NAL FINANCIAL GROUP INC, PRE 14A, 1996-04-12

NAL FINANCIAL GROUP INC
PRE 14A, 1996-04-12
ASSET-BACKED SECURITIES

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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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

NAL FINANCIAL GROUP INC.
------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

[INSERT NAME OF FILER WHEN APPLICABLE]
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item
22(a)(2) of Schedule 14A
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11

(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPY

NAL FINANCIAL GROUP INC.
April 30, 1996

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of NAL Financial Group Inc. (the "Company") which will be held at The
Westin Hotel, 400 Corporate Drive, Fort Lauderdale, Florida on Friday, May 31,
1996 at 10:00 AM. Your Board of Directors and management look forward to
personally greeting those stockholders able to attend.

At the Meeting, stockholders will be asked to approve amendments to the
Company's Certificate of Incorporation to (1) classify the Board of Directors
into three different classes and (2) to require a supermajority vote of
stockholders to approve amendments to the Company's Certificate of Incorporation
in certain circumstances. Stockholders will also be asked to elect four
directors, to approve an amendment to the Company's 1994 Stock Option Plan (the
"1994 Plan") to provide for an increase in the number of shares of common stock
the Company is authorized to issue under the 1994 Plan, to ratify the
appointment of Price Waterhouse LLP as the Company's independent auditors and to
consider such other matters as may properly come before the Meeting or at any
adjournment(s) thereof. These matters are discussed in greater detail in the
accompanying Proxy Statement.

Your Board of Directors recommends a vote FOR all of the amendments to the
Company's Certificate of Incorporation, FOR the election of directors, FOR the
amendment to the Company's 1994 Stock Option Plan, and FOR the ratification of
Price Waterhouse LLP as the Company's independent auditors.

Regardless of the number of shares you own or whether you plan to attend, it is
important that your shares be represented and voted at the meeting. You are
requested to sign, date and mail the enclosed proxy promptly.

We wish to thank our stockholders for their participation and support.

Sincerely,

Robert R. Bartolini
Chairman of the Board
and Chief Executive Officer

<PAGE>

PRELIMINARY COPY

NAL FINANCIAL GROUP INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 31, 1996

April 30, 1996

To the Stockholders of NAL FINANCIAL GROUP INC.

The Annual Meeting of Stockholders (the "Meeting") of NAL Financial
Group Inc. (the "Company") will be held at The Westin Hotel, 400 Corporate
Drive, Fort Lauderdale, Florida on Friday, May 31, 1996, at 10:00 A.M. for the
following purposes:

(1) to consider and approve an amendment to the Company's Certificate
of Incorporation to provide for the classification of the Board of
Directors into three different classes (a "Classified Board"), to
establish procedures for filling vacancies on the Board, to
provide that directors shall only be removed for cause and by a
supermajority vote of stockholders, and requiring Board consent to
amend these provisions;

(2) to consider and approve an amendment to the Company's Certificate
of Incorporation to require a supermajority vote of stockholders
to approve amendments to the Company's Certificate of
Incorporation in certain circumstances, as described in the
accompanying Proxy Statement;

(3) to elect four directors;

(4) to consider and approve an amendment to the Company's 1994 Stock
Option Plan (the "1994 Plan") to increase the number of shares of
common stock the Company is authorized to issue under the 1994
Plan;

(5) to ratify the appointment of Price Waterhouse LLP as independent
auditors for the Company; and

(6) to transact such other business as may properly come before the
Meeting and at any adjournment(s) thereof.

A copy of the Annual Report for the fiscal year ended December 31,
1995 is enclosed for your information.

<PAGE>

Only stockholders of record as of the close of business on April 20, 1996
will be entitled to vote at the Meeting, and any adjournment or adjournments
thereof.

Enclosed is a Proxy Statement, a form of proxy and an addressed return
envelope. All stockholders, whether or not they expect to be present at the
Meeting, are requested to date and sign the proxy and return it in the enclosed
envelope promptly. The return of the proxy will not affect your right to vote if
you attend the Meeting.

By Order of the Board of Directors,

JoAnn Woodside
Secretary

YOUR VOTE IS IMPORTANT
You are urged to sign, date and promptly
return your proxy in the enclosed envelope.

<PAGE>

PRELIMINARY COPY

NAL FINANCIAL GROUP INC.

PROXY STATEMENT

SOLICITATION OF PROXIES

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NAL Financial Group Inc. (the "Company") to
be voted at the Annual Meeting of Stockholders of the Company on May 31, 1996
and at any adjournment or adjournments of the meeting (the "Meeting") for the
purposes described in the foregoing notice of Meeting. Proxies which are validly
executed by stockholders and which are received by the Company no later than the
business day preceding the Meeting will be voted in accordance with the
instructions contained thereon. If no instructions are given, a proxy will be
voted FOR the amendments to the Company's Certificate of Incorporation to
provide for a Classified Board and to provide for a supermajority vote of
stockholders to approve amendments to the Company's Certificate of Incorporation
in certain circumstances as described herein, FOR the election of directors, FOR
an amendment to the Company's 1994 Stock Option Plan (the "1994 Plan") providing
for an increase in the number of shares of common stock the Company is
authorized to issue under the 1994 Plan, FOR the ratification of Price
Waterhouse LLP as the Company's independent auditors and in the discretion of
the persons named in the proxy, if granted, on all other matters presented to
the Meeting.

The securities entitled to vote at the Meeting consist of shares of Common
Stock of the Company. The number of outstanding shares of Common Stock at the
close of business on April 9, 1996 was 6,700,041. Each share of Common Stock is
entitled to one vote, and nominees receiving a plurality of the votes cast will
be elected as directors. Only holders of record at the close of business on
April 20, 1996 will be entitled to vote at the Meeting. The holders of a
majority of the outstanding shares of Common Stock must be present in person or
represented by proxy at the Meeting in order to constitute a quorum for the
transaction of business. Abstentions and broker non-votes will be counted for
the purpose of determining a quorum but neither will be counted in the election
of directors, in the voting on the amendments to the Certificate of
Incorporation, in the voting on the amendment to the 1994 Plan or in the voting
on the ratification of the Company's independent auditors, as described herein.

A copy of the Company's Annual Report for the fiscal year ended December
31, 1995 accompanies this Proxy Statement. No material contained in the Annual
Report is to be considered a part of the proxy solicitation material. The
mailing address of the Company's executive office is 500 Cypress Creek Road
West, Suite 590, Fort Lauderdale, Florida 33309. The approximate date on which
this Proxy Statement and the form of proxy was first mailed or given to
stockholders was April 30, 1996.

<PAGE>

PROPOSAL 1 - CLASSIFICATION OF THE BOARD OF DIRECTORS
- ----------

The Board of Directors has approved a resolution amending the Company's
Certificate of Incorporation to provide for a classified Board of Directors, to
establish procedures for filling vacancies on the Board, to provide that
directors shall only be removed for cause and by a supermajority vote of the
stockholders and to require Board consent to amend these provisions. At the
Meeting, stockholders will consider and vote on this proposed amendment. The
text of the proposed amendment is attached to this Proxy Statement as Exhibit 1.
The statements made in this Proxy Statement with respect to this amendment to
the Certificate of Incorporation should be read in conjunction with and are
qualified in their entirety by reference to Exhibit 1. In the event that this
proposal is approved, the Board of Directors will consider conforming amendments
to the Company's By-Laws at the meeting of the Board of Directors which is
expected to follow shortly after the Meeting.

This Amendment may have the effect of making it more difficult for
stockholders to remove the existing management of the Company and may,
therefore, discourage potentially unfriendly bids for shares of the Company. See
"Possible Anti-Takeover Effects of Proposal."

A. Description of Proposed Amendment.
----------------------------------

Section 10 of the Company's Certificate of Incorporation would be amended
to provide for a classified Board of Directors. The existing Section 10 would be
included unaltered within subsection 10(a) as amended. The Proposal would
operate to divide the Board into three separate classes of directors, as nearly
equal in number as possible, to serve a three year term and until their
successors are duly elected and qualified with each class being elected at
different annual stockholder meetings. Following the effectiveness of the
Proposal, Class I will consist of one director who will serve for an initial
term of three years, Class II will consist of two directors who will serve for
an initial term of two years, and Class III will consist of one director who
will serve for an initial term of one year. See "Proposal 3 - Election of
Directors." At each annual meeting after 1996, directors will be elected to
succeed those whose terms then expire and each newly elected director will serve
for a three-year term. The proposed Amendment would replace the prior system of
electing all of the directors annually for one-year terms.

If the number of directors constituting the Board is increased or
decreased, the resulting number of directors will be apportioned among the three
classes so as to make all classes as nearly equal in number as possible, except
that the term of any incumbent director may not be shortened. Under the Delaware
General Corporation Law ("GCL"), if a Board is classified by action of the
stockholders, unless the Certificate of Incorporation specifies otherwise,
members of the Board of each class may be removed by the stockholders before the
expiration of their respective terms only for cause. Accordingly, in the event
that stockholders approve this proposal, none of the directors elected to the
Classified Board may be removed without cause prior to the expiration of their
respective terms.

The effect of a Classified Board of Directors may be circumvented by
increasing or decreasing the size of the Board. At present, vacancies in the

<PAGE>

Board of Directors, including vacancies resulting from an increase in the number
of directors, are required to be filled by a majority of the remaining members
of the Board, although less than a quorum, and each person so elected serves as
a director until a successor is elected by the stockholders. Additionally, any
director or the entire Board may be removed with or without cause by majority
vote of the stockholders. The Proposal provides that the size of the Board may
be fixed solely by action of the Board itself, and that any vacancies in the
Board of Directors be filled by a majority vote of the remaining directors then
in office, even though less than a quorum, and each person so elected would
serve for the remainder of the full term of the class in which the new
directorship was created or the vacancy occurred. The Proposal would also
provide that directors may be removed only for cause and only by the
affirmative vote of two-thirds of the stockholders entitled to vote thereon. See
"Proposal 2 - Supermajority Voting Provisions." The GCL provides that the
Certificate of Incorporation, including these provisions, may be amended by the
stockholders only with the consent of the Board.

B. Reasons for Proposal
--------------------

Since directors will be serving for longer terms which expire at different
times, and may only be removed for cause by a supermajority vote of
stockholders, the Board of Directors believes that a classified Board will
promote continuity of management and, thereby enhance the ability of the Company
to carry out long-range plans and goals for its benefit and the benefit of its
stockholders. Although the Company has not experienced difficulties in the past
in maintaining continuity of the Board and management, the Board of Directors
believes that a classified Board will assist the Company in maintaining this
continuity of management into the future. Additionally, the Proposal has certain
anti-takeover effects that the Board believes will deter unsolicited takeover
attempts and protect the value of each stockholder's investment in the Company.
See "Possible Anti-Takeover Effects of the Proposal."

A Classified Board would also extend the time it would take for a majority
stockholder to obtain control of the Company's Board of Directors, thereby
limiting such abusive takeover tactics as two tiered tender offers. Assuming
each class of directors is equal in size, a majority stockholder could not
obtain control of the Board until the second annual stockholder's meeting after
it acquired a majority of the voting stock. During this time, the Board of
Directors would have a better opportunity to negotiate with any such majority
stockholder to obtain more favorable price and terms in any merger or tender
offer.

<PAGE>

C. Possible Anti-Takeover Effects of the Proposal
----------------------------------------------

The Board of Directors believes that Proposal 1 may have anti-takeover
effects as described below. Also described below are the general anti-takeover
provisions of the Delaware GCL.

