SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the Securities
Exchange Act of 1934
Filed by Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6 (e) (2) /X/ Definitive Proxy Statement / / Definitive Additional
Materials / / Soliciting Material Pursuant to Rule 14a-11 (c) or Rule
14a-12
PLM International, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(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:
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(4) Proposed maximum aggregate value of the transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check the 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 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.
SCHEDULE 14A
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(3) Filing Party:
PLM International, Inc.
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(4) Date Filed:
May 2, 1997
<PAGE>
May 2, 1997
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. (the "Company")
which will be held at 1:00 p.m. (Pacific Time) on Tuesday, June 10, 1997 at the
A.P. Giannini Auditorium, Concourse Level, 555 California Street, San Francisco,
California.
At the meeting, the stockholders will elect two directors. In addition,
you will be asked to consider and vote upon each of five stockholder proposals
submitted by certain stockholders of the Company. The Board of Directors has
reviewed each of these stockholder proposals and unanimously recommends that you
vote AGAINST them. The Notice of Annual Meeting of Stockholders and Proxy
Statement accompanying this letter describes 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 white 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 800
San Francisco, California 94105
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of PLM International, Inc. (the
"Company") will be held on Tuesday, June 10, 1997 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 I directors of PLM International, Inc. (Proxy
Item No. 1)
2. Consider and vote upon five stockholder proposals submitted by
certain stockholders of the Company which are more fully
described in the attached Proxy Statement, and
3. Transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Stockholders of record on April 25, 1997 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 2, 1997
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 WHITE
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
June 10, 1997
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, June 10, 1997,
at the A.P. Giannini Auditorium, Concourse Level, 555 California Street, San
Francisco, California, or any adjournments or postponements 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 3, 1997. 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. "MacKenzie") to assist in the solicitation
of proxies from brokers, nominees and individuals. MacKenzie's estimated fee for
this service is $50,000, plus reimbursement of out-of-pocket expenses. The
Company has also agreed to indemnify MacKenzie against certain liabilities and
expenses. It is estimated that MacKenzie will employ approximately 40 persons to
solicit proxies on behalf of the Board of Directors for the Annual Meeting. The
Company believes that it will incur additional expenses of $125,000 for
attorneys' fees and printing and other miscellaneous expenses. The Company will
also request brokers and other nominees who hold stock of the Company to forward
solicitation material to the beneficial owners of the Common Stock held of
record by them and will reimburse them for their reasonable out-of-pocket
expenses in forwarding such solicitation materials. A stockholder of the Company
has given the Company written notice of his intent to nominate two candidates
for election as directors. See: "Other Business."
Certain information about the directors, director nominees and
executive officers of the Company and certain employees and other
representatives of the Company who may also solicit proxies is set forth in the
attached Schedule I. Schedule II sets forth certain information relating to
shares of Common Stock owned by such parties and certain transactions between
any of them and the Company.
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 Proxy Item No. 1 and against Proxy Items Nos. 2-6. 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 a majority of shares represented and voting at the
Annual Meeting will be required for approval of Stockholder Proposals Nos. 1, 2,
3 and 5 (Proxy Items Nos. 2, 3, 4 and 6). The affirmative vote of eighty percent
(80%) of shares entitled to vote at the Annual Meeting will be required for
approval of Stockholder Proposal No. 4 (Proxy Item No. 5).
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. Broker
non-votes are not counted for purposes of determining whether a proxy item has
been approved or disapproved. Abstentions will have the effect of a vote against
all Stockholder Proposals (Proxy Item Nos. 2-6), but will have neither a
positive nor negative effect on the tabulation of votes for the election of
directors (Proxy Item No. 1) other than the determination of a quorum.
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.
OUTSTANDING VOTING SECURITIES
Stockholders of record on April 25, 1997, or their proxies, are
entitled to vote at the Annual Meeting. On such date, the outstanding voting
stock of the Company consisted of 9,209,431 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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No stockholder is known to be the beneficial owner of more than five
percent (5%) of the Company's outstanding Common Stock as of the date of this
Proxy Statement.
The following table shows the amount and percent of the Company's
outstanding Common Stock beneficially owned by each of its directors, nominees
and named executive officers (as hereinafter defined), and by all directors,
nominees and executive officers as a group, as of the date of this Proxy
Statement.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Number of Shares of Common Stock Percent of Common Stock(1)
- ----------------------------------------------------- ---------------------------------- ----------------------------
<S> <C> <C>
Douglas P. Goodrich(2)............................. 117,823 1%
Walter E. Hoadley(3)............................... 51,000 *
J. Alec Merriam(4)................................. 133,696 1%
Robert L. Pagel(5)................................. 70,000 *
Harold R. Somerset(6).............................. 36,000 *
Robert N. Tidball(7)............................... 275,439 3%
J. Michael Allgood(8).............................. 75,421 *
D.R. Dugan(9)...................................... 30,000 *
Stephen Peary(10).................................. 130,538 1%
Robert L. Witt (nominee) 5,000 *
All directors, nominees and executive officers as a
group (13 people)(11).............................. 1,037,510 11%
- ------------------
</TABLE>
* Represents less than 1% of the outstanding shares.
(1) Computed on the basis of 9,209,431 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 75,000 shares of Common Stock which may be purchased by Mr.
Goodrich upon exercise of options.
(3) Includes 50,000 shares of Common Stock which may be purchased by Dr.
Hoadley upon exercise of options.
(4) Includes 50,000 shares of Common Stock which may be purchased by Mr.
Merriam upon exercise of options.
(5) Includes 50,000 shares of Common Stock which may be purchased by Mr.
Pagel upon exercise of options.
(6) Includes 30,000 shares of Common Stock which may be purchased by Mr.
Somerset upon exercise of options.
(7) Includes 170,000 shares of Common Stock which may be purchased by Mr.
Tidball upon exercise of options.
(8) Includes 60,000 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.
Dugan upon exercise of options.
(10) Includes 60,000 shares of Common Stock which may be purchased by Mr.
Peary upon exercise of options.
(11) Includes 640,000 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...................... 61 Director, Chairman of the Board, PLM International, Inc.;
Director, PLM Financial Services, Inc.
Douglas P. Goodrich.................. 50 Director, Senior Vice President, PLM International, Inc.;
Director and President, PLM Financial Services, Inc.;
Senior Vice President, PLM Transportation Equipment
Corporation
Walter E. Hoadley.................... 80 Director, PLM International, Inc.
Robert L. Pagel...................... 60 Director, Chairman of the Executive Committee, PLM
International, Inc.; Director, PLM Financial Services, Inc.
Harold R. Somerset................... 61 Director, PLM International, Inc.
Robert N. Tidball.................... 58 Director, President and Chief Executive Officer, PLM
International, Inc.
J. Michael Allgood................... 48 Vice President of Finance and Chief Financial Officer, PLM
International, Inc. and PLM Financial Services, Inc.
Robin L. Austin...................... 50 Vice President, Human Resources, PLM International, Inc.;
Vice President, PLM Financial Services, Inc.
Stephen M. Bess...................... 50 President, PLM Investment Management, Inc.; Vice President,
PLM Financial Services, Inc.
David J. Davis....................... 40 Vice President and Corporate Controller, PLM International,
Inc. and PLM Financial Services, Inc.
Donald R. Dugan...................... 36 President, American Finance Group, Inc.
Steven O. Layne...................... 42 Vice President, Air Group, PLM Transportation Equipment
Corporation; Director and Vice President, PLM Worldwide
Management Services, Inc.
Stephen Peary........................ 48 Senior Vice President, Secretary and General Counsel, PLM
International, Inc., PLM Financial Services, Inc.; Vice
President, PLM Investment Management, Inc. and PLM
Transportation Equipment Corporation
Robert L. Witt 57 Nominee, See "Election of Directors," Proxy Item No. 1, p
........................ [ ].
</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.
Douglas P. Goodrich was appointed Senior Vice President of PLM
International in March 1994. Mr. Goodrich was elected a director of PLM
International in July 1996 and appointed Director and President of PLM Financial
Services, Inc. in June 1996. Mr. Goodrich has also served as Senior Vice
President of PLM Transportation Equipment Corporation since July 1989, and as
President of PLM Railcar Management Services, Inc. since September 1992, having
been a Senior Vice President since June 1987. 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.
