported, by the system then regarded as the most
reliable source of such prices); or (c) if the Common Stock is listed on a
domestic exchange or quoted in the domestic over-the-counter market, but there
are no reported sales on the given date, the value determined pursuant to (a)
or (b) above using the reported sale prices on the last previous date on which
so reported; or (d) if none of the foregoing clauses apply, the fair value as
determined in good faith by the Board of Directors or the Committee. "Exchange
Value" of the Common Stock on any date means the highest Fair Market Value as
of any date in the period beginning 30 days prior to such date and ending on
such date. The "Code" means the Internal Revenue Code of 1986, as amended from
time to time or any successor statute thereto. The "Exchange Act" means the
Securities Exchange Act of 1934, as amended from time to time or any successor
statute thereto. The "Plan" shall mean this 1996 Stock Option Plan of Trans
Leasing International, Inc., as amended from time to time.
7. Termination and Amendment. The Board of Directors or the Committee
at any time may suspend or terminate this Plan and make such additions or
amendments as it deems advisable under this Plan, except that they may not,
without further approval by the Company's stockholders, (a) increase the
maximum number of shares as to which options may be granted under this Plan,
except pursuant to paragraph 4(f) above, (b) extend the term of this Plan, (c)
change the method of determining the minimum price specified in an option
pursuant to paragraphs 3(a), except pursuant to paragraphs 4(f) and 5, or (d)
change the class of participants to whom options may be granted under this
Plan. No options shall be granted hereunder after November 6, 2006.
- A4 -
<PAGE> 22
Exhibit B
THIS WARRANT MAY NOT BE TRANSFERRED IN VIOLATION
OF THE PROVISIONS OF SECTION 8
Right to Purchase [ ] Shares of
Common Stock, $.01 par value per
share (subject to adjustment), of
Trans Leasing International, Inc.
TRANS LEASING INTERNATIONAL, INC.
COMMON STOCK PURCHASE WARRANT
Trans Leasing International, Inc. (the "Company"), a Delaware
corporation, hereby certifies that, for value received, [ ] (the "Purchaser")
is entitled, subject to the terms and conditions set forth below, [including
prior approval hereof by the stockholders of the Company as required in Section
13,]1 to purchase from the Company [ ] fully paid and
nonassessable shares of Common Stock, $.01 par value per share ("Common
Stock"), of the Company, at the purchase price per share of $[ ] (the
"Warrant Price"), at any time or from time to time after [
] (the "Initial Exercise Date") and before the earlier of (i) the time at which
the Purchaser ceases to be a director of the Company for any reason and (ii)
5:00 p.m., Chicago time, on [ ] (the "Expiration Date"). The Warrant Price and
the number of shares of Common Stock subject to this Warrant are subject to
adjustment as provided herein. Capitalized terms not otherwise defined herein
are defined in section 11 hereof.
1. Exercise of Warrant.
1.1 Manner of Exercise. The Purchaser may exercise this Warrant
in whole or in part, by surrender of this Warrant to the Company on any
business day between and including the Initial Exercise Date and the Expiration
Date at the Company's principal office in Northbrook, Illinois (or at such
other office or agency of the Company as it may designate by notice in writing
to the registered holder hereof at his last address appearing on the books of
the Company) accompanied by a statement setting forth the number of shares of
Common Stock being purchased accompanied by payment therefor [(a) in cash
(including check, bank draft, or money order, (b) by delivery of Common Stock,
including the withholding from issuance of Common Stock issuable upon the
exercise of the Warrant, in each case valued at the Market Value thereof on the
date of issuance, or (c) any combination of the foregoing,]1 and the Purchaser
shall thereupon be entitled to receive such number of fully paid and
nonassessable shares of Common Stock.
1.2 When Exercise Effective. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business on
the business day on which this Warrant is surrendered to the Company as
provided in section 1.1, and the Purchaser shall be deemed to have become the
holder of record of the shares of Common Stock (or Other Securities) issuable
upon such exercise at such time notwithstanding that certificates representing
such shares shall not then be actually delivered to the Purchaser.