1. Anti-Takeover Provisions of the Delaware GCL
--------------------------------------------

As set forth above, the Delaware GCL prohibits stockholders from removing
members of a Classified Board without cause before the expiration of their
respective terms unless the Certificate of Incorporation specifies otherwise.
The Delaware GCL contains a number of other provisions which are designed to
strengthen the position of incumbent management in connection with a takeover
attempt. For example, Delaware law provides that a company has the general
power, exercisable by its board of directors, to accept, reject, respond to or
take no action in respect of an actual or proposed acquisition, divestiture,
tender offer, takeover or other fundamental change. The case law of Delaware has
developed special standards for deciding whether to uphold or advocate the
actions of incumbent management in the context of takeover proposals.

The Company is also subject to Section 203 of the Delaware GCL, which
provides that a person who acquires fifteen percent (15%) or more of the
outstanding voting stock of a Delaware corporation becomes an "interested
stockholder". Section 203 prohibits a corporation from engaging in mergers or
certain other "business combinations" with an interested stockholder for a
period of three (3) years, unless (i) prior to the date the stockholder becomes
an interested stockholder, the board of directors approves either the business
combination or the transaction which results in the stockholder becoming an
interested stockholder, or (ii) the interested stockholder is able to acquire
ownership of at least eighty-five percent (85%) of the outstanding voting stock
of the corporation (excluding shares owned by directors of the corporation who
are also officers and shares owned by certain employee stock plans) in the same
transaction by which the stockholder became an interested stockholder, or (iii)
the interested stockholder obtains control of the board of directors, which then
approves a business combination which is authorized by a vote of the holders of
two-thirds of the outstanding voting stock not held by the interested
stockholder.

The definition of interested stockholder does not include persons whose
ownership of voting stock exceeds the fifteen percent (15%) threshold as a
result of action taken by the corporation unless that person thereafter acquires
additional shares.

A "business combination" is defined broadly in the GCL to include any
merger or consolidation with the interested stockholder, any merger or
consolidation caused by the interested stockholder in which the surviving
corporation will not be subject to Delaware law, or the sale, lease, exchange,
mortgage, pledge, transfer or other disposition to the interested stockholder of
any assets of the corporation having a market value equal to or greater than ten
percent (10%) of the aggregate market value of the assets of the corporation.
"Business combination" is also defined to include transfers of stock of the
corporation or a subsidiary to the interested stockholder (except for transfers

<PAGE>

in conversion, exchange or pro rata distribution which do not increase the
interested stockholder's proportionate ownership of a class or series), or any
receipt by the interested stockholder (except proportionately as a stockholder)
of any loans, advances, guaranties, pledges or the financial benefits.

2. Possible Consequences of the Anti-Takeover Effects of the Proposal
------------------------------------------------------------------

The Board of Directors believes that this Proposal 1, to the extent that it
deters unsolicited takeover attempts, will promote conditions of stability in
the business, management and control of the Company, discourage in advance
certain takeover offers or other attempts to accumulate the Company's stock and
encourage anyone contemplating such actions to negotiate with the Company, and
will assist the Company in defending against any such action if the Board does
not believe it to be in the best interests of the Company and all of its
stockholders. Although the Board of Directors is not aware of any overt threat
of such a takeover attempt at this time, the Board believes that this Proposal 1
is in the best interest of the Company.

A takeover offer often places the target corporation in the position of
making a forced sale, sometimes when the market price of its stock may be
temporarily depressed. The Board believes that the consideration offered in such
a situation, even though it may be in excess of the then market price, is less
than the consideration which could be obtained in a freely negotiated
transaction. In a freely negotiated transaction, the Board of Directors would
have the opportunity to seek a suitable partner at a time of its choosing and to
negotiate the most favorable price and terms which reflect not only the current,
but also the future value of the Company. The Board may also believe that the
takeover offer is not in the best interests of the Company and its stockholders
for additional reasons, such as those exhibited in the large number of business
failures which result from overleveraged transactions. In the context of an
unsolicited offer, the Board may not have adequate time to consider fully the
takeover offer and to determine what actions are in the best interests of the
Company and its stockholders despite the provisions of applicable federal law
regarding the minimum duration of certain takeover offers. This Proposal 1
attempts to ameliorate the problems inherent in these situations.

Takeover offers or other non-market acquisitions of stock are usually made
at prices above the prevailing market price of the corporation's stock and often
have a corresponding effect on such market price. Accumulation of stock through
market purchases, whether or not for the purpose of acquiring control, may also
support the price of a corporation's stock at levels higher than otherwise would
be the case. This Proposal 1 may discourage such takeover offers and purchases,
even if holders of a majority of the Company's shares desire to sell such
shares.

This Proposal 1 may also make it more difficult to accomplish a transaction
requiring stockholder approval or to displace management quickly, even if a
majority of the stockholders of the Company desire to do so. Under certain
circumstances, this Proposal 1 may permit management of the Company to
perpetuate itself in control of the Company. In addition, the Proposal could
encourage a potential purchaser of the Company to negotiate with the Board of
Directors and offer terms acceptable to it. Such terms might include
continuation of the existing management of the Company or a commitment by the
purchaser to provide benefits (such as employment contracts) not available to
stockholders generally.

<PAGE>

Vote Required for Approval

The affirmative vote of holders of at least the majority of the shares of
Common Stock which are entitled to vote at the Meeting is required in order to
approve this Proposal 1. Therefore, failure to vote has the same effect as a
negative vote. Accordingly, if stockholders are in favor of this Proposal 1 and
do not vote their shares for this Proposal 1 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 1 will become effective upon the filing of a Certificate of Amendment
to the Certificate of Incorporation of the Company with the Secretary of State
of Delaware, which is expected to follow shortly after the approval, if at all,
of this Proposal 1.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
---
CLASSIFICATION OF THE BOARD OF DIRECTORS

PROPOSAL 2 - SUPER MAJORITY VOTING PROVISION
- ----------

The Board of Directors has approved a resolution amending the Company's
Certificate of Incorporation to require the affirmative vote of two-thirds of
the outstanding voting stock to approve amendments to the Certificate of
Incorporation unless the proposed amendment has been approved by the affirmative
vote of at least eighty percent (80%) of the Board of Directors. At the Meeting,
stockholders will consider and vote on this proposed amendment. The text of the
proposed amendment to the Certificate of Incorporation is attached to this Proxy
Statement as Exhibit 2. The statements made in this Proxy Statement with respect
to this amendment to the Certificate should be read in conjunction with and are
qualified in their entirety by reference to Exhibit 2.

This Proposal may have the effect of making it more difficult for
stockholders to change the number of directors of the Company and to remove the
existing management of the Company. Consequently, it may discourage potentially
unfriendly bids for shares of the Company. This Proposal 2 will also make it
more difficult for a stockholder to defuse the Company's takeover defenses that
require amending the Certificate of Incorporation. For example, if this Proposal
2 is adopted, and Proposal 1 is also adopted, a stockholder seeking to eliminate
the Classified Board would have to obtain a supermajority vote of the
stockholders in order to amend the Company's Certificate of Incorporation. For
these reasons, the Board of Directors believes that this Proposal may have an
anti-takeover effect. In considering Proposal 2, stockholders should consider
and review the "Possible Anti-Takeover Effects of this Proposal" appearing in
this Proxy Statement.

Vote Required For Approval

The affirmative vote of holders of at least the majority of the shares of
Common Stock which are entitled to vote at the Meeting is required in order to
approve this Proposal 2. Therefore, failure to vote has the same effect as a
negative vote. Accordingly, if stockholders are in favor of this Proposal 2 and

<PAGE>

do not vote their shares in favor of this Proposal 2, either in person or
by proxy, such stockholders will have effectively voted against the Proposal. If
approved, this Proposal 2 will be effective upon the filing of a Certificate of
Amendment to the Certificate of Incorporation of the Company with the Secretary
of State of Delaware which is expected to follow shortly after the Meeting.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
---
SUPERMAJORITY VOTING PROVISION.

PROPOSAL 3 - ELECTION OF DIRECTORS
- ----------

The four persons listed below have been nominated by the Board of Directors
to serve as directors of the Company.

If the amendment to the Certificate of Incorporation to provide for a
Classified Board of Directors (see "Proposal 1") is adopted, the Board of
Directors will be divided into three classes. This Meeting will be the first
election of directors after the amendment which created the Classified Board.
Accordingly, at the Meeting, one director will be elected for a term expiring at
the Company's 1997 Annual Meeting, two directors for terms expiring at the 1998
Annual Meeting, and one director for a term expiring at the 1999 Annual Meeting
and, in each case, until their successors are duly elected and qualified. At
each Annual Meeting after 1996, directors will be elected to succeed those
directors whose terms then expire, and each person so elected will serve for a
three-year term.

If the Amendment to the Certificate of Incorporation is not approved,
directors elected at the Meeting will serve one-year terms until the 1997 Annual
Meeting and until their successors are duly elected and qualified.

It is the intention of the persons named in the accompanying form of proxy
to vote such proxy for the election as directors of the following nominees. In
the event that any nominee is unable to serve or will not serve as a director,
it is intended that the proxies solicited hereby will be voted for such other
person or persons as may be nominated by management. Vacancies in the Board of
Directors may be filled by the Board of Directors and, assuming stockholder
approval of Proposal 1, any director chosen to fill a vacancy would hold office
until the next election of the class for which such director had been chosen.
Assuming stockholders do not approve Proposal 1, any director chosen to fill a
vacancy would hold office until the next election of Directors.

- --------------------------------------------------------------------------------
Director Whose Term Year in Which
Expires at the 1997 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------

James F. DeVoe Chairman of the Board and 1996
CEO of J.D. Byrider Systems,
Inc.
- --------------------------------------------------------------------------------

<PAGE>

James F. DeVoe
- --------------

Mr. DeVoe, 52, has been a director of the Company since March 1996. He is
the founder and has been Chief Executive Officer and Chairman of the Board of
Directors of J.D. Byrider Systems, Inc., a used vehicle-operation franchiser
since 1989, with 75 open locations in 28 states. Mr. DeVoe has been President
and Chairman of the Board of DeVoe Chevrolet Cadillac, Inc., an auto dealership,
since 1975. Mr. DeVoe holds a bachelor of science degree and a masters degree in
business from Indiana University.

- --------------------------------------------------------------------------------
Directors Whose Terms Year in Which
Expire at the 1998 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------
David R. Jones President and CEO of 1996
D.R. Jones Financial, Inc.

John T. Schaeffer President and Chief Operating 1994
Officer of NAC
- -------------------------------------------------------------------------------

David R. Jones
- --------------

Mr. Jones, 47, has been a director of the Company since February 1996. He
has been President of D.R. Jones Financial, Inc., a privately held consulting
firm since its formation in September 1995. Prior to forming D.R. Jones
Financial, Inc., Mr. Jones was Senior Vice President - Asset Backed Finance of
Greenwich Capital Markets, Inc. from 1989 to 1995. Mr. Jones served as a
Managing Director of The First Boston Corporation, an investment banking firm,
from 1982 to 1989 and as Manager - Product Development of General Electric
Credit Corp., an asset-based lender and financial services company, from 1981 to
1982. Mr. Jones is a graduate of Harvard College and has a masters degree in
business administration from The Amos Tuck School of Business Administration.

John T. Schaeffer
- -----------------

Mr. Schaeffer, 49, has been President and Chief Operating Officer of NAL
Acceptance Corporation, a subsidiary of the Company ("NAC") since its inception
and has maintained those positions, with the addition of the office of director
of the Company in November 1994. See Footnote 1 below. Prior to joining the
Company, Mr. Schaeffer was President and Chief Operating Officer of FinancialFed
Services, Inc. ("FFS"), the automobile lease origination and servicing unit of
FinFed. From 1986 through 1989, Mr. Schaeffer was Executive Vice President and
Chief Operating Officer of CenTrust Leasing Corporation, the leasing unit of
CenTrust Savings Bank, where he was responsible for the overall activities of
the leasing subsidiary. Prior to that, he served as Vice President with First
Pennsylvania Bank, N.A. for sixteen years.