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. 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.
Donald R. Dugan, Jr. was appointed President of American Finance Group,
Inc. in January 1996. Mr. Dugan served in various capacities with American
Finance Group, G.P., including Vice President, Treasurer from 1989 to 1995, and
was appointed Vice President and National Sales Manager in mid-1995. Prior to
working with AFG Mr. Dugan served as a Lieutenant in the United States Navy.
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).
Robert L. Witt. See "Election of Directors," Proxy Item No. 1, p [ ].
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. Goodrich and Somerset.
At the Annual Meeting, two directors will be elected for a term of
three years. The term of the current Class I directors expires at the Annual
Meeting, and the terms of the Class II and Class III directors will expire at
the annual meetings of stockholders convened in 1998 and 1999, respectively. The
Company's nominees for Class I director are Robert N. Tidball and Robert L.
Witt. Mr. Tidball is currently President and Chief Executive Officer of the
Company. Mr. Tidball presently serves as a Class I director of the Company.
Immediately prior to the Annual Meeting Mr. Hoadley will retire as a director of
the Company. The Company has nominated Mr. Witt to stand for election for Mr.
Hoadley's vacated Class I seat. Since 1993, Mr. Witt, age 57, has been a
principal with WWS Associates, a consulting and investment group located in
Orinda, California, specializing in startup situations and private organizations
about to go public. From 1969 to 1993, Mr. Witt was an executive with Hexcel
Corporation, an international advanced materials company with sales primarily to
the aerospace, transportation and general industrial markets located in
Pleasanton, California. Mr. Witt served as Chief Executive Officer of Hexcel
Corporation from 1986 to July 1993 and as Chairman of the Board from 1988 to
July 1993. After Hexcel Corporation filed for protection under Chapter 11 of the
Bankruptcy Laws in December 1993, Mr. Witt was asked to assist shareholders of
Hexcel as a member of the Equity Committee. In 1995 Hexcel emerged from Chapter
11 having paid its creditors 100 percent of outstanding obligations plus 5
percent interest. Subsequently, Hexcel's stockholders elected Mr. Witt back on
the Board of Directors, from which he resigned in February 1996. Mr. Witt also
serves on the board of directors for various other companies and organizations,
including Bay View Capital Corp.
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 1996 and, to date,
has held 3 meetings in 1997. 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 1996 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 met once in 1996.
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 1996.
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 1996.
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 1996. 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.
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 receive annual options to
purchase 10,000 shares of Common Stock of the Company. Grants to each
nonemployee director were made on February 1, 1995, February 1, 1996, and
February 1, 1997. 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 exercise price of options granted on February 1, 1997 is $3.31 per common
share. The total number of shares for which options may be granted under the
1995 Directors' Plan is 120,000 shares. All options available under the 1995
Directors' Plan have been granted. Options granted under the 1995 Directors'
Plan vest pro rata over a three-year period. Generally, vested options held by a
nonemployee director who ceases to be a director of the Company may be exercised
within six months after ceasing to be a director. As of the date of this Proxy
Statement, 40,000 options were exercisable under the 1995 Directors' Plan.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth for the fiscal years ended December 31,
1996, 1995, and 1994, a summary of compensation awarded to, earned by or paid to
the Company's Chief Executive Officer and each of its four other most highly
compensated executive officers (together, the "named executive officers") at
December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Securities
Name and Restricted Underlying
Principal Salary(1) Bonus(2) Stock Options/ All Other
Position Year ($) ($) Awards ($)(3) SARS (#)(4) Compensation(5)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Tidball 1996 $ 300,000 $ 135,000 $60,000 20,000 $ 557
----
President, Chief 1995 300,000 203,054 -- -- 3,306
----
Executive Officer 1994 268,333 225,000 -- 20,000 105,716
----
Douglas P. Goodrich 1996 190,000 189,625 -- 45,000 557
----
Senior Vice President 1995 188,333 239,910 -- -- 1,779
----
1994 170,833 60,000 -- 10,000 61,211
----
Stephen Peary 1996 190,000 47,500 63,336 20,000 557
----
Senior Vice President 1995 176,667 103,054 -- -- 1,779
----
and Secretary 1994 158,333 100,000 -- 10,000 65,129
----
J. Michael Allgood 1996 175,000 52,500 23,334 30,000 557
----
Chief Financial Officer 1995 162,615 78,054 -- -- 1,726
----
and Vice President 1994 140,231 60,000 -- 10,000 7,041
----
D.R. Dugan 1996 150,000 100,000 -- 30,000 557
----
President, American 1995 -- -- -- -- --
----
Finance Group 1994 -- -- -- -- --
----
</TABLE>
(1) 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.
(2) 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. 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. In 1996, Mr. Goodrich
received commission compensation equal to $159,625.
(3) Restricted stock awarded pursuant to 1996 PLM International, Inc.
Mandatory Management Stock Bonus Plan. Restricted shares granted in
substitution of cash bonus compensation earned in designated year,
though shares actually granted effective January 8, 1997. The number of
restricted shares granted equals the amount of cash bonus awarded by
the Board of Directors to a designated recipient, multiplied by an
allocation ratio applicable to such recipient, multiplied by 1.334 (to
compensate recipients for the restricted nature of the shares and risk
of forfeiture) divided by the fair market value of the Company's common
stock on the effective date of grant. The fair market value is equal to
the closing price of the Company's common stock on the effective date
of grant. Cash bonus compensation earned in designated year is reduced
by an amount equal to the amount of cash bonus earned in the designated
year multiplied by the allocation ratio applicable to the recipient.
The allocation ratio for Mr. Tidball and Mr. Allgood for the shares
granted in substitution of cash bonus earned in 1996 is twenty-five
percent. The allocation ratio for Mr. Peary is fifty percent. Shares
granted pursuant to this plan generally vest ratably over three years.
Nonvested shares are subject to forfeiture in the event the recipient
voluntarily terminates his or her employment with the Company.
(4) Granted effective August 21, 1996, pursuant to the Company's
stockholder-approved 1988 Management Stock Compensation Plan. Exercise
price $3.25 per common share. Three-year vesting. Options expire August
21, 2001. Options granted in 1994 pursuant to same plan effective
September 12, 1994. Exercise price $3.06 per common share. Options
granted in 1994 expire March 21, 1998.
(5) Includes the following compensation:
<TABLE>
<CAPTION>
Fair market
value of
Common Stock Cash balances Company-paid
allocated to distributed from premiums for term
ESOP
accounts ESOP accounts life insurance
----------------- ----------------- --------------------
1994 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Robert N. Tidball $78,469 $816 $26,700 $557 $2,490 $547
Douglas P. Goodrich 45,167 816 15,497 557 963 547
Stephen Peary 48,072 816 16,510 557 963 547
J. Michael Allgood 4,536 763 1,958 557 963 547
D.R. Dugan -- -- -- 557 -- --
Total fair market Total cash
value of balances
Common Stock allocated distributed from
all
to all ESOP accounts: $4,847,085 ESOP accounts: $43,699 $589,517
</TABLE>
Fair market value of shares allocated to ESOP accounts 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.
STOCK OPTION GRANTS IN 1996
In 1996, the Company granted options to acquire 145,000 shares of
common stock to the named executive officers pursuant to the
stockholder-approved 1988 Management Stock Compensation Plan. Mr. Tidball
received 20,000 options. Mr. Goodrich received 45,000 options. Mr. Peary
received 20,000 options. Mr. Allgood received 30,000 options. Mr. Dugan received
30,000 options. All options were granted effective August 21, 1996. The
following table sets forth certain information, based on market value of the
Company's Common Stock on December 31, 1996, with respect to stock options held
by each of the named executive officers as of such date:
FISCAL YEAR END OPTION VALUES
<TABLE>
- --------------------------------------- -------------------------------------- --------------------------------------
Number of Securities Underlying
Unexercised Value of Unexercised In-the-Money
Options at December 31, 1996 Options at December 31, 1996
Exercisable/ Exercisable/Unexercisable(1)
Name Unexercisable
- --------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Robert N. Tidball 143,334/26,666 $182,917/$4,583
Douglas P. Goodrich 26,667/48,333 $29,583/$6,667
Stephen Peary 36,667/23,333 $50,417/$3,542
J. Michael Allgood 26,667/33,333 $29,583/$4,792
D.R. Dugan 0/30,000 $0/$3,750
- -----------------
</TABLE>
(1) Options granted in 1992 have an exercise price of $2.00. Options
granted in 1994 have an exercise price of $3.0625. Options granted in
1996 have an exercise price of $3.25. Market value of Common Stock at
December 31, 1996 close: $3.375 per share.
