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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
PLM INTERNATIONAL, INC.
(NAME OF SUBJECT COMPANY)
PLM INTERNATIONAL, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
69341L205
(CUSIP NUMBER OF CLASS OF SECURITIES)
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SUSAN C. SANTO
VICE PRESIDENT, SECRETARY, AND GENERAL COUNSEL
ONE MARKET
STEUART STREET TOWER, SUITE 800
SAN FRANCISCO, CALIFORNIA 94105
(415) 974-1399
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH A COPY TO:
Joseph S. Radovsky, Esq.
Adam P. Siegman, Esq.
Greene Radovsky Maloney & Share LLP
Four Embarcadero Center, Suite 4000
San Francisco, California 94111
(415) 981-1400
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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INTRODUCTION
This Solicitation/Recommendation Statement on Schedule 14D-9 (this
"Schedule 14D-9") relates to an offer by MILPI Acquisition Corp. ("MILPI"), a
Delaware corporation, to purchase all of the outstanding shares of common stock
of PLM International, Inc., a Delaware corporation ("PLM" or the "Company").
ITEM 1. SUBJECT COMPANY INFORMATION.
(a) NAME AND ADDRESS. The name of the subject company is PLM
International, Inc. The principal executive offices of the subject company are
located at One Market, Steuart Street Tower, Suite 800, San Francisco,
California 94105, and its telephone number is (415) 974-1399.
(b) SECURITIES. This Schedule 14D-9 relates to PLM's common stock, par
value $.01 per share (the "Common Stock" or "Shares"). As of the close of
business on December 28, 2000, there were 7,554,510 shares of Common Stock
issued and outstanding and options outstanding to purchase an aggregate of
495,000 Shares, under PLM's Directors' 1995 Nonqualified Stock Option Plan, 1998
Management Stock Compensation Plan and Directors' 2000 Nonqualified Stock Option
Plan.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) NAME AND ADDRESS. The name, business address and business telephone
number of PLM, which is the person filing this statement, are set forth in Item
1(a) above.
(b) TENDER OFFER. This Schedule 14D-9 relates to the tender offer made by
MILPI disclosed in a Tender Offer Statement on Schedule TO dated December 29,
2000 (as amended or supplemented from time to time, the "Schedule TO"), to
purchase all outstanding Shares at a price (the "Offer Price") of $3.46 per
share to the seller in cash and without interest, upon the terms and subject to
the conditions set forth in the Offer to Purchase dated December 29, 2000 (as
amended or supplemented from time to time, the "Offer to Purchase"), and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), filed as Exhibits 1
and 2 hereto, respectively, and incorporated herein by reference.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of December 22, 2000, entered into by and between MILPI and PLM (the "Merger
Agreement"). The Merger Agreement provides, among other things, that the closing
of the Merger (the "Closing") will take place as promptly as practicable (and in
any event within two business days) after satisfaction or waiver of the
conditions set forth in the Merger Agreement, including MILPI's purchase of
Shares pursuant to the Offer. At the Closing, MILPI will be merged with and into
PLM (the "Merger"), and each Share then outstanding will be converted into the
right to receive from MILPI cash in the amount of $3.46 (the "Merger
Consideration"). PLM will continue as the surviving corporation in the Merger
under the laws of the State of Delaware, under the name "PLM
International, Inc."
As set forth in the Schedule TO, the principal executive offices of MILPI
are located at 200 Nyala Farms, Westport CT 06880. All information in this
Schedule 14D-9 or incorporated by reference herein concerning MILPI or its
affiliates or actions or events in respect of any of them, was provided by
MILPI, and PLM assumes no responsibility therefor.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Certain agreements, arrangements or understandings between PLM or its
affiliates with certain of its directors and executive officers are, except as
noted below, described in the Information Statement (the "Information
Statement") pursuant to Rule 14f-1 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") that is attached as Annex A hereto and is
incorporated herein by reference. Except as described or referred to herein and
in Annex A, to the knowledge of PLM, as of the date hereof, there are no
material agreements, arrangements or understandings, or any actual or potential
conflicts of interest, between PLM or its affiliates and (i) PLM, its executive
officers, directors or affiliates; or (ii) MILPI or its officers, directors or
affiliates.
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In considering the recommendation of PLM's Board of Directors (the "Board")
set forth in Item 4 below, PLM stockholders should be aware that certain members
of PLM's management and certain members of the Board have interests in the Offer
and the Merger, which are described herein and in the Information Statement and
which may present them with certain conflicts of interest. The Board is aware of
these potential conflicts and considered them along with the other factors
described in Item 4 below.
ARRANGEMENTS WITH BUYER AND ITS AFFILIATES
THE MERGER AGREEMENT.
The following is a summary of certain provisions of the Merger Agreement,
which summary is qualified in its entirety by reference to the complete text of
the Merger Agreement, a copy of which is filed as Exhibit 3 hereto and is
incorporated herein by reference.
THE OFFER. The Merger Agreement provides that MILPI shall be required to
commence the Offer on or before the third business day following receipt from
PLM of certain information and documents necessary to commence the Offer,
including, but not limited to, stockholder mailing information. The obligation
of MILPI to accept for payment Shares tendered pursuant to the Offer is subject
to the condition that at least 50.1% of the then outstanding Shares have been
validly tendered and not withdrawn prior to the expiration of the Offer (the
"Minimum Condition") and certain other conditions that are described below;
provided, however, that MILPI expressly reserves the right to waive any of the
conditions to the Offer (other than the Minimum Condition) and to make any
change in the terms or conditions of the Offer (other than the Minimum
Condition), in its sole discretion, except as specifically provided in the
Merger Agreement. Nonetheless, MILPI may waive the Minimum Condition so long as
(x) it has irrevocably waived all other conditions to the Offer (and may, as a
legal matter, irrevocably waive such conditions and otherwise purchase Shares
pursuant to the Offer), (y) it has irrevocably exercised or irrevocably
committed to exercise the option (the "Related Option") granted it pursuant to
the "Voting Agreement" (defined and discussed in the section of this Item 3
entitled "Voting and Tender Agreement"), and (z) the Shares acquired pursuant to
the Offer and through such Related Option exercise would satisfy the Minimum
Condition. Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") and subject to the terms and conditions of the
Merger Agreement, MILPI expressly reserves the right to increase the price per
Share payable in the Offer and to make any other changes in the terms and
conditions of the Offer; provided, however, that MILPI may not, without the
prior written consent of PLM, (i) decrease the price per Share payable in the
Offer, (ii) decrease the percentage of Shares sought in the Offer, (iii) change
the form of consideration payable in the Offer, (iv) impose conditions to the
Offer in addition to the Minimum Condition and those described in the Merger
Agreement, (v) except as otherwise provided or required by any rule, regulation,
interpretation or position of the SEC applicable to the Offer, change the
expiration date of the Offer, (vi) otherwise amend or change any material term
or condition of the Offer in a manner adverse to the holders of Shares.
Without the consent of PLM, MILPI shall have the right to extend the Offer
beyond February 6, 2001 (the "Initial Expiration Date") in any of the following
events: (i) from time to time, but in no event later than the date which is
60 days from the Initial Expiration Date, if, at the Initial Expiration Date (or
the extended expiration date of the Offer, if applicable), any of the conditions
to the Offer (other than the Minimum Condition to which this clause does not
apply) shall not have been satisfied or waived, until such conditions are
satisfied or waived; (ii) for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or any period required by applicable law; (iii) if all conditions to the
Offer other than the Minimum Condition are satisfied or waived, for one or more
periods not to exceed 10 business days each (but no more than an aggregate of 30
business days for all such extensions); or (iv) if all of the conditions to the
Offer are satisfied or waived but the number of Shares validly tendered and not
withdrawn is less than 90% of the then outstanding Shares, for an aggregate
period not to exceed 20 business days (for all such extensions), provided that
MILPI shall accept and promptly pay for all Shares tendered prior to the date of
such extension (the "Offer Conditions
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Satisfaction Date"), and shall waive any condition to the consummation of the
Merger (other than the "HSR Condition" as defined and described below) that may
fail to be satisfied during such extension. In addition, MILPI shall, if
requested by PLM, from time to time extend the Offer, if at the Initial
Expiration Date (or any extended expiration date of the Offer, including
pursuant to this sentence, if applicable), any of the following have not been
satisfied: (i) the Minimum Condition, (ii) the HSR Condition, (iii) the
conditions set forth in clause (a), clause (b), clause (g) or clause (h) of the
section below entitled "Certain Conditions of the Offer", and/or (iv) provided
that such conditions can be satisfied by PLM on or before the 40th business day
following the Initial Expiration Date, and provided that PLM immediately ceases,
and does not subsequently enter into, any discussions or negotiations with any
person concerning an "Acquisition Proposal" (as defined and described below),
the conditions set forth in clause (c)(ii), clause (d), clause (e) or
clause (j) of the section below entitled "Certain Conditions of the Offer" for
one or more periods not to exceed ten business days each (but for no longer than
an aggregate of 40 Business Days after the Initial Expiration Date). Upon the
prior satisfaction or waiver of all the conditions to the Offer and subject to
the terms and conditions of the Merger Agreement, MILPI shall accept for
payment, purchase and pay for, in accordance with the terms of the Offer, all
Shares validly tendered and not withdrawn pursuant to the Offer as soon as
reasonably practicable after the Offer Conditions Satisfaction Date and then,
solely to the extent purchasable and payable pursuant to the terms of the Merger
Agreement but not previously purchased or paid for, again after the expiration
of the Offer. Under no circumstances will interest be paid on the purchase price
for tendered Shares, whether or not the Offer is extended.
CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer, MILPI shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to the obligation of MILPI to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), to pay
for any Shares tendered, and (subject to any such rules or regulations) may
delay the acceptance for payment of, or the payment for, any Shares tendered and
(except as provided in the Merger Agreement) may amend or terminate the Offer as
to any Shares not then paid for if (i) there are not validly tendered (and not
withdrawn) prior to the expiration date of the Offer that number of Shares that,
when added to any such shares owned by MILPI or any of its affiliates, will at
least satisfy the Minimum Condition, (ii) any applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") or any other applicable laws with respect to mergers or business
combinations shall not have expired or been terminated prior to the expiration
of the Offer (the "HSR Condition"), or (iii) at any time on or after
December 22, 2000 and before the expiration date of the Offer, any of the
following events shall have occurred and be continuing:
(a) There shall have been instituted or be pending any action, suit or
proceeding by or on behalf of any governmental entity (i) challenging or
seeking to make illegal, materially delay or otherwise, directly or
indirectly, restrain or prohibit the making of the Offer, the acceptance for
payment of any Shares by MILPI, or the consummation of the Merger, or
seeking to obtain material damages in connection with the Offer or the
Merger, (ii) seeking to prohibit or limit materially the ownership or
operation by PLM, MILPI or any of their respective subsidiaries of all or
any of the business or assets of PLM, MILPI or any of their respective
subsidiaries that is material to either MILPI and its subsidiaries or PLM
and its subsidiaries, in each case taken as a whole, or to compel PLM, MILPI
or any of their respective subsidiaries as a result of the Offer or the
Merger to dispose of or to hold separate all or any portion of the business
or assets of such person that is material to either MILPI and its
subsidiaries or PLM and its subsidiaries, in each case taken as a whole,
(iii) seeking to impose or confirm any limitation on the ability of MILPI to
exercise effectively full rights of ownership of any Shares, including the
right to vote any Shares acquired by MILPI pursuant to the Offer or
otherwise on all matters properly presented to PLM's stockholders, including
the approval and adoption of the Merger Agreement and the Merger,
(iv) seeking to require divestiture by MILPI of any Shares, or
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(v) that otherwise would have a "PLM Material Adverse Effect" or a "MILPI
Material Adverse Effect" (each defined below).
(b) There shall be in effect any injunction or other order, decree,
judgment or ruling by a governmental entity of competent jurisdiction, or a
law, rule or regulation shall have been promulgated or enacted by a
governmental entity, that, in any such case subject to MILPI's and PLM's
obligations to take further actions, obtain consents, and make all necessary
filings pursuant to the terms of the Merger Agreement (i) restrains,
prevents or prohibits the making or consummation of the Offer or of the
Merger or that would make such consummation illegal, (ii) prevents,
prohibits or restricts the ownership by MILPI (or any of its affiliates) of
any material portion of PLM's business or assets or that would substantially
deprive MILPI and/or its affiliates of the benefit of ownership of PLM's
business or assets, or (iii) imposes material limitations on the ability of
MILPI to effectively acquire any Shares.
(c) (i) The Merger Agreement or the Voting Agreement shall have been
terminated in accordance with its terms, or (ii) any events shall have
occurred that gives MILPI the right to terminate either the Merger Agreement
or the Voting Agreement.
(d) Any of the representations and warranties of PLM contained in the
Merger Agreement shall not be true and correct on the date of the Merger
Agreement (December 22, 2000) and as of the date of determination as if made
on the date of determination, without taking into account any qualifications
as to materiality or PLM Material Adverse Effect, except where the failure
of such representations and warranties to be true and correct, when taken
together with all such other failures, would not have a PLM Material Adverse
Effect; PROVIDED, HOWEVER, that (i) the representations and warranties in
the Merger Agreement concerning PLM's organization and qualifications,
capitalization, and authority relative to the Merger Agreement and the
transactions contemplated thereby, shall be true and correct in all
respects, and (ii) such representations and warranties in the Merger
Agreement which are made as of a specific date are true as of such date.
(e) PLM shall have failed to perform or comply with all agreements and
covenants required to be performed by it under the Merger Agreement on or
before the date of determination, except where the failure to so perform,
when taken together with all other such failures, would not have a PLM
Material Adverse Effect.
(f) Any party thereto (other than MILPI) shall have failed to perform or
comply in all material respects with all agreements and covenants required
to be performed by it under the Voting Agreement on or before the date of
determination.
(g) There shall have occurred any event, change, effect or development
that, individually or in the aggregate with any other event, change, effect
or development, has had or would reasonably be expected to have a PLM
Material Adverse Effect.
(h) There shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States (other than a shortening of trading hours or any coordinated trading
halt triggered solely as a result of a specified increase or decrease in a
market index), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) any limitation
(whether or not mandatory) by any governmental entity on, or other event
that materially and adversely affects, the extension of credit by banks or
other lending institutions, (iv) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States, or (v) in the case of any of the
foregoing existing at the time of the execution of the Merger Agreement, a
material acceleration or worsening thereof.
(i) The Board shall have (i) modified in any adverse manner or withdrawn
its approval (including by amending the Schedule 14D-9), (ii) approved or
recommended a "Superior Proposal"
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(as defined and described below) pursuant to the terms of the Merger
Agreement, or (iii) resolved to take any of the actions specified in clauses
(i) or (ii) above.
(j) The obligation of PLM to have a certain cash balance under the terms
of Merger Agreement shall not have been complied with.
"MILPI Material Adverse Effect" means any circumstance, event or occurrence
or series of circumstances, events or occurrences which individually or in the
aggregate with all other circumstances, events or occurrences would have a
material adverse effect on MILPI's ability to consummate the transactions
contemplated by the Merger Agreement (the "Transactions") (including the Offer
and the Merger).
"PLM Material Adverse Effect" means any circumstance, event or occurrence or
series of circumstances, events or occurrences which individually or in the
aggregate with all other circumstances, events or occurrences would be
reasonably likely to have a material adverse effect on (i) the business, assets,
operations, financial condition, revenues or results of operations of PLM and
its subsidiaries taken as a whole (which shall not be deemed to occur unless
there is a reduction in value or damages in excess of $250,000), other than any
PLM Material Adverse Effect caused or resulting from (A) the announcement of the
Offer or the pendency of the consummation of the Merger Agreement, (B) the
taking of any action contemplated or permitted by the Merger Agreement, or
(C) the cessation of the employment with PLM, for whatever reason, of any or all
of Stephen M. Bess, Susan C. Santo and Richard K. Brock, or (ii) PLM's ability
to consummate the Transactions. Additionally, for purposes of determining
whether a PLM Material Adverse Effect has occurred, neither PLM nor MILPI will
consider the results or effects of certain pending litigation or any claim
brought under agreements pursuant to which PLM sold certain assets or
subsidiaries.
