<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
PS GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
PS GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
- --------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
[_] 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:_____________________________________________________________
Notes:
<PAGE>
PS GROUP, INC.
4370 LA JOLLA VILLAGE DRIVE, SUITE 1050
SAN DIEGO, CALIFORNIA 92122
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 24, 1994
TO THE STOCKHOLDERS OF PS GROUP, INC.:
The Annual Meeting of Stockholders of PS Group, Inc., a Delaware corporation,
will be held at the Marriott Hotel - La Jolla, 4240 La Jolla Village Drive, La
Jolla, California, 92037, on Tuesday, May 24, 1994, at 11:00 a.m., local time,
for the following purposes:
(1) To elect two directors with terms expiring in 1997; and
(2) To transact such other business as may properly come before the
annual meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 1, 1994 as the
record date for the determination of stockholders who are entitled to notice of
and to vote at the meeting. Stockholders are cordially invited to attend the
meeting.
By Order of the Board of Directors
/s/ Dennis C. O'Dell
DENNIS C. O'DELL
Secretary
San Diego, California
April 15, 1994
------------------------------------------------------------------------
PROXY INFORMATION
In order to assure your representation at the annual meeting, please
complete, sign and date the enclosed proxy as promptly as possible and
return it in the enclosed pre-addressed envelope, which requires no
postage if mailed in the United States.
-----------------------------------------------------------------------
<PAGE>
PS GROUP, INC.
4370 LA JOLLA VILLAGE DRIVE, SUITE 1050
SAN DIEGO, CALIFORNIA 92122
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This proxy statement is provided to the stockholders in connection with the
solicitation of proxies by the Board of Directors of PS Group, Inc., a Delaware
corporation (the "Company"), for use at the annual meeting of stockholders to be
held on Tuesday, May 24, 1994, at 11:00 a.m. and at any adjournments thereof
(the "Annual Meeting"). The close of business on April 1, 1994 has been
determined by the Board of Directors as the date of record for stockholders
entitled to notice of and to vote at the Annual Meeting (the "Record Date").
This proxy statement and the accompanying proxy are being mailed to stockholders
on or about April 15, 1994.
Any stockholder who gives a proxy has the power to revoke it at any time before
it is exercised by delivery of written notice of revocation to the Secretary of
the Company prior to the commencement of the Annual Meeting. Stockholders
attending the Annual Meeting may vote their shares in person whether or not a
proxy has been previously executed and returned. Stockholders who have executed
a proxy but intend to vote in person are requested to so notify the Secretary
prior to the time of the Annual Meeting. If the accompanying proxy card is
properly signed and returned to the Company, and not revoked, it will be voted
in accordance with the instructions thereon. Unless contrary instructions are
given, the persons designated as proxy holders will vote FOR each of the
nominees for director.
At the Annual Meeting, or any adjournment thereof, the holders of 6,065,969
shares of the Company's Common Stock outstanding on April 1, 1994 will be
entitled to one vote per share.
ELECTION OF DIRECTORS
There are currently seven directors on the Company's Board of Directors. The
Directors are divided into three classes, with three year terms expiring in
successive years. At the Annual Meeting, two directors are expected to be
elected with terms expiring upon the election and qualification of their
successors at the 1997 Annual Meeting of Stockholders. The two nominees,
Messrs. Allen and Shortley, are both currently directors of the Company.
It is intended that the proxies received by the Board of Directors will be voted
for the election of the nominees for directors named below, unless authority to
do so is withheld. The favorable vote of holders of a majority of shares of the
Company's Common Stock represented at the meeting in person or by proxy is
required to elect any nominee for director. All shares represented in person or
by proxy, regardless of the nature of the vote or the absence of a vote
indication, including broker non-votes, will be counted to determine the number
of shares represented at the meeting.
<PAGE>
It is not contemplated that either of the nominees will be unable to serve as a
director, but if that contingency should occur prior to the Annual Meeting, the
holders of proxies reserve the right to substitute and vote for another person
of their choice. Information follows with respect to each nominee and present
director of the Company.
NOMINEES FOR DIRECTOR
THE FOLLOWING PERSONS ARE NOMINEES FOR DIRECTORS WITH TERMS EXPIRING IN 1997:
HOWARD P. ALLEN: Mr. Allen, 68, is Chairman of the Executive Committee of the
board of directors of SCEcorp and Southern California Edison Company
(collectively "Edison"). From 1973 to 1980 he was Executive Vice President of
Edison, from 1980 to 1984 he was President of Edison and from 1984 until his
retirement in 1990 he was Chairman of the Board and Chief Executive Officer of
Edison. He also serves as a director of AMR Corp., Computer Sciences
Corporation and The Presley Companies. Mr. Allen has served as a director of
the Company since 1979.