1996 MANDATORY MANAGEMENT STOCK BONUS PLAN
In 1996, the Board of Directors approved the PLM International, Inc.
Mandatory Management Stock Bonus Plan (the "Plan"). This Plan's purpose is to
compensate senior management for their contributions to the growth and profits
of the Company and its subsidiaries and increase their investment in the Common
Stock of the Company, thereby enhancing their incentive to build stockholder
value, while conserving Company liquidity. The Company has established a Bonus
Share reserve equal to 500,000 shares of the Common Stock subject to adjustment
for certain corporate events such as stock splits, stock dividends or
reclassification.
Any salaried executive employee of the Company or any subsidiary
(including officers and directors, except for persons serving as directors only)
who participate in the Company's Executive Management Bonus Pool or any other
executive management bonus compensation plan (together, "Bonus Compensation
Plans") is eligible to receive an allocation of Bonus Shares pursuant to this
Plan. Bonus Shares allocated pursuant to this Plan are made in substitution of
cash compensation that would otherwise be earned by the recipient under a Bonus
Compensation Plan. Bonus Shares are restricted and subject to forfeiture.
From those employees for whom a cash bonus has been recommended under a
Bonus Compensation Plan, the Compensation Committee of the Board of Directors
may from time to time select (i) those employees to whom it recommends that the
Board of Directors make allocations of Bonus Shares, and (ii) the Allocation
Ratio that should be applied to each such employee. In selecting those employees
whom it wishes to recommend for allocations and in determining the Allocation
Ratio it wishes to recommend, the Compensation Committee shall consider the
position and responsibilities of the eligible employees, the value of their
services to the Company and its subsidiaries and such other factors as the
Compensation Committee deems pertinent.
As promptly as practicable after the Compensation Committee makes its
recommendations, the Board of Directors will review the Compensation Committee's
recommendations and, in the Board's discretion, (i) determine from the list of
employees recommended by the Committee which employees should be allocated Bonus
Shares under the Plan, and (ii) the Allocation Ratio that should be applied to
each such employee, provided, however, the Board of Directors may, in its sole
discretion, increase or decrease the Allocation Ratio to the extent permitted
under the Plan. The Allocation Ratio may not be greater than 50 percent.
The number of Bonus Shares allocable and granted to a recipient shall
be determined as follows: amount of cash bonus due an employee under a Bonus
Compensation Plan, multiplied by the Allocation Ratio applicable to such
Employee, multiplied by 1.3334 (to compensate employees for the restricted
nature of the Bonus Shares and the risk of forfeiture) divided by the Fair Value
of a Bonus Share (the quoted closing price of the Company's Common Stock on the
Date of Issuance). No fractional shares may be issued under the Plan. Cash
bonuses due under a Bonus Compensation Plan will be reduced by an amount equal
to the amount of such cash bonus multiplied by the recipient's Allocation Ratio.
All Bonus Shares granted pursuant to this Plan have been registered or
are exempt from registration under the Securities Act of 1933.
Recipients are not required to pay any amounts to the Company upon
allocation, grant, transfer or sale of the Bonus Shares. The Company shall be
entitled to make appropriate withholding for income or employment taxes or other
similar items.
Bonus Shares will be promptly transferred or issued after the Date of
Issuance and a certificate or certificates for such shares shall be issued in
the recipient's name. The recipient shall thereupon be a stockholder of all the
shares represented by the certificate or certificates. As such, the recipient
will have all the rights of a stockholder with respect to such shares, including
the right to vote such shares and to receive all dividends and other
distributions paid with respect to such shares, provided, however, that the
shares shall be subject to certain restrictions on transferability and shall be
subject to forfeiture in certain circumstances. Stock certificates representing
Bonus Shares will be imprinted with a legend stating that the shares represented
thereby may not be sold, exchanged, transferred, pledged, hypothecated, or
otherwise disposed of except in accordance with this Plan's terms, and each
transfer agent for the Common Stock shall be instructed to like effect in
respect of such shares. In aid of such restrictions, the Recipient shall,
immediately upon receipt of the certificate(s) deposit such certificate(s)
together with a stock power or other instrument of transfer, appropriately
endorsed in blank, with an escrow agent designated by the Committee, under a
deposit agreement containing such terms and conditions as the Committee shall
approve, the expenses of such escrow to be borne by the Company.
The term "Restricted Period" with respect to restricted Bonus Shares
(after which restrictions shall lapse) generally means a period starting on the
Date of Issuance of such shares to the recipient and ending on the date three
(3) years after the date of issuance, or as the Compensation Committee may
otherwise establish at the time of allocation of shares hereunder.
During the Restricted Period applicable to Bonus Shares, none of such
shares shall be sold, exchanged, transferred, pledged, hypothecated, or
otherwise disposed of unless the Company shall offer to repurchase such shares
for the then fair market value of such shares. Unless such repurchase is
otherwise prohibited by the laws of the State of California or other applicable
state or federal law currently in effect at the time of an offer of Bonus Shares
by the Company for repurchase pursuant to the terms of this Plan, the Company
shall repurchase such shares and make payment in full therefor fifteen (15) days
following such offer. Fair market value of such shares shall be the quoted
closing price of the Company's Common Stock two days before payment for such
shares is made by the Company.
During the Restricted Period, in the event a recipient voluntarily
terminates his or her employment with the Company or any subsidiary or is
terminated for Cause, any and all Bonus Shares for which restrictions have not
lapsed shall be immediately forfeited by such recipient and such recipient shall
no longer have any rights, title or interests in such Bonus Shares or any
dividends or distributions derived therefrom. Such Bonus Shares and related
shares will be surrendered to the Company by the escrow agent, will be placed in
the treasury of the Company, and will no longer be considered outstanding.
The restrictions on transfer and risks of forfeiture will lapse as
follows:
(i) as to 33.33% of Bonus Shares on the first anniversary of the
Date of Issuance,
(ii) an additional 33.33% of Bonus Shares on the second anniversary
of the Date of Issuance, and
(iii) all remaining Bonus Shares on the third anniversary of the
Date of Issuance, or
(iv) upon the Recipient's death, or
(v) upon acceptance by the Board of an offer to acquire all or
substantially all of the Company's common stock or assets, or
(vi) upon announcement of an offer tendering for all or more than
50 percent of the Company's outstanding Common Stock, or
(vii) upon resolution of the Board, or
(viii) upon termination of this Plan.
Nothing in the Plan will preclude the transfer of Bonus Shares, on the
recipient's death, to the recipient's legal representatives or estate, nor
preclude such representatives from transferring any of such shares to the
person(s) entitled thereto by will or the laws of descent and distribution.
The Compensation Committee will administer the Plan and construe its
provisions. Any determination by the Committee (except insofar as it will make
recommendations only) in carrying out, administering, or construing the Plan
will be final and binding for all purposes and upon all interested persons and
their heirs, successors, and personal representatives.
Effective January 8, 1997, the Board of Directors, acting upon the
recommendations of the Compensation Committee awarded 66,670 Bonus Shares under
the Plan. The Bonus Shares awarded to the named executive officers are as
follows:
<TABLE>
<CAPTION>
Bonus Shares Awarded Reduction in 1996 Cash Bonus
-------------------- ----------------------------
<S> <C> <C>
Robert Tidball 20,001 $45,000
Stephen Peary 21,112 47,500
Michael Allgood 7,778 17,500
</TABLE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into Employment Agreements (the "Employment
Agreements") with the Chief Executive Officer, three 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 three-year terms 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, $1,480,050; Mr.