<PAGE>

- --------------------------------------------------------------------------------
Director Whose Term Year in Which
Expires at the 1999 Service as a
Annual Meeting Principal Occupation Director Began
- --------------------------------------------------------------------------------

Robert R. Bartolini Chairman of the Board, 1991(1)
President and CEO of the
Company; Chairman of the
Board and CEO of NAC
- --------------------------------------------------------------------------------

Robert R. Bartolini
- -------------------

Mr. Bartolini, 51, has been Chairman and Chief Executive Officer of the
Company since its inception in 1991 and has maintained those positions, with the
addition of the office of the President in November 1994. See Footnote 1 below.
Prior to founding NAL Financial Group Inc., he was President and Chief Operating
Officer of Financial Federal Savings & Loan Association ("FinFed" - Miami,
Florida), a $1.8 billion mutual savings and loan. From 1984 to 1987, Mr.
Bartolini was Executive Vice President at CenTrust Savings Bank, an $11 billion
institution based in Miami, Florida, with 60 branches. Prior to that, Mr.
Bartolini was with First Pennsylvania Bank, NA (assets of $6 billion; 75
branches), where he served as Senior Vice President.

- -----------------------------------
(1) NAL Financial Group Inc. (the "Company") commenced operations during June
1991. The Company became publicly held by virtue of a merger (the "Merger")
with and into Corporate Financial Ventures, Inc., an inactive public company
("COFVI"), effective November 30, 1994. Effective upon the Merger, COFVI
assumed the historic operations of NAL and changed its name to "NAL
Financial Group Inc."

BOARD MEETINGS AND COMMITTEES

There are currently four members of the Board of Directors. During the
fiscal year ended December 31, 1995, there were 2 meetings of the Board. All
members of the Board attended both meetings. The only committee of the Board of
Directors is the Audit Committee. During the fiscal year ended December 31,
1995, there were no meetings of the Audit Committee.

The Audit Committee has primary responsibility to review accounting
procedures and methods employed in connection with audit programs and related
management policies. Its duties include (1) selecting the independent auditors
for the Company, (2) reviewing the scope of the audit to be conducted by them,
(3) meeting with the independent auditors concerning the results of their audit,
and (4) overseeing the scope and accuracy of the Company's system of internal
accounting controls. The Audit Committee is the principal liaison between the
Board of Directors and the independent auditors for the Company. The members of
the Audit Committee are Messrs. Robert R. Bartolini, David R. Jones and James F.
DeVoe.

<PAGE>

Directors' Compensation

The employee-directors of the Company receive no fees or other compensation
in connection with their services as directors. Each of Mr. Jones and Mr. DeVoe
were granted Warrants to purchase 20,000 shares of the Company's Common Stock in
conjunction with joining the Board of Directors and receive $1,000 for each
meeting of the Board and any Committee attended in person and $500 for each
meeting attended telephonically.

EXECUTIVE COMPENSATION

The following table discloses individual compensation information relating
to the Company's Chief Executive Officer and the other named executive officers
of the Company for the years ended December 31, 1993, 1994 and 1995.

SUMMARY COMPENSATION TABLE

- ------------------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation(1) Compensation
- ------------------------------------------------------------------------------------------------------------------------------
Securities
Salary Bonus Underlying
Name and Position Year ($) ($) Options/SARs (#)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert R. Bartolini 1995 $300,000 $0 50,000(4)
Chairman of the Board, President and Chief Executive 1994 $281,916 $298,985 75,000(2)
Officer of NAL; 1993 $250,000 $1,248,100 0
Chairman and Chief Executive Officer of NAC
- ------------------------------------------------------------------------------------------------------------------------------
John T. Schaeffer 1995 $160,000 $0 25,000(4)
Director of NAL; 1994 $160,000 $0 40,000(3)
President and Chief Operating Officer of NAC 1993 $160,000 $161,302 0
- ------------------------------------------------------------------------------------------------------------------------------
Robert J. Carlson 1995 $80,000 $0 15,000(4)
Vice President-Finance and Principal Accounting 1994 $74,231 $86,015 15,000(3)
Officer of NAL 1993 $72,500 $18,124 0
- ------------------------------------------------------------------------------------------------------------------------------
Dennis R. LaVigne 1995 $48,461 $0 25,000(5)
Vice President and Treasurer of NAL
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Based upon the fiscal years ended December 31, 1995, 1994, and 1993.
(2) Represents stock options granted as of December 15, 1994 pursuant to
the 1994 Plan of which 66,666 options vest pro-rata over four years
commencing January 1, 1996 and 8,334 options vest pro-rata over three years
commencing January 1, 1996.
(3) Represents stock options granted as of December 15, 1994 pursuant to the
1994 Plan, which vest pro-rata over three years commencing January 1, 1996.
(4) Represents stock options granted as of December 6, 1995 pursuant to the
1994 Plan, which vest pro-rata over three years commencing January 1, 1997.
(5) Represents stock options granted as of December 6, 1995 pursuant to the
1994 Plan, which vest upon December 6, 1998.

<PAGE>

The following table discloses individual grants of stock options and
freestanding SARs made to the named executive officers for the year ended
December 31, 1995.

- --------------------------------------------------------------------------------
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------

- ----------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTION/SARs EXERCISE EXPIRATION
UNDERLYING GRANTED TO OR DATE
NAME OPTIONS/SARs EMPLOYEES IN BASE PRICE
GRANTED(#) FISCAL YEAR(1) ($/Share)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert R. Bartolini 50,000(2) 15.22% $16.50 December 6, 2005
Chairman of the Board, President and Chief
Executive Officer of NAL;
Chairman and Chief Executive Officer of
NAC
- ----------------------------------------------------------------------------------------------------------
John T. Schaeffer 25,000(2) 7.61% $15.00 December 6, 2005
Director of NAL;
President and Chief Operating Officer of
NAC
- ----------------------------------------------------------------------------------------------------------
Robert J. Carlson 15,000(2) 4.57% $15.00 December 6, 2005
Vice President-Finance and
Principal Accounting Officer of NAL
- ----------------------------------------------------------------------------------------------------------
Dennis R. LaVigne 25,000(3) 7.61% $13.25 December 6, 2005
Vice President and Treasurer of NAL
- ----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Based upon the grant during the year ended December 31, 1995 of options to
purchase an aggregate of 328,500 shares of Common Stock pursuant to the
1994 Plan.
(2) Represents stock options granted as of December 6, 1995 pursuant to the
1994 Plan, which vest pro-rata over three years commencing January 1, 1997.
(3) Represents stock options granted as of December 6, 1995 pursuant to the
1994 Plan, which vest upon December 6, 1998.
- ---------------------------------------

<PAGE>

The following table shows information regarding the exercise of stock
options during the year ended December 31, 1995 by the named executive officer
and the number and value of any unexercised stock options held by them as of
December 31, 1995:

- -------------------------------------------------------------------------------------------------------------------------------

AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

- -------------------------------------------------------------------------------------------------------------------------------
Value
Number of Securities of Unexercised
Shares Underlying In-the-Money Options/SARs
Acquired Unexercised Options/SARs at FY-End ($)
Name on Exercise(#) Value Realized at FY-End(#) Exercisable/Unexercisable(1)
Exercisable/Unexercisable(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert R. Bartolini, -0- -0- 19,445(E)/105,555(U) $138,365(E)/$393,885(U)
Chairman of the Board, President
and Chief Executive Officer of
NAL;
Chairman and Chief Executive
Officer of NAC
- -------------------------------------------------------------------------------------------------------------------------------
John T. Schaeffer -0- -0- 13,333(E)/51,667(U) $101,731(E)/$203,469(U)
Director of NAL;
President and Chief Operating
Officer of NAC
- -------------------------------------------------------------------------------------------------------------------------------
Robert J. Carlson -0- -0- 5,000(E)/25,000(U) $38,150(E)/$76,300(U)
Vice President-Finance and
Principal Accounting Officer of
NAL
- -------------------------------------------------------------------------------------------------------------------------------
Dennis R. LaVigne -0- -0- 0(E)/25,000(U) $0(E)/$9,500(U)
Vice President and Treasurer of
NAL
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Based upon the closing price of the Company's Common Stock ($13.63 per
share) as of December 29, 1995 as traded on The NASDAQ National MarketSM.

<PAGE>

Employment Agreement

Effective November 30, 1994, the Company entered into an employment
agreement with Mr. Robert Bartolini. Such agreement, as subsequently amended,
provides for a base salary of $300,000 per year together with discretionary
bonuses, if any, to be declared by the Board of Directors. The agreement also
provides for certain benefits including vacation, life insurance, certain
expenses and stock option plan participation, as well as a restrictive covenant
in favor of the Company. The agreement is annually renewable for successive
three-year periods; however, Mr. Bartolini may terminate the agreement upon
written notice on the earlier of one year from the date of such notice or 90
days after his replacement is hired by the Company. Mr. Bartolini may not cause
the agreement to terminate prior to three years from the date of the agreement.

<PAGE>

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 9, 1996, information with
respect to the securities holdings of all persons which the Company, pursuant to
filings with the Securities and Exchange Commission, has reason to believe may
be deemed the beneficial owners of more than 5% of the Company's outstanding
Common Stock. Also set forth in the table is the beneficial ownership of all
shares of the Company's outstanding stock, as of such date, of all officers and
directors, individually and as a group.

- -------------------------------------------------------------------------------------------------
Shares Owned
Beneficially and of Percentage of
Name Record(1) Outstanding Shares(1)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert R. Bartolini 2,235,647(2) 33.18%
500 Cypress Creek Road West, Suite 590
Ft. Lauderdale, FL 33309
- -------------------------------------------------------------------------------------------------
John T. Schaeffer 302,913(3) 4.50%
500 Cypress Creek Road West, Suite 590
Ft. Lauderdale, FL 33309
- -------------------------------------------------------------------------------------------------
Robert J. Carlson 65,196(4) *
500 Cypress Creek Road West, Suite 590
Ft. Lauderdale, FL 33309
- -------------------------------------------------------------------------------------------------
Dennis R. LaVigne --(5) *
500 Cypress Creek Road West, Suite 590
Ft. Lauderdale, FL 33309
- -------------------------------------------------------------------------------------------------
James F. DeVoe --(6) *
5780 West 71st Street
Indianapolis, IN 46278
- -------------------------------------------------------------------------------------------------
David R. Jones --(6) *
2 Ocean Avenue
Scituate, MA 02066-1624
- -------------------------------------------------------------------------------------------------
Florence Karp(7) 1,427,803(8) 17.57%
3418 Sansom Street
Philadelphia, PA 19104
- -------------------------------------------------------------------------------------------------
Rozel International Holdings Limited 362,318(9) 5.13%
P.O. Box 3151
Road Town
Tortola, B.V.I.
- -------------------------------------------------------------------------------------------------
All Directors and Officers 2,603,756 38.6%
as a group (6 persons)
- -------------------------------------------------------------------------------------------------
</TABLE>

- --------------------------------------------------
*Represents less than 1%

(1) Except as otherwise indicated, includes total number of shares
outstanding and the number of shares which each person has the right to
acquire, within 60 days through the exercise of options, warrants or
debentures, pursuant to Item 403 of Regulation S-B and Rule 13d-3(d)(1),
promulgated under the 1934 Act. Also reflects 6,700,041 shares of the
Company's Common Stock outstanding as of April 9, 1996.