GEORGE M. SHORTLEY: Mr. Shortley, 53, has been employed by the Company since
1968. Mr. Shortley was elected a director of the Company in 1988 and on May 1,
1989 became President and Chief Executive Officer of the Company. From 1973
until 1976 Mr. Shortley was Assistant Vice President-Finance for the Company.
In 1976 Mr. Shortley was appointed Vice President-Finance of the Company, was
appointed Senior Vice President-Finance of the Company in 1980 and was appointed
Executive Vice President of the Company in 1985. Mr. Shortley also served as
Chief Financial Officer of the Company from 1979 until 1987.
CERTAIN INFORMATION CONCERNING OTHER DIRECTORS
THE FOLLOWING PERSONS SERVE AS DIRECTORS WITH TERMS EXPIRING IN 1996:
CHARLES E. RICKERSHAUSER, JR.: Mr. Rickershauser, 65, has been Chairman of the
Board of the Company since 1991 and a director since 1984. From 1980 until 1986
he was Chairman of the Board and Chief Executive Officer of the Pacific Stock
Exchange Incorporated. From 1986 until his retirement in 1990 he was a partner
in the law firm of Fried, Frank, Harris, Shriver & Jacobson. Mr. Rickershauser
also serves as a director of City National Corp. (and its principal subsidiary,
City National Bank), Lee Enterprises, Incorporated and The Vons Companies, Inc.
DONALD W. KILLIAN, JR.: Mr. Killian, 64, has been in the private practice of
law since 1955. Since 1984 Mr. Killian has been a sole practitioner and also Of
Counsel to the law firm of Call, Clayton & Jensen in Newport Beach, CA. Mr.
Killian is also a director of the Daily Journal Corporation. Mr. Killian was
elected a director of the Company in 1993.
2
<PAGE>
THE FOLLOWING PERSONS SERVE AS DIRECTORS WITH TERMS EXPIRING IN 1995:
ROBERT M. FOMON: Mr. Fomon, 69, is, and has been since 1987, President of
Robert M. Fomon and Company Inc., a private investment company. Previously Mr.
Fomon served as Chairman of the Board (from 1977 to 1987), Chief Executive
Officer and a Director (from 1970 to 1987) of the E.F. Hutton Group Inc., a
holding company for the investment banking firm of E.F. Hutton & Company Inc.
Mr. Fomon was associated with E.F. Hutton & Company Inc. for approximately 35
years. Mr. Fomon has been a Director of the Company since 1963.
J. P. GUERIN: Mr. Guerin, 64, is a private investor. From 1965 to 1992 Mr.
Guerin was managing partner of Pacific Partners, a limited partnership holding
long-term investments. Mr. Guerin was Chairman of the Board of the Company from
1985 until 1991 and Vice Chairman of the Company from 1991 until 1993. Mr.
Guerin is a director of Lee Enterprises, Incorporated and is a director and Vice
Chairman of the Board of the Daily Journal Corporation. Mr. Guerin has been a
director of the Company since 1978.
GORDON C. LUCE: Mr. Luce, 68, is an independent investment advisor. From 1979
until his retirement in 1990 Mr. Luce was Chairman of the Board and Chief
Executive Officer of Great American First Savings Bank, where he had been
employed since 1969. Great American First Savings Bank was taken over by the
Resolution Trust Corporation in August 1991. Mr. Luce is also a director of All
American Communications, Inc., Molecular Biosystems, Inc. and Carolco Pictures
Inc. Mr. Luce has been a director of the Company since 1973.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors has standing executive and audit committees. The Board
sitting as a committee of the whole acts as the Compensation Committee (see
"Executive Compensation"). The Company has no nominating committee.
The Executive Committee is comprised of Messrs. Guerin (Chairman), Rickershauser
and Shortley. Subject to certain limitations, the Executive Committee exercises
the powers of the Board in the management of the business and affairs of the
Company in the absence of the full Board. The Executive Committee met once and
acted by unanimous written consent once during 1993.
The Audit Committee is comprised of Messrs. Guerin (Chairman), Allen and Luce.