Goodrich, $1,135,079; Mr. Peary, $899,500; and Mr. Allgood, $749,994.
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 Compensation Credited Years of Service(3)
During Last Five Years of Annual Payout to be Received
Employment(1,2) in Each of Five Years
Following Later of Termination of
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
- ---------------------------------
</TABLE>
(1) The Company's 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, 1996 for the named
executive officers equaled: Mr. Tidball, $265,667; Mr. Goodrich,
$157,883; Mr. Peary, $164,666; and Mr. Allgood, $125,833.
(2) 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.
(3) Years of credited service for named executive officers who participate
in the plan are as follows:
Years
Robert N. Tidball 11
Douglas P. Goodrich 9
Stephen Peary 9
J. Michael Allgood 4
COMPENSATION COMMITTEE REPORT<F1>
The Compensation Committee of the Board of Directors (the "Committee")
is responsible for advising and recommending to the Board of Directors policies
governing employee compensation and the Company's employee benefit plans,
including its 1988 Management Stock Compensation Plan and the 1996 Mandatory
Management Stock Bonus 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 stockholder 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, restricted stock grants 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
1996. 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. Findings of the
report submitted to the Board of Directors were that the base salary and level
of actual total cash compensation for the CEO appears reasonable and does not
require adjustment. Mr. Tidball's base compensation was increased to $300,000 in
1994 and, to date, has not changed. 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.
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 senior management 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 solely
contingent on the Company's meeting the targeted level of profitability, which
level was met during 1996. Profitability, however, is a factor in determining
the size of the bonus pool each year.
Incentive awards for the Company's key executives participating in the
senior management 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
1996, certain of the individual performance targets were met. In 1995, Mr.
Goodrich was removed from participation in the senior management bonus pool,
though he participated to a limited degree in 1996. Company profitability is
directly influenced by the volume of transportation equipment transactions
closed for the Company's affiliated investment programs. Mr. Goodrich, as to
equipment transactions, has direct functional responsibilities for this area.
During 1995 and 1996, Mr. Goodrich's 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 captions "Bonus" and "Restricted Stock Grants," incentive awards for the
named executive officers for 1996.
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
<F1> 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 1933, as amended, or the Securities Exchange Act of 1934, as
amended.
<PAGE>
primarily determined by a subjective account of his individual performance. The
Summary Compensation Table shows, under the captions "Bonus" and "Restricted
Stock Grants," the incentive award for the CEO in 1996.
Restricted Stock Grants
Restricted stock is awarded pursuant to the 1996 PLM International,
Inc. Mandatory Stock Bonus Plan to compensate senior management for their
contributions to the growth and profits of the Company and its subsidiaries and
increase their investment in the Common Stock of the Company, thereby enhancing
their incentive to build stockholder value, while conserving Company liquidity.
The Committee recommends to the Board of Directors which executives shall
receive restricted stock grants and the portion of their incentive compensation
that will be reduced in return for such grants. In selecting those employees
whom it wishes to recommend for restricted stock grants, the Committee considers
the position and responsibilities of the eligible employees, the value of their
services to the Company and its subsidiaries and such other factors as the
Committee deems pertinent. Restricted stock grants generally vest ratably over
three years and, until vested, are subject to forfeiture in the event an
executive voluntarily terminates his/her employment with the Company. The
Committee believes restricted stock grants provide long-term incentive and
rewards tied to the Company's Common Stock. Recipients benefit only when Company
stockholders benefit from stock price appreciation. The Company benefits by
paying less annual cash incentives. In addition, the restricted nature of the
stock grants, including the risk of forfeiture, rewards executives who maintain
long-term employment with the Company.
There were 48,891 shares of Common Stock granted as restricted stock to
executive officers for 1996. Mr. Tidball was granted 20,001 shares of Common
Stock. Mr. Peary was granted 21,112 shares of Common Stock. Mr. Allgood was
granted 7,778 shares of Common Stock. The Summary Compensation Table shows,
under the caption "Restricted Stock Grants," the restricted stock grants for the
CEO and other executive officers for 1996. See also "1996 Mandatory Management
Stock Bonus Plan."
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 stockholders benefit from stock price
appreciation, are an important component of the Company's annual executive
compensation program. There was a grant of 145,000 options to executive officers
during 1996. In 1996, Mr. Tidball was granted 20,000 options. Mr. Goodrich was
granted 45,000 options. Mr. Peary was granted 20,000 options. Mr. Allgood was
granted 30,000 options. Mr. Dugan was granted 30,000 options. The exercise price
of these options is $3.25. Employee options granted prior to 1996 expire on
March 31, 1998. Options granted in 1996 expire August 21, 2001. 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, 1991, and that all dividends were reinvested. All year references are to
December 31 of the applicable year.
December 1991
- -------------
PLM International, Inc.: $100
S&P 500: $100
Russell 2000: $100
December 1992
- -------------
PLM International, Inc.: $60
S&P 500: $108
Russell 2000: $119
December 1993
- -------------
PLM International, Inc.: $71
S&P 500: $118
Russell 2000: $141
December 1994
- -------------
PLM International, Inc.: $96
S&P 500: $120
Russell 2000: $139
December 1995
- -------------
PLM International, Inc.: $125
S&P 500: $165
Russell 2000: $178
December 1996
- -------------
PLM International, Inc.: $113
S&P 500: $203
Russell 2000: $207
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,
railcars, marine containers, mobile offshore drilling units and storage vaults.
In addition, the Company's wholly-owned subsidiary, American Finance Group,
Inc., leases numerous nontransportation equipment types on finance leases,
primarily domestically. No issuers are leasing similar portfolios of diversified
transportation equipment on operating leases and numerous other equipment types
on finance 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 (167,675
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 No. 1 (Proxy Item No. 2)
A stockholder has requested the Company present for approval the
following resolution ("Stockholder Proposal No. 1") at the Annual Meeting of
Stockholders:
"That the stockholders of the Company recommend that the Board of
Directors eliminate the Company's "poison pill" (Stockholder's Rights
Plan) by redeeming, pursuant to Section 24(a) of the Rights Agreement
dated as of March 13, 1989, between the Company and First Interstate
Bank of California, all the outstanding Rights to purchase shares of
the Company's Common Stock under the Rights Agreement, such redemption
to be effective 90 days after an offer (not subject to a financing
condition) has been made to acquire all the outstanding shares of the
Company."
Accompanying the above resolution, the following commentary was submitted:
This resolution enables the stockholders to express to the Board their
belief that the Company's poison pill should be eliminated. The Board
could use the poison pill to block any future offer to acquire the
Company. The poison pill is a major obstacle to the acquisition of the
Company and is generally inconsistent with the goal of maximizing
stockholder value. In recent years many public companies have decided
to redeem their poison pills, having determined that in today's changed
business environment they were unlikely to be exposed to the kinds of
abusive takeover tactics that poison pills were intended to address.
The resolution provides for the redemption of the Company's poison
pill, but delays the effectiveness of the redemption until 90 days
after an offer (not subject to a financing condition) has been made to
acquire all the Company's shares, so that if such an offer was made the
Board would have the opportunity to seek an alternative transaction at
a higher price.
The Company's poison pill provides that upon the occurrence of certain
events, including the acquisition by a person (other than the Company,
or any subsidiary, or any employee benefit plan of the Company or any
subsidiary) of 15% of the Company's Common Stock or the commencement of
or the announcement of the intention to commence (without the Company's
approval) a tender or exchange offer for 20% or more of the Company's
Common Stock, the Company will distribute Rights to its stockholders.
These Rights, in certain circumstances, would entitle stockholders of
the Company other than such person to purchase shares of the Company's
stock (or in certain circumstances, other securities, cash or
properties) having a fair market value equal to twice the exercise
price of the Rights or, if the Company were acquired, to purchase
shares of the acquiror's stock having a market value equal to twice the
exercise price of the Rights. Because of these provisions, it would not
be economically feasible for a potential acquiror of the Company to
purchase more than the threshold amount of the Company's shares unless
the Board facilitated such acquisition by redeeming the poison pill.