DIRECTORS. Pursuant to the Merger Agreement, promptly following the Offer
Conditions Satisfaction Date, (i) MILPI will be entitled to designate the number
of directors to the Board, rounded up to the next whole number, as will give
MILPI, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board that equals the product of (x) the total number of
directors on the Board (giving effect to any increase in the size of the Board
pursuant to the Merger Agreement), and (y) the percentage that the voting power
of the Shares beneficially owned by MILPI bears to the total voting power of all
of the Shares then outstanding, and (ii) PLM shall take all action within its
power to cause MILPI's designees to be elected or appointed to the Board,
including by increasing the number of directors and by seeking and accepting
resignations of incumbent directors; provided, however, that if MILPI's
designees are elected or appointed to the Board, then until the consummation of
the Merger the Board will have at least one director who was a director of PLM
on the date of the execution of the Merger Agreement or otherwise not an
affiliate of MILPI, and is not an officer of PLM or any of its subsidiaries (the
"Continuing Director"). Following the election or appointment of MILPI's
designees to the Board pursuant to the Merger Agreement and until the
consummation of the Merger, MILPI will not cause PLM to take any action with
respect to any amendment, or waiver of any term or condition, of the Merger
Agreement, PLM's certificate of incorporation (the "Certificate of
Incorporation"), or PLM's bylaws (the "Bylaws"), or certain other actions,
without the concurrence of the Continuing Director, provided that if there is no
Continuing Director during the aforementioned time period, the Merger Agreement
cannot be amended nor can compliance with obligations thereunder be waived by
PLM.
THE MERGER. The Merger Agreement provides that as promptly as practicable
(and in any event within two business days) after the satisfaction or waiver of
the conditions set forth in the Merger Agreement, MILPI will be merged with and
into PLM and PLM will continue after the Merger as the surviving corporation
(the "Surviving Corporation") under the laws of the State of Delaware under the
name "PLM International, Inc." At the effective time of the Merger (the
"Effective Time"), (i) each Share issued and outstanding immediately prior to
the Effective Time (other than Shares described in (iii) below and Shares held
by dissenting stockholders) will be converted into the right to receive from
MILPI cash in
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the amount of $3.46, (ii) each issued and outstanding share of Common Stock, par
value $.01 per share, of MILPI will be automatically converted into one share of
common stock of the Surviving Corporation, (iii) all Shares that are held in
treasury of PLM will be canceled, and (iv) Shares held by holders who properly
exercise appraisal rights under applicable state law will not be converted, and
holders of such Shares will be entitled to receive payment of the appraised
value of such Shares in accordance with applicable state law unless and until
such holders fail to perfect or effectively withdraw or lose their rights to
appraisal under applicable state law.
If, following the purchase of Shares pursuant to the Offer, MILPI owns at
least ninety percent of the outstanding Shares, MILPI will take all necessary
and appropriate action to cause the Merger to become effective as soon as is
reasonably practicable after the expiration of the Offer without a meeting of
stockholders of PLM, in accordance with applicable law. If, following the
purchase of Shares pursuant to the Offer, MILPI owns less than ninety percent of
the outstanding Shares and if required by law in order to consummate the Merger,
PLM shall take all actions necessary to convene a special meeting of its
stockholders, as promptly as reasonably practicable following the date on which
MILPI completes the purchase of Shares pursuant to the Offer, for the purpose of
considering and taking action upon the Merger and the Merger Agreement. The
Board shall recommend approval of the Merger and the Merger Agreement and take
all lawful action to solicit and obtain such approval.
CHARTER, BYLAWS, DIRECTORS AND OFFICERS. At the Effective Time, the
Certificate of Incorporation as in effect immediately prior to the Effective
Time will be amended to be identical with the certificate of incorporation of
MILPI. At the Effective Time, the Bylaws as in effect immediately prior to the
Effective Time will be amended to be identical with the bylaws of MILPI.
The directors of MILPI at the Effective Time will be the directors of the
Surviving Corporation, and the executive officers of Surviving Corporation shall
be Stephen M. Bess, President and Chief Executive Officer; Richard K. Brock,
Vice President and Chief Financial Officer and Susan C. Santo, Vice President
and General Counsel, subject, in each case, to such person being employed by PLM
at the Effective Time. Such officers shall continue in office until the earlier
of their respective death, resignation or removal and the time that their
respective successors are duly elected or appointed and qualified. The
biographies of such officers are set forth in the Information Statement attached
as Annex A hereto.
COMPANY STOCK OPTIONS AND OTHER EMPLOYEE BENEFITS. The Merger Agreement
also provides that: (i) at the Offer Conditions Satisfaction Date, without any
action on the part of the holder thereof, each unvested option to purchase
Shares granted under any PLM stock option plan (each such option a "PLM Stock
Option" and each such plan a "PLM Stock Option Plan") which remains as of such
time unexercised in whole or in part shall be automatically and immediately
vested and fully exercisable; (ii) in the event any holder of any PLM Stock
Options exercises any PLM Stock Options or surrenders any PLM Stock Options to
PLM (which may take the form of a letter to PLM requesting a cash out of such
holder's PLM Stock Options pursuant to the provisions of the Merger Agreement),
in either case on or after the Offer Conditions Satisfaction Date and before the
Effective Time, PLM shall pay to such holder cash in an amount equal to the
excess, if any, of the Offer Price over the exercise price of such PLM Stock
Option; and (iii) the Board shall, prior to or as of the Offer Conditions
Satisfaction Date, take all necessary actions, pursuant to and in accordance
with the terms of the PLM Stock Option Plans and the instruments evidencing the
PLM Stock Options, to provide for the accelerated vesting described pursuant to
the provisions of the Merger Agreement.
Pursuant to the Merger Agreement, MILPI has also agreed to maintain, with
respect to certain employees of PLM, PLM's severance policy as in effect on
December 22, 2000, and to recognize services of such employees at certain
specified levels for purposes of calculating applicable severance amounts
payable pursuant to the severance policy. MILPI will also maintain, without
change (except as permitted
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pursuant to the terms of the Merger Agreement), with respect to each officer or
employee of PLM, PLM's currently existing policies of group health insurance for
the duration of the current policy year.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, PLM has made
customary representations and warranties to MILPI with respect to, among other
matters, its organization and qualification, capitalization, authority relative
to the Merger Agreement and the transactions contemplated thereby, lack of
conflicts, necessary filing requirements and consents, SEC filings, financial
statements, liabilities, litigation, the absence of certain changes or events,
employee benefit plans, labor relations, taxes, compliance with applicable laws,
voting requirements, title to its assets and assets of its subsidiaries,
material contracts, intellectual property, interested party transactions,
environmental matters, restrictions on business activities, business practices,
insurance matters, brokers, Board approval, receipt of a fairness opinion and
lack of investment company status. MILPI has made customary representations and
warranties to PLM with respect to, among other matters, its organization and
qualification, authority relative to the Merger Agreement and the transactions
contemplated thereby, necessary filing requirements and consents, litigation
brokers and financial wherewithal.
CONDUCT OF PLM PENDING THE APPOINTMENT OF MILPI'S DESIGNEES TO THE
BOARD. With certain specific exceptions, the Merger Agreement obligates PLM and
its subsidiaries, from December 22, 2000 through the date of appointment of
MILPI's designees to the Board, to conduct their operations only in the ordinary
course of business in substantially the same manner as currently conducted, to
use commercially reasonable efforts to preserve intact their business
organizations, to keep available the services of their employees and consultants
and preserve their relationships and goodwill with those persons and entities
having significant business relationships with PLM and its subsidiaries, and to
use commercially reasonable efforts to protect the intellectual property rights
to the end that PLM and its subsidiaries' goodwill and on-going businesses shall
not be impaired in any material respect as of the Closing. The Merger Agreement
also contains specific restrictive covenants as to certain activities of PLM,
which provide that PLM will not (and will not permit any of its subsidiaries to)
take certain actions without the prior written consent of MILPI, including,
among other things and subject to certain exceptions, declaring or paying
dividends, issuing or selling its securities, subjecting to a lien or
encumbrance or selling or leasing any material assets or intellectual property
rights, granting or modifying any compensation or change of control
arrangements, modifying or entering into any new employment or services
agreements (other than terminating existing severance and employment agreements
with Messrs. Bess and Brock and Ms. Santo and entering into new agreements with
such individuals in a form as has been approved by MILPI and which is summarized
in the Information Statement attached as Annex A hereto), amending its
Certificate of Incorporation or Bylaws, making material acquisitions or
dispositions of assets, incurring indebtedness or guaranteeing debt, making
loans or advances other than to the Company and its subsidiaries or, except in
an amount or amounts not to exceed $300,000 in the aggregate, settle or
compromise any material claims or litigation, and making capital expenditures in
an amount or amounts not to exceed $50,000 in the aggregate and not in the
ordinary course of business.
CONDUCT OF PLM'S AFFILIATES PENDING THE APPOINTMENT OF MILPI'S DESIGNEES TO
THE BOARD. With certain specific exceptions, the Merger Agreement obligates PLM
to cause its affiliates, from December 22, 2000 through the date of appointing
of MILPI's designees to the Board to: (a) conduct their businesses in the
ordinary course; (b) refrain from acquiring or agreeing to acquire a substantial
portion of assets or equity interests of a business organization; (c) refrain
from making capital expenditures other than in connection with the repair or
maintenance of currently held assets; (d) only for affiliates whose governing
documents permit (or are being amended to permit) reinvestment of proceeds into
the purchase of additional equipment, from declaring or making distributions in
respect of its equity interests, except in the ordinary course; and (e) refrain
from adopting any shareholder rights plan or similar plan or arrangement;
provided however, that in no event shall PLM be required to take any action or
refrain from taking any action solely to the extent that the taking of such
action by PLM would violate any fiduciary duties.
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NO SOLICITATION. In the Merger Agreement, PLM has agreed that it will not,
and will not authorize any of its affiliates or any of its or its affiliates'
officers, directors, employees, agents or representatives, or any investment
banker, attorney or other advisor or representative of PLM or any of its
affiliates to directly or indirectly:
(a) solicit, initiate or encourage the submission of any Acquisition
Proposal (as defined below),
(b) participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to PLM or any of its subsidiaries
in connection with, or take any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may reasonably be expected
to lead to, any Acquisition Proposal, or
(c) authorize, engage in, or enter into any agreement or understanding
with respect to any Acquisition Proposal;
provided, that nothing contained in the Merger Agreement will prohibit PLM or
its directors from complying with Rule 14e-2 promulgated under the Exchange Act
or making such disclosure as is required under applicable law.
In addition, the Merger Agreement provides that, prior to the purchase of
Shares pursuant to the Offer, PLM and the Board may engage in the activities
described in (b) and (c) above with respect to any person who has submitted an
unsolicited bona fide written Acquisition Proposal indicating such person's
desire to pursue the possibility of making an Acquisition Proposal on terms
believed by PLM to be financially more favorable to the Offer and the Merger (a
"Superior Proposal") and, in either case, the Board or any committee thereof,
determines that such action is appropriate for the Board to comply with its
fiduciary duties under applicable law, the Board, concludes in good faith that
such Acquisition Proposal could lead to Superior Proposal, and, prior to
disclosing any of the information referred to in (b) above, PLM obtains from
such person an executed confidentiality agreement. PLM agreed that it will,
prior to providing any such information to any other person, notify MILPI of the
name of such other person and keep MILPI informed of the status and terms of any
Acquisition Proposals and the discussions and negotiations related thereto, as
permitted by law.
"Acquisition Proposal" means any proposal for (i) a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution, or similar transaction involving PLM, or any purchase
or sale of all or any significant portion of the assets of PLM or more than 5%
of the Shares or the capital stock or other equity interests in PLM's affiliates
or the assets of any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement and any transactions required under any
settlement of material litigation.
CONDITIONS TO THE CONSUMMATION OF THE MERGER. The respective obligations of
PLM and MILPI to effect the Merger are subject to the satisfaction on or prior
to the Effective Time of the following conditions: (i) MILPI shall have
purchased the Shares pursuant to the Offer; (ii) if required by applicable law
in order to consummate the Merger, the approval and adoption of the Merger
Agreement by the requisite vote of the stockholders of PLM entitled to vote
thereon (subject to the provision of the Merger Agreement relating to the
consummation of the Merger without the vote of PLM stockholders, pursuant to
applicable law); (iii) any waiting period applicable to the consummation of the
Merger under the HSR Act and other applicable merger control laws shall have
expired or terminated, and any material consents shall have been received; and
(iv) the consummation of the Merger shall not be prohibited by any provision of
applicable law or restrained, enjoined, or prohibited by any order, judgment,
decree, injunction or ruling by a governmental entity of competent jurisdiction.
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TERMINATION. The Merger Agreement may be terminated prior to the Effective
Time, whether before or after approval by the stockholders of PLM:
(a) By the mutual written consent of MILPI and PLM;
(b) By MILPI or PLM, if:
(i) any governmental entity of competent jurisdiction shall have
issued, enacted, entered, promulgated or enforced any order, judgment,
decree, injunction or ruling which, after commercially reasonable efforts
on the part of MILPI and PLM to resist, resolve or lift, permanently
restrains, enjoins or otherwise prohibits the Merger and such order,
judgment, decree, injunction or ruling shall have become final and
nonappealable (which, were such to occur, could be prior to or subsequent
to the time stockholders tender their Shares pursuant to the Offer and
receive the Offer Price), or
(ii) the purchase of Shares shall not have been consummated on or
before June 30, 2001, provided that the right to terminate the Merger
Agreement for this reason shall not be available to any party whose
failure to perform any material covenant or obligation under the Merger
Agreement has been the cause of or resulted in the failure of the
purchase of Shares of pursuant to the Offer to occur on or before such
date;
(c) By MILPI or PLM if the Merger shall not have been consummated on or
before the first anniversary of the date of the Merger Agreement, provided
that the right to terminate the Merger Agreement for this reason shall not
be available to any party whose failure to perform in any material respect
any covenant or obligation under the Merger Agreement has been the cause of
or resulted in the failure of the Merger to occur on or before such date;
(d) By MILPI if the Board, or any committee thereof, shall (i) modify in
any adverse manner or withdraw the "PLM Board Approval" (as defined in "The
Solicitation or Recommendation" section of Item 4(a) hereof) or any part
thereof (including by amending the Schedule 14D-9), (ii) approve or
recommend a Superior Proposal (as defined below) pursuant to the terms in
the Merger Agreement, or (iii) resolve to take any of the actions specified
in clauses (i) or (ii) above;
(e) By PLM if it shall enter into any definitive purchase agreement with
any person concerning a Superior Proposal, but only if (i) the Board, after
consultation with and receipt of advice from PLM's financial advisors and
outside legal counsel, determines in good faith that the proposed
acquisition agreement constitutes a Superior Proposal and that the failure
to enter into such acquisition agreement could reasonably be deemed to
constitute a breach of its fiduciary duties under applicable law, and
(ii) two days have elapsed following MILPI's receipt of written notice from
PLM advising MILPI that the Board has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal,
identifying the person making such Superior Proposal, and advising MILPI
that the Board has determined, upon the advice of Company's financial
advisors and outside legal counsel, that it will no longer recommend
approval of the Merger.
"Superior Proposal" means a bona fide unsolicited written Acquisition
Proposal to acquire a majority of the voting power of the Shares then
outstanding or all or substantially all the assets of PLM for consideration
consisting of cash or securities which the Board concludes in good faith (after
consultation with and receipt of advice from PLM's financial advisors and
outside legal counsel), taking into account all legal, financial, regulatory and
other aspects of the proposal and the person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to PLM's
stockholders (in their capacities as stockholders), from a financial point of
view, than the Transactions, and (ii) is reasonably capable of being completed,
including a conclusion that its financing, to the extent required, is then
committed or is, in the good faith judgment of the Board (after consultation
with and receipt of advice from PLM's financial advisors and outside legal
counsel), reasonably capable of being financed by the person making such
Acquisition Proposal.
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EFFECT OF TERMINATION. Except as described below, in the event that the
Merger Agreement is terminated by any of PLM or MILPI as provided above, the
Merger Agreement and the Voting Agreement will forthwith become void and there
will be no liability thereunder on the part of MILPI or PLM, or their respective
officers or directors. However, the provisions of the Merger Agreement regarding
brokers, confidentiality, termination fees, fees and expenses, liquidated
damages and governing laws, will survive termination, and termination will not
relieve any party from liability for breaches of its representations, warranties
or covenants contained in the Merger Agreement.