The Audit Committee recommends to the Board of Directors for its nomination
independent public accountants to audit the books, records and accounts of the
Company, and reviews and approves the overall scope and adequacy of the
independent and internal audit programs and the proposed form of the Company's
consolidated financial statements. The Audit Committee also reviews the
results, findings and recommendations of audits performed by the independent
public accountants and the internal audit department, the system of internal
accounting controls, the significant accounting policies of the Company as they
apply to its consolidated financial statements, the audit fees to be paid to the
independent public accountants and the nature of non-audit services performed by
the independent public accountants. The Audit Committee met twice during 1993.
3
<PAGE>
The Board of Directors met five times during 1993. Each director attended at
least 75% of the aggregate of the meetings of the Board of Directors and the
committees on which he served.
COMPENSATION OF DIRECTORS
Directors (other than Mr. Shortley) are paid an annual fee of $10,000 plus a fee
of $1,000 for each meeting of the Board of Directors of the Company attended or
$350 for attendance by telephone. For attendance at each meeting of a committee
of the Board which is not held on a day on which the Board of Directors meets,
member directors or those attending by invitation are also paid $1,000 for
attendance in person or $350 for attendance by telephone. The Chairman of the
Board is paid an additional annual fee of $100,000 and certain other amounts
(please see "Executive Compensation") and the Chairman of the Executive and
Audit Committees is paid an additional annual fee of $25,000.
EXECUTIVE COMPENSATION
REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission (the "SEC")
the Company is required to provide certain data and information regarding the
compensation and benefits provided to the President and Chief Executive Officer
and the three other full-time executive officers of the Company (the "other
named executive officers")./1/ The disclosure mandated by the SEC requires the
use of certain tables along with this report explaining the underlying reasons
for certain compensation decisions affecting those individuals. The Company's
executive compensation program is administered by the Board of Directors sitting
as a committee of the whole./2/ In compliance with SEC requirements the
Compensation Committee has prepared this report for inclusion in this Proxy
Statement.
Commencing in 1994, the maximum amount for which an employer may claim a
compensation deduction pursuant to Section 162(m) of the Internal Revenue Code
of 1986, as amended, is $1 million per person, unless certain performance-
related compensation exemptions are met. Since it is unlikely that any officers
of the Company will receive in excess of $1 million in aggregate compensation
for a year in the near future, the Committee has deferred consideration of the
new provision.
- -------------------
/1/ Mr. Rickershauser, Chairman of the Board of Directors of the Company, also
provides part-time services as an executive of the Company. Mr.
Rickershauser is included in tables relating to executive officers of the
Company because his total compensation as Chairman of the Board and for his
part-time services as an executive officer exceeds $100,000. However, up
to this time, Mr. Rickershauser has not participated in any of the
incentive compensation programs described in this report. Mr.
Rickershauser's compensation is established by the Board of Directors as
reflective of the value of the part-time services he provides to the
Company as Chairman of the Board and is not currently tied to the criteria
set forth herein for determining the compensation to be paid to full-time
officer employees of the Company.
/2/ Directors Rickershauser and Shortley are not present during discussions
relating to their compensation and abstain from voting on any matters
relating to themselves.
4
<PAGE>
COMPENSATION PHILOSOPHY
This report reflects the Company's compensation philosophy and also reflects the
underlying reasoning for the information set forth in the compensation tables
accompanying this report. The Company's executive compensation program is
designed to provide a competitive total compensation package based on
performance. The package consists of base salary, annual discretionary bonuses
and long-term incentives. The Company's goal is to provide base compensation
commensurate with an individual's level of experience, responsibility and
individual performance, yet at a conservative level so that a significant
portion of an executive officer's compensation opportunities can be based on
both individual and Company performance incentives through additional
discretionary and incentive compensation. Each officer also has an employment
contract with the Company prohibiting reductions in base pay from that last
established. Discretionary bonuses are awarded annually if the Board believes a
combination of the Company's performance and an individual officer's performance
in his or her particular area of responsibility so merits. The Board measures
the Company performance primarily by comparing financial results of the Company
to internally projected results for the period in question. Individual officer
performance is measured primarily by how effectively the individual officer
performed his or her assigned job. Long-term incentive opportunities are
intended to align the interests of the Company's officers with the long-term
interests of stockholders by offering potential incentive compensation the value
of which is tied to the Company's stock price.
BASE SALARIES
The base salary of Mr. Shortley, CEO of the Company, has remained at its current
level since 1990. This is consistent with the Committee's philosophy that the
compensation of the CEO of the Company is appropriately tied more directly to
the overall performance of the Company than that of other executive officers.