(2) Includes 1,647,004 shares held by Robert R. Bartolini and Marcia G.
Bartolini, Co-Trustees of the Robert R. Bartolini Revocable Trust dated
July 27, 1992, 210,000 shares of which are subject to options granted by
Mr. Bartolini during May 1995. Also includes 305,176 shares presently held
by English, McCaughan & O'Bryan, P.A. pursuant to the terms of the Voting
Trust Agreement. See "Material Voting Arrangements." Includes 264,022
shares held by Marcia G. Bartolini and Robert R. Bartolini, Co-Trustees of
the Marcia G. Bartolini Revocable Trust dated July 27, 1992. Does not
include 50,000 shares owned beneficially by Edward M. Bartolini, the adult
brother of Robert R. Bartolini. Also does not include 264,022 shares held
by George Schnabel, Trustee of the Robert R. Bartolini and Marcia G.
Bartolini Irrevocable Trust dated July 27, 1992. Includes Incentive Stock
Options to purchase 19,445 shares of Common Stock granted December 1994
which vested as of January 1, 1996. Does not include Incentive Stock
Options to purchase 105,555 shares of Common Stock granted December 1994
and December 1995, which have not vested. See "Summary Compensation Table."

(3) Includes 34,628 shares held by English McCaughan & O'Bryan, P.A. for
the benefit of Mr. Schaeffer pursuant to the terms of the Voting Trust
Agreement. See "Material Voting Arrangements." Includes 13,333 Incentive
Stock Options granted to Mr. Schaeffer in December 1994 which vested as of
January 1, 1996. Does not include 51,667 Incentive Stock Options granted to
Mr. Schaeffer in December 1994 and December 1995 which remain subject to
vesting. Includes 4,952 shares held by Mr. Schaeffer's spouse. See "Summary
Compensation Table."

(4) Includes 60,196 shares held by English, McCaughan & O'Bryan, P.A. for
the benefit of Mr. Carlson pursuant to the terms of the Voting Trust
Agreement. See "Material Voting Arrangements." Includes 5,000 Incentive
Stock Options granted to Mr. Carlson in December 1994 which vested as of
January 1, 1996. Does not include 25,000 Incentive Stock Options granted to
Mr. Carlson in December 1994 and December 1995 which remain subject to
vesting. See "Summary Compensation Table."

(5) Does not include 25,000 Incentive Stock Options granted to Mr. LaVigne
in December 1995 which remain subject to vesting. See "Summary Compensation
Table."

(6) Does not include Warrants to purchase 20,000 shares of Common Stock at
an exercise price of $14.38 per share granted to Mr. Jones in conjunction
with appointment as a director on February 5, 1996, which have not vested.
Also does not include Warrants to purchase 20,000 shares of Common Stock at
an exercise price of $11.50 per share granted to Mr. DeVoe in conjunction
with appointment as a director on March 11, 1996, which have not vested.
See "Summary Compensation Table."

(7) As custodian for Ms. Karp's minor grandchildren.

<PAGE>

(8) Includes 625,000 shares of Common Stock issuable upon the exercise, if
at all, of Warrants. Also includes 802,803 shares of Common Stock (643,939
shares representing principal and 158,864 shares representing interest at
maturity) issuable upon the conversion, if at all, of Debentures.

(9) Includes 128,818 shares issuable, if at all, upon conversion of
outstanding Debentures and 233,500 shares issuable, if at all, upon the
exercise of outstanding Warrants.

------------------------------

Material Voting Arrangements
- ----------------------------

Concurrent with the completion of the Merger, as of November 30, 1994,
Messrs. Bartolini, Schaeffer and Carlson entered into a Voting Trust Agreement
(the "Voting Trust Agreement") pursuant to which 400,000 shares were placed in a
voting trust. The Voting Trust Agreement provides that, on any matter requiring
stockholder vote, the trustee will vote such shares in the same percentage as
the other then issued and outstanding shares of Common Stock are voted. Such
shares may be released from the Voting Trust Agreement pursuant to an earn-out
formula whereby for the years 1995, 1996 and 1997, 10,000 trust shares will be
released for each $150,000 of cumulative net income after taxes of the Company
up to $3,000,000 and 5,000 shares will be released for each $150,000 of
cumulative net income after taxes in excess of $3,000,000, less the number of
trust shares previously transferred to the Stockholders under this formula. The
trust shares will be released pro rata in accordance with the number of trust
shares beneficially owned by each Stockholder. If the shares are not released
pursuant to the earn-out formula within three years, such shares will be
canceled. The trustee under the Voting Trust Agreement is English, McCaughan &
O'Bryan, P.A., counsel to the Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loan to the Company
- -------------------

Mr. Robert R. Bartolini advanced $1,098,165 to the Company on June 30, 1995
in order to provide it with additional working capital. The Company's obligation
to repay this loan was evidenced by a promissory note dated August 31, 1995. In
December 1995, the principal balance of this loan was increased to $2,919,000 by
an additional advance from Mr. Bartolini of $1,820,835 under the same terms and
conditions. The indebtedness evidenced by the promissory note is subordinated to
the prior payment, when due, of the principal and interest on all senior
indebtedness of the Company. Under the terms of this promissory note, principal
and interest was due on March 31, 1996, with interest accruing at nine (9%).
The promissory note is now due on demand upon thirty (30) days written notice.

Sale of Portfolio to Executive Officer
- --------------------------------------

As of November 30, 1994, the Company sold a portfolio of 14 unsecured
installment loans with a total principal balance of $1,055,000 to Mr. Robert R.

<PAGE>

Bartolini, Chairman and Chief Executive Officer of the Company, in consideration
for $590,965. The portfolio of which this portfolio was a part was purchased by
the Company in March 1994 from the Federal Deposit Insurance Corporation at a
purchase price equal to 22.5% of principal balance. The purchase price paid by
Mr. Bartolini was equal to 56% of principal balance which, in management's
opinion, was the approximate fair market value of the loans determined from a
review of the expected collectability of the loans. This price was considered by
the Company to be equal to their fair market value and was based on the
estimated cash flows anticipated for the portfolio. The method used for
estimating the cash flows was the same used by the Company in evaluating the
fair value of all of its portfolio acquisitions.

Transaction with Affiliate of Former Director
- ---------------------------------------------

Andrew Panzo was a member of the Company's Board of Directors from August
1995 until his resignation in March 1996. Following the Merger, American Maple
Leaf Financial Corporation ("AMLF"), an affiliate of Mr. Panzo, rendered certain
investment banking advisory services to the Company for which AMLF received
33,000 common stock purchase warrants. The Warrants permit the purchase of
additional shares at an exercise price of $9.00 per share through May 1996.

During October 1994, the Company sold 333,333 shares of Common Stock to
AMLF in a private placement transaction for consideration of $19,999.

During April 1995, AMLF purchased $1,200,000 principal amount of 9%
Convertible Subordinated Debenture Units for an aggregate purchase price of
$1,200,000. $810,000 principal amount of these Debenture Units, as well as the
accrued interest due thereon, were converted into 95,692 shares of the Company's
Common Stock during January 1996. The remaining principal amount of these
Debenture Units ($390,000) is due on April 16, 1996.

Sale of Boat to Executive Officer
- ---------------------------------

In October 1994, the Company sold a repossessed boat to John T. Schaeffer,
a director of NAL and President and Chief Operating Officer of NAC, in
consideration for a note in the amount of $89,000 which bears interest at 10%
per annum for a period of one year, and the offset by the Company of $21,000
payable to Mr. Schaeffer. The note was repaid prior to June 30, 1995. In
management's opinion the sale was at the approximate fair market value of the
boat.

Transactions with Former Principal Stockholder
- ----------------------------------------------

In 1991, the Company entered into an agreement with FTM Holdings, Inc.
("FTM"), a former principal stockholder, to provide the Company with consulting
and other business related services. Under the agreement, the Company agreed to
pay FTM $50,000 per month through March 1995. The payments for consulting
services continued through May 1994, whereupon the Company made a lump sum
settlement with FTM through a final payment of $475,000 under this agreement.
This reflected a $75,000 discount from the cumulative payments required under
the agreement. Including the lump sum settlement, payments of $675,000 were made
to FTM in 1994. Payments of $600,000 were made to FTM in 1993.

<PAGE>

During 1994, the Company paid FTM $428,000 as a commission on the sale of
certain loan portfolios.

On April 30, 1993, the Company redeemed 5,928 shares of Common Stock held
by FTM for $2,400,000. A portion of the proceeds was applied to the cancellation
of the receivable of $841,417 due from FTM to the Company.

In October 1993, Mr. Bartolini purchased the remaining shares of the
Company's stock held by FTM for a purchase price of $2,034,000. This purchase
was financed by the Company as described below. See "Purchase of Shares of
Common Stock" below. After the purchase, Mr. Bartolini's ownership percentage of
outstanding stock was increased to 95%. The financial statements at December 31,
1993 reflect the receivable from Mr. Bartolini as a reduction of stockholders'
equity.

The Company previously sub-leased a portion of the space occupied by its
headquarters at 500 Cypress Creek Road West, Fort Lauderdale, Florida from FTM.
However, in January 1995, the Company entered into a lease directly with the
landlord for such space. Thereafter, the Company entered into a sublease with
FTM by which FTM subleases from the Company certain space which it previously
leased directly from the landlord.

Purchase of Shares of Common Stock
- ----------------------------------

In April 1993, the Company issued 214 shares to Mr. John Schaeffer,
President of NAC, in exchange for his 10% ownership of the common stock of NAC.
After the issuance, the Company owned 100% of the outstanding shares of NAC, and
Mr. Schaeffer owned 5% of the Company's Common Stock.

In October 1993, Mr. Bartolini, Chairman, Chief Executive Officer and
principal stockholder of the Company, purchased 2,143 shares representing all
outstanding shares not previously owned by Mr. Bartolini or Mr. Schaeffer to
provide him with 95% ownership of the Company as of such date. Mr. Bartolini
financed the entire purchase price of such shares through a loan from the
Company represented by a note in the amount of $2,034,638 which bore interest at
5% per annum and was reflected as a "Note Receivable from a Stockholder" as a
reduction of Stockholders' equity on the Company's consolidated balance sheet as
of December 31, 1993. In June 1994, the Company redeemed the 2,143 shares from
Mr. Bartolini in consideration for canceling the note.

Employment Arrangement
- ----------------------

The Company has entered into an employment agreement with Robert R.
Bartolini, its Chairman, Chief Executive Officer and principal stockholder. See
"Employment Agreement."

<PAGE>

Grant of Options and Warrants
- -----------------------------

In December 1994 and December 1995, the Company granted certain options to
purchase shares of the Company's Common Stock to executive officers under the
Company's Stock Option Plan. See "Summary Compensation Table." In conjunction
with his appointment to the Board of Directors on February 5, 1996, the Company
granted to Mr. Jones 20,000 common stock purchase warrants with an exercise
price of $14.38 per share. In conjunction with his appointment to the Board of
Directors on March 11, 1996, the Company granted to Mr. DeVoe 20,000 common
stock purchase warrants with an exercise price of $11.50 per share. See
"Directors' Compensation."

Travel Services
- ---------------

IYS Travel, Inc. ("IYS"), a travel agency of which Mr. Robert Bartolini is
a principal stockholder, provides business and personal travel services to the
Company and its employees at prevailing market prices. IYS receives customary
industry commission for services provided. During the years ended December 31,
1995 and 1994, the Company paid IYS approximately $105,000 and $84,000,
respectively, for airline tickets booked by IYS for travel by the Company's
employees at the prevailing prices charged by the airlines.

During 1994, the Company advanced to IYS approximately $66,000 for payroll,
which IYS subsequently repaid.