PLM will pay to MILPI $1,000,000, plus third-party fees and expenses
(including investment banking fees, financing fees, third-party due diligence
fees, accounting fees and legal fees) incurred by MILPI in connection with the
Merger Agreement and the transactions contemplated thereby in the amount of
$500,000, (such $1,500,000 referred to as the "Termination Fee and Expenses")
solely as follows:
(a) If MILPI terminates the Merger Agreement under subsection (b) of the
"Termination" section of this Item 3, provided that MILPI shall not be
entitled to the Termination Fee pursuant to this subsection (a) if the
events or circumstances giving rise to such termination right were beyond
the control of PLM and PLM used commercially reasonable efforts to attempt
to cause such events or circumstances to not occur or cease to exist;
(b) If MILPI terminates the Merger Agreement under subsection (d) of the
"Termination" section of this Item 3; or
(c) Upon any material breach of the Voting Agreement or any
determination by a court with jurisdiction thereover that the Voting
Agreement is unenforceable, but only if the court challenge was brought by a
party to the Voting Agreement other than MILPI;
(d) If PLM terminates the Merger Agreement under subsection (e) of the
"Termination" section of this Item 3;
(e) If, on or before December 22, 2001, PLM enters into a definitive
purchase agreement with a party other than MILPI with whom PLM entered into
or otherwise initiated, solicited or conducted any discussions or
negotiations concerning an Acquisition Proposal prior to the termination of
the Merger Agreement but after December 22, 2000, provided, that if such
definitive purchase agreement is entered into after June 22, 2001, the
parties to such definitive purchase agreement must have closed the
transactions contemplated thereby, whether such closing occurs on or after
June 22, 1001, a purchase price in excess $3.46 per share, subject to
certain conditions.
LIQUIDATED DAMAGES AND STANDSTILL. In the event of a breach of the Merger
Agreement by MILPI which results in the failure of the parties to consummate the
Transactions on or before June 30, 2001, (a) MILPI shall pay to PLM, as
liquidated damages, $1,000,000 (the "Liquidated Damages") and (b) neither MILPI
nor its affiliates shall, for a period of twelve months following such breach
(unless such action involves an offer to purchase Shares in excess of the Offer
Price), (i) acquire, publicly offer to acquire or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of PLM or any of its affiliates
or, except in the ordinary course of business, any assets of PLM or any of its
affiliates, (ii) make or in any way participate in, directly or indirectly, any
solicitation of proxies (as such terms are used in the rules of the SEC) or
consents to vote, or seek to advise or influence any person or entity with
respect to the voting of, any voting securities of PLM, (iii) make any public
announcement with respect to, or submit a proposal for, or offer of (with or
without conditions) any merger, consolidation, business combination, tender or
exchange offer, restructuring, recapitalization or other extraordinary
transaction involving PLM or any of its securities or material assets,
(iv) form, join or in any way participate in any "group" (as defined in
Section 13(d)(3) of the Exchange Act) in connection with any voting securities
of PLM, (v) otherwise act, alone or in concert with others, to seek to control
or influence the management, Board or policies of PLM, or (vi) have any
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discussions or enter into any arrangements, understandings or agreements
(whether written or oral) with, or advise, assist or encourage, any other
persons in connection with any of the foregoing.
AMENDMENT. The Merger Agreement may be amended by PLM or MILPI at any time
before or after approval thereof by the stockholders of PLM, but, after such
approval, no amendment shall be made which under applicable law would require
approval of PLM's stockholders without the further approval of such
stockholders; provided, however, that from and after the time MILPI designates
directors to the Board pursuant to the Merger Agreement until the Effective
Time, if there is no Continuing Director then the Merger Agreement cannot be
amended except as required by law.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer; however, stockholders not tendering in the Offer, and who otherwise
comply with the requirements of applicable law, will have the right to demand
appraisal of, and to receive payment in cash of the fair value of, their Shares
in connection with the Merger. See "Appraisal Rights" in Item 8.
CONFIDENTIALITY AGREEMENT.
The following is a summary of certain provisions of the confidentiality
agreement, dated November 23, 1999, between the PLM and EFG (the
"Confidentiality Agreement"). This summary is qualified in its entirety by
reference to the Confidentiality Agreement, which is incorporated herein by this
reference, and a copy of which has been filed with the SEC as Exhibit (d)(3) to
the Schedule TO filed by MILPI.
On November 23, 1999, PLM entered into a Confidentiality Agreement with
Equis Financial Group, Inc., an affiliate of MILPI and the recipient (the
"Recipient") of certain confidential non-public information concerning PLM (the
"Evaluation Material").
As a condition to PLM disclosing the Evaluation Material the Recipient
agreed, among other things: (1) to treat confidentially the Evaluation Material,
(2) to use the Evaluation Material only for the purposes of determining whether
to enter into a possible transaction with the Company, (3) to disclose
Evaluation Material to its directors, officers, employees, affiliates, agents,
partners, advisors or representatives (collectively, its "Representatives") only
to the extent necessary to permit such Representatives to assist in determining
whether to enter into a transaction with PLM, (4) not to disclose the fact that
the parties are having or have had discussions concerning a transaction, unless
it must make disclosure so as to not commit a violation of law, in which case,
it must promptly advise PLM of such fact, (5) to promptly notify PLM of the
receipt of any request or requirement (by deposition, interrogatories, requests
for information or documents in legal proceedings, subpoenas, civil
investigative demand or similar process), in connection with any proceeding, to
disclose any Evaluation Material, so that PLM may seek an appropriate protective
order or other remedy and/or waive compliance with the provisions of the
Confidentiality Agreement, and (6) in the event the Recipient decides not to
proceed with a transaction, to promptly return all Evaluation Material. PLM
agreed that neither it nor any of its representatives would, without the
Recipient's prior written consent, disclose to any person that it was engaged in
discussions concerning a possible transaction. In addition, pursuant to the
Confidentiality Agreement, the Recipient agreed that until November 23, 2000 it
and its affiliates will not knowingly, as a result of knowledge or information
obtained from the Evaluation Material or otherwise in connection with a possible
transaction, divert any business from PLM, or solicit for employment an employee
of PLM or any of its affiliates.
VOTING AND TENDER AGREEMENT
As of December 22, 2000, PLM, Steel Partners II, L.P., Steel Partners,
L.L.C., Warren G. Lichtenstein, Robert Tidball, and Doug Goodrich (Steel
Partners II, L.P., Steel Partners, L.L.C., and Messrs. Lichtenstein, Tidball,
and Goodrich, collectively, the "Certain Stockholders") entered into an Amended
and Restated Voting and Tender Agreement with MILPI (the "Voting Agreement").
Pursuant to the Voting Agreement, among other things, the Certain Stockholders
agreed (a) to vote all Shares beneficially owned by them in favor of the Merger
Agreement and the transactions contemplated thereby
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(including the Merger) and (b) against (i) any proposal made in opposition to or
in competition with the Offer, the Merger or the transactions contemplated by
the Merger Agreement, (ii) any merger, reorganization, consolidations, shares
exchange, business combination, sale of assets or similar transaction with or
involving PLM and any party other than MILPI, and (iii) any other action the
consummation of which would reasonably be expected to prevent or delay the
consummation of the Offer, the Merger or the transactions contemplated by the
Merger Agreement. Based on 7,554,510 Shares outstanding on December 28, 2000,
the Certain Stockholders' Shares in the aggregate represent approximately 23.78%
of the total outstanding Shares.
Pursuant to the Voting Agreement each Certain Stockholder agreed to tender
or cause to be tendered, all of his or its Shares to MILPI for the Offer Price
and granted to MILPI an irrevocable option to purchase his or its Shares not
tendered. The Voting Agreement will terminate immediately upon the earlier of
(i) the consummation of the Merger, or (ii) upon the termination of the Merger
Agreement.
The above summary is qualified in its entirety by reference to the complete
text of the Voting Agreement, a copy of which is filed as Exhibit 4 hereto and
is incorporated herein by this reference.
THE ESCROW AGREEMENT.
The following is a summary of certain provisions of the Escrow Agreement,
dated December 22, 2000, by and among MILPI, PLM and Bank of San Francisco, as
escrow agent (the "Escrow Agreement"). This summary is qualified in its entirety
by reference to the Escrow Agreement, a copy of which is filed as Exhibit 7
hereto and is incorporated herein by this reference.
Pursuant to the Escrow Agreement, Bank of San Francisco agreed to act as the
escrow agent (the "Escrow Agent") in connection with the Merger Agreement and
Offer. Pursuant to the Merger Agreement, MILPI has delivered to the Escrow Agent
cash in the amount of $1,200,000 and PLM has delivered to the Escrow Agent cash
in the amount of $1,700,000 to be held and disbursed pursuant to the terms of
the Escrow Agreement. The Escrow Agent will invest each escrow deposit along
with any instruments, securities, proceeds and income derived therefrom in an
interest bearing account or as directed jointly by both MILPI and PLM.
The Escrow Agent may release MILPI's escrow funds to PLM if PLM becomes
entitled to Liquidated Damages plus reasonable costs and expenses incurred to
enforce the Escrow Agreement up to a maximum of $200,000 (and MILPI does not
dispute that PLM is entitled to such damages). The Escrow Agent may release
PLM's escrow funds to MILPI if MILPI becomes entitled to the Termination Fee and
Expenses plus reasonable costs and expenses incurred to enforce the Escrow
Agreement up to a maximum of $200,000 (and PLM does not dispute that MILPI is so
entitled).
If the Merger Agreement is terminated or not consummated and neither MILPI
nor PLM is entitled to any payment under the Merger Agreement, or if MILPI
accepts and pays for all Shares tendered and not withdrawn pursuant to the
Offer, then the Escrow Agent will return to each of MILPI and PLM their
respective escrow funds. The Escrow Agent has been paid $3,800 for its services
and reimbursed for reasonable costs and expenses. MILPI and PLM have also
indemnified the Escrow Agent in the Merger Agreement.
DIRECTOR INDEMNIFICATION.
Pursuant to the Merger Agreement, MILPI agreed that all rights to
indemnification existing as of the date of the Merger Agreement in favor of any
director, officer, employee or agent of PLM or any of its subsidiaries as
provided by law, in their respective certificates of incorporation, by-laws or
other governing documents or in indemnification agreements with PLM or any of
its subsidiaries, or otherwise in effect as of the date of the Merger Agreement,
shall survive the Offer and the Merger and shall continue in full force and
effect.
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In addition, PLM shall maintain, for so long as the Continuing Director
shall serve as a Director of PLM, a policy of directors' and officers' liability
insurance covering such Continuing Director. Further, PLM shall purchase tail
coverage lasting for six years for each policy of directors' and officers'
liability insurance maintained by PLM for claims arising out of occurrences
prior to the dates when each of PLM's directors, as of the date hereof, resigns
from his directorship.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) RECOMMENDATION OF PLM BOARD
The Board, by resolutions duly adopted by unanimous vote of those voting at
a meeting on December 21, 2000 duly called and held and not subsequently
rescinded or modified in any way (the "PLM Board Approval"), duly:
(i) determined that the Merger Agreement, the Voting Agreement and the
Escrow Agreement, and the transactions contemplated thereby (including the
Offer and the Merger) are advisable, fair to and in the best interests of
PLM and its stockholders;
(ii) approved and adopted the Merger Agreement, the Voting Agreement and
the Escrow Agreement, and the transactions contemplated thereby (including
the Offer and the Merger) and authorized Mr. Tidball to execute each such
agreement as promptly as practicable following such meeting;
(iii) resolved to recommend that the stockholders accept the Offer,
tender their Shares pursuant to the Offer and approve and adopt the Merger
Agreement and the Merger;
(iv) consented to the inclusion of the PLM Board Approval in the
Schedule TO, the Schedule 14D-9 and, if applicable, a proxy statement; and
(v) directed that, if applicable, the Merger Agreement and the Merger be
submitted for consideration by PLM's stockholders at a special meeting.
A press release announcing the execution of the Merger Agreement and a
letter to the stockholders communicating the Board's recommendation are filed as
Exhibits 6 and 5, respectively, and are incorporated by this reference.
(B) BACKGROUND; REASONS FOR PLM BOARD'S RECOMMENDATION.
BACKGROUND
In 1996, Equis Financial Group L.P. ("EFG"), a representative of MILPI, sold
to PLM its lease origination business, a customer list and the name American
Finance Group. In 1997, EFG offered to purchase PLM for $5.00 per Share with
certain contingencies. This offer was rejected by the Board, for reasons
including the inadequacy of the amount offered. Also in 1997, three officers of
EFG and two non-affiliated individuals formed a committee (the "Committee") to
solicit proxies from shareholders of PLM with respect to certain proposals
submitted for a vote at PLM's annual meeting of stockholders that were designed
to: amend the Bylaws and Certificate of Incorporation; terminate a stockholder
rights plan (poison pill) in effect at that time; and add two of the Committee's
designees to the Board. The intent of the proxy solicitation was to make it
easier for a third party to purchase PLM without the approval of the Board. The
outcome of the proxy solicitation was that the Committee's slate of directors
did not receive enough votes to be elected to the Board, and the other proposals
did not receive enough votes to be adopted. PLM terminated the rights plan on
its own, immediately prior to the annual meeting at which the proxy vote
occurred.
In 1997 and 1998, EFG periodically made inquiries to PLM as to whether or
not PLM would be interested in discussing a sale of PLM or of PLM's subsidiary,
PLM Financial Services Inc. ("FSI"). In
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March of 1999, EFG sent a letter to the Board offering to purchase PLM for $7.50
per Share. In April of 1999, representatives of EFG held discussions with
representatives of PLM to review certain public information; and then EFG
increased its offer to $7.75 per Share plus all of the after-tax proceeds from
the sale of PLM's wholly-owned subsidiary American Finance Group, Inc. ("AFG")
in excess of $23,000,000. In May of 1999, EFG signed a confidentiality agreement
with PLM so as to enable it to receive confidential information (which it
subsequently received). It also contained a customary standstill provision that
precluded certain actions by EFG to acquire Shares for five years without the
consent of the Board. By letter dated May 20, 1999, EFG increased the proposed
purchase price to $8.45 per share. This offer was subject to numerous
conditions, including the substantiation of the values of the equipment held by
PLM's affiliates and the consent of all of PLM's lenders to waive the
acceleration of the maturity of their loans upon a change of control. During
1999, PLM's operations included the trailer leasing business ("Trailer
Leasing"), investment management operations ("Investment Management") and AFG.
In 2000, PLM sold AFG and Trailer Leasing, and on November 3, 2000, stockholders
of PLM received $5.00 per Share as a partial liquidating distribution.
On May 27, 1999, the Board met to discuss the offer from EFG and, in
addition to seeking a higher price, asked EFG to remove all conditions from its
offer. EFG was unwilling to either increase its offer or to remove all
conditions. Nonetheless, EFG and PLM thereafter exchanged information and EFG
was provided with introductions to PLM's lenders. By the middle of August 1999,
both parties had determined not to proceed in the above-described manner,
however at that time EFG expressed an interest in making a direct equity
investment in PLM. By letter dated September 1, 1999, the Board informed EFG
that it was uninterested in such a type of transaction and discussions between
EFG and PLM were terminated.
On November 3, 1999, the Board engaged Imperial Capital, LLC ("Imperial
Capital") to pursue strategic and financial alternatives for maximizing
stockholder value on a near-term basis, including a possible transaction or
series of transactions representing a merger, consolidation, or any other
business combination, a sale of all or a substantial amount of the business,
securities, or assets of PLM, or a recapitalization or spin-off.
In November of 1999, Imperial Capital prepared a letter containing both
public information about PLM and a confidentiality agreement, which was sent to
200 parties whom Imperial Capital or PLM believed would be interested in
acquiring PLM or a significant portion thereof. Of these parties, approximately
50, including MILPI (through its representative EFG), expressed an interest in
receiving further information and signed and returned to Imperial Capital the
confidentiality agreement. During December 1999 and January 2000, Imperial
Capital prepared two confidential information memorandums, and distributed them
to those parties which had signed the confidentiality agreement. One of the
memorandum prepared by Imperial Capital described Trailer Leasing and the other
described Investment Management. Imperial Capital received a number of
expressions of interest for Trailer Leasing, for Investment Management and for
PLM as a whole. EFG submitted an expression of interest regarding Investment
Management. As a result of the responses received by Imperial Capital, the Board
instructed Imperial Capital to proceed first with a sale of Trailer Leasing. PLM
closed the sale of Trailer Leasing to Marubeni America Corporation on
September 29, 2000.