<PAGE> 23
1.3 Delivery of Stock Certificates, etc. As soon as practicable
after the exercise of this Warrant in whole or in part, and in any event within
10 days thereafter, the Company at its expense (including the payment by it of
any applicable issuance taxes) will cause to be issued in the Purchaser's name,
(a) a certificate or certificates for the number of fully
paid and nonassessable shares of the Common Stock (or Other
Securities) to which the Purchaser shall be entitled upon such
exercise, plus, in lieu of any fractional share to which the Purchaser
would otherwise be entitled, cash in an amount equal to the same
fraction of the Market Price (as hereinafter defined) of one full
share on the business day next preceding the date of such exercise,
and
(b) in case such exercise is in part only, a new Warrant
or Warrants of like tenor, providing in the aggregate on the face or
faces thereof for the number of shares of Common Stock equal to the
number of such shares provided for on the face of this Warrant minus
the number of such shares designated by the Purchaser upon such
exercise as provided in section 1.1.
2. Adjustment of Warrant Price. The Warrant Price and number of
shares of Common Stock subject to this Warrant shall be subject to adjustment
from time to time as set forth hereinafter in this section 2.
2.1 If the Company shall at any time issue or sell any shares of
Common Stock, including any treasury shares, at a price less than the Warrant
Price in effect immediately prior to such issuance, then forthwith upon such
issue or sale such Warrant Price shall be reduced to a price (calculated to the
nearest cent) determined by dividing (A) an amount equal to the sum of (i) the
number of shares of Common Stock outstanding immediately prior to such issuance
or sale multiplied by the then existing Warrant Price, and (ii) the
consideration, if any, received by the Company upon such issuance or sale, by
(B) the total number of shares of Common Stock outstanding immediately after
such issue or sale.
2.2 The following provisions, in addition to the other provisions
of this section 2, shall be applicable in determining any adjustment under
section 2.1.
(a) In case of the issuance or sale of shares of Common
stock part or all of which shall be for cash, the consideration
received by the Company therefor shall be deemed to be the amount of
gross proceeds of such sale of shares without deducting therefrom any
compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing
similar services or any expenses incurred in connection therewith,
plus the amounts, if any, determined as provided in section 2.2(b).
(b) In the case of the issuance or sale of shares of
Common Stock for a consideration other than cash, the amount of the
consideration other than cash received by the Company for such shares
shall be deemed to be the value of such consideration as determined by
a resolution adopted by the Board of Directors of the Company acting
in good
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<PAGE> 24
faith, irrespective of any accounting treatment thereof. In case of
the issuance or sale of shares of Common Stock together with other
stock or securities or other assets of the Company for a consideration
which is received for both, the Board of Directors of the Company
acting in good faith shall determine what part of the consideration so
received is to be deemed to be the consideration for the issuance of
such Common Shares irrespective of any accounting treatment thereof.
(c) In case at any time the Company shall declare a
dividend or make any other distribution upon any stock of the Company
payable in Common Stock, then such Common Stock issuable in payment of
such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(d) In case the Company shall at any time after the date
hereof issue options or rights to subscribe for shares of Common Stock
(including shares held in the Company's treasury) (hereinafter
referred to as "Options") or issue any securities convertible into or
exchangeable for Common Stock (hereinafter referred to as "
Convertible Securities") and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon conversion
or exchange of such Convertible Securities calculated pursuant to this
section 2.2(d) shall be less than the Warrant Price in effect
immediately prior to the issuance of such Options or Convertible
Securities, then such Warrant Price shall be reduced to a price
determined by making a computation in accordance with the provisions
of section 2.1 and 2.2 hereof, provided that:
(i) The price per share for which Common Stock is
issuable upon the exercise of the Options or upon conversion
or exchange of the Convertible Securities shall be determined
by dividing (A) the total amount, if any, received or
receivable by the Company as consideration for the issuance of
such Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, by (B)
the aggregate maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities.