At the annual review of executive officer salaries in March 1994 it was
determined that satisfactory individual performances by executive officers did
not sufficiently offset the Company's less than satisfactory results in 1993, so
no base salary increases for executive officers were granted at that time.
ANNUAL DISCRETIONARY BONUSES
Mr. Shortley and the other named executive officers are eligible to receive
bonuses based upon a combination of factors including Company performance,
individual performance and the performance of each such officer's division of
responsibility. In the case of Mr. Shortley, Company performance is preeminent
in determining an award while criteria for other executive officers is weighted
more heavily toward individual proficiency of performance. Bonuses are normally
awarded in March of each year to reflect performance for the prior year. The
Committee has specifically elected not to establish defined criteria on which
bonus compensation will be based but has instead elected to maintain a
subjective approach to bonus compensation based on a post hoc review of the
prior year's performance by each officer. In March of 1994 the Committee
reviewed the performance of each officer during 1993. While results for the
Company during 1993 were unsatisfactory the Committee noted that extraordinary
efforts were expended by the four officers in 1993 in connection with the (i)
restructuring of the Company's bank debt, (ii) refinancing of certain assets
and (iii) potential sale of the Company's travel management subsidiary, all of
which helped avoid certain defaults under the Company's bank credit agreement
and led, by April 1994, to repayment of all outstanding
5
<PAGE>
borrowed funds under the Company's bank credit agreement and the cash
collateralization of all of the Company's outstanding letters of credit. In
March of 1994 each full-time executive officer was awarded a discretionary bonus
of $25,000 in specific recognition of his or her efforts during 1993 in
restructuring and reducing the Company's bank debt.
LONG-TERM INCENTIVE PROGRAM
The long-term incentive program of the Company consists primarily of a long-term
cash award program (the "Performance Unit Program") and the Company's 1984 Stock
Incentive Plan (the "Stock Plan"). The two plans are designed to provide an
opportunity for Company executives to earn a portion of their total compensation
only if certain performance levels of the Company's stock are met. Any stock
options awarded typically vest over a period of time and only have value if the
market price of the Company's stock increases. Any long-term incentive units
awarded can only vest if certain performance targets (established at the
discretion of the Board at the time of the incentive award) are met.
Thereafter, the value of vested units is tied to the market value of the
Company's stock. No performance units or stock options have been awarded since
1990 and 1988 under either the Performance Unit Program or the Stock Plan,
respectively, and none of the previously granted performance units vested during
1993 due to the failure of the Company to meet the necessary target levels of
performance established at the time of grant in 1990 by the Board of Directors.
Performance Units granted in 1990 could only vest if certain levels of return on
investment established at the time of grant were met by the Company. The
Committee does not expect to award additional Performance Units or stock options
until such time as the Company's financial status has improved sufficiently to
warrant such awards. Consequently, the Committee has elected not to establish
any objective performance criteria for such future awards at this time.
Howard P. Allen
Robert M. Fomon
J. P. Guerin
Donald W. Killian, Jr.
Gordon C. Luce
Charles E. Rickershauser, Jr.
George M Shortley
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors sits as a committee of the whole with respect to
executive compensation matters, except Mr. Shortley and Mr. Rickershauser were
not present during discussions regarding, nor did either vote on, compensation
matters concerning themselves. Mr. Shortley and Mr. Rickershauser did
participate in discussions regarding compensation of executive officers other
than themselves.
6
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows the compensation of the Company's Chief Executive
Officer and the four most highly compensated executive officers as of the end of
each of the last three years ending December 31, 1993.
<TABLE>
<CAPTION>
Annual Compensation
-------------------------- All Other
Compensation
Name and Principal Position Year Salary (A) Bonus (B,C)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles E. Rickershauser, Jr. 1993 $121,800 - $19,292
Chairman of the Board 1992 134,496 - 20,812
1991 87,019 - N/A
George M. Shortley 1993 279,600 $25,000 (D) 4,497
President and 1992 289,985 - 29,364
Chief Executive Officer 1991 279,600 - N/A
Lawrence A. Guske 1993 161,600 25,000 (D) 4,497
Vice President - Finance and 1992 165,438 - 4,364
Chief Financial Officer 1991 152,400 25,000 (E) N/A
Johanna Hinds 1993 133,600 25,000 (D) 4,008
Vice President and 1992 136,869 - 4,364
Controller 1991 126,600 15,000 (E) N/A
Dennis C. O'Dell 1993 155,600 25,000 (D) 4,497
Vice President, General 1992 159,346 - 4,364
Counsel and Secretary 1991 147,000 20,000 (E) N/A
- ---------------
</TABLE>
(A) For all named officers amounts deferred pursuant to Section 401(k) of the
Internal Revenue Code are included. Cash payments designated as automobile
allowances are also included for all executive officers. Fees and
compensation paid to Mr. Rickershauser as a director and Chairman of the
Board are included. Due to a bi-weekly payroll cycle, 1992 had 27 pay days
whereas 1993 and 1991 had only 26.