In October 2000, Imperial Capital was directed by the Board to prepare a new
confidential information memorandum describing PLM in its then current form
(primarily Investment Management). Imperial Capital distributed this new
confidential information memorandum to approximately 14 parties who had either
initially submitted bids (or expressions of interest) or had otherwise expressed
interest, to purchase Investment Management, including MILPI. Among other
things, this new confidential information contained financial projections
prepared by PLM and which are reproduced in Section 7 of the Offer to Purchase.
The projections reflect numerous assumptions with respect to general business
and economic conditions and other matters, many of which are inherently
uncertain or beyond PLM's control, and does not take into account any changes in
PLM's operations or capital structure which may result from the Offer and the
Merger. It is not possible to predict whether the assumptions made in preparing
the
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projected financial information will be valid, and actual results may prove to
be materially higher or lower than those contained in the projections. The
projections should not be regarded as an indication that PLM or any other person
who received this information considered it a reliable predictor of future
events, and the projections should not be relied on as such. Neither PLM nor any
of its representatives assumes any responsibility for the validity,
reasonableness, accuracy or completeness of the projections.
In mid-October of 2000, after receiving the confidential information
memorandum, MILPI, in conjunction with The Diversified Group ("Diversified"),
orally submitted a bid of $3.00 per share to Imperial Capital, subject to
conducting due diligence. On October 25, 2000, based upon feedback from Imperial
Capital that its $3.00 bid was insufficient, Diversified submitted to Imperial
Capital a written indication of interest in acquiring PLM at $3.25 per Share.
On October 23, 2000, Jan Melgaard, President of Sigma Aircraft Management,
LLC, a consultant to MILPI, visited PLM and met with Doug Fowler, Senior
Aircraft Attorney of PLM, and Mr. Brock, to conduct due diligence on aircraft
owned by PLM's affiliates.
Based upon further feedback from Imperial Capital that its new bid of $3.25
per share was still insufficient, on October 30, 2000, Diversified submitted a
letter to PLM, whereby it increased its bid to $3.50 per Share. This bid was not
subject to any financing contingency or any contingency associated with the
outcome of material litigation. As a condition of going forward with additional
due diligence, and entering into negotiations intended to produce a definitive
agreement, Diversified required PLM to agree to a three-week exclusivity period
during which PLM could not enter into any letter of intent or other written
agreements relating to the Transactions with other parties unless it paid
Diversified a fee of $1,000,000. Such letter agreement was signed that day.
Later on the same day, James A. Coyne, Vice President of MILPI, Mr. Tidball,
Mr. Bess, Ms.. Santo, and Peter Gatto, Director of Taxation of PLM, as well as
representatives of Diversified, Imperial Capital and legal counsel to PLM,
discussed by telephone a proposed structure for the transaction.
On November 1 and 2, 2000, Mr. Coyne visited PLM to conduct due diligence
and met with Messrs. Tidball and Bess, Ms. Santo and John McCarthy, PLM's
Director of Financial Analysis and Planning.
On November 15, 2000, Messrs. Coyne and Reese discussed the proposed terms
and structure of a transaction that would not include Diversified (and
Diversified was in accord with no longer being involved in a transaction). On
November 16, 2000, Mr. Coyne sent Imperial Capital a written confirmation of
such terms, which terms were revised by Mr. Coyne on November 17, 2000.
On November 17, 2000, counsel for MILPI delivered to counsel for PLM a first
draft of a definitive merger agreement and a form of voting and tender agreement
for certain stockholders of PLM. Advisors to and counsel for PLM objected to
several provisions of the draft merger agreement, including the terms of the
tender offer, conditions to the tender offer, terms restricting PLM's ability to
negotiate with third parties regarding a superior proposal, and the ability of
the parties to terminate the Merger Agreement.
From November 20 through November 22, 2000 representatives from Nixon
Peabody LLP, counsel to MILPI, visited PLM to conduct further due diligence.
On December 4 and 5, 2000, Mr. Coyne, along with MILPI's legal counsel, met
with Messrs. Bess and Tidball and Ms. Santo of PLM, representatives of Imperial
Capital and PLM's legal counsel, at the offices of PLM's legal counsel, to
negotiate the terms of the merger agreement, including those terms specifically
mentioned above. Among other things, MILPI agreed to eliminate or revise certain
terms of the tender offer, conditions to the tender offer, terms restricting
PLM's ability to negotiate with third parties regarding a superior proposal, and
the ability of the parties to terminate the merger agreement.
On December 11, 2000, the Board held a special meeting to discuss the
auction process Imperial Capital had been conducting. All of the members of the
Board were present. Also present were
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representatives of Imperial Capital (to discuss the auction process and to
answer questions from the Board), legal counsel to PLM and Mr. Coyne, who
attended a portion of the meeting. The Board discussed all firm proposals which
had been received, including the consideration offered, the status and
availability of financing for each proposal, the extent to which each bidder had
conducted due diligence, and the readiness and ability of each bidder to
promptly execute and effect a transaction. The Board was advised that, except
for MILPI, no persons had expressed an interest in acquiring the Shares at a
price equal to or greater than MILPI's offer of $3.50 per Share that was not
subject to the outcome of material litigation. After such discussions, the Board
determined that MILPI's offer of $3.50 per Share, which was not subject to a
financing contingency or to the outcome of any material litigation, was superior
to all other offers, and it instructed legal counsel to PLM to continue
negotiations with MILPI to finalize the Merger Agreement.
From December 11, 2000 through December 20, 2000, the parties continued
negotiations. On December 20, 2000, as a result of continued due diligence and
negotiations between the parties concerning certain provisions of the Merger
Agreement, MILPI indicated its intent to decrease the bid price per Share in
conjunction with modifying certain conditions to the Offer.
On December 21, 2000, MILPI revised its bid to be equal to the Offer Price
and agreed to modify certain conditions to the Offer. Later that day, the Board
of Directors of PLM met to consider the Offer Price and other terms and
conditions of the Merger Agreement. All members of the Board were present. Also
present were representatives of Imperial Capital and legal counsel to PLM. At
the Board meeting, Imperial Capital delivered its opinion to the Board that the
consideration to be received by PLM's stockholders pursuant to the Offer is fair
to such holders from a financial point of view. The Board unanimously voted to
approve the Merger Agreement, the Escrow Agreement and the Voting Agreement and
the transactions contemplated thereby, including the Merger and the Offer and
authorized Mr. Tidball to execute and deliver such agreements as promptly as
practicable.
On December 22, 2000, PLM and MILPI executed the Merger Agreement and the
Escrow Agreement, and PLM, MILPI and certain stockholders of PLM executed the
Voting Agreement. On December 22, 2000, both PLM and MILPI issued press releases
announcing the execution of the Merger Agreement.
DISCUSSIONS WITH PARTIES OTHER THAN MILPI
On October 26, 2000, representatives of a third-party, along with its
advisor, visited PLM to conduct initial due diligence. On or about November 21,
2000, this third-party informed Imperial Capital that it was unlikely to proceed
in its evaluation of PLM, or submit a bid, until all material litigation was
settled. However, when Imperial Capital informed representatives of this
third-party that PLM was in discussion with a potential buyer who would assume
all risks associated with material litigation, the third-party indicated it
would carry on with its due diligence, and, on November 28, 2000, it submitted
to Imperial Capital a written bid to acquire PLM for $2.07 per Share. The bid
was not subject to any financing contingency or to the settlement of material
litigation. Imperial Capital informed this third party that such bid was
significantly below other bids already received.
On November 1, 2000, representatives of another third-party and its advisor
met with representatives of PLM and Imperial Capital to discuss a possible
acquisition of PLM. On November 9, 2000, representatives of this third-party
indicated in a telephone conversation with Imperial Capital that it was unlikely
to submit a bid for PLM. The following day, November 10, 2000, its
representatives again indicated in a telephone conversation with Imperial
Capital that it would not submit a bid for PLM.
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On November 8 and 9, 2000, representatives of another third-party and its
advisors visited PLM and met with PLM's management to discuss the operations of
PLM. On November 15, 2000, after completion of initial due diligence,
representatives of this third-party orally informed Imperial Capital that it
would be willing to pay $2.75 per share for all outstanding Shares. Imperial
Capital thereafter informed these representatives that PLM had already received
a bid of more than $3.00 per Share and, in response to such information these
representatives indicated they would conduct further evaluation to determine if
they were willing to increase the amount this third-party would pay per Share.
The following day, on November 16, 2000, this third-party submitted a written
indication of interest at $3.25 per Share, subject to obtaining financing,
settlement of material litigation and completion of due diligence.
On November 21, 2000, Imperial Capital spoke with representatives of this
third-party regarding its bid of November 16, 2000, and informed such
representatives that PLM had received a bid in excess of the November 16 bid,
and that such other bid was not subject to any financing contingency or any
contingency related to the outcome of material litigation. This third-party
reiterated to Imperial Capital its interest in acquiring PLM, and stated to
Imperial Capital that its advisors would shortly visit PLM to conduct further
due diligence to determine whether it was willing to increase its offer.
From November 29 through December 1, 2000, representatives of, and advisors
to, this third-party visited PLM to conduct further due diligence and discuss
operations, financial and legal matters with management of PLM. On December 4,
2000, its representatives informed Imperial Capital by telephone that the
third-party would not offer more than $3.25 per Share, which was still subject
to settlement of all material litigation. However, it was willing to consider
making an offer for a significantly lesser amount which would not be conditioned
upon the settlement of all material litigation, and it might be willing to agree
to pay PLM's stockholders an additional amount if all material litigation was
favorably settled. Its representatives also indicated the third-party would
provide a comfort letter from its bank as to its ability to finance the
transaction. After Imperial Capital discussed the matter with representatives of
the Board, Imperial Capital orally informed the third-party that such offer was
insufficient.
The next day, on December 5, 2000, representatives of the third-party called
Imperial Capital to inform Imperial Capital that the third-party was evaluating
whether it could increase or modify its offer. On December 8, 2000, the
third-party submitted a new written bid to PLM for $3.60 per Share. However,
such bid remained conditioned upon the outcome of all material litigation,
obtaining necessary financing and completion of additional due diligence. On
December 11, 2000, Imperial Capital spoke via telephone with representatives of
the third-party regarding the bid it submitted on December 8, 2000 and the
third-party reiterated that it was unwilling to pay $3.60 per Share unless all
material litigation was favorably resolved. The third-party also informed
Imperial Capital that its financing had yet to be finalized.
Later that week, representatives of this third-party orally withdrew the
party's December 8 bid and offered $3.25 per Share, subject only to financing
and completion of due diligence. Members of the Board discussed this offer with
representatives of the third-party, who confirmed that it was the third-party's
best and final offer.
On November 17, 2000, another third-party submitted a written bid of $3.50
per Share to PLM, subject to: due diligence; the settlement of all material
litigation; and a financing contingency. As of that date, this third-party had
not conducted significant due diligence nor had it or its advisors visited PLM.
On November 21, Imperial Capital spoke with representatives of this third-party
to discuss PLM's requirements for an acceptable bid, but the third-party never
modified its offer.
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REASONS FOR THE TRANSACTION; FACTORS CONSIDERED BY PLM BOARD
In reaching its determinations to approve the Merger and the Offer, the
Board considered the following factors, each of which, in the view of the Board,
supported such determinations:
(i) the amount of consideration to be received by PLM's stockholders in the
Offer and the Merger pursuant to the Merger Agreement, as well as the
fact that stockholders would receive a cash payment with no financing
condition;
(ii) PLM's prospects if it were to remain independent, including the risks
inherent in remaining independent, and the prospects of PLM going
forward as an independent company;
(iii) the financial condition, historical results of operations and business
and strategic objectives of PLM, as well as the risks involved in
achieving those objectives;
(iv) other historical information concerning PLM's business, prospects,
financial performance and condition, operations, technology, management
and competitive position;
(v) the fact that the $3.46 per Share to be paid in the Offer and as the
consideration in the Merger represents a premium of approximately 56%
over $2.22, the per-share average closing price of the Shares on the
AMEX for the 30 trading days prior to December 21, 2000;
(vi) current financial market conditions, and historical market prices,
volatility and trading information with respect to the Common Stock of
PLM;
(vii) the presentation from Imperial Capital and Imperial Capital's written
opinion dated December 21, 2000 that, as of such date and based upon
and subject to the matters set forth therein, the $3.46 in cash to be
paid in the Offer and the Merger was fair from a financial point of
view to the holders of Shares, which opinion is attached hereto as
Annex B and is incorporated herein by reference. The opinion was not
intended to be and does not constitute a recommendation to any holder
of Shares whether or not to tender his or Shares in the Offer.
STOCKHOLDERS ARE URGED TO READ THE FULL TEXT OF THE OPINION IN
CONJUNCTION WITH THE OFFER;
(viii) the high likelihood that the proposed acquisition would be consummated,
in light of the experience and financial capabilities of MILPI's
affiliates, and that the proposed acquisition could be consummated more
quickly than a long-form merger and, on the other hand, the risks to
PLM if the acquisition were not consummated or were not consummated for
a significant period of time, including a potential negative effect on
(a) PLM's operating results and (b) PLM's stock price;
(ix) the terms of the Merger Agreement, including the parties'
representations, warranties and covenants, and the conditions to their
respective obligations; and
(x) the fact that pursuant to the Merger Agreement, PLM is not prohibited
from responding to any unsolicited Acquisition Proposal, and PLM may
terminate the Merger Agreement and accept a Superior Proposal, subject
to PLM's compliance with the terms of the Merger Agreement and PLM's
obligation to pay the Termination Fee and Expenses in the manner
described in the Merger Agreement; and
(xi) the fact that pursuant to the Merger Agreement, MILPI agreed to pay PLM
Liquidated Damages if MILPI breaches the Merger Agreement and such
breach results in a failure to consummate the Transactions on or before
June 30, 2001.
The members of the Board evaluated the various factors listed above in light
of their knowledge of the business, financial condition and prospects of PLM,
and based upon the advice of financial and legal advisors. In light of the
number and variety of factors that the Board considered in connection with their
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evaluation of the Offer and the Merger, the Board did not find it practicable to
assign relative weights to the foregoing factors and, accordingly, the Board did
not do so. In addition to the factors listed above, the Board considered the
fact that consummation of the Offer and the Merger would eliminate the
opportunity of the stockholders to participate in any potential future growth in
the value of PLM, but determined that this loss of opportunity was reflected by
the price of $3.46 per Share to be paid in the Offer and the Merger.
OPINION OF FINANCIAL ADVISOR
On December 21, 2000, Imperial Capital rendered its opinion to the Board
that, as of such date and based upon and subject to certain matters stated
therein, the consideration to be received by the holders of Shares in the
proposed Offer is fair to such holders from a financial point of view. A copy of
the opinion, dated December 21, 2000, which sets forth the assumptions made,
matters considered, the scope and limitations of the review undertaken and the
procedures followed by Imperial Capital is filed as Annex B hereto and is
incorporated herein by reference. Stockholders are urged to read the opinion
carefully and in its entirety for assumptions made, matters considered and
limits of the review by Imperial Capital. Stockholders should note that the
opinion expressed by Imperial Capital was provided for the information of the
Board in its evaluation of the Offer and does not constitute a recommendation to
any stockholder as to whether such stockholder should accept the Offer. No
limitations were placed on Imperial Capital by the Board with respect to the
investigation made or the procedures followed in preparing and rendering its
opinion.
(C) INTENT TO TENDER
To PLM's knowledge after reasonable inquiry, all of PLM's executive
officers, directors, and affiliates currently intend to either (i) tender all
Shares held of record or beneficially by them pursuant to the Offer, or
(ii) vote all Shares held of record or beneficially by them for the adoption of
the Merger Agreement and specifically with respect to the Certain Stockholders,
they have agreed with PLM and MILPI to do so pursuant to the Voting Agreement
(other than any Shares held by such persons which, if tendered, could cause them
to incur liability under Section 16(b) of the Exchange Act). The foregoing does
not include any Shares over which, or with respect to which, any such executive
officer, director, or affiliate acts in a fiduciary or representative capacity
or is subject to the instructions of a third party with respect to such tender.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
Pursuant to a letter agreement dated November 3, 1999, PLM formally retained
Imperial Capital to provide general financial advisory services to, and to
advise PLM concerning, one or more strategic transactions, including a possible
acquisition, sale, merger, joint venture or business combination, and, if
requested, to render an opinion to the Board regarding the fairness, from a
financial point of view, to the holders of the Shares of the consideration to be
received in any such strategic transaction. The Board retained Imperial Capital
based upon Imperial Capital's qualifications, experience and expertise.