Currently, the Board may redeem the poison pill prior to the fifteenth
business day following an announcement that such a person has exceeded
or intends to commence a tender or exchange offer that will exceed the
threshold level of share ownership.
The proponent of Stockholder Proposal No. 1 is Gary D. Engle; 10 Stony
Point West, Westport, Connecticut 06880. Mr. Engle did not provide a telephone
number with his proposal, but the Company believes he may be contacted at
617/854-5800. Mr. Engle is the beneficial owner of 133,400 shares of Common
Stock.
COMPANY RESPONSE
In March 1989, the Board of Directors unanimously adopted a Rights
Agreement ("Rights Plan") and declared a dividend distribution of one Right
(collectively, "Rights") on each outstanding share of the Company's Common
Stock. A stockholder rights plan is commonly referred to as a "poison pill." The
Company's Rights Plan is designed to protect and maximize the value of your
investment in the Company. Under Delaware law, the Board of Directors has a
fiduciary responsibility to act in the best interests of the stockholders and
accordingly has a duty to oppose unfair takeover offers. The Delaware Supreme
Court has held that adoption of a rights plan is a valid exercise of a Board's
business judgment when the rights plan is adopted to help the Board better
fulfill its fiduciary duties. Federal and state courts interpreting Delaware law
have repeatedly validated the use of rights plans during actual takeover
contests as a useful and legitimate tool available to directors in fulfilling
their fiduciary duties. Over 1,400 publicly-held companies have adopted
stockholder rights plans.
The Rights Plan is intended to allow the Board of Directors adequate
time and flexibility to negotiate on behalf of the stockholders and enhance the
Board's ability to negotiate the highest possible bid from a potential acquiror,
develop alternatives which may better maximize stockholder values, preserve the
long-term value of the Company for the stockholders, and ensure that all
stockholders are treated fairly and equally. Its purpose is to protect
stockholders against abusive takeover practices, such as partial and two-tiered
tender offers and creeping stock accumulation programs, which do not treat all
stockholders fairly and equally. The Rights Plan is not intended to prevent a
takeover on terms that are fair and equitable to all stockholders, nor is it
designed as a deterrent to a stockholder's initiation of a proxy contest.
The Board of Directors may, pursuant to the terms of the Rights Plan,
redeem the Rights to permit an acquisition that it determines, in the exercise
of its fiduciary duties, adequately reflects the value of the Company and to be
in the best interests of all stockholders. Moreover, numerous companies with
existing rights plans have received unsolicited offers and have redeemed their
rights after their directors were satisfied that the offer, as negotiated by the
target company's board of directors, adequately reflected the underlying value
of the company and was fair and equitable to all stockholders. Thus, experience
indicates that rights plans do not prevent companies from being acquired at
prices that are fair and adequate to stockholders.
A particular problem with Stockholder Proposal No. 1 is that it
requires redemption of the Rights Plan 90 days after any cash offer is made to
acquire all of the outstanding shares of the Company, including offers which the
Board of Directors have determined to be inadequate and unfair to stockholders.
The Board of Directors believes that it would be against the stockholders' best
interest to establish a date in advance on which the rights must be redeemed
because it would deter good faith negotiations between a potential acquiror and
the Board of Directors. Thus, in the event of an acquisition offer, Stockholder
Proposal No. 1 likely would not maximize stockholder value but instead would
reduce the ability of your Board of Directors to negotiate the highest possible
price for your interest in the Company.
Even though a bidder may offer a premium over the current market price
of the target company's stock, that premium does not necessarily recognize the
inherent value of the target company. The bidder, of course, can be expected to
act in its own self interest; in other words, to try to acquire the target
company as cheaply as possible and to pressure stockholders into selling. The
Rights Plan provides, in the opinion of the Board of Directors, valuable
stockholder protection against that happening.
The Board of Directors specifically examined its fiduciary
responsibilities under Delaware law when it adopted the original Rights Plan in
1989. It is important to note that the Company's Board of Directors is an
independent board, and that this preponderance of independent outside directors
has consistently been the case since origination of the Company in 1989, thus
providing further assurance that the Rights Plan will not be used for
entrenchment purposes. The Board of Directors adopted the Rights Plan with the
aim of protecting the interests of all stockholders and maximizing the value of
the investments in the Company. Based on the Board's collective business
experience and knowledge of the Company, it believes that the adoption of the
Rights Plan was a valid exercise of its fiduciary obligations to all
stockholders, and is in accord with the its responsibility under Delaware law to
manage and direct the management of the Company's business and affairs. The
Board of Directors does not believe that the Rights Plan will deter an
acquisition offer that adequately reflects the underlying value of the Company
and that is fair to all stockholders, nor will it deter the initiation of a
proxy contest.
Directors Recommend a Vote AGAINST Stockholder Proposal No. 1 (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 represented and entitled to vote
at the Annual Meeting will be required for approval of Stockholder Proposal No.
1.
STOCKHOLDER PROPOSAL NO. 2 (Proxy Item No. 3)
A stockholder has requested the Company present for approval the
following resolution (Stockholder Proposal No. 2) at the Annual Meeting of
Stockholders:
"That the stockholders of the Company recommend that the Board of
Directors approve, and submit to a vote of the stockholders for
approval, an amendment repealing Article Eleventh of the Company's
Certificate of Incorporation, as amended."
Accompanying the above resolution, the following commentary was submitted:
The Board could use Article Eleventh to block any future offer to
acquire the Company. This resolution enables the stockholders to
express to the Board their belief that Article Eleventh should be
repealed. It may be an obstacle to the acquisition of the Company and
is generally inconsistent with the goal of maximizing stockholder
value.
Article Eleventh requires, in effect, that the holders of at least 80%
of the Company's shares approve mergers and certain other transactions
involving an Interested Stockholder (as defined below) or any of its
affiliates or associates unless the transaction is approved by a
majority of the members of the Board who are not affiliates or
associates or representatives of the Interested Stockholder and who
were directors prior to the time the Interested Stockholder became an
Interested Stockholder (the "Continuing Directors"). For purposes of
Article Eleventh, an "Interested Stockholder" is defined, in effect, as
any person (other than the Company, or any subsidiary, or any
profit-sharing, employee stock ownership or other employee benefit plan
of the Company or any subsidiary) who is (a) the beneficial owner of
more than 10% of the Company's shares or (b) is an affiliate or
associate of the Company and at any time within the prior two-year
period was the beneficial owner of more than 10% of the Company's
shares. Article Eleventh may be repealed by an amendment to the
Certificate of Incorporation approved by a vote of 80% of the
outstanding shares (excluding shares owned by an Interested Stockholder
if such amendment was proposed by or on behalf of such Interested
Stockholder).
The proponent of Stockholder Proposal No. 2 is Geoffrey A. MacDonald;
100 Southeast 5th Avenue, Unit 411, Boca Raton, Florida 33432. Mr. MacDonald did
not provide a telephone number with his proposal, but the Company believes Mr.
MacDonald may be contacted at 617/854-5800. Mr. MacDonald is the beneficial
owner of 3,000 shares of Common Stock.
COMPANY RESPONSE
The Board of Directors believes that Article Eleventh of the
Certificate of Incorporation helps assure that all holders of the Company's
Common Stock will be treated similarly in mergers and other business
combinations involving an Interested Stockholder. In particular, Article
Eleventh is designed to discourage an acquiror from utilizing two-tiered or
other similar abusive takeover tactics. Article Eleventh does not impede a
takeover in which each stockholder receives substantially the same price for his
shares as the other stockholders, nor does it impede a business combination
which a majority of the Continuing Directors has approved. Article Eleventh also
does not prevent a tender offer for less than all of the shares of the Common
Stock if no subsequent business combination is proposed. Except for the
restrictions on business combinations, Article Eleventh will not prevent a
holder of a controlling interest of the Common Stock from exercising control
over the Company or increasing its interest in the Company. Moreover, the holder
of a controlling interest could increase its ownership to 80 percent and avoid
application of Article Eleventh.