(B) In accordance with the transitional provisions applicable to the revised
rules on executive officer and director compensation disclosure adopted by
the SEC, amounts of "All Other Compensation" are excluded for the Company's
1991 fiscal year.
(C) The amounts shown in this column for 1993 and 1992 represent the Company's
contribution to each executive officer's 401(k) plan. In addition, for Mr.
Rickershauser, $15,625 and $16,765 is included for life insurance premiums
for 1993 and 1992, respectively. The Company has agreed to pay life
insurance premiums on Mr. Rickershauser for a period of five years
beginning in 1992. All premiums so paid will be reimbursed to the Company
out of any death benefits paid under such insurance. The amount shown for
Mr. Shortley in 1992 includes a one-time payment of additional compensation
of $25,000.
(D) Bonuses earned for calendar year 1993 were actually awarded and paid in
March of 1994.
(E) Bonuses earned for calendar year 1991 were actually awarded and paid in
March of 1992.
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options/SARs at
Name December 31, 1993 (all exercisable)
- -----------------------------------------------------------------------
<S> <C>
Charles E. Rickershauser, Jr. -
George M. Shortley -
Lawrence A. Guske 9,033
Johanna Hinds 6,108
Dennis C. O'Dell 4,000
</TABLE>
None of the unexercised options were in-the-money at December 31, 1993.
RETIREMENT BENEFITS
The Company maintains a retirement plan (the "Plan") providing unfunded
retirement benefits for its officers. Normal retirement under the Plan is at
age 60 with lesser benefits payable upon early retirement. The Plan provides
that participating officers (those retiring as an officer or who terminate
employment having completed 10 or more years as an officer) receive a monthly
benefit of 2.5% of compensation for each year of service up to 20 years plus 2%
of compensation for each year of additional service up to five years. The term
"Compensation," for such purposes, means the average monthly compensation
received from the Company for the 60 consecutive calendar months during the last
120 months in which the officer had the highest compensation. For illustrative
purposes the following table provides examples of the benefits payable under the
Plan as a straight life annuity at age 60.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
----------------------------------------
"Compensation" 10 15 20 25
- -------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
$125,000 $31,250 $ 46,875 $ 62,500 $ 75,000
150,000 37,500 56,250 75,000 90,000
200,000 50,000 75,000 100,000 120,000
250,000 62,500 93,750 125,000 150,000
300,000 75,000 112,500 150,000 180,000
350,000 87,500 131,250 175,000 210,000
</TABLE>
Messrs. Shortley, Guske and O'Dell and Ms. Hinds have approximately 26, 24, 14
and 15 years of service, respectively. All amounts listed in the Summary
Compensation Table are included in Compensation except that Company 401(k)
contributions shown under All Other Compensation are excluded.
8
<PAGE>
In 1988 the Company terminated its defined benefit plan (the "Terminated Plan")
covering employees generally. Messrs. Shortley, Guske and O'Dell and Ms. Hinds
each received a lump sum payment for accrued benefits under the Terminated Plan.
The benefits payable under the Plan will be reduced by the actuarial equivalent
of such lump sum payments. The benefits payable under the Plan are not subject
to any deduction for social security or other offset amounts.
The Plan provides a disability benefit for participating officers with at least
three years of service as an officer. This benefit is equal to 60% of regular
salary, excluding bonuses, (less other long-term disability and social security
benefits which may be payable) and is payable for a number of years equal to the
number of years of service as an employee. Thereafter, the monthly benefit is
reduced to an amount which is the greater of (a) 40% of regular salary, (b)
$3,000 or (c) the amount to which he or she would be entitled as a normal
retirement benefit on his or her normal retirement date. The benefit continues
until the earlier of normal retirement date, recovery from permanent disability
or death. In addition, the years of service while disabled are counted toward a
retirement benefit but are limited to the number of years of service accumulated
at the time of disability.