Pursuant to the Imperial Capital engagement letter, PLM agreed to pay to
Imperial Capital: (i) a cash retainer; (ii) a fee for delivery of a fairness
opinion; and (iii) a success fee of one and three-quarter (1.75%) of the
aggregate consideration received in a transaction involving Investment
Management. The cash retainer and opinion fees are creditable against the fee
payable upon consummation of a strategic transaction. Prior to delivery of its
fairness opinion relating to the Offer, Imperial Capital received retainer fees
aggregating $50,000. Imperial Capital has received a cash opinion fee of
$175,000 and, if PLM consummates the Transactions, Imperial Capital will receive
a net additional cash fee of approximately $315,000, plus out-of-pocket
expenses. In addition, PLM has also agreed to indemnify Imperial Capital against
certain liabilities and expenses, including certain liabilities under the
federal securities laws, arising out of Imperial Capital's engagement or, if
such indemnification is unavailable to Imperial Capital or
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insufficient to hold it harmless, then PLM has agreed to contribute to the
amount paid or payable by Imperial Capital as a result of such occurrence.
Neither PLM nor any person acting on its behalf has employed, retained or
compensated any other person to make solicitations or recommendations to PLM's
stockholders with respect to the Offer or the Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Except as contemplated by the Voting Agreement or as described in the
following sentences, during the past 60 days, neither PLM nor any subsidiary of
PLM nor, to the best of PLM's knowledge, any executive officer, director or
affiliate of PLM, has effected a transaction in Shares. In connection with a
partial liquidating distribution of $5.00 paid to PLM's stockholders on
November 3, 2000, all outstanding options on such date to acquire Shares for an
exercise price of $5.00 or less were deemed exercised on November 3, 2000 and
the option holder (i) was paid the difference between $5.00 and the exercise
price for each option held and (ii) received one Share for each option. As a
result of the foregoing, on November 3, 2000: Douglas P. Goodrich was deemed to
have exercised options for 45,000 Shares; Mr. Tidball was deemed to have
exercised options for 20,000 Shares; and Harold R. Somerset was deemed to have
exercised options for 30,000 Shares.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Other than as set forth in this Schedule 14D-9, no negotiation is being
undertaken or is underway by PLM in response to the Offer that relates to (1) a
tender offer for or other acquisition of PLM's securities by PLM, any subsidiary
of PLM or any other person; (2) an extraordinary transaction, such as a merger,
reorganization or liquidation, involving PLM or any subsidiary of PLM; (3) a
purchase, sale or transfer of a material amount of assets by PLM or any
subsidiary of PLM; (4) any material change in the present dividend rate or
policy of PLM; or (5) indebtedness or capitalization of PLM.
Other than as set forth in this Schedule 14D-9, there are no transactions,
Board resolutions, agreements in principle or signed contracts in response to
the Offer which relate to, or would result in, one or more of the matters
referred to in this Item 7.
ITEM 8. ADDITIONAL INFORMATION.
INFORMATION PROVIDED PURSUANT TO RULE 14F-1 UNDER THE EXCHANGE ACT.
The Information Statement attached as Annex A hereto is being furnished to
PLM stockholders in connection with the possible designation by MILPI, pursuant
to the Merger Agreement, of certain persons to be appointed to the Board other
than at a meeting of PLM's stockholders as described in Item 3 above, and is
incorporated herein by reference.
DIRECTORS' RESIGNATIONS.
All members of the Board, except for Robert N. Tidball, have tendered
resignations from their directorships to be effective upon the Offer Conditions
Satisfaction Date.
STATE TAKEOVER LAWS AND THE CERTIFICATE OF INCORPORATION.
PLM is incorporated under the laws of the State of Delaware. In general,
Section 203 ("Section 203") of the DGCL prevents an "interested stockholder"
(including a person who owns or has the right to acquire 15% or more of a
corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other actions) with a
Delaware corporation for a period of three years following the time such person
becomes an interested stockholder unless, among other
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exceptions, the "business combination" is approved by the board of directors of
such corporation prior to such time.
Additionally, and in general, Article Eleventh of the Certificate of
Incorporation prevents an "interested shareholder" (including a person who plans
to become the beneficial owner of more than 10% of the voting stock of PLM) from
engaging in a "business combination" (defined to include mergers and certain
other actions) unless such business combination is approved by a majority of the
"continuing directors" (defined to include (i) any member of the Board who is
not an interested stockholder and was a member of the Board before the
interested stockholder became interested, and (ii) any person who subsequently
becomes a member of the Board, who is not an interested stockholder, if such
person's nomination for election to the Board is approved by a majority of the
continuing directors then in office).
PLM has represented in the Merger Agreement that the Board (including the
continuing directors) has approved, among other things, the Merger Agreement,
the Voting Agreement and the Transactions, including the Offer and the Merger,
and such approval constitutes approval of the foregoing for purposes of
Section 203 and Article Eleventh of the Certificate of Incorporation.
SECTION 253 OF THE DGCL.
Under Section 253 of the DGCL, if MILPI acquires, pursuant to the Offer or
otherwise, at least ninety percent of the outstanding Shares, MILPI will be able
to effect the Merger after consummation of the Offer without a vote by PLM's
stockholders. If, following the purchase of Shares pursuant to the Offer, MILPI
owns less than ninety percent of the outstanding Shares and if required by law
in order to consummate the Merger, PLM shall take all actions necessary to
convene a special meeting of its stockholders, as promptly as reasonably
practicable following the date on which MILPI completes the purchase of Shares
pursuant to the Offer, for the purpose of considering and taking action upon the
Merger and the Agreement. The Board shall recommend approval of the Merger and
the Merger Agreement and take all lawful action to solicit and obtain such
approval.
ANTITRUST COMPLIANCE.
Under the HSR Act and the rules that have been promulgated thereunder by the
Federal Trade Commission (the "FTC"), certain acquisition transactions may not
be consummated unless the antitrust division of the U.S. Department of Justice
(the "Antitrust Division") and the FTC have been notified of the transaction,
provided certain information relating thereto, and applicable waiting period
requirements have been satisfied. Based upon amendments to the HSR Act that
become effective on February 1, 2001, the Offer and the Merger will not be
subject to these requirements because the Initial Expiration Date will occur
after the effective date of such amendment.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of the
Shares by MILPI pursuant to the Offer. At any time before or after the purchase
of the Shares pursuant to the Offer by MILPI, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
the Shares pursuant to the Offer or seeking the divestiture of the Shares
purchased by MILPI or the divestiture of substantial assets of MILPI, PLM or
their respective subsidiaries. Private parties and state attorneys general also
may bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to PLM
relating to the businesses in which MILPI, PLM and their respective subsidiaries
are engaged, PLM believes that the Offer will not violate the antitrust laws.
Nevertheless, there can be no assurance that a challenge to the Offer on
antitrust grounds will not be made or, if such a challenge is made, what the
result would be.
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APPRAISAL RIGHTS.
GENERAL. Holders of record of Shares who do not vote in favor of the
adoption of the Merger Agreement may, under certain circumstances and by
following the procedure, prescribed by Section 262 of the DGCL, exercise
appraisal rights and receive cash for their Shares. In order to properly assert
one's rights, a dissenting stockholder must follow the appropriate procedures
under the DGCL or suffer the termination or waiver of such rights.
Any demand for appraisal or that PLM purchase your Shares or certificates
for endorsement as dissenting Shares should be submitted, within the time
periods described herein, to the Secretary of PLM International, Inc., One
Market, Steuart Street Tower, Suite 800, San Francisco, CA 94105, telephone
number (415) 974-1399.
Any failure to comply strictly with the requirements of the Delaware
provisions will result in the termination of your appraisal or dissenters'
rights. The summary provided below does not purport to be complete and are
qualified by reference to the applicable statutory provisions.
APPRAISAL RIGHTS UNDER DELAWARE LAW. If the Merger is completed, record
holders of Shares who:
- do not vote to adopt the Merger Agreement or consent to it in writing, and
- do not tender their shares in the Offer and continuously hold their Shares
through the Effective Time, and
- make a timely demand for appraisal, and
- otherwise comply with Section 262 of the DGCL,
- will have the right to be paid the fair value of their Shares, as
determined by the Delaware Court of Chancery.
"Fair value" excludes any value arising from the accomplishment or
expectation of the Merger, and includes a fair rate of interest, if any, as
determined by the Court of Chancery.
PLM stockholders who wish to exercise appraisal rights must deliver to PLM a
timely written demand for appraisal of their Shares. A demand for appraisal will
be sufficient if it reasonably informs PLM of the stockholder's identity and
that the stockholder intends to demand appraisal of such stockholder's Shares.
Each stockholder demanding appraisal must be the record holder of the Shares on
the date the written demand for appraisal is made and, if the demand is
submitted prior to the Effective Time, must continue to hold such Shares through
the Effective Time.
Within 60 days after the Effective Time, a stockholder may withdraw the
demand for appraisal and accept the Offer Price, provided that any such attempt
to withdraw made more than 60 days after the Effective Time will require the
written approval of PLM and, once a petition for appraisal is filed, the
appraisal proceeding may not be dismissed as to any holder absent court
approval.
Within 120 days after the Effective Time, PLM, or any holder of Shares who
complied with the requirements for perfecting appraisal rights, as summarized
above, may file a petition with the Court of Chancery demanding a determination
of the fair value of the Shares held by all dissenting stockholders who have
perfected their appraisal rights. PLM is under no obligation to and has no
present intention to file such a petition. Accordingly, it is the obligation of
the holders of Shares to initiate all necessary action to perfect their
appraisal rights in respect of such Shares within the time prescribed in
Section 262 of the DGCL. Within 120 days after the Effective Time, any
stockholder who has perfected appraisal rights may, by written request, require
that PLM mail a statement setting forth the total number of holders of Shares
that have perfected appraisal rights and the total number of Shares held by
them.
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After determining which dissenting stockholders are entitled to appraisal,
the Chancery Court will appraise the fair value of their Shares, exclusive of
any element of value arising from the accomplishment or expectation of the
Merger, together with a fair rate of interest, if any, to be paid upon the
amount determined to be the fair value. Holders of Shares considering seeking
appraisal should be aware that the fair value of their Shares determined by
Section 262 of the DGCL could be more or less than, or the same as the
consideration they would have received pursuant to the Merger if they did not
seek appraisal of their Shares and that investment banking opinions as to
fairness from a financial point of view are not necessarily opinions as to fair
value under Section 262 of the DGCL.
Section 262 of the DGCL requires that stockholders entitled to exercise
appraisal rights be notified that such rights are available. The foregoing does
not constitute such notice; rather such notice will be delivered at the
appropriate time to the holders of Shares entitled to receive such notice and
will set forth, among other things, the timing and other requirements for the
submission of a written demand for appraisal.
CERTAIN LITIGATION MATTERS.
PLM and various of its wholly-owned subsidiaries are defendants in a class
action lawsuit filed in January 1997 and which is pending in the United States
District Court (the "court") for the Southern District of Alabama, Southern
Division (Civil Action No. 97-0177-BH-C) (the "KOCH action"). The named
plaintiffs are six individuals who invested in PLM Equipment Growth Fund IV, PLM
Equipment Growth Fund V ("Fund V"), PLM Equipment Growth Fund VI ("Fund VI"),
and PLM Equipment Growth & Income Fund VII ("Fund VII" and together with Fund V
and Fund VI, the "Partnerships"), each a California limited partnership for
which FSI acts as the general partner. The complaint asserts causes of action
against all defendants for fraud and deceit, suppression, negligent
misrepresentation, negligent and intentional breaches of fiduciary duty, unjust
enrichment, conversion, and conspiracy. Plaintiffs allege that each defendant
owed plaintiffs and the class certain duties due to their status as fiduciaries,
financial advisors, agents, and control persons. Based on these duties,
plaintiffs assert liability against defendants for improper sales and marketing
practices, mismanagement of the Partnerships, and concealing such mismanagement
from investors in the Partnerships. Plaintiffs seek unspecified compensatory
damages, as well as punitive damages.
In June 1997, PLM and the affiliates who are also defendants in the KOCH
action were named as defendants in another purported class action filed in the
San Francisco Superior Court, San Francisco, California, Case No.987062 (the
"ROMEI action"). The plaintiff is an investor in Fund V, and filed the complaint
on her own behalf and on behalf of all class members similarly situated who
invested in the Partnerships. The complaint alleges the same facts and the same
causes of action as in the KOCH action, plus additional causes of action against
all of the defendants, including alleged unfair and deceptive practices and
violations of state securities law. In July 1997, defendants filed a petition in
federal district court under the Federal Arbitration Act seeking to compel
arbitration of plaintiff's claims. In October 1997, the district court denied
PLM's petition, but in November 1997, agreed to hear PLM's motion for
reconsideration. Prior to reconsidering its order, the district court dismissed
the petition pending settlement of the ROMEI action, as discussed below. The
state court action continues to be stayed pending such resolution.
In February 1999 the parties to the KOCH and ROMEI actions agreed to settle
the lawsuits, with no admission of liability by any defendant, and filed a
Stipulation of Settlement with the court. The settlement is divided into two
parts, a monetary settlement and an equitable settlement. The monetary
settlement provides for a settlement and release of all claims against
defendants in exchange for payment for the benefit of the class of up to
$6.6 million. The final settlement amount will depend on the number of claims
filed by class members, the amount of the administrative costs incurred in
connection with the settlement, and the amount of attorneys' fees awarded by the
court to plaintiffs' attorneys. PLM will pay up to $0.3 million of the monetary
settlement, with the remainder being funded by an insurance policy. For
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settlement purposes, the monetary settlement class consists of all investors,
limited partners, assignees, or unit holders who purchased or received by way of
transfer or assignment any units in the Partnerships between May 23, 1989 and
August 30, 2000. The monetary settlement, if approved, will go forward
regardless of whether the equitable settlement is approved or not.
The equitable settlement provides, among other things, for: (a) the
extension (until January 1, 2007) of the date by which FSI must complete
liquidation of the Partnerships' equipment, (b) the extension (until
December 31, 2004) of the period during which FSI can reinvest the Partnerships'
funds in additional equipment, (c) an increase of up to 20% in the amount of
front-end fees (including acquisition and lease negotiation fees) that FSI is
entitled to earn in excess of the compensatory limitations set forth in the
North American Securities Administrator's Association's Statement of Policy;
(d) a one-time repurchase by each of Funds V, VI and VII of up to 10% of that
partnership's outstanding units for 80% of net asset value per unit; and
(e) the deferral of a portion of the management fees paid to an affiliate of FSI
until, if ever, certain performance thresholds have been met by the
Partnerships. Subject to final court approval, these proposed changes would be
made as amendments to each Partnership's limited partnership agreement if less
than 50% of the limited partners of each Partnership vote against such
amendments. The equitable settlement also provides for payment of additional
attorneys' fees to the plaintiffs' attorneys from Partnership funds in the
event, if ever, that certain performance thresholds have been met by the
Partnerships. The equitable settlement class consists of all investors, limited
partners, assignees or unit holders who on August 30, 2000 held any units in
Funds V, VI, and VII, and their assigns and successors in interest.
The court preliminarily approved the monetary and equitable settlements in
August 2000, and information regarding each of the settlements was sent to class
members in September 2000. The monetary settlement remains subject to certain
conditions, including final approval by the court following a final fairness
hearing. The equitable settlement remains subject to certain conditions,
including judicial approval of the proposed amendments and final approval of the
equitable settlement by the court following a final fairness hearing.
A final fairness hearing was held on November 29, 2000 and the parties await
the court's decision. PLM continues to believe that the allegations of the KOCH
and ROMEI actions are completely without merit and intends to continue to defend
this matter vigorously if the monetary settlement is not consummated.
PLM is involved as plaintiff or defendant in various other legal actions
incidental to its business. Management of PLM does not believe that any of these
actions will be material to the financial condition of PLM.
AVAILABLE INFORMATION
PLM is subject to the informational filing requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the SEC relating to its business,
financial condition and other matters. Stockholders may read and copy such
reports, proxy statements and other information at the public reference
facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Stockholders can also obtain copies of such materials by
mail, upon payment of the SEC's customary fees, by telephone at 1-800-SEC-0330,
or electronically through the SEC's Web Site at http://www.sec.gov, which
contains reports and other information regarding issuers that file
electronically with the SEC.
