May 31, 1996
Dear Stockholder:
It is with great pleasure that the directors and I invite you to attend
the Annual Meeting of Stockholders of PLM International, Inc. which will be held
at 1:00 p.m. (Pacific Time) on Tuesday, July 16, 1996 at the A.P. Giannini
Auditorium, Concourse Level, 555 California Street, San Francisco, California.
At the meeting, the stockholders will elect two directors, vote on a
stockholder proposal regarding amendment of Company employment contracts and
transact such other business as may properly come before the meeting. The Notice
of Annual Meeting of Stockholders and Proxy Statement accompanying this letter
describe the business to be transacted at the meeting.
Whether you plan to attend the meeting or not, we urge you to sign,
date and return the enclosed proxy card in the enclosed postage-paid envelope in
order that as many shares as possible may be represented at the meeting. The
vote of every stockholder is important and your cooperation in promptly
returning your executed proxy will be appreciated. Each proxy is revocable and
will not affect your right to vote in person in the event that you attend the
meeting. Thank you for your continued support.
Very truly yours,
J. ALEC MERRIAM
Chairman of the Board
<PAGE>
PLM INTERNATIONAL, INC.
One Market
Steuart Street Tower, Suite 900
San Francisco, California 94105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of PLM International, Inc. will be
held on Tuesday, July 16, 1996 at 1:00 p.m. (Pacific Time) in the A.P. Giannini
Auditorium, Concourse Level, 555 California Street, San Francisco, California
for the following purposes:
1. Elect two Class III directors of PLM International, Inc.
2. Vote on a stockholder proposal regarding the amendment of
employment contracts entered into by and among PLM
International, Inc. and certain management employees.
3. Transact such other business as may properly come before the
meeting or any adjournment thereof.
Stockholders of record on May 24, 1996 shall be entitled to notice of, and to
vote at, the Annual Meeting of Stockholders.
By Order of the Board of Directors
STEPHEN PEARY
Senior Vice President, Secretary and General Counsel
May 31, 1996
San Francisco, California
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL
MEETING OF STOCKHOLDERS, WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY
CARD IN THE ENCLOSED POSTAGE, PREPAID ENVELOPE. IF YOU ATTEND THE MEETING, YOU
MAY VOTE YOUR SHARES IN PERSON BY COMPLETING A BALLOT OR PROXY AT THE MEETING.
YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL MEETING
OF STOCKHOLDERS.
<PAGE>
PLM INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
July 16, 1996
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of PLM International, Inc. ("PLM
International" or the "Company") of proxies to be voted at the Annual Meeting of
Stockholders to be held at 1:00 p.m. (Pacific Time) on Tuesday, July 16, 1996,
at the A.P. Giannini Auditorium, Concourse Level, 555 California Street, San
Francisco, California, or any adjournment thereof (the "Annual Meeting").
The Notice of Annual Meeting, this Proxy Statement and the accompanying
proxy card are being mailed to stockholders on or about May 30, 1996. The costs
of this proxy solicitation will be borne by the Company. Proxies may be
solicited by mail, personal interview, telephone, telegraph and advertisements.
Proxies are expected to be solicited by directors, officers and regular
employees of the Company. The directors, officers and employees who assist in
the solicitation will not receive any additional compensation for such services
and will perform such services in addition to their usual duties. The Company
has retained MacKenzie Partners, Inc. to assist in the solicitation of proxies
from brokers, nominees and individuals. MacKenzie Partners, Inc.'s estimated fee
for this service is $6,000. Brokers and other nominees who hold stock of the
Company will be asked to contact the beneficial owners of the shares which they
hold.
VOTING OF PROXIES
All properly executed proxies delivered pursuant to this solicitation
and not revoked will be voted at the Annual Meeting as specified in such
proxies. If no choice is given, the shares represented by a signed proxy will be
voted in favor of the first item and against the second item set forth in the
notice attached hereto. The two nominees for election as directors who receive
the highest number of votes therefor at the Annual Meeting shall be elected as
directors (Proxy Item No. 1). The affirmative vote of the majority of shares
present and voting at the Annual Meeting will be required for approval of the
Stockholder Proposal (Proxy Item No. 2).
Votes at the Annual Meeting will be tabulated by one or more
independent inspectors of election appointed by the Company. Abstentions and
votes withheld by brokers in the absence of instructions from street-name
holders (broker non-votes) will be included in the determination of shares
present at the Annual Meeting for purposes of determining a quorum. Abstentions
will be counted towards the tabulation of votes cast on proxy items submitted to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proxy item has been approved.
A stockholder submitting a proxy may revoke it at any time before it is
voted at the Annual Meeting by notifying the Secretary of the Company in writing
of such revocation, by properly executing a later-dated proxy, or by voting in
person at the Annual Meeting.
<PAGE>
OUTSTANDING VOTING SECURITIES
Stockholders of record on May 24, 1996, or their proxies, are entitled
to vote at the Annual Meeting. On such date, the outstanding voting stock of the
Company consisted of 10,805,861 shares of the Common Stock. Each share of Common
Stock will be entitled to one vote per share, on each matter to be voted at the
Annual Meeting. There is no provision in the Certificate of Incorporation of the
Company permitting cumulative voting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the beneficial ownership of shares of the
Company's Common Stock by each stockholder known to be the beneficial owner of
more than 5% of the outstanding Common Stock as of the date of this Proxy
Statement.
Number of
Shares of Percent of
Name and Address Common Stock Common
of Beneficial Owner Stock(1)
------------------------------------------------------------------------------
HPB Associates, L.P.(2) 960,000 8.9
888 Seventh Avenue
New York, NY 10106
--------------------------
(1) Computed on the basis of 10,805,861 shares of Common Stock
outstanding.
(2) Schedule 13D filed on October 21, 1994 indicating beneficial ownership
of 960,000 shares of Common Stock. Shares acquired in October 1994
from Official Bondholders Committee of Transcisco Industries, Inc.
("OBC") in a transaction in which the Company repurchased 922,367
common shares and other institutions and individuals acquired
beneficial ownership of 1,485,000 common shares. In December 1995, the
Company repurchased 630,700 shares of the 1,485,000 common shares
acquired by other institutions.
<PAGE>
The following table shows the amount and percent of the Company's
outstanding Common Stock beneficially owned by each of its directors and named
executive officers (as hereinafter defined), and by all directors and executive
officers as a group, as of the date of this Proxy Statement.
Number of
Shares of Percent of
Name and Address Common Stock Common
of Beneficial Owner Stock(1)
----------------------------------------------------------------------
Allen V. Hirsch(2)........................ 192,095 1.7
Walter E. Hoadley(3) ..................... 41,000 *
J. Alec Merriam(4)........................ 120,696 1.1
Robert L. 60,000 *
Pagel(5)........................
Harold R. 26,000 *
Somerset(6).....................
Robert N. 235,438 2.1
Tidball(7)......................