Two-tier takeover attempts tend to pressure stockholders into selling
as many of their shares as possible without having the opportunity to make a
considered investment choice between remaining a stockholder of the Company or
disposing of their shares. It is also generally the case in a two-tier
transaction that arbitrageurs and other professional investors, because of their
greater knowledge, sophistication and expertise in the takeover area, can take
advantage of the more lucrative first-stage transaction (typically a cash tender
offer) while many long-term stockholders must accept the price and form of
consideration paid in the second-stage transaction (typically a squeeze-out
merger). Because Article Eleventh does not stop an acquiror willing to pay
substantially the same consideration to all Company stockholders, and for many
of the reasons stated in the Company's response to Stockholder Proposal No. 1,
the adoption of Stockholder Proposal No. 2, in the Board's view, does not
maximize stockholder value but instead invites coercive and abusive takeover
practices.
Directors Recommend a Vote AGAINST Stockholder Proposal No. 2 (Proxy Item
No. 3).
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 represented and entitled to vote
at the Annual Meeting will be required for approval of Stockholder Proposal No.
2.
STOCKHOLDER PROPOSAL NO. 3 (Proxy Item No. 4)
A Stockholder has requested the Company present for approval the
following resolution (Stockholder Proposal No. 3) at the Annual Meeting of
Stockholders:
"That the stockholders of the Company recommend that the Board of
Directors approve, and submit to a vote of the stockholders for
approval, an amendment, pursuant to Section 203(b)(3) of the Delaware
General Corporation Law, that adds a new Article Fifteenth to the
Company's Certificate of Incorporation, as amended, which shall read as
follows:
FIFTEENTH: The Corporation shall not be governed by Section 203 of the
Delaware General Corporation Law."
The following commentary was submitted in relation to the above proposal:
The Board could use Section 203 to block any future offer to acquire
the Company. This resolution enables the stockholders to eliminate a
major obstacle to the acquisition of the Company that is generally
inconsistent with the goal of maximizing stockholder value.
Section 203 of the Delaware General Corporation Law provides, in
effect, that if any person acquires beneficial ownership of 15% or more
of the Company's outstanding shares (thereby becoming an "Interested
Stockholder"), the Interested Stockholder may not engage in a business
combination with the Company for three years thereafter, subject to
certain exceptions. Among the exceptions are the Board's prior approval
of such acquisition; the acquisition of at least 85% of the Company's
shares (subject to certain exclusions) in the transaction in which such
person becomes an Interested Stockholder; and the approval of such
business combination by 66 2/3% of the outstanding stock not owned by
the Interested Stockholder. The Company's stockholders may, by a vote
of a majority of the outstanding shares, adopt an amendment to the
Certificate of Incorporation electing not be governed by Section 203.
Such amendment would become effective twelve months after adoption and
would not be subject to amendment by the Board and would not apply to a
business combination with a person who became an Interested Stockholder
prior to the adoption of such amendment.
The proponent of Stockholder Proposal No. 3 is Douglas Smuckler; 2630
Gough Street, #305, San Francisco, California 94123. Mr. Smuckler did not
provide a telephone number with his proposal, but the Company believes that Mr.
Smuckler may be contacted at 415/765-5473. Mr. Smuckler is the beneficial owner
of 786 shares of Common Stock.
COMPANY RESPONSE
By virtue of being incorporated in Delaware, the Company is subject to
the provisions of Section 203 of the Delaware General Corporation Law. In the
absence of a charter provision or stockholder-approved bylaw to the contrary,
Section 203 prohibits the Company from engaging in a business combination, such
as a merger or a consolidation, with any person who acquires 15 percent or more
of the Common Stock (an "interested stockholder") for three years, unless the
Company's Board of Directors approves the proposed business combination before
the interested stockholder reaches the 15 percent threshold. However, this
three-year ban will not apply if the interested stockholder acquires 85 percent
of the stock in the same transaction in which that stockholder acquires 15
percent of the stock (excluding shares owned by officers and directors and
certain employee stock plans). Nor will the ban apply if the business
combination is approved by the Board of Directors and holders of at least
two-thirds of stock not owned by the interested stockholder. Section 203 permits
stockholders to "opt out" of its provisions by voting to amend the Company's
Bylaws to provide that the Company elects not to be governed by Section 203.
Section 203 is intended to protect stockholders by curbing abusive
two-tier offers, highly leveraged financing of offers, and self-dealing
transactions. The General Assembly of Delaware adopted Section 203 after an
extensive period of study and comment by representatives of stockholders, public
corporations, employees, committees, and other constituencies. The General
Assembly declared, in the official synopsis, that Section 203 is designed "to
strike a balance between the benefits of an unfettered market for corporate
shares and the well-documented and judicially-recognized need to limit abusive
takeover tactics" and "to encourage a full and fair offer to stockholders."
The Board of Directors has received a written opinion of counsel that
this attempt to amend the Certificate of Incorporation without advance Board
approval is invalid under Delaware law. Thus, even if Stockholder Proposal No. 3
is approved by the stockholders, it likely could not be implemented because it
is of questionable validity. Further, the Board of Directors disagrees with the
assertion in the commentary to Stockholder Proposal No. 3 that Section 203 is
generally inconsistent with maximizing stockholder value. To the contrary, the
Board of Directors believes that Section 203 discourages inadequate offers and
provides for the fair treatment of all stockholders. For instance, Section 203
encourages an interested stockholder to make an all-cash tender offer for all
shares at a price that is attractive enough to obtain the general support of
holders of 85 percent of the stock. Further, Section 203 strengthens the Board
of Director's ability to discharge its fiduciary duty by providing additional
means of protecting stockholders against coercive takeover tactics. Thus, the
Board of Directors believes that "opting out" of Section 203 could expose
stockholders to coercive takeover tactics and would not be in the best interest
of the stockholders of the Company.
Directors Recommend a Vote AGAINST Stockholder Proposal No. 3 (Proxy Item
No. 4).
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 represented and entitled to vote
at the Annual Meeting will be required for approval of Stockholder Proposal No.
3.
STOCKHOLDER PROPOSAL NO. 4 (Proxy Item No. 5)
A stockholder has requested the Company present for approval the
following resolution (Stockholder Proposal No. 4) at the Annual Meeting of
Stockholders:
"That the stockholders hereby amend the Company's By-Laws by adding a
new Section 11 to Article II which shall read as follows:
Section 11. Stockholder Meeting in Event of Certain Cash Tender Offers.
If a cash tender offer (not subject to a financing condition) is made
to acquire all the Company's Common Stock at a price at least 25%
greater than the average closing price of such shares during the 30
days prior to the date on which such offer is made, and the Board of
Directors opposes such offer (including without limitation declining to
redeem the outstanding Rights pursuant to Section 24(a) of the Rights
Agreement dated as of March 13, 1989, between the Company and First
Interstate Bank of California, the Board of Directors shall terminate
all defensive measures against such offer at the end of the 90th day
after such offer is made unless the Board's policy of opposition is
approved by a majority of the votes cast for or against such policy of
opposition at a meeting of stockholders held on or before such 90th day
at which a quorum is present. Prior to the end of such 90-day period,
the Board of Directors shall take such reasonable actions (including
without limitation delaying the Distribution Date of the Rights under
the Rights Agreement) as are necessary to preserve the stockholders'
ability to accept such offer."
The following commentary was submitted in relation to the above proposal:
This resolution would assure that if the Board decided to oppose a cash
tender offer (not subject to a financing condition) at a premium of at
least 25% above the market price of the Company's Common Stock during
the preceding month, the Board would be obligated to call a
stockholders' meeting to vote on the Board's opposition to such offer;
and the Board would be required to abandon its opposition unless its
opposition was approved by stockholders within 60 days after the offer
was made. If a substantial offer is made to acquire a company's shares,
the stockholders, not the Board of Directors, should have the ultimate
decision on whether to accept the offer. The provision for a
stockholder vote assures that the By-Law cannot be used to facilitate
coercive offers, and the total period of up to 90 days in which the
Board can continue defensive actions regardless of the stockholder vote
allows management the opportunity to seek superior alternatives to such
offer or to persuade stockholders that the Company should preserve its
independence.
The proponent of Stockholder Proposal No. 4 is James A. Coyne; 10
Waldron Court, Marblehead, Massachusetts 01945. Mr. Coyne did not provide a
telephone number with his proposal, but the Company believes Mr. Coyne may be
contacted at 617/854-5800. Mr. Coyne is the beneficial owner of 1,000 shares of
Common Stock.