24
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1 Offer to Purchase dated December 29, 2000.**+
2 Letter of Transmittal dated December 29, 2000.**+
3 Agreement and Plan of Merger dated December 22, 2000, among
MILPI and PLM.*
4 Amended and Restated Voting and Tender Agreement dated
December 22, 2000, among MILPI, PLM, Steel Partners II,
L.P., Steel Partners, L.L.C., Warren G. Lichtenstein, Robert
Tidball, and Doug Goodrich.*
5 Letter to Stockholders of PLM dated December 29, 2000.+
6 Press Release of PLM dated December 22, 2000.*
7 Escrow Agreement, dated December 22, 2000 among PLM, MILPI
and Bank of San Francisco.*
8 Form of Company Nonqualified Stock Option Agreement,
incorporated by reference to PLM's Annual Report on Form
10-K filed with the Securities and Exchange Commission on
March 31, 1993.
9 Directors' 1995 Nonqualified Stock Option Plan, incorporated
by reference to PLM's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 15, 1995.
10 1998 Management Stock Compensation Plan, dated May 12, 1998,
incorporated by reference to PLM's Form 10-Q filed with the
Securities and Exchange Commission on July 22, 1998.
11 Employment Agreement dated December 18, 1992 between PLM and
Stephen M. Bess, incorporated by reference to PLM's Form 10
K/A filed with the Securities and Exchange Commission on
January 19, 2000.
12 Employment Agreement dated May 12, 1998 between PLM and
Richard K Brock, incorporated by reference to PLM's Form 10
K/A filed with the Securities and Exchange Commission on
January 19, 2000.
13 Amendment to Employment Agreement dated November 18, 1998
between PLM and Richard K Brock, incorporated by reference
to PLM's Form 10 K/A filed with the Securities and Exchange
Commission on January 19, 2000.
14 Employment Agreement dated November 19, 1997 between PLM and
Susan C. Santo, incorporated by reference to PLM's Form 10
K/A filed with the Securities and Exchange Commission on
January 19, 2000.
15 Amendment to Employment Agreement dated November 17, 1998
between PLM and Susan C. Santo, incorporated by reference to
PLM's Form 10 K/A filed with the Securities and Exchange
Commission on January 19, 2000.
16 Executive Deferred Compensation Agreement dated December 18,
1992 between PLM and Stephen M. Bess, incorporated by
reference to PLM's Form 10- K/A filed with the Securities
and Exchange Commission on January 19, 2000.
17 Executive Deferred Compensation Agreement dated January 18,
1999 between PLM and Richard K Brock, incorporated by
reference to PLM's Form 10-K/A filed with the Securities and
Exchange Commission on January 19, 2000.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
18 Executive Deferred Compensation Agreement dated January 18,
1999 between PLM and Susan C. Santo, incorporated by
reference to PLM's Form 10-K/A filed with the Securities and
Exchange Commission on January 19, 2000.
19 Amendment to PLM Directors' 1995 Nonqualified Stock Option
Plan, dated April 28, 1999, incorporated by reference to
PLM's Form 10-Q filed with the Securities and Exchange
Commission on May 4, 1999.
20 Amendment to PLM 1998 Management Stock Compensation Plan,
dated April 28, 1999, incorporated by reference to PLM's
Form 10-Q filed with the Securities and Exchange Commission
on May 4, 1999.
21 Amended Form of Nonqualified Stock Option Agreement,
incorporated by reference to PLM's Form 10-Q filed with the
Securities and Exchange Commission on May 4, 1999.
22 Second Amendment to PLM 1998 Management Stock Compensation
Plan, dated May 29, 1999, incorporated by reference to PLM's
Form 10-Q filed with the Securities and Exchange Commission
on July 26, 1999.
23 Severance Agreement dated July 7, 2000 between PLM and
Stephen Bess, incorporated by reference to PLM's Form 10-Q
filed with the Securities and Exchange Commission on August
2, 2000.
24 Information Statement of PLM pursuant to Section 14f-1 of
the Exchange Act, dated December 29, 2000 (included as, and
incorporated by reference to, Annex A attached hereto).+
25 Opinion of Imperial Capital to the Board dated December 21,
2000 (included as, and incorporated by reference to, Annex B
attached hereto).+
</TABLE>
------------------------
* Incorporated by reference to Form 8-K filed by PLM on December 28, 2000.
** Incorporated by reference to the Schedule TO filed by MILPI on the date of
this Schedule 14D-9.
+ Included in the materials mailed to stockholders.
26
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C>
Dated: December 29, 2000.
By: /s/ Robert N Tidball
-----------------------------------------
Robert N. Tidball
CHAIRMAN
</TABLE>
27
<PAGE>
ANNEX A
PLM INTERNATIONAL, INC.
ONE MARKET, STEUART STREET TOWER, SUITE 800
SAN FRANCISCO, CALIFORNIA 94105
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF
THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
NO VOTE OR OTHER ACTION OF PLM INTERNATIONAL, INC.'S
STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION
STATEMENT. NO PROXIES ARE BEING SOLICITED AND YOU ARE
REQUESTED NOT TO SEND A PROXY TO PLM INTERNATIONAL, INC.
This Information Statement is being mailed on or about December 29, 2000, as
a part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of PLM International, Inc. ("PLM" or the "Company"), a
Delaware corporation, to the holders all of the outstanding shares of common
stock, par value $.01 per share, of PLM (the "Shares") with respect to the
tender offer by MILPI Acquisition Corp. ("MILPI"), a Delaware corporation, to
purchase the Shares at a purchase price of $3.46 per Share in cash and without
interest, upon the terms and subject to the conditions set forth in MILPI's
Offer to Purchase and related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
Capitalized terms used and not otherwise defined herein shall have the meaning
set forth in the Schedule 14D-9.
You are receiving this Information Statement in connection with the possible
election or appointment of persons designated by MILPI to a majority of the
seats on the Board of Directors of PLM (the "Board"). Such election or
appointment is to be made pursuant to the Merger Agreement.
The Merger Agreement provides that, promptly after such time as MILPI
acquires Shares pursuant to the Offer, MILPI will be entitled, to the fullest
extent permitted by law, to designate up to that number of directors (rounded up
to the next whole number), subject to compliance with Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as will make
the percentage of PLM's directors designated by MILPI equal to the percentage of
the aggregate voting power of the Shares held by MILPI. However, the Merger
Agreement also provides that in the event that MILPI's designees are appointed
to the Board, until the effective time of the Merger (the "Effective Time"), the
Board will have at least one director who was a director of PLM on the date of
the Merger Agreement and was not an officer of PLM or its subsidiaries (a
"Continuing Director"). The Merger Agreement requires PLM to take all action
within its power to cause MILPI's designees to be elected or appointed to the
Board, including by increasing the number of directors and by seeking and
accepting resignations of incumbent directors.
Following the election or appointment of MILPI's designees to the Board and
until the consummation of the Merger, the approval of the Continuing Director
shall be required to authorize (and such authorization shall constitute the
authorization of PLM's Board and no other action on the part of PLM, including
any action by any other directors of PLM, shall be required to authorize)
(a) any termination of the Merger Agreement by Company, (b) any amendment of the
Merger Agreement requiring action by PLM's Board, (c) any amendment of the
certificate of incorporation or by-laws of PLM or any of its subsidiaries,
(d) any extension of time for performance of any obligation or action hereunder
or under the Offer by MILPI, or (e) any waiver of compliance with, or
enforcement of, any of the agreements or conditions contained in the Merger
Agreement, or under the Offer for the benefit of PLM and any material
transaction with MILPI or any affiliate thereof.
This Information Statement is required by Section 14(f) of the Exchange Act
and Rule 14f-1 thereunder in connection with the appointment of MILPI's
designees to the PLM Board. You are urged to read this Information Statement
carefully. You are not, however, required to take any action in connection with
this Information Statement.
<PAGE>
Pursuant to the Merger Agreement, MILPI commenced the Offer on December 29,
2000. The Offer is scheduled to expire at midnight, New York City time, on
February 6, 2001, unless the Offer is extended, at which time, if all conditions
to the Offer have been satisfied or waived, MILPI will purchase all of the
Shares validly tendered pursuant to the Offer and not properly withdrawn. The
information contained in this Information Statement (including information
incorporated by reference) concerning MILPI and MILPI's designees has been
furnished to PLM by MILPI, and PLM assumes no responsibility for the accuracy or
completeness of such information. At the close of business on December 28, 2000,
there were 7,554,510 Shares issued and outstanding, which is the only class of
securities outstanding having the right to vote for the election of PLM's
directors, each of which entitles its record holder to one vote. Additionally,
at the close of business on December 28, 2000, there were outstanding options to
purchase 495,000 shares of PLM common stock.
MILPI'S DESIGNEES TO PLM'S BOARD
The Board currently consists of 8 members. The Company's by-laws provide
that the Company may have between 3 and 15 members of the Board. MILPI has
informed PLM that the designees MILPI has the right to designate to the PLM
Board pursuant to the Merger Agreement will be chosen from the individuals
listed in Schedule I of the Offer to Purchase, a copy of which is being mailed
to stockholders together with the Schedule 14D-9. The information with respect
to such individuals in Schedule I is hereby incorporated by reference. MILPI has
informed PLM that each of the individuals listed in Schedule I of the Offer to
Purchase has consented to act as a director of PLM, if so designated. PLM will
take all action within its power to cause MILPI's designees to be elected or
appointed to the Board including by increasing the number of directors and by
seeking and accepting resignations of incumbent directors.
Based solely on the information set forth in Schedule I of the Offer to
Purchase filed by MILPI, none of the executive officers and directors of MILPI
(i) is currently a director of or holds any position with PLM, or (ii) has a
familial relationship with any directors or executive officers of PLM. PLM has
been advised that MILPI and, to the best knowledge of MILPI, none of the persons
listed in Schedule I (except as indicated on Schedule I) beneficially owns any
equity securities (or rights to acquire such equity securities) of PLM.
Moreover, except as set forth in the Offer to Purchase, MILPI and, to the best
knowledge of MILPI, none of the persons listed in Schedule I has been involved
in any transactions with PLM or any of its directors, executive officers,
affiliates or associates which are required to be disclosed pursuant to the
rules and regulations of the SEC.
MILPI has informed PLM that, to the best knowledge of MILPI, during the past
five years, none of the executive officers and directors of MILPI has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to any judicial or administrative proceeding
(except for matters that were dismissed without sanction or settlement) that
resulted in a judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities laws.
It is expected that MILPI's designees may assume office at any time
following the Offer Conditions Satisfaction Date, which cannot be earlier than
February 6, 2001.
INFORMATION CONCERNING PLM
GENERAL
The authorized capital stock of PLM consists of 50,000,000 Shares and
10,000,000 shares of Preferred Stock, par value $.01 per share. As of the close
of business on December 28, 2000, there were 7,554,510 Shares and no shares of
Preferred Stock issued and outstanding. PLM's Bylaws authorize the number of
directors to be not less than 3 nor more than 15. The Board currently consists
of 8 members.
2
<PAGE>
Each Share entitles the record holder to one vote. PLM's Certificate of
Incorporation and the Bylaws provide for a classified Board. The Board is
separated into three classes, and the Directors in each class are elected to
serve for three-year terms, and until their respective successors are duly
elected and qualified. The Board currently consists of three Class I Directors
(Robert N. Tidball, Stephen M. Bess and Robert L. Witt), three Class II
Directors (Randall L-W. Caudill, Douglas P. Goodrich, and Harold R. Somerset),
and two Class III Directors (Warren G. Lichtenstein and Howard M. Lorber). The
terms of the Class I Directors expire at the annual meeting of stockholders to
be held in 2000, the term of the Class II Directors expires at the annual
meeting of stockholders to be held in 2001 and the term of the Class III
Directors expires at the annual meeting of stockholders to be held in 2002.
DIRECTORS AND EXECUTIVE OFFICERS
CURRENT MEMBERS OF THE BOARD
As of the filing date of this Information Statement, the directors of PLM
are:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
Robert N. Tidball..................... 61 Chairman of the Board, Director
Stephen M. Bess....................... 54 Director, President and Chief
Executive Officer
Randall L-W. Caudill.................. 53 Director
Douglas P. Goodrich................... 54 Director
Warren G. Lichtenstein................ 35 Director
Howard M. Lorber...................... 52 Director
Harold R. Somerset.................... 65 Director
Robert L. Witt........................ 60 Director
</TABLE>
The following are brief biographies of each director of PLM (including
present principal occupation or employment, and material occupations, positions,
offices or employments for the past five years). To the knowledge of PLM, during
the past five years no director of PLM has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) and no
director of PLM was a party to any judicial or administrative proceeding (except
for any matters that were dismissed without sanction or settlement) that
resulted in a judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities laws. Unless
otherwise indicated, each such person is a citizen of the United States and each
individual's business address is One Market, Steuart Street Tower, Suite 800,
San Francisco, California 94105.
ROBERT N. TIDBALL joined the Board in 1989 and was appointed Chairman of the
Board in August 1997 and serves on the Nominating Committee and the Executive
Committee. His current three-year term as a Class I director expires at the 2000
annual meeting of stockholders of the Company. Between March 1989 and
September 2000 Mr. Tidball served as President and Chief Executive Officer of
PLM. He also served as an officer or director of various subsidiaries and
affiliates of PLM from 1987 through September 2000.
STEPHEN M. BESS was appointed Director, President and Chief Executive
Officer of PLM in September 2000. His current three-year term as a Class I
director expires at the 2000 annual meeting of stockholders of the Company. He
was appointed President of PLM Financial Services, Inc. in September 2000 and a
Director in July 1997. Mr. Bess was appointed President of PLM Investment
Management, Inc. in August 1989. He also served as an officer or director of
certain other of PLM's subsidiaries or affiliates, including PLM Financial
Services, Inc. and PLM Investment Management, Inc. since 1982.
RANDALL L-W. CAUDILL was elected to the Board in September 1997 and his
current three-year term as a Class II director expires at the 2001 annual
meeting of stockholders of PLM. He serves on the Executive Committee, the
Compensation Committee and the Audit Committee (Chairman) of the Board.
3
<PAGE>
Mr. Caudill has been President of Dunsford Hill Capital Partners, a San
Francisco-based financial consulting firm serving emerging growth companies
since 1997. Prior to founding Dunsford Hill Capital Partners in 1997,
Mr. Caudill held senior investment banking positions at Prudential Securities
from 1987 to 1997, and before that at Morgan Grenfell Inc. and The First Boston
Corporation. Mr. Caudill also serves as a director of SBE, Inc., a publicly-held
company, and various other companies.
DOUGLAS P. GOODRICH was elected to the Board in July 1996, and served as
Senior Vice President of PLM between March 1994 and September 2000. He also
served as an officer or director of various subsidiaries of PLM from 1987
through September 2000. Since October 2000, Mr. Goodrich has been the President
of MAC Trailer Leasing, LLC d/b/a PLM Trailer Leasing. Mr. Goodrich's current
three-year term as a Class II director expires at the 2001 annual meeting of
stockholders of the Company.
WARREN G. LICHTENSTEIN was elected to the Board in December 1998 and his
current three-year term as a Class III director expires at the 2002 annual
meeting of stockholders of PLM. Mr. Lichtenstein has been since 1990 the Chief
Executive Officer of Steel Partners L.L.C., the general partner of Steel
Partners II, L.P., which is PLM's largest stockholder. Additionally,
Mr. Lichtenstein is the Chief Executive Officer and a director of WebFinancial
Corporation and is a director of Gateway Industries, Inc., CPX Corp., ECC
International Corporation and Puroflow, Inc., each a publicly-held company.
HOWARD M. LORBER was elected to the Board in January 1999 and his current
three-year term as a Class III director expires at the 2002 annual meeting of
stockholders of PLM. Mr. Lorber has been President, Chief Operating Officer and
a director of New Valley Corporation, an investment banking and real estate
concern since 1994. He also has been since 1987 Chairman of the Board and Chief
Executive Officer of Nathan's Famous, Inc., a fast food company. Additionally,
Mr. Lorber is a director of United Capital Corporation and Prime Hospitality
Corporation, and serves on the boards of several community service
organizations.
HAROLD R. SOMERSET was elected to the Board of PLM in July 1994 and his
current three- year term as a Class II director expires at the 2001 annual
meeting of stockholders of PLM. Mr. Somerset serves on the Executive Committee,
the Compensation Committee (Chairman) and the Audit Committee of the Board.