J. Michael 36,643 *
Allgood(8).....................
Douglas P. 72,823 *
Goodrich(9)....................
Stephen Peary(10) ........................ 89,426 *
All directors and executive officers as a
group (14 people)(11)..................... 988,546 8.7
- ------------------
* Represents less than 1% of the outstanding shares.
(1) Computed on the basis of 10,805,861 shares of Common Stock outstanding
plus, in the case of any person deemed to own shares of Common Stock as a
result of owning options to purchase such securities exercisable within
60 days of the date of the Proxy Statement, the additional shares of
Common Stock which would be outstanding upon exercise by such person.
(2) Includes 125,000 shares of Common Stock which may be purchased by Mr.
Hirsch upon exercise of options.
(3) Includes 40,000 shares of Common Stock which may be purchased by Dr.
Hoadley upon exercise of options.
(4) Includes 40,000 shares of Common Stock which may be purchased by Mr.
Merriam upon exercise of options.
(5) Represents 40,000 shares of Common Stock which may be purchased by Mr.
Pagel upon exercise of options.
(6) Includes 20,000 shares of Commons Stock which may be purchased by Mr.
Somerset upon exercise of options.
(7) Includes 150,000 shares of Common Stock which may be purchased by Mr.
Tidball upon exercise of options.
(8) Includes 30,000 shares of Common Stock which may be purchased by Mr.
Allgood upon exercise of options.
(9) Includes 30,000 shares of Common Stock which may be purchased by Mr.
Goodrich upon exercise of options.
(10) Includes 40,000 shares of Common Stock which may be purchased by Mr.
Peary upon exercise of options.
(11) Includes 470,000 shares of Common Stock which may be purchased by members
of the Board of Directors and executive officers upon exercise of
options.
<PAGE>
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
As of the date of this report the directors and executive officers of
PLM International (and key executive officers of its subsidiaries) are as
follows:
<TABLE>
<CAPTION>
Name Age Position
- -------------------------------------- ------ ------------------------------------------------------------------------------
<S> <C> <C>
J. Alec Merriam..................... 60 Director, Chairman of the Board, PLM International, Inc.; Director, PLM
Financial Services, Inc.
Allen V. Hirsch..................... 42 Director, Vice Chairman of the Board, Executive Vice President, PLM
International, Inc.; Director and President, PLM Financial Services, Inc.;
President, PLM Securities Corp.
Walter E. Hoadley................... 79 Director, PLM International, Inc.
Robert L. Pagel..................... 59 Director, Chairman of the Executive Committee, PLM International, Inc.;
Director, PLM Financial Services, Inc.
Harold R. Somerset.................. 60 Director, PLM International, Inc.
Robert N. Tidball................... 57 Director, President and Chief Executive Officer, PLM International, Inc.
J. Michael Allgood.................. 47 Vice President of Finance and Chief Financial Officer, PLM International,
Inc. and PLM Financial Services, Inc.
Robin L. Austin..................... 49 Vice President, Human Resources, PLM International, Inc.; Vice President,
PLM Financial Services, Inc.
Stephen M. Bess..................... 49 President, PLM Investment Management, Inc.; Vice President, PLM Financial
Services, Inc.
David J. Davis...................... 39 Vice President and Corporate Controller, PLM International, Inc.
Douglas P. Goodrich................. 49 Senior Vice President, PLM International, Inc. and PLM Transportation
Equipment Corporation
Steven O. Layne..................... 41 Vice President and General Manager, Air Group, PLM Transportation Equipment
Corporation
Stephen Peary....................... 47 Senior Vice President, Secretary and General Counsel, PLM International,
Inc., PLM Financial Services, Inc.; Vice President, PLM Investment
Management, Inc., PLM Transportation Equipment Corporation and PLM
Securities Corp.
</TABLE>
J. Alec Merriam was appointed Chairman of the Board of Directors of PLM
International in September 1990, having served as a director since February
1988. In October 1988 he became a member of the Executive Committee of the Board
of Directors of PLM International. From 1972 to 1988 Mr. Merriam was Executive
Vice President and Chief Financial Officer of Crowley Maritime Corporation, a
San Francisco area-based company engaged in maritime shipping and transportation
services. Previously, he was Chairman of the Board and Treasurer of LOA
Corporation of Omaha, Nebraska, and served in various financial positions with
Northern Natural Gas Company, also of Omaha.
Allen V. Hirsch became Vice Chairman of the Board and a Director of PLM
International in April 1989. He is an Executive Vice President of PLM
International and President of PLM Securities Corp. Mr. Hirsch became the
President of PLM Financial Services, Inc. in January 1986 and President of PLM
Investment Management, Inc. and PLM Transportation Equipment Corporation in
August 1985, having served as a Vice President of PLM Financial Services, Inc.
and Senior Vice President of PLM Transportation Equipment Corporation beginning
in August 1984, and as a Vice President of PLM Transportation Equipment
Corporation beginning in July 1982 and of PLM Securities Corp. from July 1982 to
October 1, 1987. He joined PLM, Inc. in July 1981, as Assistant to the Chairman.
Prior to joining PLM, Inc., Mr. Hirsch was a Research Associate at the Harvard
Business School. From January 1977 through September 1978, Mr. Hirsch was a
consultant with the Booz, Allen and Hamilton Transportation Consulting Division,
leaving that employment to obtain his master's degree in business
administration. Mr. Hirsch's employment with the Company will terminate
effective May 31, 1996. His term as a Class III director of the Company will
expire at this year's Annual Meeting of Stockholders.
Dr. Walter E. Hoadley joined PLM International's Board of Directors and
its Executive Committee in September, 1989. He served as a Director of PLM, Inc.
from November 1982 to June 1984 and PLM Companies, Inc. from October 1985 to
February 1988. Dr. Hoadley has been a Senior Research Fellow at the Hoover
Institute since 1981. He was Executive Vice President and Chief Economist for
the Bank of America from 1968 to 1981 and Chairman of the Federal Reserve Bank
of Philadelphia from 1962 to 1966. Dr. Hoadley served as a Director of
Transcisco Industries, Inc. from February 1988 until August 1995.
Robert L. Pagel was appointed Chairman of the Executive Committee of
the Board of Directors of PLM International in September 1990, having served as
a director since February 1988. In October 1988 he became a member of the
Executive Committee of the Board of Directors of PLM International. From June
1990 to April 1991 Mr. Pagel was President and Co-Chief Executive Officer of The
Diana Corporation, a holding company traded on the New York Stock Exchange. He
is the former President and Chief Executive Officer of FanFair Corporation which
specializes in sports fan's gift shops. He previously served as President and
Chief Executive Officer of Super Sky International, Inc., a publicly traded
company, located in Mequon, Wisconsin, engaged in the manufacture of skylight
systems. He was formerly Chairman and Chief Executive Officer of Blunt, Ellis &
Loewi, Inc., a Milwaukee based investment firm. Mr. Pagel retired from Blunt,
Ellis & Loewi in 1985 after a career spanning 20 years in all phases of the
brokerage and financial industries. Mr. Pagel has also served on the Board of
Governors of the Midwest Stock Exchange.