COMPANY RESPONSE
The Company has received a written opinion of its Delaware legal
counsel that this proposal is invalid as a matter of Delaware law. Stockholder
Proposal No. 4 is invalid for two principal reasons. First, this Bylaw proposal
requiring the Board of Directors to call a special stockholder meeting within
the described time periods is fundamentally inconsistent with the Company's
Certificate of Incorporation. The Certificate provides that special stockholder
meetings may be called only by the Board of Directors or the President of the
Company and not by any other person(s). Thus, Stockholder Proposal No. 4 seeks
to make mandatory what is now left to the Chairman's or a President's
discretion. Under Delaware law, a bylaw provision may not be inconsistent with a
company's certificate of incorporation. Moreover, under the Company's
Certificate, any provision inconsistent with the special stockholder meetings
provisions of the Certificate requires an amendment to the Company charter
passed by at least 80 percent of the outstanding shares.
Second, Delaware counsel has opined Stockholder Proposal No. 4 may not
be adopted as a Bylaw amendment. Under Delaware law, except as provided in a
company's certificate of incorporation, a company's business and affairs must be
managed by or under the discretion of the Board of Directors. The Board of
Directors has the affirmative legal duty under Delaware law to respond to and
resist takeover attempts that it determines in good faith to be against the best
interests of the Company and the stockholders. The proponent's scheme would, by
a Bylaw amendment, attempt to remove this legal obligation from the Board of
Directors. Such a delegation of statutory and fiduciary responsibility may not
be effected through a Bylaw amendment under Delaware law.
Because Stockholder Proposal No. 4 is invalid, the Board of Directors
urges you to vote against this resolution. In the event that this proposal is
adopted, the Bylaw amendment will not be given any effect by the Company.
Directors Recommend a Vote AGAINST Stockholder Proposal No. 4 (Proxy Item
No. 5).
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 80 percent of shares entitled to vote at the Annual
Meeting will be required for approval of Stockholder Proposal No. 4.
STOCKHOLDER PROPOSAL NO. 5 (Proxy Item No. 6)
A stockholder has requested the Company present for approval the
following resolution (Stockholder Proposal No. 5) at the Annual Meeting of
Stockholders:
"That the stockholders of the Company recommend that the Board of
Directors establish a committee (the "Committee") to actively seek to
maximize stockholder value by (a) exploring opportunities, and
considering proposals, for an acquisition of the Company on terms that
are in the best interests of the Company's stockholders or (b)
recommending an alternative transaction such as a structured share
repurchase program significantly larger than the Company's prior share
repurchase programs. The Committee shall consist of four independent
directors (at least one of which was elected in each of 1996 and 1997,
as long as the Board includes independent directors who were elected in
such years) selected by a majority vote of the entire Board of
Directors. An independent director means one who has not within five
years either (i) been an officer or an employee of the Company or any
of its affiliates or (ii) personally or as an officer, employee or
member of an entity provided goods or services to the Company as a
supplier, attorney investment or commercial banker or otherwise (except
for services rendered as a director) for which the Company paid
consideration in excess of $10,000 in any year. The Committee shall, at
the Company's expense, retain independent legal and financial advisors,
excluding the Company's existing attorneys and investment bankers. The
Committee shall maintain reasonable records of its activities and such
records shall be open to inspection by stockholders."
Accompanying the above resolution, the following commentary was submitted:
This resolution is proposed to allow stockholders to express their
belief that the Board should be committed to the goal of maximizing
stockholder value. It is also a means for stockholders to express their
view that those persons on the Board who are also employed by the
Company as executive officers and who potentially have the most to lose
in the event of an acquisition of the Company should not play the key
role in exploring the Company's acquisition opportunities or in
reviewing and negotiating any acquisition proposal for the Company.
Recognizing that an acquisition may not be the best means of maximizing
stockholder value at a particular point in time, the resolution also
authorizes the Committee to recommend an alternative transaction such
as a structured share repurchase program significantly larger than the
Company's prior share repurchase program, which authorized the
repurchase of up to $5 million of the Company's Common Stock. Although
the ultimate decision with respect to recommending a proposal to the
stockholders, or taking other steps to maximize stockholder value,
remains with the Board, the creation of the Committee will help assure
that the Board pursues the goal of maximizing stockholder value.
The proponent of Stockholder Proposal No. 5 is Timothy Perkins IRA
Rollover; 1020 West Upsal Street, Philadelphia, Pennsylvania 19119. Timothy
Perkins IRA Rollover did not provide a telephone number with his proposal. The
Timothy Perkins IRA is the beneficial owner of 1,000 shares of Common Stock.
COMPANY RESPONSE
The Board of Directors regards this proposal to be unnecessary,
wasteful and disruptive to the Company. The Board consists of six members, one
of whom is also the Chief Executive Officer. Another director is a Senior Vice
President. Accordingly, four of the six directors are not and have not been
officers or employees of the Company. Indeed, these four directors satisfy
proponent's own definition of "independent director."
Stockholder Proposal No. 5 recommends that the Company establish
another independent Board committee, but one with its own set of new financial
and legal advisors. Moreover, the activities of this committee must apparently
be public at all times. In the view of the Board of Directors, the proponent's
recommendation, if adopted by the Board of Directors, would create an expensive
and unwieldy addition to the Board's process that is not likely to "maximize"
stockholder value but instead become an expensive and unnecessary distraction
and undermine the Company's competitive advantages.
Further, on March 3, 1997, the Board of Directors announced the
authorization for the Company to repurchase up to $5.0 million of the Company's
Common Stock. This repurchase program is the third repurchase program announced
by the Company in as many years. Since February 1995, the Company has bought
back a total of 2.5 million shares, reducing the total number of shares from
11.7 to 9.2 million shares. Since 1993 the Company has repurchased 3.4 million
shares of Common Stock pursuant to repurchase programs. The current stock
repurchase program underscores the continuing commitment of the Board of
Directors to build value for the stockholders.
Directors Recommend a Vote AGAINST Stockholder Proposal No. 5 (Proxy Item
No. 6).
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 a majority of shares represented and voting at the
Annual Meeting will be required for approval of Stockholder Proposal No. 5.
INDEPENDENT AUDITORS
Representatives of KPMG Peat Marwick LLP, 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.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals from stockholders for the 1998 Annual Meeting must be
received by the Company no later than January 2, 1998, to be included in the
Company's Proxy Statement and form of proxy relating to the 1998 Annual Meeting.
Such proposals should be directed to the attention of the Secretary, PLM
International, Inc., One Market, Steuart Street Tower, Suite 800, 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. A stockholder of the Company has
given the Company written notice of his intent to nominate two candidates for
election as directors. The nominees are: Hans Peter Jebsen and Malcolm G.
Witter. In addition, the Company has been informed that a stockholder committee
has been formed for the purpose, among other things, of soliciting proxies for
the election of their two candidates as directors and in favor of the
Stockholder Proposals. The Company has also received notice from the chairman of
the stockholders committee that an affiliate of his is prepared to acquire all
the outstanding shares of the Company in a cash-out merger for $5.00 per share.
The Board of Directors knows of no other items that are likely to be
brought before the Annual Meeting except those that are set forth in the
foregoing Notice of Annual Meeting of Stockholders. If any other matters
properly come before the Annual Meeting, the persons designated on the enclosed
proxy card will vote in accordance with their judgment on such matters.
By Order of the Board of Directors
STEPHEN PEARY
Senior Vice President, Secretary and General Counsel
San Francisco, California
May 2, 1997
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 800, San Francisco, California 94105.
<PAGE>
SCHEDULE I
INFORMATION CONCERNING THE DIRECTORS, DIRECTOR NOMINEES,
EXECUTIVE OFFICERS AND CERTAIN EMPLOYEES OF THE COMPANY
The following table sets forth the name and the present principal
occupation or employment (except with respect to the directors, whose principal
occupation is set forth in the Proxy Statement), and the name, principal
business and address of any corporation or other organization in which such
employment is carried on, of (1) the directors, director nominees and executive
officers of the Company and (2) certain employees of the Company who may assist
in soliciting proxies from stockholders of the Company. Unless otherwise
indicated below, the principal business address of each such person is One
Market, Steuart Street Tower, Suite 800, San Francisco, CA 94105-1301, and such
person is an employee of the Company. Directors are indicated by a (1) footnote
reference.