The Company has agreed to accrue for Mr. Rickershauser an unfunded retirement
benefit of $50,000 per year plus accrued interest thereon for each year he
serves as Chairman of the Board of Directors of the Company. This benefit is in
lieu of any participation by Mr. Rickershauser in the Plan.
EXECUTIVE EMPLOYMENT AGREEMENTS
Executive employment agreements have been entered into with Messrs. Shortley,
Guske and O'Dell and Ms. Hinds. The agreement with respect to Mr. Shortley
provides for his full time services until the first day of the calendar month
following his sixtieth birthday. The agreements with Mr. Guske, Ms. Hinds and
Mr. O'Dell are for continually renewing one year periods. Compensation to be
paid to each of them is to be determined by the Board of Directors of the
Company but is not to be less than the amount last established by the Board. The
annual salary for each of them last established was as follows: Mr. Shortley,
$270,000; Mr. Guske, $155,000; Mr. O'Dell, $149,000; and Ms. Hinds, $127,000.
Under the employment agreements, the Company has agreed to continue for a three
year period, or to age 60, whichever is shorter, with respect to Mr. Shortley
and for a one year period with respect to Mr. Guske, Mr. O'Dell and Ms. Hinds,
their then present compensation if any of them are terminated without cause or
resign because certain provisions of their respective agreements have not been
complied with by the Company. Mr. Guske's, Mr. O'Dell's and Ms. Hinds'
agreements provide that in the event they are terminated as a result of a change
in control of the Company they will be entitled to severance pay equal to two
years at their then current compensation. Retirement benefits continue to
accrue during such periods.
9
<PAGE>
BENEFICIAL OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth as of the Record Date, the number of shares
beneficially owned by each nominee to or member of the Board of Directors, for
each executive officer named in the Summary Compensation Table and for all
executive officers, directors and nominees as a group. All references are to
Common Stock.
<TABLE>
<CAPTION>
Common Stock Percent of
Name Beneficially Common
Owned (1) Stock
- -------------------------------------------------------------------------------
<S> <C> <C>
Howard P. Allen 625 (2) *
Robert M. Fomon 281 *
J.P. Guerin 416,063 (3) 6.9
Lawrence A. Guske 15,583 (4) *
Johanna Hinds 6,108 (5) *
Donald W. Killian, Jr. 1,600 (6) *
Gordon C. Luce 153 (7) *
Dennis C. O'Dell 6,302 (8) *
Charles E. Rickershauser, Jr. 4,000 *
George M. Shortley 42,050 (9) *
All Officers and Directors as a group
(10 persons including those named above) 492,765 (10) 8.1
</TABLE>
*Less than 1 percent.
(1) Unless otherwise disclosed, beneficial ownership is direct and the person
indicated has sole voting and dispositive power over the shares of common
stock listed. In certain instances, as footnoted, includes shares that may
be acquired pursuant to options exercisable within 60 days of the Record
Date. All expressions of percentage of shares held assume that the options
of the particular person or group in question have been exercised and no
others.
(2) These shares are held by the Allen Family Trust of which Mr. Allen is a
Trustee and beneficiary.
(3) Includes (i) 12,358 shares owned by Mr. Guerin's wife, (ii) 50,714 shares
and 176,370 shares in the John Patrick Guerin Trust and Guerin Family
Trust, respectively, each of which Mr. Guerin is a Trustee and beneficiary
and (iii) 176,621 shares in the J. Patrick Guerin III Trust, of which Mr.
Guerin is a Trustee but in which he has no beneficial interest.
(4) Includes 12 shares owned by Mr. Guske's son and 9,033 shares which may be
acquired upon the exercise of stock options.
(5) These shares may be acquired upon the exercise of stock options.
(6) These shares are held by the Killian Family 1987 Trust of which Mr. Killian
is a Trustee and beneficiary.
(7) These shares are held by the Luce Family Trust of which Mr. Luce is a
Trustee and beneficiary.
(8) Includes 100 shares owned by Mr. O'Dell's wife and 4,000 shares which may
be acquired upon the exercise of stock options.
(9) Includes 1,700 shares owned by Mr. Shortley's wife and 18,900 shares owned
by the Shortley Living Trust of which Mr. Shortley is a Trustee and
beneficiary.
(10) Includes 19,141 shares which directors and officers as a group may acquire
upon exercise of stock options.
10
<PAGE>
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to all persons known to
the Company to be the beneficial owners of more that five percent of the
Company's Common Stock as of April 1, 1994.