Mr. Somerset has been retired since 1993. From February 1988 to December 1993,
Mr. Somerset was President and Chief Executive Officer of California & Hawaiian
Sugar Corporation (C&H Sugar), a subsidiary of Alexander & Baldwin, Inc.
Mr. Somerset also serves on the boards of directors for various other companies
and organizations, including Longs Drug Stores, Inc., a publicly-held company.
ROBERT L. WITT was elected to the Board in June 1997 and his current
three-year term as a Class I director expires at the 2000 annual meeting of
stockholders of PLM. He serves on the Executive Committee, the Compensation
Committee, the Nominating Committee and the Audit Committee of the Board. Since
January 2000, Mr. Witt has been the President and Chief Executive Officer of
1201 Financial & Insurance Services, Inc., a financial and insurance services
company. He also has been a principal with WWS Associates, a consulting and
investment group specializing in start-up situations and private organizations
about to go public, since 1993. Mr. Witt also serves on the boards of directors
for various other companies and organizations.
DIRECTORS' RESIGNATIONS
All members of the Board, except for Robert N. Tidball, have tendered
resignations from their directorships to be effective upon the Offer Conditions
Satisfaction Date.
BOARD MEETINGS AND COMMITTEES
During 1999, the Board held 16 meetings and acted 13 times by unanimous
written consent. During 1999, each director then in office attended 75% or more
of the aggregate of (i) the total number of
4
<PAGE>
meetings of the Board, and (ii) the total number of meetings held by all
committees of the Board on which he served.
The Board has a standing Compensation Committee, Executive Committee, Audit
Committee and Nominating Committee. The Compensation Committee is comprised of
Messrs. Somerset (Chairman), Caudill and Witt. The Compensation Committee is
responsible for advising and recommending to the Board of the Company policies
governing executive compensation and the Company's incentive compensation plans.
The Compensation Committee met three times in 1999.
The Executive Committee consists of Messrs. Tidball (Chairman), Caudill,
Somerset and Witt. The Executive Committee, which was formed in October 1988,
may exercise all the powers and authority of the Board in the management of the
business and affairs of the Company, subject to the limitations prescribed by
the Board, the Bylaws of the Company and Delaware law. The Executive Committee
did not meet in 1999.
The Audit Committee consists of Messrs. Caudill (Chairman), Somerset and
Witt. 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
auditors' report to management, and review financial statements and internal
accounting controls. The Audit Committee met two times in 1999. The Board
adopted a written charter for the Audit Committee in May 2000, a copy of which
is attached to this Information Statement as Appendix 1. The report of the Audit
Committee is included herein.
The Nominating Committee was established in September 1990 to investigate
and make recommendations to the Board for nominees to the Board and its
committees. The Nominating Committee consists of Messrs. Tidball (Chairman),
Somerset and Witt. The Nominating Committee did not meet in 1999. The Nominating
Committee will consider nominees to the Board recommended by stockholders 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.
EXECUTIVE OFFICERS
Set forth below are the names, ages, and titles of the current executive
officers of PLM. Officers are selected by the Board from time to time and hold
office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH PLM
---- -------- --------------------
<S> <C> <C>
Stephen M. Bess....................... 54 President and Chief Executive Officer
Richard K. Brock...................... 37 Vice President and Chief Financial
Officer
Susan C. Santo........................ 37 Vice President, Secretary and General
Counsel
</TABLE>
The following are brief biographies of each executive officer of PLM,
including present principal occupation or employment, and material occupations,
positions, offices or employments for the past five years (except for Mr. Bess,
whose biography is provided above under the paragraph listing the Current
Members of the Board). To the knowledge of PLM, no executive officer of PLM has
been convicted in a criminal proceeding during the last five years (excluding
traffic violations or similar misdemeanors), and no executive officer of PLM was
a party to any judicial or administrative proceeding during the last five years
(except for any matters that were dismissed without sanction or settlement) that
resulted in a judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to, federal or state securities
laws; or a finding of any violation of federal or state securities laws. Unless
otherwise indicated, each such person is a citizen of the United States and each
individual's business address is One Market, Steuart Street Tower, Suite 800,
San Francisco, California 94105.
5
<PAGE>
Richard K. Brock was appointed Vice President and Chief Financial Officer of
PLM in January 2000, having served as Acting Chief Financial Officer since
June 1999 and as Vice President and Corporate Controller of PLM since
June 1997. Prior to June 1997, Mr. Brock served PLM as an accounting manager
beginning in September 1991 and as Director of Planning and General Accounting
beginning in February 1994.
Susan C. Santo was appointed Vice President, Secretary, and General Counsel
of PLM in November 1997. She has worked as an attorney for PLM since 1990 and
served as its Senior Attorney from 1994 until her appointment as General
Counsel.
EXECUTIVE AND DIRECTOR COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years ended December 31, 1999,
1998 and 1997, a summary of compensation awarded to, earned by or paid to PLM's
Chief Executive Officer and each of its four other most highly compensated
executive officers (together, the "named executive officers") at December 31,
1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION RESTRICTED SECURITIES
------------------------------- STOCK UNDERLYING ALL OTHER
SALARY(1) BONUS(2) AWARDS(3) OPTIONS(4) COMPENSATION(5)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- -------- --------- -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Bess, 1999 183,417 42,560 -- -- 5,304
President and Chief Executive 1998 176,417 52,500 23,334 20,000 5,971
Officer 1997 170,000 52,500 23,334 -- 6,682
Robert N. Tidball,(6) 1999 323,400 -- -- -- 5,304
Former President, Chief 1998 311,000 180,000 80,000 110,000 5,971
Executive Officer 1997 300,000 172,500 76,670 -- 6,682
Douglas P. Goodrich,(6) 1999 205,333 -- -- -- 5,304
Former Senior Vice President 1998 197,733 80,000 106,672 85,000 5,971
1997 190,000 75,000 100,000 -- 6,682
Donald R. Dugan,(7) 1999 188,817 202,250 -- -- 5,304
President, American Finance 1998 179,733 50,000 -- 50,000 5,971
Group, Inc. 1997 150,000 105,000 46,669 -- 6,682
Susan C. Santo, 1999 176,417 40,000 -- -- 5,304
Vice President, General Counsel 1998 170,000 80,000 -- 40,000 5,971
and Secretary 1997 115,167 25,000 -- -- 6,682
</TABLE>
------------------------
(1) Amounts shown do not include the cost to PLM of personal benefits, the value
of which did not exceed the lesser of $50,000 or 10% of the aggregate salary
and bonus compensation for each named executive officer.
(2) Bonus compensation reflects the amount earned in the designated year, but
paid in the immediate subsequent year, except that, Mr. Bess, as the officer
responsible for marine container transactions for PLM's equipment
acquisition subsidiary, PLM Transportation Equipment Corporation, was paid
$32,560 in 1999 pursuant to a commission incentive plan based on the dollar
amount of certain containers purchased in 1998/1999.
6
<PAGE>
(3) Restricted stock (also referred to as "Bonus Shares") was awarded pursuant
to the 1996 PLM International, Inc. Mandatory Management Stock Bonus Plan.
Bonus Shares were granted in substitution of cash bonus compensation earned
in the designated year, though shares were actually granted in January of
the subsequent year. The number of Bonus Shares granted equals the amount of
cash bonus awarded by the Board 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 PLM's common stock on the
effective date of grant. The fair market value is equal to the closing price
of PLM's common stock on the effective date of grant or the immediately
preceding trading day if the grant day was a non-trading day. Cash bonus
compensation earned in a 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. Bonus Shares granted pursuant
to this plan generally vest ratably over three years, except that in
connection with PLM's sale of all of the issued and outstanding common stock
of AFG on March 1, 2000, the Bonus Shares granted to Mr. Dugan were fully
vested as of March 1, 2000, and in connection with the Company's sale of
Trailer Leasing, the Bonus Shares granted to Messrs. Bess, Goodrich and
Tidball became fully vested. Non-vested Bonus Shares are subject to
forfeiture in the event the recipient voluntarily terminates his or her
employment with PLM. The allocation ratio for the Bonus Shares granted in
substitution of cash bonus earned in 1998 and 1997, the resulting awards of
Bonus Shares, and the reduction in cash bonus are as follows for each of the
named executive officers:
<TABLE>
<CAPTION>
BONUS SHARES REDUCTION IN
AWARDED CASH BONUS
ALLOCATION ------------------- -------------------
NAME RATIO 1998 1997 1998 1997
---- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Robert N. Tidball.................... 25% 13,606 14,960 $60,000 $57,500
Douglas P. Goodrich.................. 50% 18,141 19,513 80,000 75,000
Donald R. Dugan...................... 25% -- 9,106 -- 35,000
Stephen M. Bess...................... 25% 3,968 4,553 17,500 17,500
</TABLE>
(4) Comprised of options granted effective May 12, 1998, pursuant to PLM's 1998
Management Stock Compensation Plan, which was approved by the Board on
May 12, 1998. The options have an exercise price of $6.813 per share. All
options vest ratably over three years and expire on May 12, 2008, except
that in connection with PLM's sale of all of the issued and outstanding
common stock of American Finance Group, Inc. on March 1, 2000, the options
granted to Mr. Dugan were fully vested as of March 1, 2000, and in
connection with the Company's sale of Trailer Leasing, the options granted
to Messrs. Bess, Goodrich and Tidball and Ms. Santo became fully vested.
(5) Includes for 1999, contributions made by PLM pursuant to the PLM
International, Inc. Profit Sharing and 401(k) Plan to each of the named
executive officer's accounts as follows: $4,000 in 401(k) matching
contributions and $731 in profit-sharing contributions (an equal amount of
profit-sharing contributions were made to the retirement accounts of each of
PLM's eligible employees). Also includes for each named executive officer
PLM-paid premiums in the amount of $573 for term life insurance.
(6) On September 29, 2000 Messrs. Goodrich and Tidball resigned their executive
positions with the Company (and its subsidiaries and affiliates) immediately
following the sale of Trailer Leasing.
(7) On March 1, 2000, PLM sold all of the issued and outstanding common stock of
AFG to Guaranty Federal Bank, FSB. Accordingly, Mr. Dugan is no longer
employed by PLM or any of its subsidiaries.
STOCK OPTION GRANTS
No stock options were granted to any of the named executive officers in
1999.
7
<PAGE>
STOCK OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the exercise of stock
options during the last fiscal year by each of the named executive officers and
the December 31, 1999 value of unexercised options held by each of the named
executive officers as of such date:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
-------------------- --------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(1) VALUE REALIZED UNEXERCISABLE UNEXERCISABLE(2)
---- ------------------ -------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Stephen M. Bess(3)........ -- -- 16,667/13,333 $ 38,750/--
Robert N. Tidball(4)...... 65,000 243,750 121,666/73,334 $ 304,375/ --
Douglas P. Goodrich(5).... 10,000 36,250 83,333/56,667 $ 156,875/ --
Donald R. Dugan, Jr.(6)... -- -- 46,667/33,333 $ 78,750/ --
Susan C. Santo(7)......... -- -- 13,333/36,667 -- / --
</TABLE>
------------------------
(1) All of the options exercised were granted in 1992 and had an exercise price
of $2.00 per share.
(2) Options granted in 1992 have an exercise price of $2.00; options granted in
1996 have an exercise price of $3.25; and options granted in 1998 have an
exercise price of $6.813. The closing price of PLM's common stock on the
American Stock Exchange on December 31, 1999 was $5.875 per share.
(3) On December 31, 1999, Mr. Bess had outstanding options granted in 1992 to
purchase 10,000 shares of common stock and options granted in 1998 to
purchase 20,000 shares of common stock.
(4) On December 31, 1999, Mr. Tidball had outstanding options granted in 1992 to
purchase 65,000 shares of common stock, options granted in 1996 to purchase
20,000 shares of common stock and options granted in 1998 to purchase
110,000 shares of common stock.
(5) On December 31, 1999, Mr. Goodrich had outstanding options granted in 1992
to purchase 10,000 shares of common stock, options granted in 1996 to
purchase 45,000 shares of common stock and options granted in 1998 to
purchase 85,000 shares of common stock.
(6) On December 31, 1999, Mr. Dugan had outstanding options granted in 1996 to
purchase 30,000 shares of common stock and options granted in 1998 to
purchase 50,000 shares of common stock.
(7) On December 31, 1999, Ms. Santo had outstanding options granted in 1998 to
purchase 40,000 shares of common stock.
8
<PAGE>
PENSION BENEFITS
The following table sets forth certain information regarding annual benefits
payable in specified compensation and years of service classifications under
PLM's nonqualified supplemental retirement income plan:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ANNUAL PAYOUT TO BE RECEIVED IN EACH OF FIVE
YEARS FOLLOWING LATER OF TERMINATION OF EMPLOYMENT OR
ATTAINMENT OF AGE 60
------------------------------------------------------
AVERAGE ANNUAL COMPENSATION CREDITED YEARS OF SERVICE(3)
DURING LAST FIVE YEARS OF ------------------------------------------------------
EMPLOYMENT(1,2) 5 10 15
--------------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
100,000..$........ $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) PLM'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 (a) 5%,
(b) number of years of employment with PLM, its affiliates or predecessors
(up to a maximum of 15 years) and (c) 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 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, 1999 for the named executive officers were as follows:
Mr. Tidball, $306,800; Mr. Goodrich, $194,200; Mr. Bess, $166,467; and
Ms. Santo, $117,694.
(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 PLM,
and the participating executive is deemed to have attained age 60 prior to
such change in control. The Board 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 at December 31, 1999 for the named executive
officers are as follows:
<TABLE>
<CAPTION>
YEARS
--------
<S> <C>
Stephen M. Bess............................................. 17
Douglas P. Goodrich......................................... 12
Susan C. Santo.............................................. 9
Robert N. Tidball........................................... 14
</TABLE>
DIRECTOR COMPENSATION
Each non-employee director of PLM (Messrs. Caudill, Goodrich, Lichtenstein,
Lorber, Somerset, Tidball and Witt) receives a monthly retainer of $2,000 and a
per-meeting fee of $1,000 for each meeting of the Board and the Executive
Committee attended in person ($250 for meetings attended by telephone). A
9
<PAGE>
fee of $250 per meeting is paid to all non-employee directors for meetings of
all other committees of the Board.
Additionally, each non-employee director of PLM is entitled to participate
in the Directors' 1995 Nonqualified Stock Option Plan (the "1995 Directors'
Plan") which was adopted by the Board on January 25, 1995, and the Directors'
2000 Nonqualified Stock Option Plan (the "2000 Directors' Plan") which was
adopted by the Board on February 1, 2000. PLM reserved 120,000 shares with
respect to which options may be granted under the 1995 Directors' Plan, and
70,000 shares with respect to which options may be granted under the 2000
Directors' Plan. The 1995 Directors' Plan provides that each non-employee
director of PLM is granted on February 1 of each year options to purchase 10,000
shares of common stock of PLM, or, if the number of shares available for grant
is insufficient, options are granted pro rata to each eligible director to the
extent shares are available under the Directors' 1995 Plan. On February 1, 2000,
10,000 shares were available for grant under the Directors' 1995 Plan, and each
of the then five non-employee directors of PLM were granted options to purchase
2,000 shares of common stock. The 2000 Directors' Plan provides for a grant on
February 1, 2000 to each non-employee director of PLM, an option to purchase
8,000 shares of PLM common stock. Both directors' plans provide that the
exercise price of options granted under such plans shall be the closing price of
the common stock on the American Stock Exchange as of the date as of which the
options were granted, that such options generally vest pro rata over a
three-year period, and that vested options held by a non-employee director who
ceases to be a director of PLM may be exercised within six months after ceasing
to be a director. Accordingly, each non-employee director of the Company, as of
February 1, 2000, was granted options to purchase a total of 10,000 shares of
common stock of PLM at an exercise price of $6.188 per share.
AGREEMENTS WITH EXECUTIVE OFFICERS
PLM and its Chief Executive Officer and four other named executive officers
are parties to employment agreements, termination of employment arrangements
and/or change in control arrangements as further described herein.
PLM has entered into an Employment Agreement (the "Employment Agreement")
with each of Robert N. Tidball, Douglas P. Goodrich, Stephen M. Bess and Susan
C. Santo. The Employment Agreements are designed to encourage those employees to
remain in the employ of PLM and to reinforce their continued attention and
dedication to their duties in the event of an unsolicited attempt to take over
control of PLM. The Employment Agreements have three-year terms from the date on
which they were entered into (the "Original Term") and are automatically
extended for one additional year on each succeeding anniversary thereof unless
earlier terminated by PLM or the employee. Each Employment Agreement contains
provisions governing salary, bonus and participation in PLM benefit plans, and
provides in certain events for payments to the employee upon termination of his
or her employment with PLM.