Harold R. Somerset was appointed to the Board of Directors of PLM
International in July 1994. From February 1988 to December 1993, Mr. Somerset
was President and Chief Executive officer of California & Hawaiian Sugar
Corporation, a recently acquired subsidiary of Alexander & Baldwin, Inc.
("C&H"). Mr. Somerset joined C&H in 1984 as Executive Vice President and Chief
Operating Officer, having served on its Board of Directors since 1978, a
position in which he continues to serve. Between 1972 and 1984, Mr. Somerset
served in various capacities with Alexander & Baldwin, Inc., a publicly-held
land and agriculture company headquartered in Honolulu, Hawaii, including
Executive Vice President - Agriculture and Vice President and General Counsel.
Mr. Somerset also serves on the board of directors for various other companies
and organizations.
Robert N. Tidball was appointed President and Chief Executive Officer
of PLM International in March 1989. At the time of his appointment, he was
Executive Vice President of PLM International. Mr. Tidball became a director of
PLM International in April 1989 and a member of the Executive Committee of the
Board of Directors of PLM International in September 1990. Mr. Tidball was
Executive Vice President of Hunter Keith, Inc., a Minneapolis-based investment
banking firm, from March 1984 to January 1986. Prior to Hunter Keith, Inc., he
was Vice President & General Manager and Director of North American Car
Corporation, and Director of the American Railcar Institute and the Railway
Supply Association.
J. Michael Allgood was appointed Vice President of Finance and Chief
Financial Officer of PLM International in October 1992. Between July 1991 and
October 1992, Mr. Allgood was a consultant to various private and public sector
companies and institutions specializing in financial operational systems
development. In October 1987, Mr. Allgood cofounded Electra Aviation Limited and
its holding company, Aviation Holdings Plc of London, where he served as Chief
Financial Officer until July 1991. Between June 1981 and October 1987, Mr.
Allgood served as a First Vice President with American Express Bank, Ltd. In
February 1978, Mr. Allgood founded and until June 1981, served as a director of
Trade Projects International/Philadelphia Overseas Finance Company, a joint
venture with Philadelphia National Bank. From March 1975 to February 1978, Mr.
Allgood served in various capacities with Citibank, N.A.
Robin L. Austin is Vice President, Human Resources of PLM
International. Ms. Austin became Vice President, Human Resources of PLM
Financial Services, Inc. in February 1984, having served in various capacities
with PLM Investment Management, Inc., including Director of Operations, since
February 1980. From June 1970 to September 1978, Ms. Austin served on active
duty in the United States Marine Corps. She is currently a Colonel in the United
States Marine Corps Reserves. Ms. Austin serves on the board of directors for
two nonprofit organizations, the Marine Memorial Club and the International
Diplomacy Council.
Stephen M. Bess was appointed President of PLM Investment Management,
Inc. in August 1989, having served as Senior Vice President of PLM Investment
Management, Inc. beginning in February 1984 and as Corporate Controller of PLM
Financial Services, Inc. beginning in October 1983. Mr. Bess served as Corporate
Controller of PLM, Inc., beginning in December 1982. Mr. Bess was Vice
President-Controller of Trans Ocean Leasing Corporation, a container leasing
company, from November 1978 to November 1982, and Group Finance Manager with the
Field Operations Group of Memorex Corp., a manufacturer of computer peripheral
equipment, from October 1975 to November 1978.
David J. Davis was appointed Vice President and Controller of PLM
International in January 1994. From March 1993 through January 1994, Mr. Davis
was engaged as a consultant for various firms, including PLM International.
Prior to that Mr. Davis was Chief Financial Officer of LB Credit Corporation in
San Francisco from July 1991 to March 1993. From April 1989 to May 1991, Mr.
Davis was Vice President and Controller for ITEL Containers International
Corporation which was located in San Francisco. Between May 1978 and April 1989,
Mr. Davis held various positions with Transamerica Leasing Inc. in New York,
including that of Assistant Controller for its rail leasing division.
Douglas P. Goodrich was appointed Senior Vice President of PLM
International in March 1994. Mr. Goodrich was appointed Vice President, Rail
Group, of PLM Transportation Equipment Corporation in July 1989, and President
of PLM Railcar Management Services, Inc. in September 1992. Mr. Goodrich was an
Executive Vice President of G.I.C. Financial Services Corporation, a subsidiary
of Guardian Industries Corp. of Chicago, Illinois from December 1980 to
September 1985.
Steven O. Layne was appointed Vice President and General Manager, Air
Group, PLM Transportation Equipment Corporation in November 1992. Mr. Layne was
its Vice President, Commuter and Corporate Aircraft beginning in July 1990.
Previously, Mr. Layne was the Director, Commercial Marketing for Bromon Aircraft
Corporation, a joint venture of General Electric Corporation and the Government
Development Bank of Puerto Rico. Mr. Layne is a Major in the United States Air
Force Reserves and Senior Pilot with 13 years of accumulated service.
Stephen Peary was appointed Senior Vice President, Secretary and
General Counsel of PLM International in March 1994. Mr. Peary served as Vice
President, Secretary and General Counsel of PLM International beginning in
February 1988. Mr. Peary was Assistant General Counsel of PLM Financial
Services, Inc. from August 1987 through January 1988. Previously, Mr. Peary was
engaged in the private practice of law in San Francisco. Mr. Peary is a graduate
of the University of Illinois, Georgetown University Law Center, and Boston
University (Masters of Taxation Program).
<PAGE>
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
The Board of Directors currently consists of six directors and is
divided into three classes, designated Class I, Class II and Class III. Each
director is elected to a three-year term. The current Class I directors are
Messrs. Hoadley and Tidball. The current Class II directors are Messrs. Merriam
and Pagel. The current Class III directors are Messrs. Hirsch and Somerset.
At the Annual Meeting, two directors will be elected for a term of
three years. The term of the current Class III directors expires at the Annual
Meeting, and the terms of the Class I and Class II directors will expire at the
annual meetings of stockholders convened in 1997 and 1998, respectively. The
Company's nominees for Class III director are Douglas P. Goodrich and Harold R.
Somerset. Mr. Goodrich is currently Senior Vice President of the Company. Mr.
Somerset presently serves as a Class III director of the Company.
The Company's nominees have consented to be nominated and to serve if
elected. If the nominees become unavailable for election, the proxy will be
voted for such other persons, if any, as the Board of Directors may designate.
INFORMATION CONCERNING DIRECTORS
The Company's Board of Directors held 9 meetings in 1995 and, to date,
has held 5 meetings in 1996. Each of the directors serving on the Board of
Directors attended at least 75% of (i) the total number of meetings of the Board
of Directors held in 1995 and (ii) the total number of meetings held by all
committees of the Board of Directors on which such director served.