(ii) In determining the price per share for which
Common Stock is issuable upon exercise of any Options or
conversion or exchange of any Convertible Securities as set
forth in section 2.2(d)(i) and in computing the reduced
Warrant Price (A) the aggregate maximum number of shares of
Common Stock issuable upon the exercise of such Options or
conversion or exchange of such Convertible Securities shall be
considered to be issued at the time such Options or
Convertible Securities were issued and to have been issued for
the price per share determined for such Options or Convertible
Securities pursuant to section 2.2(d)(i) and (B) the
consideration for the issuance of such Options or Convertible
Securities and the amount of additional consideration payable
to the Company upon exercise of such Options or upon the
conversion or exchange of such Convertible Securities shall be
determined in the same manner as the consideration received
upon the issuance or sale of Common Stock as provided in
paragraphs 2.2(a) through 2.2(c).
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<PAGE> 25
(iii) On the expiration of any Options or the
termination of such right to convert or exchange any
Convertible Securities, the Warrant Price shall forthwith be
readjusted to such Warrant Price as would have obtained had
the adjustments made upon the issuance of such Options or
Convertible Securities been made upon the basis of the
delivery of only the number of shares of Common Stock actually
delivered upon the exercise of such Options or upon conversion
or exchange of such Convertible Securities.
(iv) If the minimum purchase price per share of
Common Stock provided for in any Option or the rate at which
any Convertible Securities are convertible into or
exchangeable for Common Stock shall change or a different
purchase price or rate shall become effective at any time or
from time to time (other than pursuant to any antidilution
provision of such Options or Convertible Securities) then,
upon such change becoming effective, the Warrant Price then in
effect hereunder shall forthwith be increased or decreased to
such Warrant Price as would have obtained had the adjustments
made upon the granting or issuance of such Options or
Convertible Securities been made upon the basis of (A) the
issuance of the number of shares of Common Stock theretofore
actually delivered upon the exercise of such Options or upon
the conversion or exchange of such Convertible Securities, and
the total consideration received therefor, and (B) the
granting or issuance at the time of such change of any such
Options or Convertible Securities then still outstanding for
the consideration, if any, received by the Company therefor
and to be received by the Company on the basis of such changed
price or rate of exchange or conversion.
(e) In case at any time the Company shall establish a
record date for the purpose of determining the holders of Common Stock
entitled (i) to receive a dividend or other distribution payable in
Common Stock or in Convertible Securities, or (ii) to subscribe for or
purchase Common Stock or Convertible Securities, then such record date
shall be deemed to be the date of the issuance or sale of the shares
of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase,
as the case may be.
(f) The number of shares of Common Stock outstanding at
any given time shall not include treasury shares and the disposition
of any such treasury shares shall be considered an issuance or sale of
Common Stock for the purposes of this section.
(g) Anything hereinabove to the contrary notwithstanding,
no adjustment of the Warrant Price or in the number of Common Shares
subject to this Warrant shall be made upon: (i) the issuance or sale
by the Company of any shares of Common Stock pursuant to the exercise
of any of (A) any Warrants issued hereunder, (B) any of the warrants
issued by the Company on October 21, 1992 to Ladenburg, Thalman & Co.
Inc., Interstate/Johnson Lane Corporation, Herbert L. Hochberg and
Page W.T. Stodder, or (C) any of the warrants that have been
previously issued, or on the date hereof are issued, by the Company to
any Director of the Company, (ii) the issuance or sale by the Company
of up to 250,000 shares of Common Stock pursuant to its 1986 Employees
Stock Option and Performance Unit Plan, (iii) the issuance or sale by
the Company of up to 214,260 shares of Common Stock pursuant
- B4 -
<PAGE> 26
to the 1992 Executive Management Group Stock Option Plan and
[(iv) the issuance or sale by the Company of up to [1,000,000] 3
shares of Common Stock pursuant to its 1996 Employees Stock Option and
Performance Unit Plan]1.
(h) No adjustment in the Warrant Price shall be required
under section 2.1 hereof unless such adjustment would require an
increase or decrease in such price of at least $.05; provided,
however, that any adjustments which by reason of the foregoing are not
required at the time to be made shall be carried forward and taken
into account and included in determining the amount of any subsequent
adjustment; and provided further, however, that in case the Company
shall at any time subdivide or combine the outstanding shares of
Common Stock or issue any additional shares of Common Stock as a
dividend, said amount of $.05 per share shall forthwith be
proportionately increased in the case of a combination or decreased in
the case of a subdivision or stock dividend so as to appropriately
reflect the same.