<TABLE>
<CAPTION>
Common Stock
Beneficially Percent of
Name and Address of Beneficial Owner Owned Common Stock
- ------------------------------------ ------------ ------------
<S> <C> <C>
SC Fundamental Group (1) 384,900 6.3
437 Madison Avenue
New York, New York 10022
J.P. Guerin (2) 416,063 6.9
355 South Grand Street
Los Angeles, California 90071
ESL Partners, L.P. (3) 508,100 8.4
115 East Putnam Avenue
Greenwich, Connecticut 06830
Berkshire Hathaway Inc. (4) 1,208,032 19.9
1440 Kiewit Plaza
Omaha, Nebraska 68131
- -----------------
</TABLE>
(1) Ownership information obtained from Schedule 13D filed July 12, 1993 on
behalf of the following group: (i) The SC Fundamental Value Fund, L.P.
which exercises shared voting and dispositive power over 276,190 shares;
(ii) SC Fundamental Value BVI, Inc. which exercises shared voting and
dispositive power over 108,710 shares; (iii) SC Fundamental Inc. which
exercises shared voting and dispositive power over 276,190 shares; (iv)
Gary N. Siegler who exercises shared voting and dispositive power over
384,900 shares; and (v) Peter M. Collery who exercises shared voting and
dispositive power over 384,900 shares.
(2) Ownership information obtained from Schedule 13D filed January 7, 1993 on
behalf of Mr. Guerin and Fabienne M. Guerin, his wife, and Forms 4 filed
October 7, 1993 and January 3, 1994 on behalf of Mr. Guerin. Mr. Guerin
exercises sole voting and dispositive power over 403,705 shares, 176,621 of
which are included because Mr. Guerin is Trustee of the J. Patrick Guerin
III Trust, but in which Mr. Guerin disclaims any beneficial ownership. Mrs.
Guerin exercises sole voting and dispositive power over 12,358 shares that
are owned by her and in which Mr. Guerin disclaims beneficial ownership.
(3) Ownership information contained in Schedule 13D filed February 18, 1994.
ESL Partners, L.P. exercises sole voting and dispositive power over all
shares.
(4) Ownership information obtained from Berkshire Hathaway Inc. Schedule 13D
dated December 14, 1990 ("Berkshire 13D"). The Berkshire 13D was also
filed on behalf of Warren E. Buffet, who may be deemed to control Berkshire
Hathaway Inc., and the following subsidiaries of Berkshire Hathaway Inc.
(the amount of the Company's stock owned by each such subsidiary as
reported in the Berkshire 13D is shown in parentheses following the
subsidiaries' names): National Indemnity Company (579,957); National
Liability & Fire Insurance Company (330,475); Columbia Insurance Company
(197,600); and National Fire and Marine Insurance Company (100,000).
Berkshire Hathaway exercises shared voting and dispositive power over all
shares listed.
11
<PAGE>
RELATED TRANSACTIONS
For information regarding certain transactions with directors, see "Executive
Compensation."
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of equity securities of the
Company. Directors, executive officers and greater than ten-percent stockholders
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the Company's fiscal year 1993 all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were met.
STOCK PERFORMANCE GRAPH
The following performance graph compares the five-year cumulative total
shareholder returns (assuming reinvestment of dividends) realized by the
Company's common shareholders with the S&P 500 index and with a peer group
described below. The performance graph assumes $100 is invested in the
Company's common stock, the S&P 500 index and a composite index for the peer
companies on December 31, 1988, and that dividends paid during the five years
ending December 31, 1993 were reinvested to purchase additional shares. The
Company had material revenues during the five-year period from four different
lines of business. In order to develop a meaningful peer group the companies
listed below were selected from each of the four lines of business. Within each
line of business the selected peer companies were weighted annually by market
capitalization at the beginning of each period for which a return is indicated.
Weighting of peer companies within the Company's four lines of business was done
annually by the asset value of each individual line of business. The following
companies were used in each line of business:
Travel management:*
AMR Corp.
Delta Air Lines Inc.
UAL Corp.
USAir Group
Fuel sales and distribution:
International Recovery Corp.
Mercury Air Group Inc.
Aircraft leasing:
Airlease Ltd.
PLM International Inc.
Oil and gas:
Alta Energy Corp.
Hallador Petroleum Corp.
Hallador Energy Corp.
*Because there are no publicly traded companies that are exclusively in travel
management, airline companies were selected as the businesses that most closely
match the market conditions affecting travel management.