Among the committees of the Board of Directors are an Executive
Committee, an Audit Committee, a Compensation Committee and a Nominating
Committee.
The Executive Committee consists of Mr. Pagel-Chairman, Dr. Hoadley,
Mr. Merriam and Mr. Tidball. The Executive Committee, which was formed in
October 1988, may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Company, subject
to the limitations prescribed by the Board of Directors, the bylaws of the
Company and Delaware law. The Executive Committee did not meet in 1995.
The Audit Committee consists of Mr. Merriam-Chairman, Dr. Hoadley and
Mr. Pagel. The Audit Committee was formed in February 1988 to recommend the
appointment and compensation of the independent auditors, approve professional
services provided by the auditors, review the scope of the annual audit and the
auditors' report to management and review financial statements and internal
accounting controls. The Audit Committee met twice in 1995.
The Compensation Committee consists of Mr. Pagel-Chairman, Mr. Merriam
and Mr. Somerset. The Compensation Committee was formed in February 1988 to
review all compensation programs, policies and practices, including salaries,
incentives, stock options and stock purchase programs, and to make
recommendations to the Board of Directors regarding the salary of all corporate
officers and certain key employees. The Compensation Committee met once in 1995.
The Nominating Committee was established in September 1990 to
investigate and make recommendations to the Board of Directors for nominees to
the Board of Directors and its committees. The Nominating Committee consists of
Mr. Tidball-Chairman, Mr. Merriam and Mr. Pagel. The Nominating Committee met
once in 1995. The Nominating Committee will consider nominees to the Board of
Directors recommended by security holders upon submission of the names of such
nominees and such other information as requested by the Nominating Committee in
accordance with the Company's bylaws.
<PAGE>
COMPENSATION OF DIRECTORS
Each nonemployee director of the Company (Messrs. Hoadley, Merriam,
Pagel and Somerset) receives a monthly retainer of $2,000 and a per meeting fee
of $1,000 for meetings of the Board of Directors and the Executive Committee
attended in person ($250 for meetings attended by telephone). A fee of $250 per
meeting is paid to all nonemployee directors for meetings of all other
committees of the Board of Directors. In addition, Mr. Merriam, as Chairman of
the Board of Directors, receives a monthly retainer equal to $4,000, and Mr.
Pagel, as Chairman of the Executive Committee, receives a monthly retainer equal
to $3,000.
On January 25, 1995, the Board of Directors adopted the Directors' 1995
Nonqualified Stock Option Plan (the "1995 Directors' Plan") pursuant to which
Directors who are not employees of the Company will receive annual options to
purchase 10,000 shares Common Stock of the Company. Grants to each nonemployee
director were made on February 1, 1995 and February 1, 1996. The exercise price
is the closing price of the Company's Common Stock on the date of grant. The
exercise price of options granted on February 1, 1995 under the 1995 Directors'
Plan is $2.625 per common share. The exercise price of options granted on
February 1, 1996 is $3.50 per common share. The total number of shares for which
options may be granted under the 1995 Directors' Plan is 120,000 shares. Options
granted under the 1995 Directors' Plan vest pro rata over a three-year period.
Generally, vested options held by a nonemployee director who ceases to be a
director of the Company may be exercised within six months after ceasing to be a
director. As of the date of this Proxy Statement, 13,332 options were
exercisable under the 1995 Directors' Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth for the fiscal years ended December 31,
1995, 1994, and 1993, a summary of compensation awarded to, earned by or paid to
the Company's Chief Executive Officer and each of its four other most highly
compensated executive officers (together, the "named executive officers") at
December 31, 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name Securities
and Underlying
Principal Salary<F1> Bonus<F2> Options/ All Other
Position Year ($) ($) SARS (#) Compensation<F3>
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert N. Tidball 1995 $300,000 $203,054 -- $ 3,306
----
President, Chief 1994 268,333 225,000 20,000 105,716
----
Executive Officer 1993 260,000 100,000 -- 15,237
----
Allen V. Hirsch<F4> 1995 230,000 207,987 -- 1,380
----
Executive Vice President 1994 228,333 100,000 10,000 90,559
----
and Director 1993 220,000 100,000 -- 12,956
----
Douglas P. Goodrich 1995 188,333 239,910 -- 1,779
----
Senior Vice President 1994 170,833 60,000 10,000 61,211
----
1993 125,000 35,000 -- 9,133
----
Stephen Peary 1995 176,667 103,054 -- 1,779
----
Senior Vice President 1994 158,333 100,000 10,000 65,129
----
and Secretary 1993 150,000 50,000 -- 9,532
----
J. Michael Allgood 1995 162,615 78,054 -- 1,726
----
Chief Financial Officer 1994 140,231 60,000 10,000 7,041
----
and Vice President 1993 130,000 20,000 -- 1,008
----
<FN>
<F1> Amounts shown do not include the cost to the Company of personal benefits,
the value of which did not exceed 10 percent of the aggregate salary and
bonus compensation for each named executive officer.
<F2> Bonus compensation reflects amount earned in designated year, but paid in
the immediate subsequent year; provided, however, the bonus compensation
reflects for each named Executive Officer a bonus of $3,054 paid in 1995 to
replace Company matching program delayed until 1996 by the termination of
the Company's 401(k) plan, effective December 31, 1994. Every employee of
the Company employed throughout 1995 received the same $3,054 bonus
compensation. Mr. Hirsch, as President of the Company's syndication
subsidiary, did not participate in the Company's bonus compensation plan in
1995. Mr. Hirsch receives a quarterly commission incentive based on the
amount of syndicated equity raised by the Company. In 1995, Mr. Hirsch
received commission compensation equal to $204,933. Mr. Goodrich, as Senior
Vice President of the Company's equipment acquisition subsidiary, has had
his bonus compensation restructured to add a commission incentive plan
based on the amount of equipment transactions closed during a fiscal
quarter. In 1995, Mr. Goodrich received commission compensation equal to
$206,856.
<F3> Includes the following compensation:
Fair market value
of
Common Stock Cash balances Company paid
allocated to ESOP distributed from premiums for term
accounts ESOP accounts life insurance
-------------------- ------------------- --------------------
1994 1993 1995 1994 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
Robert N. Tidball $78,469 $14,576 $816 $26,700 $2,490 $547 $661
Allen V. Hirsch 67,098 12,285 816 22,914 564 547 661
Douglas P. Goodrich 45,167 8,472 816 15,497 963 547 661
Stephen Peary 48,072 8,871 816 16,510 963 547 661
J. Michael Allgood 4,536 347 763 1,958 963 547 661
Total fair market Total cash
value of balances
Common Stock allocated distributed from
all
to all ESOP accounts: $4,847,085 $641,914 ESOP accounts: $43,699 $589,517
Fair market value of shares allocated to ESOP accounts was determined using
closing price of the Company's Common Stock on January 18, 1995 ($2.9375),
the date all ESOP account balances were distributed to ESOP participants.