Mr. Bartolini receives only indirect benefits as a principal stockholder of
IYS through profits of IYS, if any.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires directors and
certain officers of the Company, as well as persons who own more than 10% of a
registered class of the Corporation's equity securities ("Reporting Persons"),
to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with
the Securities and Exchange Commission. The Company believes that during the
year ended December 31, 1995 all Reporting Persons timely complied with all
filing requirements applicable to them, except Mr. Andrew Panzo, a former
director, failed to timely file in conjunction with joining the Board of
Directors in August 1995 and Mr. Abraham Bernstein, a former director, failed to
timely file in conjunction with joining the Board of Directors and the grant of
options to purchase common stock in August 1995.

PROPOSAL 4 - INCREASE IN THE NUMBER OF COMMON SHARES THE
- ----------
COMPANY IS AUTHORIZED TO ISSUE UNDER THE 1994 STOCK OPTION PLAN
FROM 600,000 SHARES TO 1,000,000 SHARES

At the Meeting, stockholders will vote on a Proposal to amend the Company's
1994 Stock Option Plan (the "1994 Plan"). The 1994 Plan provides for the
issuance of a maximum of 600,000 shares of Common Stock. The Board of Directors
has adopted, and recommends for approval by the Company's stockholders, a
resolution to provide for an increase in the number of shares of Common Stock
the Company is authorized to issue under the 1994 Plan from 600,000 shares to

<PAGE>

1,000,000 shares. The 1994 Plan and the proposed amendment are attached to this
Proxy Statement as Exhibits 3 and 4, respectively. The statements made in this
Proxy Statement with respect to the 1994 Plan and the proposed amendment should
be read in conjunction with and are qualified in their entirety by reference to
Exhibits 3 and 4.

A. Description of the 1994 Stock Option Plan.
------------------------------------------

Pursuant to stockholder approval, the 1994 Plan became effective in 1994.
The 1994 Plan is designed to provide an incentive to the Company's employees,
officers, directors and consultants to improve the performance of the Company,
and by doing so, serve the interests of the Company's stockholders. The 1994
Plan is intended to closely align the interests of management and other key
employees, consultants and directors of the Company with those of its
stockholders by creating as an important part of the Company's compensation
program, options whose value rely upon the market price of the Company's common
stock.

The 1994 Plan currently authorizes the Board of Directors or a committee
thereof (the "Committee") to grant stock options, until November 1, 2004, to
eligible employees, officers, directors and consultants of the Company to
purchase up to 600,000 shares of Common Stock, $.15 par value (the "Common
Stock") of the Company which constitutes, in the aggregate, approximately 9% of
the presently outstanding shares of Common Stock. The Company's Common Stock is
included on The NASDAQ National MarketSM. On April 9, 1996, the closing sale
price of the Company's Common Stock was $13.50 per share.

B. Participants in the 1994 Plan - Eligible Employees
--------------------------------------------------

Under the 1994 Plan, stock options and/or stock appreciation rights may be
granted to eligible employees, officers, directors and consultants of the
Company. The stock options may take the form of either "incentive" (as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) or
"non-qualified" stock options. A stock appreciation right ("SAR") entitles the
optionee to receive, upon surrender of the related stock option and exercise of
the SAR, Common Stock with a fair market value equal to the difference between
the exercise price per share of the Common Stock subject to the stock option and
the fair market value of a share of Common Stock. Under the 1994 Plan, a person
who owns, directly or indirectly, more than 10% of the total combined voting
power of all classes of stock of the Company immediately before the grant of an
incentive option, is eligible for the grant of an incentive stock option only if
the exercise price of such option is at least 110% of the fair market value of
the shares underlying the option on the day on which the option is granted.
Non-employee directors and consultants are not eligible for incentive stock
option grants.

Option grants under the 1994 Plan are made at the discretion of the
Committee and the Board of Directors. Selection of optionees is within the
discretion of the Committee and may be by individual or by class. As of March
31, 1996, the Company had approximately 200 employees. The number of option
shares granted is based on the optionee's position, responsibility,
accomplishments and performance, and is determined in the sole discretion of the
Committees and the Board of Directors. See "Administration of the 1994 Plan."

<PAGE>

C. Administration of the 1994 Plan
-------------------------------

The Board of Directors, or the Committee which may be appointed by the
Board consisting of at least three directors, has the authority to grant stock
options under and administer the 1994 Plan. The Board of Directors has not as
yet formed such Committee. The 1994 Plan authorizes the Board of Directors or
the Committee to administer and interpret the 1994 Plan and gives the Board of
Directors or the Committee authority to determine to whom, in what amounts and
when stock options shall be granted.

D. Amendment. Modification and Termination of the 1994 Plan
--------------------------------------------------------

The Board of Directors may amend, suspend or terminate the 1994 Plan at any
time, subject to the requirements of applicable securities and tax laws and to
the following restrictions. The Board of Directors may not, without stockholder
approval, amend the 1994 Plan so as to increase the number of shares subject to
the 1994 Plan, decrease the minimum option price provided in the 1994 Plan or
change the employees or class of employees eligible to receive options. The
Board of Directors may not take any action which would have a material adverse
effect on the terms and conditions of any options previously granted without the
consent of the optionee.

E. Awards Under the 1994 Plan
--------------------------

Participants in the 1994 Plan receive, shortly after the grant of an
option, a stock option agreement which states the number of shares covered, the
exercise price and the terms and conditions of grant, including the "vesting
schedule" under which the options may be exercised. The Company does not issue
periodic reports to optionees on the status of their outstanding options.

Options are exercisable at an exercise price per share equal to the fair
market value of a share of Common Stock on the date of grant, which value is
equal to the closing price of the Common Stock as reported by NASDAQ on the date
of grant. However, in the case of employees who are stockholders of more than
10% of the total combined voting power of all classes of stock of the Company
("Special Stockholders"), the exercise price must be 110% or more of the fair
market value of a share of Common Stock on the date of grant.

Options granted under the 1994 Plan typically may be exercised for ten
years after the date of grant, or five years in the case of employees who are
Special Stockholders, or such shorter period as the Committee or the Board of
Directors may determine. The aggregate fair market value of the shares of Common
Stock with respect to which incentive options are exercisable for the first time
by an optionee under the 1994 Plan during any calendar year shall not exceed
$100,000. No option may be transferred by the optionee other than by will or by
the laws of descent and distribution, and each option is exercisable during the
optionee's lifetime only by the optionee.

<PAGE>

Subject to the terms and conditions imposed by the Board of Directors or
the Committee in the option grant or the stock option agreement, options under
the 1994 Plan may be exercised (1) while the holder is employed by the Company
or (2) within three months from the date employment is terminated, or (3) in the
event of death or incapacity of the optionee, within one year from the date of
death or incapacity. The exercise price of an option shall be satisfied by the
optionee delivering to the Company a check payable to the order of the Company.

F. Federal Income Tax Aspects
--------------------------

The following summary of Federal income tax aspects of Options granted
under the 1994 Plan is based upon the Company counsel's interpretation of
present Federal income tax laws and regulations . This summary should not be
considered tax or legal advice. It may be inapplicable if such laws and
regulations are changed. State and local tax law considerations are not included
in the summary.

(a) Incentive Stock Options
-----------------------

Under the 1994 Plan, the Company may issue options which will be
designated as incentive stock options ("ISOs") which are intended to qualify
under Code Section 422. Pursuant to Code Section 422, the optionee will not be
deemed to have received any income at the time an ISO is granted or exercised.
However, the excess, if any, of the fair market value of the Common Stock on the
date of exercise over the exercise price will generally be treated as an
adjustment in computing alternative minimum taxable income for a non-corporate
optionee and may subject such optionee to the alternative minimum tax in the
year of exercise. Generally, the alternative minimum tax ("AMT") is computed by
applying either a 26% or 28% tax rate to a taxpayer's alternative minimum
taxable income (reduced by possible exemptions). To the extent this amount
exceeds the taxpayer's regular tax liability for the tax year, the excess will
be the AMT liability. As an AMT adjustment item, the "spread" upon the exercise
of an ISO increases alternative minimum taxable income. Thus, the "spread" may
be subject to tax twice: once, in the year of exercise as part of alternative
minimum taxable income; and again, in the year of sale, as short-term or
long-term capital gain.

If the optionee disposes of ISO shares later than two years after the date
of grant and one year after the exercise of the ISO, and certain other
requirements are met, the gain or loss, if any, (i.e., the difference between
the amount received for the shares and the exercise price), will be long-term
capital gain or loss. The basis in the shares will generally be equal to the
exercise price and the holding period for the shares will begin on the date of
exercise. However, for minimum tax purposes, the basis of the shares upon
disposition will be increased by the amount of "spread" which constituted an AMT
adjustment item. Thus, the gain or loss on disposition of the shares acquired
pursuant to an ISO will differ for purposes of regular tax and minimum tax
computation.

If the foregoing holding periods are not satisfied or the ISO is exercised
more than three months after the optionee's employment with the Company is

<PAGE>

terminated, the disposition will constitute a "disqualifying disposition," and
the optionee will realize income in the year of the disqualifying disposition
equal to the excess of the amount received for the Common Stock over the
exercise price. Of that income, the portion equal to the excess of the fair
market value of the Common Stock at the time the ISO was exercised over the
exercise price will be compensation income, and the balance, if any, will be
either short-term capital gain, if the Common Stock is disposed of within one
year after the ISO is exercised, or long-term capital gain, if the shares are
disposed of more than one year after the ISO is exercised.

If the optionee disposes of Common Stock in a disqualifying disposition at
a price that is below the fair market value of the Common Stock at the time the
ISO was exercised and such disposition is a sale or exchange to an unrelated
party, the amount includable as compensation income to the optionee will be
limited to the excess of the amount received on the sale or exchange over the
exercise price.

No income tax deduction will be allowed by the Company upon the grant or
exercise of an ISO. However, if there is a disqualifying disposition, the
Company may deduct an amount equal to the compensation income recognized by the
optionee upon the disqualifying disposition in the taxable year of the Company
in which the disqualifying disposition occurs. The Company's compensation
expense deduction will be subject to the reasonable compensation and other
requirements applicable to business expense deductions including the limits on
excess employee remuneration under Code Section 162(m).

(b) Non-Qualified Stock Options
---------------------------

Under the 1994 Plan, the Company may issue options which will be
designated as non-qualified stock options ("NQSOs") which are taxed pursuant to
Code Section 83. Under the provisions of that Section, if an option is granted
to an employee in connection with the performance of services and the option has
a "readily ascertainable fair market value" at the time of the grant, the
employee will be deemed to have received compensation income in the year of
grant in an amount equal to the excess of the fair market value of the option at
the time of grant over the amount, if any, paid by the optionee for the option.
However, a NQSO generally has "readily ascertainable fair market value" only
when the option is actively traded on an established market and when certain
stringent Code requirements are met.

If the option does not have a readily ascertainable fair market value at
the time of the grant, the option is not included as compensation income at that
time. Rather, the optionee realizes compensation income only when the option is
exercised, and the optionee has become substantially vested in the shares
transferred. The shares are considered to be substantially vested when they are
either transferable or not subject to a substantial risk of forfeiture. It is
intended that an optionee will be substantially vested in the Common Stock at
the time of exercise of an option. Accordingly, the amount of income realized
will be equal to the excess of the fair market value of the shares at the time
the NQSO is exercised over the sum of the exercise price.

When the optionee disposes of the shares acquired pursuant to a NQSO, the
optionee will recognize capital gain or loss equal to the difference between the

<PAGE>

amount received for the shares and the optionee's basis in the shares. The
optionee's basis in the shares will generally be equal to the exercise price of
the option plus the amount of compensation income realized by the optionee. The
capital gain or loss will be short-term if the shares are disposed of within one
year after the option is exercised, and long-term if the shares are disposed of
more than one year after the option is exercised.