12
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG PS GROUP, S&P 500 INDEX AND PEER GROUP INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period S&P
(Fiscal Year Covered) PS GROUP 500 INDEX Peer Group
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/31/88 $100 $100 $100
FYE 12/31/89 $110.1 $131.6 $119.7
FYE 12/31/90 $122.6 $127.5 $ 83.5
FYE 12/31/91 $ 99.7 $166.2 $ 75.6
FYE 12/31/92 $ 31.5 $178.8 $ 72.0
FYE 12/31/93 $ 44.3 $196.7 $ 99.8
</TABLE>
OTHER MATTERS
INDEPENDENT AUDITORS
Ernst & Young were the Company's auditors for 1993 and have been appointed to
serve as auditors during 1994. A representative of Ernst & Young is expected to
be present at the Annual Meeting with the opportunity to make a statement if the
representative desires to do so and to be available to respond to appropriate
questions.
13
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1995 Annual Meeting of
Stockholders must be submitted to the Secretary of the Company at the Company's
principal executive offices not later than December 18, 1994 to be considered
for inclusion in the 1995 proxy materials. Any stockholder wishing to nominate
a candidate for election as a director must notify the Secretary of the Company
of such fact, together with other information about the candidate as required by
the Bylaws of the Company not less than 30 days nor more than 60 days prior to
the date of the 1995 Annual Meeting; provided, however, that if less than 40
days' notice or prior public disclosure of the 1995 Annual Meeting is given, a
stockholder's notice must be received at the principal offices of the Company
not later than the close of business on the 10th day following the day that
notice of the 1995 Annual Meeting was mailed or public disclosure of such
meeting was made.
SOLICITATION OF PROXIES
The expenses of preparing and mailing the Notice of Annual Meeting, Proxy
Statement and form of Proxy will be paid by the Company. In addition to the
solicitation of proxies by mail, proxies may be solicited by directors, officers
and regular employees of the Company (who will receive no additional
compensation), by personal interviews, telephone, telecopy and telegraph. The
Company has retained Skinner & Co. to assist in solicitation of proxies and for
assistance in distribution of proxies and accompanying material to brokerage
houses and institutions. Skinner & Co. will use approximately 10 of its
employees and will be paid fees of approximately $3,500 for its services. It is
anticipated that banks, custodians, nominees and fiduciaries will forward proxy
soliciting material to beneficial owners of the Company's Common Stock and that
such persons will be reimbursed by the Company for their expenses incurred in
this connection.
OTHER MATTERS
The Board of Directors is not aware of any matters to be brought before the
Annual Meeting other than as stated in the Notice of Annual Meeting. However,
if any other matters come before the meeting, it is the intention of the proxy
holders to vote in their discretion on such matters pursuant to such proxy.
By Order of the Board of Directors
/s/ Dennis C. O'Dell
DENNIS C. O'DELL
Secretary
Dated: April 15, 1994
14
<PAGE>
F O R M O F P R O X Y L A N G U A G E
- -------------------------------------------
* * * * * * S i d e 1 * * * * * *
PROXY
PS GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints GEORGE M. SHORTLEY and DENNIS C. O'DELL and each of
them, proxies, with power of substitution, to vote all shares which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of PS
Group, Inc. called to be held at the Marriott Hotel - La Jolla, 4240 La Jolla
Village Drive, La Jolla, California 92037, on Tuesday, May 24, 1994, at 11:00
a.m. local time and all adjournments.
(Continued and to be signed on other side.)
* * * * * * S i d e 2 * * * * * *
UNMARKED PROXIES SHALL BE VOTED IN FAVOR OF EACH NOMINATED DIRECTOR unless
specified to the contrary.
<TABLE>
<S> <C> <C>
-------------- ------------
Account Number Common Stock I plan to attend meeting ___
</TABLE>
Item 1. ELECTION OF DIRECTORS: Howard P. Allen, George M. Shortley
<TABLE>
<S> <C> <C>
For all nominees listed WITHHOLD (Instruction: To withhold authority to
(except as marked to the AUTHORITY vote for any individual nominee, write
contrary at right) to vote for all that nominee's name in the space
nominees listed above. provided below.)
----- ----- --------------------------------------
Important: Please sign exactly as your
name or names appear hereon. If signing
as executor, trustee or other fiduciary,
give your full title as such.
Dated: ----------------------------1994
----------------------------------------
(Signature)
----------------------------------------
(Signature)
</TABLE>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE U.S.A.