Amounts reported in this column for 1993 for named individuals in the 1993
proxy statement consisted of the fair market value of ESOP allocations made
to individual accounts determined using appraised fair market value of ESOP
preferred stock at December 31 of applicable year, plus the value of
Company paid premiums for term life insurance.
<F4> Mr. Hirsch's employment with the Company will terminate effective May 31,
1996. His term as a Class III director of the Company will expire at this
year's Annual Meeting of Stockholders.
</FN>
</TABLE>
<PAGE>
<PAGE>
STOCK OPTION GRANTS IN 1995
There were no grants or exercises of options to or by any named
executive officer in 1995. The following table sets forth certain information,
based on market value of the Company's Common Stock on December 31, 1995, with
respect to stock options held by each of the named executive officers as of such
date:
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options at Options at
December 31, 1995 December 31, 1995
Exercisable/ Exercisable/
Name Unexercisable Unexercisable<F1>
- --------------------------------- ------------------------------- ------------------------------
<S> <C> <C>
Robert N. Tidball 136,666/13,334 $232,083/$9,167
Allen V. Hirsch 118,333/6,667 $203,541/$4,584
Douglas P. Goodrich 23,333/6,667 $37,291/$4,584
Stephen Peary 33,333/6,667 $54,791/$4,584
J. Michael Allgood 23,333/6,667 $37,291/$4,584
- ------------------------------------
<FN>
<F1> Options granted in 1992 have an exercise price of $2.00. Options granted in
1994 have an exercise price of $3.0625. Market value of Common Stock at
December 31, 1995 close $3.75 per share.
</FN>
</TABLE>
<PAGE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into Employment Agreements (the "Employment
Agreements") with the Chief Executive Officer, each of its four other named
executive officers and others (each a "Contract Employee"). The Employment
Agreements are designed to encourage Contract Employees to remain in the employ
of the Company and to reinforce their continued attention and dedication to
their duties in the event of an unsolicited attempt to take over control of the
Company. The Employment Agreements have terms of one, two or three years from
the date on which they were entered (the "Original Term") and are automatically
extended one additional year on each succeeding anniversary thereof unless
earlier terminated by the Company or the employee. Each Employment Agreement
contains provisions governing salary, bonus and participation in Company benefit
plans, and provides in certain events for payments to the Contract Employee upon
termination of his or her employment with the Company. In addition, each
Employment Agreement includes a covenant not to solicit the Company's customers
or otherwise compete against the Company for a period of time after termination
of employment.
If, after a change in control occurs, the Company terminates a Contract
Employee other than for cause or if the employee terminates his or her
employment for good reason (including, without limitation, any demonstrable and
material diminution of the compensation, duties, responsibilities, authority or
powers of the Contract Employee), then the Company is required to pay the
Contract Employee the sum of (i) the employee's annual base compensation rate
then in effect multiplied by the number of years in the Original Term (up to
2.99 years), (ii) an amount equal to the greater of the amount paid and/or
payable to or due the Contract Employee under the Company's bonus or incentive
plans (a) for the Company's fiscal year prior to the fiscal year of any change
in control or (b) for the immediately preceding fiscal year, multiplied by the
number of years in the Original Term (up to 2.99 years) and (iii) all other cash
benefits due the Contract Employee.
In addition, if following a change in control, the Contract Employee
terminates his or her employment for good reason all options to purchase stock
of the Company granted to such Contract Employee immediately become fully vested
and any restrictions on the exercise of such options lapse.
For purposes of the Employment Agreements, a change in control is
defined to include, among other things, (i) any Person acquiring Beneficial
Ownership (as defined in the Employment Agreements) of 36% or more of the
combined voting power of the Company's securities, (ii) any Person who did not
have Beneficial Ownership of 5% or more of the voting power of the Company's
securities on the date the Employment Agreement was entered into acquiring
Beneficial Ownership of more than 15% of such voting power or (iii) a change in
the Board of Directors of the Company due to proxy solicitations or other
actions to influence voting at a meeting of stockholders of the Company by a
Person who has Beneficial Ownership of 5% or more of the voting power of the
Company, and which causes the Continuing Directors (as defined below) to cease
to be a majority of the Board of Directors, unless such event(s) have been
approved by a majority of the Continuing Directors.
"Continuing Directors" are (a) those who were directors on the date the
Employment Agreement was entered, (b) those who were appointed or recommended
for election by a majority of those who were directors on such date, or (c)
those who were appointed or recommended by a majority of those directors
described in (a) and (b) above.
The Employment Agreements are structured so that no excess payments
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), will be made to any Contract Employee pursuant to the
Employment Agreements. If a change in control occurred on the date hereof and
the employment of the Contract Employees was immediately terminated without
cause, based on certain assumptions, the following would be the present value of
post-employment compensation benefits provided under the Employment Agreements
to the following named executive officers: Mr. Tidball, $1,504,131; Mr.
Goodrich, $1,280,447; Mr. Peary, $836,366; and Mr.
Allgood, $719,600.
(This space intentionally left blank.)
<PAGE>
PENSION BENEFITS
The following table sets forth certain information regarding annual
benefits payable in specified compensation and years of service classifications
under the Company's nonqualified supplemental retirement income plan:
<TABLE>
<CAPTION>
Average Annual Credited Years of Service<F3>
-------------------------------------------------------------------
Compensation Annual Payout to be Received
During Last in Each of Five Years
Five Years of Following later of Termination of
Employment<F1><F2> Employment or Attainment of Age 60
-------------------------------------------------------------------------------------------------------
5 10 15
- -- --
<S> <C> <C> <C>
$ 60,000 $ 15,000 $ 30,000 $ 45,000
100,000 25,000 50,000 75,000
140,000 35,000 70,000 105,000
180,000 45,000 90,000 135,000
220,000 55,000 110,000 165,000
260,000 65,000 130,000 195,000
300,000 75,000 150,000 225,000
400,000 100,000 200,000 300,000
- ---------------------------------
<FN>
<F1> The Company's shareholder-approved nonqualified supplemental retirement
income plan provides that an executive participating in the plan is
generally entitled to receive for a period of 60 months, commencing upon
the later of attainment of age 60 or termination of employment, an amount
equal to the product of (i) 5%, (ii) number of years of employment with PLM
International, its affiliates or predecessors (up to a maximum of 15 years)
and (iii) average monthly base compensation during the most recent
consecutive months of employment (not to exceed 60) preceding termination
of employment. Obligations under the plan are funded by general corporate
funds and insurance policies on the lives of the participants. For purposes
of computing benefits under the plan, compensation includes only salaries
and wages and does not include directors' fees or bonuses. Benefits payable
are not subject to any deduction for social security or other offset
amounts. The annual base compensation 60-month averages at December 31,
1995 for the named executive officers equaled: Mr. Tidball, $245,667; Mr.