2.3 If the Company shall at any time subdivide its outstanding
shares of Common Stock by recapitalization, reclassification or stock split
thereof, the Warrant Price immediately prior to such subdivision shall be
proportionately decreased, and, if the Company shall at any time combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the Warrant Price immediately prior to such combination
shall be proportionately increased. Any such adjustment to the Warrant Price
shall become effective at the close of business on the record date for such
subdivision or combination.
2.4 If the Company after the date hereof shall distribute to all
of the holders of its shares of Common Stock any securities or other assets
(other than a cash distribution made as a dividend payable out of earnings),
the Board of Directors shall make such equitable adjustment in the Warrant
Price in effect immediately prior to the record date for such distribution as
may be necessary to preserve to the holder of this Warrant rights substantially
proportionate to those enjoyed hereunder by such holder immediately prior to
the happening of such distribution. Any such adjustment shall become effective
as of the record date for such distribution.
2.5 Upon any adjustment of the Warrant Price as hereinabove
provided, the number of shares of Common Stock issuable upon exercise of this
Warrant shall be changed to the number of shares determined by dividing (i) the
aggregate Warrant Price payable for the purchase of all shares issuable upon
exercise of this Warrant immediately prior to such adjustment by (ii) the
Warrant Price per share in effect immediately after such adjustment.
2.6 In case of any reclassification of the outstanding shares of
Common Stock (other than a change covered by section 2.3 hereof or which solely
affects the par value of such shares of Common Stock) or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or capital
reorganization of the outstanding shares of Common Stock), or in the case of
any sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety in connection with which the
Company is dissolved, the holder of this Warrant shall have the right
thereafter (until the expiration of the right to exercise this Warrant) to
receive upon the exercise
- B5 -
<PAGE> 27
hereof, for the same aggregate Warrant Price payable hereunder immediately
prior to such event, the kind and amount of shares of stock or other securities
or property receivable upon such reclassification, capital reorganization,
merger or consolidation, or upon the dissolution following such sale or other
transfer by a holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Warrant immediately prior to such event, and
if any reclassification also results in a change in shares of Common Stock
covered by section 2.3, then such adjustment shall be made pursuant to both
this section 2.6 and section 2.3. The provisions of this section 2.6 shall
similarly apply to successive reclassifications, or capital reorganization,
mergers or consolidations, sales or other transfers.
3. Covenants of the Company; No Dilution or Impairment. Until
the earlier of the Expiration Date or the exercise of this Warrant in full, the
Company shall not, by amendment of its certificate of incorporation or though
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of the Warrants, but
shall at all times in good faith carry out all such terms and shall take all
such action as may be necessary or appropriate in order to protect the rights
of the holders of the Warrants against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(a) shall not permit the par value of any shares of stock
receivable upon the exercise of the Warrants to exceed the amount
payable therefor upon such exercise;
(b) shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of stock or other property
deliverable upon the exercise of all Warrants from time to time
outstanding; and
(c) shall not (i) transfer all or substantially all of
its properties and assets to any other person, or (ii) consolidate
with or merge into any other person where the Company is not the
continuing or surviving person, or (iii) permit any other person to
consolidate with or merge into the Company where the Company is the
continuing or surviving person unless, in connection with such
consolidation or merger, the Common Stock (or Other Securities) then
issuable upon the exercise of this Warrant shall be changed into or
exchanged for stock or other securities or property of any other
person, and, in any such case, the other person acquiring such
properties and assets, continuing or surviving after such
consolidation or merger or issuing or distributing such stock or other
securities or property, as the case may be, shall expressly assume in
writing and be bound by all the terms of this Warrant.
4. Accountants' Report as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of the Warrants, the Company at its expense will
promptly compute such adjustment or readjustment in accordance with the terms
of the Warrants and cause independent public accountants of recognized national
standing selected by the Company to verify such computation and prepare a
report setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based, including a
statement of (a) the number of shares of Common Stock outstanding or deemed to
be outstanding, and (b) the Warrant Price and the number of shares subject
- B6 -
<PAGE> 28
to this Warrant in effect immediately prior to the event requiring such
adjustment or readjustment and as adjusted and readjusted on account thereof.