The Company is generally entitled to a deductible compensation expense in
an amount equivalent to the amount included as compensation income to the
optionee. This deduction is allowed in the Company's taxable year in which the
income is included as compensation to the optionee. The Company is only entitled
to this deduction if the Company deducts and withholds upon the amount included
in an employee's compensation. The Company's compensation expense deduction will
be subject to the reasonable compensation and other requirements applicable to
business expense deductions including the limits on excess employee remuneration
under Code Section 162(m).

In connection with an option granted to an employee under the 1994 Plan,
the Company may grant to such employee a related stock appreciation right
("SAR"). The grantee of a SAR shall have the right to surrender to the
Company for cancellation all or a portion of the related option granted under
the 1994 Plan, but only to the extent that such option is then exercisable. Upon
such surrender, the employee shall be paid an amount equal to the excess (if
any) of: (i) the aggregate fair market value of the shares of Common Stock
subject to the option or portion thereof surrendered; over (ii) the aggregate
exercise price of the shares of Common Stock subject to the portion thereof
surrendered. Payment due upon exercise of SARs shall be made in cash, in
Common Stock, or both, as determined by the Board of Directors.

Generally, the granting of SARs is not the receipt of taxable property
under Code Section 83 and is not otherwise a taxable event to the employee or to
the Company.

If an employee exercises a SAR and receives the appreciation inherent in
the SAR in cash, the cash is compensation income taxable to the employee. If the
employee receives the appreciation in the form of Common Stock, the fair market
value of the Common Stock received is taxable to the employee as compensation
income under Code Section 83(a).

The Company is generally entitled to a deductible compensation expense in
an amount equivalent to the amount included as compensation income to the
optionee at the time of the exercise of a SAR. This deduction is generally
allowed in the Company's taxable year in which the income is included as
compensation to the optionee. The Company is only entitled to this deduction if
the Company deducts and withholds upon the amount included in an employee's
compensation. The Company's compensation expense deduction will be subject to
the reasonable compensation and other requirements applicable to business
expense deductions including the limits on excess employee remuneration under
Code Section 162(m).

<PAGE>

G. Amended Plan Benefits Table
---------------------------

The following table shows, as to the chief executive officer and the other
named executive officers, all current executive officers, as a group, all
directors, who are not executive officers, as a group; and all employees,
including officers who are not executive officers, as a group, who are eligible
to receive stock options under the 1994 Plan, the following information with
respect to stock options: (i) the number of option shares granted and presently
outstanding; (ii) the exercise price per share of such stock options; and (iii)
the dollar value of vested stock options.

<PAGE>

- -------------------------------------------------------------------------------------------
NAL Financial Group Inc. 1994 Stock Option Plan
- -------------------------------------------------------------------------------------------
Name Number of Option Exercise Price Per Dollar Value(1)
Shares Share
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert R. Bartolini 8,336 $6.00
Chairman of the Board,
President and Chief
Executive Officer of 66,664 $6.60
NAL; Chairman and $135,838(2)
Chief Executive Officer
of NAC 50,000 $16.50
- -------------------------------------------------------------------------------------------
John T. Schaeffer 40,000 $6.00
Director of NAL; 25,000 $15.00 $100,005(3)
President and Chief
Operating Officer of
NAC
- -------------------------------------------------------------------------------------------
Robert J. Carlson 15,000 $6.00
Vice President-Finance 15,000 $15.00 $37,500(4)
and Principal Accounting
Officer of NAC
- -------------------------------------------------------------------------------------------
Dennis R. LaVigne 25,000 $13.25 $0(5)
Vice President and
Treasurer of NAL
- -------------------------------------------------------------------------------------------
All current executive 245,000 $6.00-$16.50 $273,343(6)
officers, as a group (4)
- -------------------------------------------------------------------------------------------
All directors who are not 0 $0 $0
executive officers, as a
group (2)
- -------------------------------------------------------------------------------------------
All employees, including 530,000 $6.00-$16.50 $273,343(7)
officers who are not
executive officers, as a
group (181)
- -------------------------------------------------------------------------------------------
</TABLE>

- ------------------------------------
(1) Dollar value calculated based on the closing sale price of the Company's
Common Stock on April 9, 1996 of $13.50 per share as reported on The
NASDAQ National Market(sm) as of such date, less the exercise price of the
vested options.
(2) Does not include 105,555 options which have not vested.
(3) Does not include 51,666 options which have not vested.
(4) Does not include 25,000 options which have not vested.
(5) Does not include 25,000 options which have not vested.
(6) Does not include 101,666 options which have not vested.
(7) Does not include 428,834 options which have not vested.

<PAGE>

The number and choice of recipients of stock options granted under the 1994
Plan is at the sole discretion of the Committee and the Board of Directors. It
is not possible to determine at this time the number of stock options which may
be granted in the future to the executive officers of the Company. See
"Participants in the 1994 Plan - Eligible Employees."

H. Reasons for Proposal
--------------------

A total of 600,000 shares of Common Stock were initially reserved for
issuance upon the exercise of options under the 1994 Plan. Through December 31,
1995, options covering 530,500 shares are outstanding under the 1994 Plan. It is
the Company's intention to continue making appropriate option grants on an
annual basis which cannot be accomplished without an increase in the number of
shares authorized for issuance under the 1994 Plan. The Board of Directors
believes that increasing the authorized number of shares of Common Stock the
Company may issue under the 1994 Plan will provide the Company with the ability
to retain key personnel and to attract the level of employees necessary to meet
the Company's future demands.

Vote Required for Approval

The affirmative vote of a majority of the shares present in person or by
proxy is required for approval of the amendment to the 1994 Plan to increase the
number of shares of Common Stock the Company is authorized to issue under the
1994 Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE INCREASE IN THE
---
NUMBER OF SHARES OF COMMON STOCK THE COMPANY IS AUTHORIZED TO ISSUE UNDER THE
1994 PLAN FROM 600,000 SHARES TO 1,000,000 SHARES.

PROPOSAL 5 - RATIFICATION OF THE COMPANY'S INDEPENDENT AUDITORS
- ----------

Price Waterhouse LLP has audited the Company's financial statements since
the Company's inception in 1991. Price Waterhouse LLP has been selected by the
Board of Directors to serve as the independent auditors for the Company for the
fiscal year ending December 31, 1996. Representatives of Price Waterhouse LLP
are expected to be present at the Meeting to make a statement if they so desire
and will be available to respond to appropriate questions.

Vote Required for Approval

The affirmative vote of a majority of the shares present in person or by
proxy is required for ratification of Price Waterhouse LLP as the Company's
independent auditors for the fiscal year ending December 31, 1996.

THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR RATIFICATION OF PRICE WATERHOUSE LLP
---
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 1996 FISCAL YEAR

<PAGE>

The Board of Directors does not know of any other matter which is intended
to be brought before the Meeting, but if such matter is presented, the persons
named in the enclosed proxy intend to vote the same according to their best
judgment.

The enclosed proxy may be revoked by a later-dated proxy, by giving notice
to the Secretary of the Company in writing prior to the Meeting or by personal
notification at the Meeting prior to the voting.

EXPENSES OF SOLICITATION

The cost of this proxy solicitation will be borne by the Company. In
addition to the use of mail, proxies may be solicited in person or by telephone
by employees of the Company without additional compensation. The Company will
reimburse brokers and other persons holding stock in their names or in the names
of nominees for their expenses incurred in sending proxy material to principals
and obtaining their proxies.

1997 STOCKHOLDER PROPOSALS

In order for stockholder proposals for the 1997 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's 1997 proxy statement,
they must be received by the Company at its principal office in Fort.
Lauderdale, FL, on or before December 30, 1996.

By Order of the Board of Directors

Robert R. Bartolini
Chairman of the Board and
Chief Executive Officer
Dated: April 30, 1996

<PAGE>

EXHIBIT 1

The Board of Directors has adopted a resolution to amend Section 10 of the
Company's Certificate of Incorporation, which provides in its entirety, as
follows:

10. BOARD OF DIRECTORS:

(a) NUMBERS, ELECTIONS AND TERMS. Except as otherwise fixed by or
pursuant to provisions hereof relating to the rights of the holders of
any class or series of stock having a preference over common stock as
to dividends or upon liquidation to elect additional Directors under
specified circumstances, the number of Directors of the Corporation
shall be fixed from time to time by affirmative vote of a majority of
the Directors then in office. The Directors, other than those who may
be elected by the holders of any classes or series of stock having a
preference over the common stock as to dividends or upon liquidation,
shall be classified, with respect to the time for which they severally
hold office, into three class, as nearly equal in number as possible,
as shall be provided in the manner specified in the By-Laws of the
corporation, one class to be originally elected for a term expiring at
the annual meeting of stockholders to be held in 1997, another class to
be originally elected for a term expiring as the annual meeting of
stockholders to be held in 1998, and another class to be originally
elected for a term expiring at the annual meeting of stockholders to be
held in 1999, with each class to hold office until its successor is
elected and qualified. At each annual meeting of the stockholders of
the Corporation after fiscal year 1996, the successors of the class of
Directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of stockholders held
in the third year following the year of their election. Election of
directors need not be by written ballot unless so provided in the
By-Laws of the corporation.

(b) NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as otherwise
fixed by or pursuant to provisions hereof relating to the rights of the
holders of any class or series of stock having a preference over common
stock as to dividends or upon liquidation to elect additional Directors
under specified circumstances, newly created directorships resulting
from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation,

<PAGE>

disqualification, removal or other cause shall be filled by the
affirmative vote of a majority of the remaining Directors than in
office, even though less then a quorum of the Board of Directors. Any
Director elected in accordance with the preceding sentence shall hold
office for the remainder of the full term of the class of Directors in
which the new directorship was created or the vacancy occurred and
until such Director's successor shall have been elected and qualified.
No decrease in the number of Directors constituting the Board of
Directors shall shorten the term of any incumbent director.

(c) REMOVAL. Except as otherwise fixed by or pursuant to provisions
hereof relating to the rights of the holders of any class or series of
stock having a preference over common stock as to dividends or upon
liquidation to elect additional Directors under specified
circumstances, any Director may be removed from office only for
cause and only by the affirmative vote of the holders of two-thirds of
the combined voting power of the then outstanding shares of stock
entitled to vote generally in the election of Directors, voting
together as a single class.

(d) AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the consent of the Board
of Directors shall be required to alter, amend, adopt any provisions
inconsistent with or repeal this Section 10.

<PAGE>

EXHIBIT 2

The Board of Directors has adopted a resolution to amend the Company's
Certificate of Incorporation to include a Section 14, which provides in its
entirety, as follows:

14. AMENDMENTS TO CERTIFICATE OF INCORPORATION. Amendments to
the Certificate of Incorporation of the Corporation shall require the
affirmative vote of two-thirds of the holders of a majority of the combined
voting power of the then outstanding shares of stock entitled to vote on any
proposed amendment to the Certificate of Incorporation. Notwithstanding the
foregoing, in the event that a resolution to amend the Certificate of
Incorporation of the Corporation is adopted by the affirmative vote of at least
eighty percent (80%) of the Board of Directors approval of the amendment shall
only require the affirmative vote of the holders of a majority of the combined
voting power of the then outstanding shares of stock entitled to vote generally
on such amendment, voting together as a single class.

<PAGE>

EXHIBIT 3

NAL FINANCIAL GROUP INC.