Hirsch, $201,833; Mr. Goodrich, $144,475; Mr. Peary, $147,333; and Mr.
Allgood, $117,777.
<F2> Benefits under the plan generally vest over a five-year period. Vesting is
accelerated immediately to 100% in the event of a change in control of the
Company. The Board of Directors has discretion to accelerate the date for
making payments under the plan in the event of a change in control.
<F3>Years of credited service for named executive officers who participate in
the plan are as follows:
Years
Robert N. Tidball 10
Allen V. Hirsch 14
Douglas P. Goodrich 8
Stephen Peary 8
J. Michael Allgood 3
</FN>
</TABLE>
<PAGE>
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for advising and recommending to the Board of Directors of the
Company policies governing employee compensation and the Company's employee
benefit plans, including its 1988 Management Stock Compensation Plan, and
determining the compensation of the Company's executive officers, subject to
review by the disinterested members of the Board of Directors. The Committee
evaluates the performance of management and determines compensation polices and
levels. The disinterested members of the Board of Directors review the
Committee's recommendations regarding the compensation of executive officers.
The Company's executive compensation programs are designed to attract
and retain executives capable of leading the Company to meet its business
objectives and motivate them to enhance long-term shareholder value.
Compensation for the Company's executive officers consists of both fixed (base
salary) and variable (incentive) compensation elements. Variable compensation
consists of annual cash incentives and stock option grants. These elements are
designed to operate on an integrated basis and together comprise total
compensation value.
It is the Compensation Committee's belief that none of the Company's
executive officers will be affected by the provisions of Section 162(m) of the
Code which limits the deductibility of certain executive compensation during
1995. Therefore, the Committee has not adopted a policy as to compliance with
the requirements of Section 162(m) of the Code.
Base Salary
Base salary levels of the Company's key executives are largely
determined through comparison with comparable companies in the San Francisco Bay
Area. Salary information about comparable companies is reviewed by reference to
public disclosures and published surveys. In addition, the Committee from time
to time obtains information about comparable salary levels from outside
compensation consultants.
The companies included in the salary comparisons are generally not the
same as the companies included in the index in the stock performance graph
included in this Proxy Statement. The Committee believes that the Company's most
direct competitors for executive talent in the San Francisco Bay Area are not
necessarily the same companies to which the Company would be compared for stock
performance purposes.
In 1994, the Company engaged the services of a national compensation
consultant to advise on the overall compensation of the CEO and the Company's
Executive Vice President ("EVP"). Findings of the report submitted to the Board
of Directors were that the base salaries and level of actual total cash
compensation for both the CEO and EVP appear reasonable and do not require
adjustment. The consultant did suggest, which suggestion was approved by the
Committee as well as the Board of Directors, that after a threshold level is
met, the EVP should have an uncapped override or commission on the production of
syndication sales for which the EVP is responsible. See "Annual Cash
Incentives," below.
For fiscal 1994, base salaries of the Company's executive officers
(other than the President and Chief Executive Officer ("CEO")) were set to
approximate the 75th percentile of the survey data. The base salary of the CEO
was set to approximate the 50th percentile of the survey data.
- -------------------------------
(1) The material in this report is not "soliciting material," is not deemed
filed with the Securities and Exchange Commission and is not to be
incorporated by reference in any filing of the Company under the
Securities Act of 1993, as amended, or the Securities Exchange Act of
1934, as amended.
<PAGE>
Annual Cash Incentives
The annual cash incentive is designed to provide a short-term
(one-year) incentive to executive officers. Generally, the cash incentive is
paid from a single bonus pool established by the Compensation Committee at the
beginning of each year based on a targeted level of profitability. The Committee
retains the right to increase or decrease the size of the bonus pool during the
year. Payment of cash incentives is not contingent on the Company's meeting the
targeted level of profitability, which level was met during 1995.
Incentive awards for the Company's key executives participating in the
single bonus pool (other than the CEO) are based on the achievement of
predetermined individual performance goals. Specific individual goals for each
executive are established at the beginning of the year by the CEO and are tied
to the functional responsibilities of each executive. Individual goals may
include objective and subjective factors, such as improving the performance of
assets managed by the executive, successful acquisitions or sales, management of
operating expenses, development of leadership skills and personal training and
education. No specific weights are assigned to the individual goals. In fiscal
1995, certain of the individual performance targets were met. In 1995, both Mr.
Hirsch and Mr. Goodrich were removed from participation in the single bonus
pool. Company profitability is directly influenced by the level of syndicated
equity raised and the volume of transportation equipment transactions closed for
the Company's affiliated investment programs. Mr. Hirsch, as to syndicated
equity, and Mr. Goodrich, as to equipment transactions, had or have direct
functional responsibilities for these two areas. During 1995, their incentive
commission compensation was measured as a percentage of predetermined individual
performance goals in these respective areas of responsibility. The Summary
Compensation Table shows, under the caption "Bonus," incentive awards for the
named executive officers for 1995.
In establishing the annual cash incentive for the CEO, the Committee
considers the performance of the Company and the CEO, including his leadership
and effectiveness in dealing with major corporation problems and opportunities.
While overall corporate performance, including stock price performance, is taken
into account, the incentive award for the CEO is primarily determined by a
subjective account of his individual performance. The Summary Compensation Table
shows, under the caption "Bonus," the incentive award for the CEO in 1995.
Stock Options
Stock options are designed to provide long-term incentives and rewards
tied to the price of the Company's Common Stock. Given the fluctuations of the
stock market, stock price performance and financial performance are not always
consistent. The Committee believes that stock options, which provide value to
participants only when the Company's shareholders benefit from stock price
appreciation, are an important component of the Company's annual executive
compensation program. There was no grant of options to executive officers during
1995. Options to acquire 10,000 shares of common stock were granted in 1995 to
an employee who heads the Company's Canadian railcar operations. All outstanding
employee options expire on March 31, 1998. The table "Fiscal Year End Option
Values" identifies all options granted to the named executive officers,
including the CEO.
J. ALEC MERRIAM ROBERT L. PAGEL
The Members of the Compensation Committee
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following performance graph compares the performance of the
Company's Common Stock to the S&P 500 Index and the Russell 2000 Index, an index
of small market capitalization companies. The graph assumes that the value of
the investment in the Company's Common Stock and each index was $100 on December
31, 1990, and that all dividends were reinvested. All year references are to
December 31 of the applicable year.