The Company will forthwith mail a copy of each such report to each holder of
the Warrants, and will, upon such holder's reasonable written request at any
time, furnish to such holder a like report setting forth the Warrant Price and
the number of shares subject to this Warrant at the time in effect and showing
how it was calculated.
5. Notices of Record Date, etc. If the Company proposes
(a) to establish a record of the holders of any class of
securities for the purpose of determining holders thereof who are
entitled to vote at any meeting of stockholders for any purpose, or
who are entitled to receive any dividend (other than a regular cash
dividend payable out of earned surplus at the rate most recently
established by the Board of Directors of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to any other person or any consolidation or merger involving
the Company and any other person, or
(c) any voluntary or involuntary dissolution, liquidation
or winding up of the Company,
the Company shall give the Purchaser a notice stating the date or expected date
on which any such record is to be taken and, if it relates to a meeting, the
matters expected to be considered at such meeting, or the amount and character
of such dividend, distribution or right, or the nature of such reorganization,
reclassification, transfer, or merger or consolidation. Such notice shall be
given at least 10 days prior to the record date therein specified.
6. Registration under the Securities Act of 1933.
6.1 Piggyback Registration. The Company shall advise the
Purchaser and any other holder of Warrants or shares of Common Stock issued
upon the exercise of the Warrants not publicly held (the "Shares") by written
notice, at least fifteen days prior to the filing at any time on or after the
Initial Exercise Date and on or before six years after the Initial Exercise
Date, of any registration statement or post-effective amendment thereto under
the Securities Act of 1933 covering common stock or equivalents thereof of the
Company (except on Form S-4 or Form S-8 or any successor form) and will, upon
the request of such holders, provided that such holders shall furnish the
Company with such appropriate information (relating to the intentions of such
holders) in connection therewith as the Company shall request in writing, and
without any charge to such holders, include in any such post-effective
amendment or registration statement such information as may be required to
permit a public offering of the Shares; provided that the aggregate offering
value of the Shares to be registered is reasonably anticipated to equal at
least $100,000. The Company shall supply reasonable quantities of
prospectuses, qualify the Shares for sale in such jurisdictions as such holder
may reasonably designate (subject to the same type of limitations contained in
the Underwriting
- B7 -
<PAGE> 29
Agreement dated October 21, 1992 among the Company and the several underwriters
included as an exhibit to the Registration Statement in the form filed with the
Securities Exchange Commission at the time it became effective in connection
with its 1992 public offering of Common Stock (the "Underwriting Agreement"))
and furnish indemnification in the manner set forth in section 6.2 hereof.
Such holder shall furnish information and indemnification as set forth in
section 6.2 hereof. If the managing underwriters for the registration of
securities advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such registration, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Shares requested to be included in such registration by Ladenburg,
Thalman & Co. Inc., Interstate/Johnson Lane Corporation, Herbert L. Hochberg
and Page W.T. Stodder, (iii) third, the Shares requested to be included in such
registration, pro rata among the remaining holders of such Shares (or Warrants)
on the basis of the number of Shares (or Warrants) to be offered by such
holders, and (iv) fourth, other securities requested to be included in such
registration.
6.2 Obligations Relating to Registration. The following
provisions of this section 6 shall also be applicable:
(a) The Company and all holders requesting registration
of Shares pursuant to section 6.1 shall enter into such customary
agreements (including underwriting agreements in customary form) as
reasonably are necessary in order to expedite or facilitate the
disposition of Shares.
(b) The Company shall indemnify and hold harmless each
holder requesting registration and each underwriter, within the
meaning of the Securities Act of 1933, who may purchase from or sell
for any such holder Warrants and/or the Shares from and against any
and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in
any registration statement under the Securities Act or any prospectus
included therein required to be filed or furnished by reasons of this
section 6 or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or alleged untrue statement or omission or alleged omission
based upon information furnished in writing or required to be
furnished to the Company by such holder or underwriter expressly for
use therein, which indemnification shall include each person, if any,
who controls any such holder or such underwriter within the meaning of
the Securities Act; provided, however, that the Company shall not be
obligated so to indemnify the holder or any underwriter unless such
holder or underwriter shall indemnify the Company, its directors, each
officer signing the related registration statement and each person, if
any, who controls the Company within the meaning of the Securities
Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement
of a material fact contained in any registration statement or any
prospectus required to be filed or furnished by reason of this section
6 or caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement or omission
or alleged
- B8 -
<PAGE> 30
omission based upon information furnished in writing or required to be
furnished to the Company by such holder or underwriter expressly for
use therein; provided that the aggregate liability of any holder
pursuant to this section 6.2(b) shall not exceed the total aggregate
amount of the net proceeds to be received by such holder from the sale
of Shares to be registered.
