[PLM International, Inc. Letterhead]
PLM International, Inc.
One Market, Steuart Street Tower, Suite 800
San Francisco, Ca 94105-1301
May 27, 1997
Dear Fellow Stockholder,
As a follow-up to our May 19, 1997 letter, we want to provide you with
additional information regarding Gary D. Engle and the PLM Stockholder
Committee. We also want to identify the specific statements and accusations made
by Mr. Engle in information he has distributed which we believe are misleading.
PLM'S "NET INCOME" FIGURES
In our prior letter, we objected to Engle's statement that PLM has
incurred nearly $22.7 million of cumulative net losses since 1991. We believe
this statement is inaccurate because it does not point out that the losses
included dividends of approximately $21.4 million on preferred stock which has
now been retired and $5.1 million resulting from a non-recurring accounting
change. We do, however, acknowledge that Engle's statement is accurate in to so
far as it reflects the Company's net income to common shares for these five
years.
WE DOUBT ENGLE'S CHARACTERIZATION OF HIMSELF AS A "CONCERNED STOCKHOLDER" WHO IS
LOOKING OUT FOR YOUR INTEREST.
In our prior letter, we noted that Engle and companies he controls have
sponsored 21 unsolicited tender offers for companies that he originally
organized and managed, and have been sued in a federal class action lawsuit, and
in Massachusetts Superior court, for breach of his duties to investors in
connection with those tender offers.
Ultimately, these lawsuits were settled. In the Settlement Agreement,
without admitting or denying fault, Engle agreed to disseminate a Supplement to
the Offers providing additional information to each of the unitholders, to
increase the tender offer prices to reflect a premium, and to purchase up 35% of
the outstanding units in the partnerships.
WE QUESTION ENGLE'S CLAIM THAT "A SALE OF THE COMPANY TO EQUIS ...
WOULD BE ATTRACTIVE TO STOCKHOLDERS."
As noted in our prior letter and press releases, shortly after
submitting his proposals and commencing this proxy contest, Engle delivered a
letter to your Board of Directors stating that another company he controls is
"prepared to offer" to pay stockholders $5 per share for all of the Company's
outstanding stock. Engle's proposed purchase price is below the Company's per
share book value and below the market price as of the close of trading on May
16, 1997. However, a $5.00 price does represent a premium to stock prices before
Engle's submission of his proposed transaction, stockholder proposals and
nominees for election to the Board, and over the historic price levels of the
past five years.
Although your Board has decided not to pursue the $5 proposal submitted
by Engle, it is committed to maximizing stockholder value and has engaged
Josephthal Lyon & Ross Incorporated to assist the Board in its review of all
financial and strategic alternatives which fully reflect the Company's inherent
value.
WE DON'T BELIEVE ENGLE'S PROMISE TO INCREASE THE VALUE OF YOUR INVESTMENT IN
PLM.
Engle's past record shows a history of making below-market tender
offers for companies and liquidating them for his own profit. In one of the
unsolicited tender offers referred to above, Engle's investment earned a return
of 138% in just eleven months. Investors in the same company earned 0.6% per
year over approximately 8 years! Indeed, Engle's proxy materials reveal that he
is already cashing in -- during the stock's recent price increase, Gary Engle
SOLD 31,500 shares of PLM's common stock.
In our prior letter, we noted that in 13 of the unsolicited tender
offers referred to above, Engle liquidated the companies within one year even
though in documents filed with the Securities and Exchange Commission he stated
that there were no plans to liquidate the companies or sell their assets. We are
concerned that these past actions cast doubt on Mr. Engle's intentions regarding
PLM, not only in the context of a proposed "cash-out merger" or tender offer,
but also in conjunction with his contest for representation on the Board.
WE DO BELIEVE THAT ENGLE IS ATTEMPTING TO PROFIT AT YOUR EXPENSE
We do believe that Engle and his associates are trying to do the same
thing to PLM's investors as they have done to other companies' investors. As
part of their attempt to gain control of your Company, Engle and his associates
submitted five proposals for your consideration which would make it easier for
him to succeed in a coercive takeover. They are also sponsoring two nominees for
election to your Board of Directors.
We also think it is important to set PLM International's record
straight.
ENGLE'S STOCK PERFORMANCE GRAPHS ARE MISLEADING.
ENGLE SAYS: "The poor performance of the Company's stock is
underscored by comparing its significant decline with the
tremendous increase in the major stock market indices ..."
THE TRUTH IS: Since completing its restructuring plan in
December 1994, PLM's stock price has almost doubled, and
it has increased 60% this year alone.1 During both
periods, PLM's stock price outperformed the S&P 500 (SPX).
Engle's information distorts PLM's stock performance by
presenting different scales in his two charts. As shown
below, the comparative results since completing our
restructuring appear much different when PLM's stock
performance is measured on charts using the same scale.
[INSERT STOCK PERFORMANCE GRAPH]
The diagram is a line graph showing the percentage change in daily closing price
through 5/16/97 for PLM and the S&P 500. During the defined time period the PLM
line stays generally above the S&P 500 line (a greater increase in value since
12/1/94) until May 1996, and then after lagging behind the S&P 500 for about 11
months, catches and exceeds it in April 1997.
In 1994, the Board initiated a share repurchase program, believing that the
Company's stock price did not fully reflect the intrinsic value of the shares.
The Board of Directors believes that this program, which to date has resulted in
the repurchase of a total of approximately 3,500,000 shares (representing
approximately 22% of the outstanding shares) at an average price of $3.60 per
share, has had a positive impact on the increase in the stock price reflected on
the preceding graph. The Company has also experienced nine consecutive quarters
of profitable operations since completing its restructuring plan.
DON'T GAMBLE YOUR INVESTMENT ON ENGLE
We have rebuilt PLM International into a financially sound, growth company. The
Board of Directors believes that it is not in the best interest of all
stockholders to turn over control of the Company just when the positive results
of our strategic plan are beginning to become apparent.
RETURN THE WHITE PROXY CARD TODAY
If your shares are registered in your own name, you may mail or fax the
Company's WHITE proxy card to MacKenzie Partners, Inc. at the address or fax
number listed below.
If your shares are held in "Street Name" - held in your name by your brokerage
firm or bank - immediately instruct your broker or bank representative to sign
the Company's WHITE proxy card on your behalf. If you have further questions,
please call:
MACKENZIE PARTNERS, INC. (logo)
156 Fifth Avenue
New York, NY 10010
CALL TOLL FREE (800) 322-2885
FAX: (212) 929-0308
SUPPORT YOUR CURRENT BOARD
VOTE PLM'S WHITE PROXY CARD TODAY!
Even if you have already returned PLM's WHITE proxy card, which we recently sent
you together with PLM's Annual Report, please take a moment to sign, date and
mail the enclosed WHITE card in the postage-paid envelope to be sure your shares
are represented at the Annual Meeting. We again ask you NOT to return Engle's
GREEN proxy card, even as a protest against their nominees, because it will have
the effect of canceling your vote for your Board's nominees.
IF YOU HAVE ALREADY RETURNED ENGLE'S GREEN PROXY CARD, YOU MAY CHANGE YOUR VOTE
BY RETURNING A LATER DATED WHITE PROXY CARD.
We appreciate your support and thank you for your continuing interest in PLM.
On Behalf of the Board of Directors,
Sincerely,
/S/ ROBERT N. TIDBALL
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ROBERT N. TIDBALL
President and Chief Executive Officer
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1 Based on the closing price of $5.625 per share on the American Stock Exchange
on May 16, 1997.