December 1990
- ----------------------
Russell 2000: 100
S&P 500: 100
PLM International, Inc.: 100
December 1991
- ----------------------
Russell 2000: 146
S&P 500: 130
PLM International, Inc.: 68
December 1992
- ----------------------
Russell 2000: 173
S&P 500: 140
PLM International, Inc.: 41
December 1993
- ----------------------
Russell 2000: 206
S&P 500: 155
PLM International, Inc.: 48
December 1994
- ----------------------
Russell 2000: 202
S&P 500: 157
PLM International, Inc.: 65
December 1995
- ----------------------
Russell 2000: 260
S&P 500: 215
PLM International, Inc.: 85
The Company is an equipment leasing company specializing in the
management of equipment on operating leases domestically and internationally.
Its portfolio of owned and managed equipment primarily consists of diversified
transportation equipment and includes marine vessels, aircraft,
trailers/tractors, railcars/locomotives, marine containers, mobile offshore
drilling units and storage vaults. No issuers are leasing similar portfolios of
diversified transportation equipment on operating leases. Therefore, the Company
believes it cannot reasonably identify a peer group and has used an index
composed of companies with similar market capitalizations.
<PAGE>
TERMINATION OF EMPLOYEE STOCK OWNERSHIP PLAN
The Board of Directors established the Company's Employee Stock
Ownership Plan (the "Plan") on August 21, 1989. The Plan was a defined
contribution plan which was established to invest primarily in qualified
employer securities issued by the Company. On August 21, 1989, the Company
borrowed $63,654,993 from a group of banks to finance the Plan. The Company
immediately reloaned that amount to the Plan and made an initial contribution to
the Plan of $345,007. The Plan then utilized $64,000,001 of the foregoing amount
to purchase 4,923,077 shares of the Company's newly issued Series A Preferred
Stock (the "Preferred Stock"). All of those shares were initially held in a
pledge account (the "Loan Suspense Account") and were released from the Loan
Suspense Account for allocation to participants as payments were made on the
Plan's indebtedness to the Company. As a condition to their loans to the
Company, the banks required the Company to provide security for the loans, which
security, except for a short period in 1990, took the form of cash (or cash
equivalents) deposited in a collateral account maintained by one of the banks.
This collateral is referred to as the "restricted cash collateral." Except for
the form of the collateral, the terms of the loans from the banks to the Company
and from the Company to the Plan had substantially identical terms and
substantially identical principal balances.
The Plan received an initial determination letter from the Internal
Revenue Service ("IRS") which states that the Plan (and the related trust) are
exempt from Federal income taxation under Section 401(a) of the Code and qualify
as an employee stock ownership plan under Section 4975(e)(7) of the Code. Under
the terms of the Plan, all employees of the Company and its subsidiaries who
were United States citizens were eligible to participate in the Plan after the
satisfaction of certain age and service requirements. Under the terms of the
Plan, the Company retained the right to terminate the Plan at any time.
In October 1994, the Company's Board of Directors announced its
intention to terminate the Plan. The Plan was terminated effective December 31,
1994. The assets of the Plan allocated to participants were distributed on
January 18, 1995. The Board's decision was based on several factors. First, the
Company anticipated that the cash collateral initially required as part of the
Plan financing described above could ultimately be fully accessed for use in the
Company's business. Instead, however, the banks required that all such amounts
be held in a collateral account which could only be invested in certificates of
deposit and similar low yielding investments. The Plan financing arrangement for
that reason continuously reduced corporate earnings and growth. Second,
employees were generally dissatisfied with the Plan as a vehicle for retirement
planning. An employee stock ownership plan like the Plan generally provides an
undiversified investment, and the annual allocation of an increased number of
shares to participants was unfortunately matched by a decline in the value of
the Company's outstanding Common Stock. The Company's Board of Directors
determined to terminate the Plan because it was satisfying neither the Company's
nor the participants' expectations and could not be expected to do so in the
foreseeable future. The Company received a favorable final IRS determination
letter as to the qualified status of the Plan as of the date of termination
under the rules and regulations of the Code. Upon Plan termination, each share
of Preferred Stock held by the Plan which had been allocated to Plan
participants became 100% vested. Upon distribution each allocated share
automatically converted to one share of Common Stock.
At termination 1,650,075 common shares were distributed to (or to the
individual retirement accounts of) approximately 191 Plan participants (215,153
shares of Common Stock were distributed to the named executive officers or their
respective individual retirement accounts). In addition, approximately 468,519
shares were distributed in November 1994 to participants who at the time were no
longer employees of the Company. All shares distributed from the Plan to
participants are freely tradable and listed on the American Stock Exchange.
Shares of Preferred Stock held by the Plan which were not allocated to
participants' accounts at the date of termination (2,804,483 shares) were
surrendered to the Company. All indebtedness of the Plan to the Company was
canceled. In addition, the corresponding bank indebtedness of the Company
related to the Plan was fully repaid using restricted cash collateral. At plan
termination, the principal amount of this indebtedness was $43,288,241 and was
fully secured by restricted cash collateral.
Termination of the Plan and the related Plan loan eliminated payment
by the Company of the annual dividend on the Preferred Stock. For the year ended
December 31, 1994, the aggregate pretax amount of this dividend was $6,957,513.
STOCKHOLDER PROPOSAL (Proxy Item No. 2)
Two stockholders have requested the Company present for approval the
following resolution (the "Stockholder Proposal") at the Annual Meeting of
Stockholders:
"The Board of Directors of PLM International, Inc. is hereby requested
to take the following action:
The Company has entered into Employment Agreements (the "Employment
Agreements") with the Chief Executive Officer, each of its four other
named officers and others (each a "Contract Employee"). The Employment
Agreements are designed to encourage Contract Employees to remain in
the employ of the Company and to reinforce their continued attention
and dedication to their duties in the event of an unsolicited attempt
to take over control of the company. Each Employment Contract contains
provisions governing salary, bonus and participation in Company benefit
plans, and provides in certain events for payments to the Contract
Employee upon termination of his or her employment with the Company. In
the event of change in control (as described in the proxy statement for
the annual meeting of May 18, 1995) occurs, and the Company terminates
a Contract Employee for cause or if the employee terminates his or her
employment for good reason (as defined), the Company is required to pay
the Contract Employee compensation comprising of the Contract
Employee's annual base compensation multiplied by up to 2.99 years, an
amount equal to the greater of the last amount paid or payable to the
Contract Employee under the Company's annual bonus or incentive plans
multiplied by up to 2.99 years, and all other cash benefits due the
Contract Employee.
These Employment Agreements will be amended so that in the event of a
change of control, as described in the proxy statement for the annual
meeting of May 18, 1995, the Company will be required to pay the
Contract Employees no more than six (6) months or one half year of each
Contract Employee's annual compensation, and an amount equal to the
greater of the amount paid or payable under the Company's bonus or
incentive plans for the current year. In addition, the Contract
Employees will be entitled to the continuation of their participation
in life, health, disability and accident insurance plans for a maximum
term of six (6) months following each such Contract Employee's
termination or until the Contract Employee obtains coverage under any
other such plans, whichever is earlier."