(c) Each indemnified party shall give prompt written
notice to each indemnifying party of any action, litigation or
proceeding commenced against it with respect to which indemnity may be
sought hereunder, but failure so to notify an indemnifying party shall
not relieve it from any liability which it may have on account of this
indemnity agreement or otherwise unless such indemnifying party shall
sustain the burden of proving that it has been prejudiced in a
material respect by such failure. An indemnifying party may
participate at its own expense in the defense of such action,
litigation or proceeding. In addition, if it so elects within a
reasonable time after receipt of such notice, an indemnifying party
(jointly with any other indemnifying parties receiving such notice)
may assume the defense of such action, litigation or proceeding with
counsel chosen by it (jointly with such other indemnifying parties)
and reasonably satisfactory to the indemnified parties defendant in
such action, litigation or proceeding. If an indemnifying party
assumes the defense of such action, litigation or proceeding, such
indemnifying party shall not be liable for any fees and expenses of
counsel for the indemnified parties defendant in such action,
litigation or proceeding incurred thereafter in connection therewith.
The indemnified party shall have the right to employ its counsel in
any such action, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized by the
indemnifying parties, (ii) the indemnified party shall have been
advised by its counsel that there may be a conflict of interest
between the indemnifying parties and the indemnified party in the
conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action
on behalf of the indemnified party) or (iii) the indemnifying parties
shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the indemnifying parties. In no event, however,
shall the indemnifying parties be liable for the fees and expenses of
more than one counsel for all indemnified parties in connection with
any one action, litigation or proceeding, or in connection with
separate but similar or related actions, litigations or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances. The indemnifying party shall not be liable for any
settlement of any such action, litigation or proceeding effected
without its written consent, but if any such action, litigation or
proceeding is settled with the written consent of the indemnifying
party or if there is a final judgment for the plaintiff in any such
action, litigation or proceeding, the indemnifying party shall
indemnify and hold any indemnified party harmless from and against any
loss or liability by reason of such settlement or judgment.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided
for above is due in accordance with its terms but is for any reason
held by a court to be unavailable, the Company, each such holder and
each such underwriter shall contribute to the aggregate losses,
claims, damages and liabilities in a manner that is fair and equitable
in accordance with the relative fault of such party. In no
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<PAGE> 31
case, however, shall the Company, holder or underwriter be responsible
for any amount in excess of the net proceeds to him or it from the
public offering as disclosed in the prospectus for such offering. No
party shall be liable for contribution with respect to any action or
claim settled without its consent.
(e) Neither the giving of any notice by the holder nor
the making of any request for prospectuses shall impose upon the
holder making such request any obligation to sell any Shares or
exercise any Warrants.
6.3 Obligations to Continue. The Company's agreements in this
section 6 with respect to the Warrants and/or the Shares shall continue in
effect regardless of the exercise and surrender of this Warrant.
7. Company's Option to Purchase Shares. In lieu of including the
Shares in a registration statement or amendment as described in section 6.1.,
the Company has the option, exercisable by notice within 10 days after receipt
of the request of the holder of the Warrants or the Shares for such
registration of securities, to purchase within 30 days after the receipt of
such request, all (but no fewer) of the Warrants or the Shares as are the
subject of such request. If the Company exercises the option to purchase the
Warrants or the Shares, it shall do so, in the case of any Share, at a price
equal to the average of the reported bid and asked prices for the 20 business
days preceding the request for registration and, in the case of any Warrant, at
a price equal to the average of the reported bid and asked prices for the 20
business days preceding the request for registration less the Warrant Price
then in effect multiplied by the number of Shares issuable upon the exercise of
such Warrant in full.