AMENDED AND RESTATED 1994 STOCK OPTION PLAN

This NAL Financial Group Inc. Amended and Restated 1994 Stock Option Plan
(the "Plan") amends and restates the 1994 Stock Option Plan which became
effective October 31, 1994. The Plan provides for the grant to certain
employees, officers, directors and consultants of NAL Financial Group Inc.
("NAL" or the "Company") or any subsidiary thereof of options to purchase
("Options") shares of common stock of NAL and related stock appreciation rights
and for the issuance, transfer or sale of such stock upon the exercise of such
Options. The term "Company" as used in the Plan shall, unless the context
indicates otherwise, include NAL and any present or future subsidiary thereof.

1. Purpose. The purpose of the Plan is to provide additional incentive to
the directors, officers and other key employees and consultants of the Company,
who are responsible for the management and growth of the Company or otherwise
materially contribute to the conduct and direction of its business, operations
and affairs, in order to strengthen their desire to remain in the employ of the
Company, or in the case of consultants afforded Options, to strengthen their
bond to the Company, to stimulate their efforts on behalf of the Company and to
retain and attract persons of competence, and, by encouraging ownership of a
stock interest in NAL, to gain for the organization the advantages inherent in
directors, officers and employees having a sense of proprietorship.

2. The Stock. The aggregate number of shares of stock which may be issued,
transferred or sold upon the exercise of Options granted under the Plan shall
not, except as such number may be adjusted in accordance with Paragraph (f) of
Article 6 hereof, exceed 600,000 shares of Common Stock of NAL ("Common
Stock"), which may be either authorized and unissued shares or issued shares
reacquired by NAL. Notwithstanding the above limitation, if any Option granted
under the Plan shall expire, terminate or be canceled for any reason without
having been exercised in full, the corresponding number of unexercised shares
shall again be available for the purposes of the Plan.

3. Employees. The term "employees" as used in the Plan shall mean officers,
other employees and consultants of the Company (including officers, other
employees and consultants who are also directors) within the classes referred to
in Article 1 hereof and shall, for the purposes of the Plan, also include
directors of the Company who are not employees. The term "employment" shall mean
in reference to directors, the period in which a director serves on the Board of
Directors of the Company.

<PAGE>

4. Eligibility. Options and related stock appreciation rights shall be
granted only to persons who, at the time of the grant of the Option, are
employees of the Company. A person to whom the Option is granted hereunder is
hereinafter sometimes referred to an an "Optionee." The Board of Directors of
NAL, or a committee appointed by its Board of Directors and constituted as
provided in Article 8 hereof (hereinafter called the "Committee"), will
determine the employees who are to be granted Options under the Plan and the
number of shares subject to each Option. Notwithstanding anything herein to the
contrary, no person serving upon the Board of Directors (if administering the
Plan) or the Committee shall be prohibited from receiving Options during any
period, provided, however, such person must abstain from voting upon the grant
of such Options.

5. Grant of Stock Appreciation Rights.

(a) The Board of Directors or Committee (as applicable) may, in
connection with all or any part of an Option granted to an employee under the
Plan, grant to such employees (or to any person or persons having the right to
exercise such Option upon the death or incapacity of the employee as provided in
Paragraph (d) of Article 7 hereof) a related stock appreciation right, either at
the time the related Option is granted or at any time thereafter prior to the
exercise, termination or cancellation of such Option, on such terms and
conditions as the Board of Directors or Committee (as applicable) shall from
time to time determine. The grantee of a related stock appreciation right shall
have the right to surrender to the Company for cancellation all or a portion of
the related Option granted under the Plan, but only to the extent that such
Option is then exercisable, and to be paid therefore an amount equal to the
excess (if any) of: (i) the aggregate fair market value of the shares of Common
Stock subject to the Option or portion thereof surrendered (determined as of the
date of exercise of such stock appreciation right); over (ii) the aggregate
exercise price of the shares of Common Stock subject to the portion thereof
surrendered.

(b) Payment due upon exercise of a stock appreciation right shall be
made (i) in cash; (ii) in Common Stock (valued at the fair market value thereof
as of the date of exercise); or (iii) partly in cash and partly in Common Stock
(valued at the fair market value thereof as of the date of exercise), all as
determined by the Board of Directors or Committee (as applicable) in its sole
discretion. If the Board of Directors or Committee (as applicable) shall
determine to make all of such payment in Common Stock, no fractional shares of
Common Stock shall be issued and no payments shall be made in lieu of fractional
shares.

<PAGE>

(c) The grant of a stock appreciation right shall be subject to
execution, by the recipient thereof, of an instrument in writing in a form
approved by the Board of Directors or the Committee (as applicable), which shall
contain further terms and conditions, as deemed appropriate by the Board of
Directors or the Committee (as applicable), relative to, among others, the
grant, exercise or disposition of such stock appreciation rights. The terms of
such instrument need not be identical for all grantees of such stock
appreciation rights.

6. General Terms of Options.

(a) Consideration. Subject to the terms of Paragraph (a) of Article 7
hereof, the Board of Directors or the Committee shall determine the
consideration to NAL, if any, for the granting of Options under the Plan, as
well as the conditions, if any, which it may deem appropriate to ensure that
such consideration will be received by, or will accrue to, NAL, and in the
discretion of the Board of Directors or the Committee, such consideration need
not be the same, but may vary for Options granted under the Plan at the same
time or from time to time.

(b) Number of Options which may be Granted to, and Number of shares
which may be Acquired by, Optionees. The Board of Directors or the Committee may
grant more than one Option to an individual during the life of the Plan and,
subject to the requirements of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), with respect to incentive stock options (hereinafter
referred to as "Qualified Options"), such Option may be in addition to, in
tandem with, or in substitution for, Options previously granted under the Plan
or of another corporation and assumed by NAL.

The Board of Directors or the Committee may permit the voluntary
surrender of all or a portion of any Option granted under the Plan to be
conditioned upon the granting to the employee of a new Option surrendered, or
may require such voluntary surrender as a condition precedent to a grant of a
new Option to such employee. Such new Option shall be exercisable at the price,
during the period, and in accordance with any other terms or conditions
specified by the Board of Directors or the Committee at the time the new Option
is granted, all determined in accordance with the provisions of the Plan without
regard to the price, period of exercise, or any other terms or conditions of the
Option surrendered (except as otherwise provided in Paragraph (f) of Article 7
hereof).

<PAGE>

may be granted at any time after the Plan has been approved by the Board of
Directors of NAL. However, no Options shall be granted under the Plan after
November 1, 2004.

(d) Option Agreement. NAL shall effect the grant of Options under the
Plan, in accordance with determinations made by the Board of Directors or the
Committee, by execution of instruments in writing in a form approved by the
Board of Directors or the Committee. Each Option shall contain such terms and
conditions (which need not be the same for all Options, whether granted at the
same time or at different times) as the Board of Directors or the Committee
shall deem to be appropriate and not inconsistent with the provisions of the
Plan, and such terms and conditions shall be agreed to in writing by the
Optionee. The Board of Directors or the Committee may, in its sole discretion,
and subject to such terms and conditions as it may adopt, accelerate the date or
dates on which some or all outstanding Options may be exercised. Options shall
be exercised by submitting to NAL a signed copy of a notice of exercise in a
form to be supplied by NAL. The exercise of an Option shall be effective on the
date on which NAL receives such notice at its principal corporate offices.

(e) Non-Transferability of Option. No Option granted under the Plan
shall be transferable by the holder thereof otherwise than by will or by the
laws of descent and distribution, and such Option shall be exercisable, during
the holder's lifetime, only by such holder, or in case of the legal incapacity
of a holder, by such holder's legal representative.

(f) Effect of Change in Common Stock. In the event of a reorganization,
recapitalization, liquidation, stock split, stock dividend, combination of
shares, merger or consolidation, or the sale, conveyance, lease or other
transfer by NAL of all or substantially all of its property, or any other change
in the corporate structure or shares of NAL, pursuant to any of which events the
then outstanding shares of the Common Stock are split up or combined, or are
changed into, become exchangeable at the holder's election for, or entitle the
holder thereof to, other shares of stock, or in the case of any other
transaction described in Section 424(a) of the Code, the Board of Directors or
the Committee may change the number and kinds of shares available under the Plan
and any outstanding Option (including substitution of shares of another
corporation) and the price of any Option and the fair market value determined
under Article 6 hereof in such manner as it shall deem equitable; provided,
however, that in no event may any change be made to a Qualified Option which
would constitute a "modification" within the meaning of Section 424(h)(3) of the
Code. Options granted under the Plan shall contain such provisions as are
consistent with the foregoing with respect to adjustments to be

<PAGE>

made in the number and kind of shares covered thereby and in the option price
per share in the event of any such change.

(g) Optionees not Stockholders. An optionee or a legal representative
thereof shall have none of the rights of a stockholder with respect to shares
subject to Options until such shares shall be issued, transferred or sold upon
exercise of the Option.

(h) Fair Market Value. As used in the Plan, the term "fair market value"
shall: (i) if the Common Stock of NAL is traded in the over-the-counter market,
be the mean between the closing bid and asked sales prices for Common Stock of
NAL as reported by the National Quotations Bureau, Inc. (or similar quotation
agency) on the date the calculation thereof shall be made; or the NASDAQ
Small-Cap Index or National Market System; or (ii) if the Common Stock of NAL is
listed on a national securities exchange, be the mean between the high and low
sales prices for Common Stock of NAL on such exchange on the date the
calculation thereof shall be made, in each case with such adjustments, if any,
as shall be made in accordance with Paragraph (f) of this Article 6. In the
event the date of calculation shall be a date on which there shall not have been
reported a closing bid and asked price for Common Stock of NAL, or a date which
shall not be a trading date on such national securities exchange, as the case
may be, determination, of fair market value shall be made as of the first date
prior thereto on which there shall have been reported a closing bid and asked
price for Common Stock of NAL or the first date prior thereto which shall have
been a trading date on such national securities exchange, as the case may be.

(i) Types of Options. Options granted under the Plan shall be in a form
of: (i) Qualified Options as defined as incentive stock options in Section 422
of the Code; or (ii) options not qualifying under such Section, or both, in the
discretion of the Board of Directors or the Committee, as well as related stock
appreciation rights. The status of each Option shall be identified in the Option
Agreement executed by NAL and the Optionee pursuant to Paragraph (d) of this
Article 6.

7. Terms of Options.

(a) Option Price. The price or prices per share for shares of Common
Stock to be sold pursuant to an Option shall be fixed by the Board of Directors
or the Committee, but not less, in any case, than the fair market value per
share of such stock on the date of the granting of the Option, subject to
adjustment pursuant to Paragraph (f) of Article 6 hereof.

<PAGE>

For the purposes of this Article 7, the date of the granting of an Option
under the Plan shall be the date fixed by the Board of Directors or the
Committee as the date for such Option.

(b) Period of Option.

(i) Notwithstanding any other provisions contained in this Plan, each
Option granted under the Plan shall be exercisable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the Board
of Directors or the Committee shall specify in the Option Agreement.

(ii) Options will be exercisable thereafter over the Option Period,
which shall be for that period fixed by the Board of Directors or the Committee,
and shall be exercisable at such times and in such amounts as determined by the
Board of Directors or the Committee at the time each Option is granted.
Notwithstanding any other provision contained in this Plan, no Option shall be
exercisable after the expiration of the Option Period. Except as provided in
Paragraphs (c) and (d) of this Article 7, no Option may be exercised unless the
Optionee is then in the employ of the Company or a subsidiary thereof and shall
have been continuously so employed since the date of the grant of such Option.
The Plan shall not confer upon any Optionee any right with respect to
continuation of employment by the Company, nor shall it interfere in any way
with the employee's right or the Company's right to terminate employment at any
time.