Accompanying the above resolution, the following commentary was submitted:
The adoption of these currently generous Employment Agreements for
certain executives and officers of PLM International, Inc. is not in
the best interests of the shareholders. These Employment Agreements
amount to little more than "golden parachutes," which have a
demonstrable effect of reducing shareholder value. Moreover, far from
reinforcing the dedication of Contract Employees to their duties in the
event of an unsolicited takeover attempt, these Employment Contracts
create a conflict of interest between the shareholders and the Contract
Employees!
A change of control makes the Contract Employees eligible for large
cash payments in the event they are terminated by the Company or leave
for "good reason." This occurs whether management has negotiated the
best value for the shareholders in the event of a takeover or not.
Additionally, a takeover is not a necessary condition to trigger such
payments -- the acquisition of 15% or more of the Company's voting
power (or common stock), such as a single investor making a substantial
investment in the Company, will also constitute a change in control and
could activate the terms of the Employment Contracts. How can we the
shareholders be assured certain PLM executives will not subordinate
shareholder interests to their own? How can we be assured they will
seek the best value for us in the face of such financial temptation?
Numerous studies have shown that the implementation of anti-takeover
defenses, including "golden parachutes," lead to a decline in
shareholder value. If you don't want to sell something, you reduce its
desirability and, correspondingly, its perceived value. Were an
outsider to contemplate acquiring PLM, or even acquiring a large block
of its stock, he or she would have to consider the added cost of paying
off the Contract Employees under their current Employment Contracts.
According to the Company's 1995 10-K/A, this amounts to approximately
$5.6 million, representing a premium of approximately 12% on the
Company's 1995 shareholder's equity! PLM stock has sold for less than
its underlying book value for several years -- is this really because,
as management claims, no analysts on Wall Street are watching the
stock? Or is it because the "golden parachutes," and other
anti-takeover defenses erected by the Company, are reducing its value
to any potential investor? Who wouldn't want a discount on the price of
the Company given the obligation he or she would incur to pay off the
Contract Employees?
The amendments proposed for the Employment Contracts do not reduce the
compensation legitimately earned by Contract Employees under their
incentive or bonus plans. However, it substantially reduces payoffs
based on multiples of annual income and bonuses. I (we) believe
compensation equal to six months salary is appropriate and sufficient
to reward Contract Employees for their continuing dedication to their
responsibilities in the event of unsolicited attempts to acquire the
Company.
I (we) urge PLM shareholders to align the interests of PLM executives
and officers with themselves by voting to amend the Employment
Contracts.
The proponents of the Stockholder Proposal are: Douglas E. Smuckler;
2630 Gough Street #305, San Francisco, California 94123; Telephone 415/765-5473,
and Peter Christopher Violich; 1200 Taylor Street #14, San Francisco, California
94108; Telephone 415/567-5716. Mr. Smuckler is the beneficial owner of 786
shares of Common Stock. Mr. Violich is the beneficial owner of 1,507 shares of
Common Stock.
Agreements Allow the Company to Compete
The Board of Directors believes that the Employment Agreements entered
into by the Company and described in this Proxy Statement, which agreements
include the payment of certain compensation contingent upon the merger or
acquisition of the Company, are necessary to assist the Company to compete for
and retain top executives. Executives increasingly request compensation programs
which take into account the employment uncertainty caused by a merger or
acquisition. Many public companies in the United States have arrangements
similar to those adopted by PLM International. If the Company could not offer
such compensation, it could be at a distinct disadvantage in attracting and
keeping talented managers and executives.
Your Board of Directors is cognizant of its fiduciary responsibilities
to its stockholders and considers compensation matters in light of this
overriding concern. The Board believes that it needs the flexibility to assure
that the levels and types of employee compensation are adequate to recruit,
motivate and retain qualified personnel. Further, adopting as policy the
Stockholder Proposal would deprive the Board of the flexibility it needs to
address a broad array of compensation matters affecting potentially all
employees in the context of a merger, acquisition or other change in control.
Agreements Are Binding Contracts
The Employment Agreements are legally binding contracts. The Board of
Directors cannot unilaterally amend the Employment Agreements. Unilateral
amendment would expose the Company to significant litigation risks and costs.
Agreements Protect Stockholders' Value
The Board of Directors believes that the Employment Agreements and
other compensation plans described in this Proxy Statement protect the Company
and the value of its stock in potential takeover situations. These agreements
are not intended to be and do not have the traditional characteristics of
"golden parachutes" that the proponents oppose in the Stockholder Proposal.
Rather, it is the acquirer -- not the executive -- who controls whether
severance payments will be owed. Under these agreements, severance payments are
made only to executives who are terminated without cause or who terminate their
agreement for "good reason," after a change of control. Good reason is defined
to include any demonstrable and material diminution of compensation, duties,
responsibilities, authority or power of the Contract Employee. Therefore, the
Board of Directors believes that executives do not have any financial or other
incentive to act contrary to shareholder interests.
The change of control provisions in these Employment Agreements help
ensure that key executives and other covered employees remain with the Company
while a takeover is pending. The Board of Directors believes that an exodus of
talent and leadership at such time would be contrary to protecting stockholders'
value.
In any takeover context, the Board of Directors has the fiduciary
obligation to maximize stockholder value.
Directors Recommend a Vote AGAINST the Stockholder Proposal (Proxy Item No. 2).
For all of these reasons, your Board of Directors recommends that the
stockholders vote AGAINST the proposal. Proxies solicited by the Board will be
so voted unless a stockholder specifies a contrary choice in his or her proxy.
The affirmative vote of the majority of shares present and voting at the Annual
Meeting will be required for approval of the Stockholder Proposal.
INDEPENDENT AUDITORS
Representatives of KPMG Peat Marwick, the Company's independent
auditors, are expected to be present at the Annual Meeting. They will be
afforded an opportunity to make a statement, if they so desire, and are expected
to be available to respond to appropriate questions.
<PAGE>
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Proposals from stockholders for the 1997 Annual Meeting must be
received by the Company no later than January 8, 1997, to be included in the
Company's Proxy Statement and form of proxy relating to the 1996 Annual Meeting.
Such proposals should be directed to the attention of the Secretary, PLM
International, Inc., One Market, Steuart Street Tower, Suite 900, San Francisco,
California 94105.
OTHER BUSINESS
The Board of Directors of the Company does not intend to present any
other items of business at the Annual Meeting. The Board of Directors knows of
no other items that are likely to be brought before the meeting except those set
forth in the foregoing Notice of Annual Meeting of Stockholders.
By Order of the Board of Directors
STEPHEN PEARY
Senior Vice President, Secretary and General Counsel
San Francisco, California
May 31, 1996
PLM International will provide without charge to each person furnished
a copy of this Proxy Statement, a copy of its Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission, upon receipt of a written
request therefor sent to the Secretary of PLM International, Inc., One Market,
Steuart Street Tower, Suite 900, San Francisco, California 94105.