8. Transfer of Warrant. This Warrant and the Shares may not be
transferred, except to a person or an entity under common control with the
Purchaser (including, without limitation, any corporate successors thereto) and
may not be transferred unless, in the opinion of counsel reasonably
satisfactory to the Company, such transfer would not result in a violation of
the provisions of the Securities Act. Any transfer of this Warrant, in whole
or in part, shall be effected upon the surrender of this Warrant, duly endorsed
(unless endorsement is waived by the Company) at the Company's office referred
to in section 1.1. The Purchaser acknowledges that the Company may require
that certificates for Shares which are not freely transferable under the
Securities Act of 1933 bear a customary restrictive legend. Any person or
entity to whom or to which all or part of the Warrants are transferred in
accordance with this section 8 shall be deemed to be a Purchaser for the
purposes of this Warrant and shall be entitled to all the benefits granted in,
and subject to all the obligations imposed by, this Warrant and there may be
one or more Purchaser. Any action requiring the consent of the Purchaser
hereunder may be taken if such action has been consented to by the holders of
Warrants or Shares together representing a total of more than 50% of the
Shares. Each taker and holder of the Warrants, by taking or holding the same,
consents to and agrees to be bound by the provisions of this section 8.
9. Exchange or Loss of Warrant. This Warrant is exchangeable,
without expense, at the option of the Purchaser, upon presentation and
surrender hereof to the Company or at the office of its stock transfer agent,
if any, for other Warrants of different denominations entitling the Purchaser
thereof to purchase in the aggregate the same number of shares of Common Stock
purchasable
- B10 -
<PAGE> 32
hereunder. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Purchaser hereof. The term "Warrant" as used herein
includes any warrants into which this Warrant may be divided or exchanged.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed
and delivered shall constitute an additional contractual obligation on the part
of the Company, whether or not the Warrant so lost, stolen, destroyed, or
mutilated shall be at any time enforceable by anyone.
10. Reservation of Stock, etc. The Company shall at all times
until the Expiration Date reserve and keep available, solely for issuance and
delivery upon the exercise of the Warrants, all shares of Common Stock (or
Other Securities) from time to time issuable upon the exercise of the Warrants
at the time outstanding. All shares of Common Stock issuable upon the exercise
of the Warrants shall be duly authorized, validly issued, fully paid and
nonassessable.
11. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
Common Stock: the Common Stock, $.01 par value per share, of the
Company as constituted on the Warrant Date, any stock into which such Common
Stock shall have been converted or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or
classes (however designated) of the Company, the holders of which have the
right, without limitation as to amount, either to all or a share of the balance
of current dividends and liquidating dividends after the payment of dividends
and distributions on any shares entitled to preference.
Company : includes any corporation which shall succeed to or assume
the obligations of the Company hereunder in compliance with section 3.
Convertible Securities: the meaning specified in section 2.2(d).
Initial Exercise Date : the meaning specified in the opening
paragraph of this Warrant.
[Market Value: the Market Value of the Common Stock on any given date
means (a) the mean between the highest and lowest reported sale prices on the
New York Stock Exchange-Composite Transactions Tape (or, if not so reported, on
any domestic stock exchanges on which the Common Stock is then listed); or (b)
if the Common Stock is not listed on any domestic stock exchange, the mean
between the closing high bid and low asked prices as reported by the National
Association of Securities Dealers Automated Quotation System (or, if not so
reported, by the system then regarded as the most reliable source of such
quotations); or (c) if the Common Stock is listed on a domestic exchange or
quoted in the domestic over-the-counter market, but there are no reported sales
or quotations, as the case may be, on the given date, the value determined
pursuant to (a) or (b) above using the reported sale prices of quotations on
the last previous date on which so reported;
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<PAGE> 33
or (d) if none of the foregoing clauses apply, the fair value as determined in
good faith by the Board of Directors.]1
Options: the meaning specified in section 2.2(d).
Other Securities: any stock (other than Common Stock) or other
securities of the Company or any other person (corporate or otherwise) which
the holders of the Warrants at any time shall be entitled to receive, or shall
have received, upon the exercise of the Warrants, in lieu of or in addition to
Common Stock, or, which at any time shall be issuable or shall have been issued
in exchange for or replacement of Common Stock or Other Securities pursuant to
section 2 or otherwise.