(c) Termination of Employment. In the case of a Qualified Option, an
Optionee whose employment by the Company or a subsidiary terminates by reason
other than death, shall, but only within the three-month period after the date
of such termination of employment and in no event after the expiration of the
Option Period, be entitled to exercise such Option and then only if and to the
extent that the Optionee was entitled to exercise the Option at the date of the
termination of employment; provided, however, that the exercise of an Option
(whether Qualified or non-qualified) or a related stock appreciation right
granted pursuant to this Plan shall be subject to the terms, conditions and
limitations imposed by the Board of Directors or the Committee in connection
with such grant and/or in the Option Agreement.

(d) Death or Incapacity of Optionee. If an Optionee should die while in
the employment of the Company, an Option theretofore granted shall be
exercisable by the estate of the Optionee, or by a person who acquired the right
to exercise such Option by bequest or inheritance or by reason of the death of
the Optionee, but then only if and to the extent that the Optionee was entitled
to exercise the Option at the date of death and only

<PAGE>

within the twelve-month period next succeeding the death of the Optionee and in
no event after the expiration of the Option Period. Upon the legal incapacity of
an Optionee, any Option held by the Optionee shall be exercisable by the
Optionee's legal representative pursuant to the terms of this Paragraph (d) of
Article 7. Notwithstanding any other provision of this Plan, the exercise of an
Option or a related stock appreciation right following the death or legal
incapacity of an Optionee shall be subject to the terms, conditions and
limitation imposed by the Board of Directors or the Committee in connection
with the Option grant and/or in the Option Agreement.

(e) Payment for Shares. Payment for shares of Common Stock purchased
(the "Option Price") shall be made in full at the time of exercise of the Option
by check made payable to the Company.

(f) Incentive Stock Options. Options granted in the form of incentive
stock options ("Qualified Options") shall be subject, in addition to the
foregoing provisions of this Article 7 and Article 6 hereof, to the following
provisions:

(i) Sequential Exercise. Each Qualified Option shall by its terms be
exercisable even though there is outstanding any Qualified Option which was
granted, before the granting of such Option, to such Optionee to purchase Common
Stock or stock of any subsidiary (determined at the time of granting such
Option).

(ii) Ten Percent Shareholder. A Qualified Option may be granted to
any individual who, at the time of the proposed grant, owns Common Stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of NAL or any subsidiary if, in addition to meeting the other
requirements of the Plan: (A) the prices per share for shares of Common Stock to
be sold pursuant to such Qualified Option shall not be less than 110% of the
fair market value per share for such stock on the date of the granting of the
Qualified Option, subject to adjustment pursuant to Paragraph (f) of Article 6
hereof; and (B) the Option Period of such Qualified Option shall be for a period
of not longer than five (5) years from the date of the grant of such Qualified
Option.

(iii) First Time Limitation. Notwithstanding any other provision
contained in this Plan, the fair market value of Common Stock and stock of any
subsidiary of the Company for which a Qualified Option is also granted
(determined at the time such Qualified Option is granted) with respect to which
such options are exercisable by any one individual for the first time during
any calendar year (under this or any other plan) shall not

<PAGE>

exceed the sum of $100,000.

(g) Non-Qualified Options. In granting any non-qualified option, the
Board of Directors or the Committee may specify that such non-statutory option
shall be subject to such additional or different termination or cancellation
provisions from those applicable to Qualified Options as the Board of Directors
or the Committee may specify, which provisions may vary for Options granted
under the Plan at the same time or from time to time.

8. Administration of the Plan. The Plan shall be administered under the
supervision of the Board of Directors of NAL or by a Committee, which the Board
of Directors may appoint at any time, consisting of at least three members of
the Board of Directors, who shall be appointed by, and shall serve at the
pleasure of, the Board of Directors. A majority of the Committee shall
constitute a quorum and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by a majority
of the Committee, shall be acts of the Committee.

In addition to the discretionary authority of the Board of Directors or of
the Committee set forth in other Articles hereof, the Board of Directors or the
Committee is authorized to establish such rules and regulations for the proper
administration of the Plan as it may deem advisable and not inconsistent with
provisions of the Plan. Unless otherwise determined by the Board of Directors,
all questions arising under the Plan adopted by the Board of Directors or the
Committee, whether such questions involve an interpretation of the Plan or
otherwise, shall be decided by the Board of Directors or the Committee, and its
decisions shall be conclusive and binding in all cases.

The Board of Directors or the Committee shall determine the employees to
whom Options under the Plan are to be granted and the number of shares to be
covered by each Option granted. In selected the individuals to whom Options
shall be granted, as well as in determining the number of shares subject to
each Option, the Board of Directors or the Committee shall consider the
positions and responsibilities of the individuals being considered, the nature
of the services and accomplishments of each, the value to the Company of their
services, their present and potential contribution to the success of the
Company, the anticipated number of years of service remaining, and such other
factors as the Board of Directors or the Committee may deem relevant.

<PAGE>

9. Amendment and Discontinuance of the Plan.

(a) The Board of Directors of NAL may at any time alter, suspend or
terminate the Plan, but, except in accordance with the provisions of Paragraph
(f) of Article 6 and Article 9 hereof, no change shall be made which will have a
material adverse effect upon any Option previously granted unless the consent
of the Optionee is obtained; provided, however, that except in the case of
adjustment made pursuant to Paragraph (f) of Article 6 hereof, the Board of
Directors may not, without further approval of stockholders: (i) increase the
maximum number of shares for which Options may be granted under the Plan or
which may be purchased by an individual employee; (ii) decrease the minimum
Option Price provided in the Plan; or (iii) change the class of employees
eligible to receive Options.

(b) The Company intends that Options designated by the Board of
Directors or Committee as Qualified Options shall constitute incentive stock
options under Section 422 of the Code. Additionally, the Company intends that
Options designated by the Board of Directors or Committee as Qualified Options
shall comply with all of the provisions of Section 16(b)-3 of the Securities
Exchange Act of 1934. Should any of the foregoing provisions not be necessary in
order to so comply or should any additional provisions be required, the Board of
Directors may in its complete and total discretion amend the Plan in the manner
it deems appropriate, without the necessity of obtaining the approval of the
stockholders of NAL.

(c) Notwithstanding the foregoing provisions of this Article 9, no
person may be divested of the ownership of Common Stock previously issued, sold
or transferred under the Plan.

10. Other Conditions. If at any time counsel of NAL shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to an Option
granted under the Plan is or may in the circumstances be unlawful under the
statutes, rules or regulations of the United States, or any applicable
jurisdiction, NAL shall have no obligation to make such sale or delivery, or to
make any application or to effect or to maintain any qualification or
registration under the Securities Act of 1933 or otherwise with respect to
shares of stock or Options under the Plan, until the right to exercise any such
Option shall be unlawful.

Upon the termination or suspension of any period set forth herein, any
Option affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all shares available upon exercise of the
Option before such suspension and to shares which would otherwise have become
available for purchase

<PAGE>

during the period of such suspension, but no such suspension shall extend any
Option Period.

At the time of any grant or exercise of any Option, NAL may, if it shall
deem it necessary or desirable for any reason connected with any law or
regulation of any governmental authority relative to the regulation of
securities, condition the grant and/or exercise of such Option by the Optionee
upon requiring the Optionee to make certain representations to NAL to the
satisfaction of NAL as to correctness of such representations.

11. Approval; Effective Date. The Plan initially became effective on
October 31, 1994. The amended and restated Plan was adopted by the Board of
Directors of NAL on ________________, 1996, effective upon the approval by the
stockholders of NAL on _____________, 1996.

NAL FINANCIAL GROUP INC.
By:____________________________
Robert R. Bartolini
President

<PAGE>

EXHIBIT 4

The Board of Directors has adopted a resolution to amend Article 2 of the
Company's 1994 Stock Option Plan to read, in its entirety, as follows:

2. The Stock. The aggregate number of shares of stock which may be issued,
transferred or sold upon the exercise of Options granted under the Plan shall
not, except as such number may be adjusted in accordance with Paragraph (f) of
Article 6 hereof, exceed 1,000,000 shares of Common Stock of NAL ("Common
Stock"), which may be either authorized and unissued shares or issued shares
reacquired by NAL. Notwithstanding the above limitation, if any Option granted
under the Plan shall expire, terminate or be canceled for any reason without
having been exercised in full, the corresponding number of unexercised shares
shall again be available for the purposes of the Plan.

<PAGE>

PRELIMINARY COPY

NAL FINANCIAL GROUP INC.

This proxy is Solicited on Behalf of the Board of Directors

The undersigned hereby appoints Robert R. Bartolini and John T. Schaeffer
and each of them, Proxies with power to appoint a substitute and hereby
authorizes them to represent and to vote all shares of Common stock of NAL
Financial Group Inc. held of record by the undersigned on April 20, 1996 at the
Annual Meeting of Stockholders of NAL Financial Group, Inc. to be held on May
31, 1996 and at any adjournments thereof, and to vote as directed on the reverse
side of this form and, in their discretion, upon such other matters not
specified as may come before said meeting.

<TABLE>

<S> <C>
ELECTION OF DIRECTORS Change of Address and Comments

Nominees: James F. DeVoe ___________________________________
David R. Jones
John T. Schaeffer ___________________________________
Robert R. Bartolini
` ___________________________________
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this form.)

</TABLE>

You are encouraged to specify your choice by marking the appropriate box (SEE
REVERSE SIDE), but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendations.
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD

SEE REVERSE SIDE

<PAGE>

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED, FOR APPROVAL OF AMENDMENTS TO
---
THE CERTIFICATE OF INCORPORATION TO CREATE A CLASSIFIED BOARD OF DIRECTORS AND
TO REQUIRE A SUPERMAJORITY VOTE OF STOCKHOLDERS TO AMEND THE COMPANY'S
CERTIFICATE OF INCORPORATION, FOR THE ELECTION OF DIRECTORS, FOR APPROVAL OF THE
--- ---
AMENDMENT TO THE COMPANY'S 1994 STOCK OPTION PLAN AND FOR APPROVAL OF THE
---
RATIFICATION OF PRICE WATERHOUSE LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.

- ----------------------------------------------------------------------------
1. Proposal 1 -

Approval of an amendment to the Certificate of Incorporation
to create a Classified Board of Directors.

FOR AGAINST ABSTAIN

/ / / / / /

The Board of Directors recommends a vote FOR Proposal 1
- -------------------------------------------------------

2. Proposal 2 -
Approval of an amendment to the Certificate of Incorporation
to require a supermajority vote of stockholders to amend the
Certificate of Incorporation.

FOR AGAINST ABSTAIN

/ / / / / /

The Board of Directors recommends a vote FOR Proposal 2
- -------------------------------------------------------

3. Proposal 3 -
Election of Directors (See reverse)
For, except vote withheld from the following nominee(s):

FOR WITHHELD

/ / / /
Change of Address / /
Comments on Reverse side

----------------------------------------------------------

The Board of Directors recommends a vote FOR Proposal 3
- -------------------------------------------------------

4. Proposal 4 -
Approval of amendment to the Company's 1994 Stock Option Plan
to increase the number of shares that can be issued under the Plan
from 600,000 shares to 1,000,000 shares.

FOR AGAINST ABSTAIN

/ / / / / /

<PAGE>

5. Proposal 5 -
Ratification of Price Waterhouse LLP as the
Company's independent auditors for the 1996
Fiscal Year.

FOR AGAINST ABSTAIN

/ / / / / /

The Board of Directors recommends a vote FOR Proposal 5
- -------------------------------------------------------

PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF MAILED IN THE UNITED
STATES.

NOTE: Please sign name(s) exactly as printed hereon.
Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.

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SIGNATURE(S)
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