<TABLE>
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS OF THE COMPANY
<CAPTION>
PRESENT OFFICE OR OTHER
NAME AND PRINCIPAL PRINCIPAL OCCUPATION
BUSINESS ADDRESS OR EMPLOYMENT
<S> <C>
J. Alec Merriam (1)
Robert L. Pagel (1)
Harold R. Somerset (1)
19 Donald Drive
Orinda, CA 94563
Robert N. Tidball (1)
Douglas P. Goodrich (1)
Walter E. Hoadley (1)
555 California Street, 11th Floor
San Francisco, CA 94104
Robert L. Witt (nominee)
684 Fox Run
Orinda, CA 94563
J. Michael Allgood (2)
Stephen Peary (2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CERTAIN EMPLOYEES OF THE COMPANY WHO ALSO MAY SOLICIT
<S> <C>
Deborah Alexander (3)
Lorraine Arriaga (3)
Stephen M. Bess (3)
Lesley Brush (3)
James Chandler (3)
Elaine Corey (3)
David J. Davis (3)
Steven O. Layne (3)
Ryan Rickert (3)
Janet Turner (3)
Joseph Williams (3)
Aaron Wong (3)
</TABLE>
(1) Messrs. Merriam, Pagel, Somerset, Tidball, Goodrich and Hoadley are
currently directors of the Company. A complete description of each directors'
principal occupation or employment and the principal business of any corporation
or other organization in which such employment is carried on is contained in the
Proxy Statement.
(2) Messrs. Allgood and Peary are executive officers of the Company,
whose business address is set forth above.
(3) Employees of the Company, whose business address is set forth
above.
<PAGE>
SCHEDULE II
SHARES HELD BY DIRECTORS, DIRECTOR NOMINEES, EXECUTIVE OFFICERS
AND CERTAIN EMPLOYEES OF THE COMPANY AND
CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND THE COMPANY
The shares of common stock held by directors, director nominees and
Messers. Allgood and Peary are set forth in the Proxy Statement. The following
employees of the Company own the following shares as of April 25, 1997:
<TABLE>
<CAPTION>
NAME OF SHARES OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED
<S> <C>
Stephen M. Bess 40,658
David J. Davis 6,935
</TABLE>
PURCHASES AND SALES OF SECURITIES
The following table sets forth information concerning all purchases and
sales of securities of the Company by directors, officers, and certain employees
since January 1, 1995:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
DIRECTORS AND DIRECTOR DATE OF NATURE OF COMMON STOCK
NOMINEES: TRANSACTION TRANSACTION
<S> <C> <C> <C>
J. Alec Merriman 2/1/95 Stock Options 10,000
2/6/95 Purchase Common Stock 5,196
3/22/95 Purchase Common Stock 10,000
6/20/95 Purchase Common Stock 10,000
2/1/96 Stock Options 10,000
6/20/96 Purchase Common Stock 3,000
2/1/97 Stock Options 10,000
Robert L. Pagel 2/1/95 Stock Options 10,000
5/18/95 Purchase Common Stock 20,000
2/1/96 Stock Options 10,000
2/1/97 Stock Options 10,000
Harold R. Somerset 2/1/95 Stock Options 10,000
2/8/95 Purchase Common Stock 3,000
4/5/96 Purchase Common Stock 3,000
2/1/96 StockOptions 10,000
2/1/97 Stock Options 10,000
Robert N. Tidball 1/18/95 ESOP Distribution 73,438
2/6/95 Purchase Comon Stock 1,000
5/24/95 Purchase Common Stock 1,000
8/21/96 Stock Options 20,000
1/9/97 Common Stock (Stock Bonus Plan) 20,001
Walter E. Hoadley 2/1/95 Stock Options 10,000
2/1/96 Stock Options 10,000
2/1/97 Stock Options 10,000
Douglas P. Goodrich 1/18/95 ESOP Distribution 42,823
8/21/96 Stock Options 45,000
Robert L. Witt 4/3/97 Purchase Common Stock 5,000
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
DATE OF NATURE OF COMMON STOCK
OFFICERS: TRANSACTION TRANSACTION
<S> <C> <C> <C>
J. Michael Allgood 1/18/95 ESOP Distribution 5,818
2/14/95 Purchae Common Stock 613
1/29/96 Purchase Common Stock 212
8/21/96 Stock Options 30,000
1/9/97 Common Stock (Stock Bonus Plan)
Purchase Common Stock 7,778
3/13/97 Purchase Common Stock 1,000
4/21/97 1,200
Stephen Peary 1/18/95 ESOP Distribution 45,596
4/2/96 Purchase Common Stock 2,630
8/21/96 Stock Options 20,000
1/9/97 Common Stock (Stock Bonus Plan)
21,116
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
CERTAIN DATE OF NATURE OF COMMON STOCK
EMPLOYEES: TRANSACTION TRANSACTION
<S> <C> <C> <C>
Stephen M. Bess 1/18/95 ESOP Distribution 46,796
David J. Davis 1/18/95 ESOP Distributions 268
8/21/96 Stock Options 10,000
1/9/97 Common Stock (Stock Bonus Plan)
6,667
Steven O. Layne 1/18/95 ESOP Distribution 18,499
3/21/97 Sold Common Stock 5,000
3/13/97 Sold Common Stock 5,000
3/14/97 Sold Common Stock 8,499
Janet Turner 8/21/96 Stock Options 5,000
3/12/97 Sold Common Stock 5,000
</TABLE>
<PAGE>
\LOGO
PROXY PLM INTERNATIONAL, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS -- JUNE 10, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints J. Alec Merriam and
Robert L. Pagel, and each of them, true and lawful agents and proxies of the
undersigned, with full power of substitution, to represent the undersigned and
to vote all shares of stock which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of PLM International, Inc. (the "Company") to be
held on June 10, 1997, and at any and all adjustments and postponements thereof,
on all matters before such meeting.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. However, if no vote is
specified, this Proxy will be voted FOR proxy item no. 1 and AGAINST proxy item
nos. 2, 3, 4, 5 and 6.
Please mark this Proxy Card, fill in the date, sign on the reverse side
and return promptly in the enclosed envelope. No postage is necessary if mailed
in the United States.
This proxy grants discretionary authority (1) to vote for a substitute
nominee of the Board of Directors if any nominee for director listed on the
reverse side is unable to serve, or for good cause will not serve as a director
(unless authority to vote for all nominees or for the particular nominee who has
ceased to be to a candidate is withheld), and (2) to vote in accordance with the
best judgment of the named proxies on other matters that may come before the
meeting..
/X/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
The Board of Directors recommends a vote FOR proxy item no. 1.
WITHHOLD
FOR FOR ALL
1. ELECTION OF DIRECTORS: / / / /
NOMINEES:
Robert N. Tidball,
Robert L. Witt
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
<PAGE>
The Board of Directors recommends a vote AGAINST the proxy items below:
FOR AGAINST ABSTAIN
2. Rights Elimination Proposal / / / / / /
3. Article Eleventh Proposal / / / / / /
4. Business Combination Proposal / / / / / /
5. Tender Offer Vote Proposal / / / / / /
6. Special Committee Proposal / / / / / /
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Signature(s) Dated ________________, 1997
Please sign this proxy exactly as your name appears hereon. Joint owners should
each sign personally. Trustees and other fiduciaries should indicate the
capacity in which they sign, and where more than one name appears, a majority
should sign. If a corporation, the signature should be that of an authorized
person who should state his or her title.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED "FOR" ITEM NO. 1 AND "AGAINST" PROXY ITEM NOS. 2, 3, 4, 5 AND 6.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROXY ITEM NO. 1 AND "AGAINST"
PROXY ITEM NOS. 2, 3, 4, 5, AND 6.
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 1933, as amended, or the Securities Exchange Act of
1934, as amended.