Shares: the meaning specified in section 6.1.
Underwriting Agreement: the meaning specified in section 6.1.
Warrant Date : the date this Warrant is issued.
Warrant Price: the meaning specified in the opening paragraph of this
Warrant.
12. Notices. All notices, consents and other communications under
this Warrant shall be in writing and shall be deemed given when delivered
personally or when sent by telex (or its equivalent) and confirmed by
registered mail, return receipt requested, to a party at its address as follows
(or such other address as a party may designate by notice given to the other
parties pursuant to this section): (a) if to the Company, 3000 Dundee Road,
Northbrook, Illinois 60062, Attention: President, with a copy to Carter W.
Emerson, Esq., Kirkland & Ellis, 200 East Randolph Drive, Chicago, Illinois
60601 and (b) if to the Purchaser, at the address set forth in Schedule 1
hereto.
[13. Shareholder Approval of the Warrant. The grant of this
Warrant is subject to its approval by the stockholders of the Company as
required by Rule 4460(i) of the National Association of Securities Dealers,
Inc. The grant of this Warrant will be deemed null and void if such approval
is not obtained prior to the first anniversary of the date hereof.]1
14. Miscellaneous.
(a) Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated except by an instrument in
writing signed by the holder of the Warrant and by the Company.
(b) This Warrant and all amendments hereof and waivers
and consents hereunder shall be governed by the law of the State of
Illinois applicable to contracts made and to be performed therein.
(c) The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning
hereof.
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<PAGE> 34
[15. Termination of Outstanding Warrants. This instrument
terminates the Warrant issued by the Company to the Purchaser on [ ] to
purchase [ ] shares of Common Stock (the "Previously Issued
Warrant"). The Previously Issued Warrant is hereby cancelled and is replaced
with this Warrant.]4
Dated as of [ ]
Trans Leasing International, Inc.
By:
_____________________________________
Name:
Its:
The undersigned hereby acknowledges having read this Warrant
and hereby agrees to be bound by all provisions set forth herein as of the date
of the issuance of this Warrant.
Dated as of [ ]
By:
___________________________________
Purchaser
1 Provision not contained in November 21, 1995 Director Warrants.
2 Provision not contained in May 30, 1996 Director Warrants.
3 Provision is for 500,000 in November 7, 1996 Director Warrants.
4 Provision not contained in November 7, 1996 or February 21, 1997 Director
Warrants
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<PAGE> 35
[Proxy card - Front]
PROXY PROXY
TRANS LEASING INTERNATIONAL, INC.
This Proxy is Solicited on Behalf of the Board of Directors for
the Special meeting of Shareholders to be held on May 1, 1997
The undersigned Shareholder of Trans Leasing International, Inc. (the
"Company") hereby appoints Larry S. Grossman and Michael J. Heyman, and each of
them, proxies, with power of substitution, to vote at the Special Meeting of
Shareholders of the Company to be held at the offices of the Company at 3000
Dundee Road, Northbrook, Illinois 60062 on Thursday, May 1, 1997 at 9:00 a.m.,
CDT, or any postponement or adjournment thereof.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE> 36
[Proxy Card - Back]
TRANS LEASING INTERNATIONAL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARE INK ONLY. [x]
1. Approval of Plan -
Approval of the Company's 1996 Stock Option Plan.
For Withhold Abstain
[ ] [ ] [ ]
2. Approval of Director Warrants -
Approval of Director Warrants issued to members of the Board
of Directors of the Company.
For Withhold Abstain
[ ] [ ] [ ]
3. Discretionary Voting of Proxies on Other Matters -
In the discretion of the proxies, in the transaction of such other business
which may properly come before the meeting; all as described in the Notice of
1997 Special Meeting of Shareholders and related Proxy Statement.
The Board of Directors Favors A Vote FOR Items And 2. The Shares Represented
By This Proxy Will Be Voted As Directed, But Where No Direction Is Given, Those
Shares Will Be Voted FOR Such Item(s).
Dated: _________________________, 1997
Signature(s) __________________________________
_______________________________________________
Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