The Employment Agreements provide that, if, following an unsolicited change
in control, PLM terminates the 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 employee), then PLM is required to
pay the employee the sum of (a) 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), (b) an amount equal to the greater of the amount paid and/or
payable to or due the employee under PLM's bonus or incentive plans (i) for
PLM's fiscal year prior to the fiscal year of any change in control or (ii) for
the immediately preceding fiscal year, multiplied by the number of years in the
Original Term (up to 2.99 years) and (c) all other cash benefits due the
employee. In addition if, following an unsolicited change in control, the
employee terminates his or her employment for good reason, all options to
purchase stock of PLM granted to such employee immediately become fully vested
and any restrictions on the exercise of such options lapse.
10
<PAGE>
For purposes of the Employment Agreements, a change in control is generally
defined to include, among other things, (a) any Person acquiring Beneficial
Ownership (as such terms are defined in the Employment Agreements) of 36% or
more of the combined voting power of PLM's securities, (b) any Person, who did
not have Beneficial Ownership of 5% or more of the voting power of PLM's
securities on the date the Employment Agreement was entered into, subsequently
acquiring Beneficial Ownership of more than 15% of such voting power or (c) a
change in the Board of PLM due to proxy solicitations or other actions to
influence voting at a meeting of stockholders of PLM by a Person who has
Beneficial Ownership of 5% or more of the voting power of PLM, and which causes
the Continuing Directors (as defined below) to cease to be a majority of the
Board, unless such event(s) have been approved by a majority of the Continuing
Directors. "Continuing Directors" are those who (a) were directors on the date
the Employment Agreement was entered into, (b) were appointed or recommended for
election by a majority of those who were directors on such date, or (c) 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 the employee. If a change in control as defined in
the Employment Agreements occurred on the date hereof and the employment of each
of the following named executive officers was immediately terminated without
cause, based on certain assumptions, the amounts of post-employment compensation
benefits provided under the Employment Agreements to Mr. Bess would be $874,754
and to Ms. Santo would be $669,999. No amounts would be payable to Mr. Tidball
or to Mr. Goodrich, as neither is currently employed by the Company.
PLM has also entered into a Severance Agreement (the "Severance Agreement")
with each of Messrs. Tidball, Goodrich and Bess and Ms. Santo. The Severance
Agreements were entered into in connection with the Board of Director's decision
to explore strategic and financial alternatives for maximizing stockholder
value, including a transaction or transactions representing a merger,
consolidation, business combination or sale of all or a substantially all of the
business, securities or assets of PLM, and are designed to encourage those
employees to remain in the employ of PLM and to act vigorously and
constructively in connection with any negotiations being conducted regarding any
such transaction. In connection with a change in control, as defined in the
Severance Agreements, that occurs prior to December 31, 2000, the term of the
Severance Agreements continues until the employee's employment has been
terminated by the Company or the employee, and all obligations under the
Severance Agreement have been met.
For purposes of the Severance Agreements, a change in control is generally
defined to mean (a) any Person acquiring Beneficial Ownership (as such terms are
defined in Rule 13d-3 of the Exchange Act) of more than 50% of the combined
voting power of PLM's securities, (b) a merger, consolidation or reorganization
involving PLM, (c) the sale or other disposition of AFG followed by the sale or
other disposition of Trailer Leasing, (d) the sale or other disposition of all
or substantially all of the assets of PLM (excluding the sales or dispositions
referred to in (c), or a sale or other disposition of FSI, or (e) the
stockholders of PLM approve a plan of dissolution or liquidation of PLM. A
change in control consisting of the sale or other disposition of AFG followed by
the sale or other disposition of Trailer Leasing occurred in September 2000.
Upon the occurrence of a change in control, each Severance Agreement
provides for the acceleration and full vesting of all stock grants and options
to purchase stock of PLM granted to the employee, that any restrictions on the
grants and options shall lapse, and that the employee may elect that PLM
"cash-out" the grants and/or options by paying the employee the value of the
grants and/or options. Additionally, upon a change in control, the employee is
deemed to have attained age 60 prior to the change in control and to be fully
vested under and for the purposes of PLM's nonqualified supplemental retirement
income plan. Each of the Severance Agreements also provides that, following a
termination which requires the payment of severance (as described below), the
employee may elect that PLM pay to employee in a lump
11
<PAGE>
sum the present value of the total amount of any payments due to be paid
pursuant to PLM's nonqualified supplemental retirement income plan.
The Severance Agreements entered into with each of Mr. Tidball and
Mr. Goodrich provide that, in the event employee's employment with PLM is
terminated at will by either PLM or the employee following a change in control
consisting of the sale or other disposition of AFG followed by the sale or other
disposition of Trailer Leasing, or without cause by PLM or for good reason by
the executive following any other change in control transaction, then, following
any such termination, Mr. Tidball will be paid a severance amount equal to three
years of his annual base salary and Mr. Goodrich will be paid a severance amount
equal to two years of his annual base salary.
The Severance Agreements entered into with each of Mr. Bess and Ms. Santo
provide that, in the event employee's employment with PLM is terminated without
cause by PLM or for good reason by employee following a change in control
transaction, then, following any such termination, Mr. Bess will be paid a
severance amount equal to two years of his annual base salary and Ms. Santo will
be paid a severance amount equal to one year of her annual base salary.
The Severance Agreements are structured so that no excess payments within
the meaning of Section 280G of the Code will be made to the employee pursuant to
the Severance Agreements. Additionally, if a change in control transaction as
defined in the Severance Agreements occurs, and the transaction is also deemed
to be a change in control as defined under the Employment Agreements, then the
terms and conditions of the Employment Agreements govern and supersede the
Severance Agreements.
Because a change in control as defined in the Severance Agreements occurred
in September 2000, if the employment of each of Mr. Bess and Ms. Santo was
immediately terminated without cause, based on certain assumptions, the amounts
of post-employment compensation benefits provided under the Severance Agreements
to Mr. Bess would be $500,000 and to Ms. Santo would be $184,080. Mr. Tidball
was paid $1,010,880 and Mr. Goodrich was paid $428,480 under each of their
respective Severance Agreements in September 2000 in connection with their
resignations from their executive offices with the Company following the change
in control.
Pursuant to the terms of the Merger Agreement, PLM may, until January 6,
2001, enter into a Transition Services and Employment Agreement with Mr. Bess
and a Transition Services, Employment and Consulting Agreement with Ms. Santo
(collectively, the "Transition Services Agreements"). Under Mr. Bess' Transition
Services and Employment Agreement, Mr. Bess would agree to provide certain
senior management and transition services to PLM for six months following the
appointment of MILPI's designees to the Board. Mr. Bess would be paid monthly
compensation of $36,500 during the six-month term and would be paid a retention
bonus of $425,000 (the "Retention Bonus") at the end of the six-month term.
Either party may terminate the agreement and Mr. Bess' services thereunder
before the end of the six-month term; provided, if Mr. Bess terminates early for
"good reason", if PLM terminates early without "cause", or if Mr. Bess ceases to
be employed by PLM because of his death or "disability" (as each term is defined
in the Transition Services and Employment Agreement), then PLM shall pay him the
Retention Bonus along with a termination payment in the amount of $15,667 times
the number of months between the termination date and the end of the six-month
term.
If PLM and Mr. Bess enter into the Transition Services and Employment
Agreement, the Employment Agreement dated as of December 18, 1992 and the
Severance Agreement dated as of July 7, 2000 (as well as other agreements
between Mr. Bess and PLM, excluding any Option Agreements or the Executive
Deferred Compensation Agreement dated December 18, 1992) would be terminated and
discharged.
Under Ms. Santo's Transition Services, Employment and Consulting Agreement,
Ms. Santo would agree to provide certain senior management and transition
services to PLM as an employee from the time MILPI's designees are appointed to
the Board through the Closing Date (the "Employment Period"); and
12
<PAGE>
thereafter, to provide consulting services for a period of six months (the
"Consulting Period"). Ms. Santo would be paid monthly compensation of $23,007
during the Employment Period, a monthly retainer of $7,667 for up to ten hours
of consulting services per month during the Consulting Period, a retention bonus
of $88,800 at the end of the Employment Period (the "Employment Retention
Bonus") and a retention bonus of $59,200 at the end of the Consulting Period
(the "Consulting Retention Bonus"). Either party may terminate the agreement and
Ms. Santo's services thereunder before the end of the Consulting Period;
provided, if Ms. Santo terminates early for "good reason", if PLM terminates
early without "cause", or if Ms. Santo ceases to provide services to PLM because
of her death or "disability" (as each term is defined in the Transition
Services, Employment and Consulting Agreement), then PLM shall pay her the
Employment Retention Bonus and the Consulting Retention Bonus (if not already
paid) along with a termination payment in the amount of $7,667 times the number
of months between the termination date and the end of the Consulting Period.
The Transition Services Agreements are structured so that no excess payments
within the meaning of Section 280G of the Code will be made to Mr. Bess or
Ms. Santo. Furthermore, as part of the Transition Services and Employment
Agreement, Mr. Bess will release PLM and certain individuals from certain
employment related claims upon receipt of the Retention Bonus. Ms. Santo, as
part of the Transition Services, Employment and Consulting Agreement, will
release PLM and certain individuals from certain employment related claims upon
the later of her receipt of the Employment Retention Bonus or her receipt of the
Consulting Retention Bonus.
13
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(1)
The Compensation Committee of the Board (the "Committee") is responsible for
advising and recommending to the Board of PLM policies governing executive
compensation and PLM's incentive compensation plans. PLM's executive
compensation programs are designed to attract and retain executives capable of
leading PLM to meet its business objectives and to motivate them to enhance
long-term stockholder value. The Committee is also responsible for determining
the annual compensation levels for PLM's Chief Executive Officer and other
executive officers, subject to review by the disinterested members of the Board.
The Committee reviews the policies and specific programs annually to determine
if they are meeting the goals of attracting and retaining qualified executives.
Compensation for PLM's executive officers may consist of both fixed (base
salary) and variable (incentive) compensation elements, including annual cash
incentives, stock option grants and stock grants. These elements are designed to
operate on an integrated basis and together comprise total compensation value.
Base compensation for the executive officers is determined at the beginning of
each fiscal year based, in part, on an evaluation of the individual's
performance for the prior fiscal year, as well as reference to compensation data
included in a variety of salary surveys. Incentive compensation for the
executive officers for each fiscal year is determined after the end of the
fiscal year, based on individual and PLM performance as compared to goals set at
the beginning of the year. The disinterested members of the Board review the
Committee's recommendations regarding the compensation of executive officers.
BASE SALARY
Base salary levels of PLM's executive officers other than the Chief
Executive Officer are largely determined based on the executive's performance,
as reflected by the appraisal and recommendation of the Chief Executive Officer
after he has completed written performance reviews of the executives. These
reviews are designed to assess the extent to which each executive has met
certain goals which are established at the beginning of the year by the Chief
Executive Officer 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. The base salary level of
the Chief Executive Officer is determined by the Committee on an annual basis
based on the Committee's evaluation of his performance, including factors such
as leadership and strategic planning for the future of PLM, and the financial
results of PLM.
Additionally, from time to time, for comparison purposes, the Committee
reviews salary surveys complied by PLM. These surveys include information about
comparable salary levels from outside compensation consultants and/or
compensation information for companies located in the San Francisco Bay Area,
companies with total revenues of between $100 to $650 million, companies with a
gross leasing portfolio between $500 million and $1 billion, companies in the
transportation leasing and financial services industries, and companies with
less than 500 employees. 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 below. The Committee believes that PLM's most direct
competitors for executive talent in the San Francisco Bay Area are not
necessarily the same companies to which PLM would be compared for stock
performance purposes.
In determining base compensation for PLM's named executive officers other
than the Chief Executive Officer for 1999, the Committee considered the 1998
compensation of each executive, along with the individual performance of each
executive, in order to determine the amount, if any, of a base salary
------------------------
(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.
14
<PAGE>
increase. The Summary Compensation Table above shows, under the caption
"Salary," the base compensation for the named executive officers in 1999.
Mr. Tidball's base compensation was set at $324,000, effective February 1,
1999. Mr. Tidball's annual base salary was in part determined based on the
Committee's evaluation of his performance during fiscal year 1998. The Committee
also took into consideration the fact that Mr. Tidball's base compensation was
approximately 21% less than the average compensation of chief executive officers
as reflected in the most recent salary survey conducted by PLM in
December 1997.
ANNUAL CASH INCENTIVES
The annual cash incentive is designed to provide short-term (one-year)
incentives to executive officers. Generally, the cash incentive is paid from a
senior management bonus pool established by the Committee at the beginning of
each year based on a targeted level of profitability which is measured by an
increase in earnings compared to the prior fiscal year. The Committee retains
the right to increase or decrease the size of the bonus pool during the year.
Consideration of whether PLM has met the targeted level of profitability is a
significant factor in determining the amount, if any, of cash incentives to be
paid.
Incentive awards for PLM's executive officers participating in the single
bonus pool (other than the Chief Executive Officer) are also 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
Chief Executive Officer 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 1999, certain of the individual
performance targets were met, but the targeted level of profitability for PLM
was not. The Summary Compensation Table above shows, under the caption "Bonus,"
incentive awards for the named executive officers for 1999.
In establishing the annual cash incentive for the Chief Executive Officer
for 1999, the Committee primarily considered the profitability of PLM in 1999.
The Compensation Committee did not recommend an incentive bonus for the Chief
Executive Officer in 1999, as reflected in the Summary Compensation Table above
under the caption "Bonus," because PLM did not meet its targeted level of
profitability.
THE MEMBERS OF THE COMPENSATION
COMMITTEE
HAROLD R. SOMERSET, Chairman
RANDALL L-W. CAUDILL
ROBERT L. WITT
15
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following stock performance graph compares the performance of PLM's
common stock to the S&P 500 Index and the Russell 2000 Index, an index of small
market capitalization companies. PLM believes it cannot reasonably identify a
peer group of issuers leasing similar portfolios of diversified transportation
equipment on operating leases, numerous other equipment types of equipment on
finance leases and refrigerated trailers on a short term basis. Therefore, PLM
has used an index composed of companies with similar market capitalizations. The
graph assumes that the value of the investment in PLM's common stock and each
index was $100 on December 31 of the applicable year.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PLM INTERNTAIONAL, INC. S & P 500 RUSSELL 2000
<S> <C> <C> <C>
12/94 $100 $100 $100
12/95 $130 $138 $127
12/96 $117 $169 $155
12/97 $196 $226 $204
12/98 $231 $290 $191
12/99 $205 $351 $188
</TABLE>
16
<PAGE>
AUDIT COMMITTEE REPORT(1)
The Audit Committee of PLM International, Inc.'s (the "Company") Board of
Directors is composed of 3 independent directors, Randall L-W. Caudill, as its
Chair, and Robert Witt and Harold Somerset. Each of the members of the Audit
Committee is independent as defined by the American Stock Exchange's listing
standards. On May 30, 2000, the Board of Directors adopted a written charter
setting forth the duties and responsibilities of the Audit Committee. A copy of
the charter, as adopted by the Board of Directors of the Company, is included in
this Information Statement as Appendix 1. In this context:
(1) The Audit Committee of the Board of Directors has reviewed and discussed
the audited financial statements with the Company's management.
(2) The Audit Committee has discussed with KPMG, LLC, the Company's
independent auditors, the matters required to be discussed by Statement
on Auditing Standards No. 61 (Codification of Statements on Auditing
Standards, AU Section 380), as may be modified or supplemented.
(3) The Audit Committee has also received the written disclosures and the
letter from KPMG, LLC required by the Independence Standards Board
Standard No. 1 (Independent Standards Board Standard No. 1, Independence
Discussion with Audit Committees), as may be modified or supplemented,
and has discussed with KPMG, LLC the independence of that firm as the
Company's auditors.
(4) Because the requirements of Item 306 of Regulation S-K were not
effective at the time the Company's Annual Report on Form 10-K for the
year ended December 31, 1999, was prepared and filed with the Securities
and Exchange Commission, there was no Audit Committee recommendation that
the Company's audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999
for filing with the Securities and Exchange Commission.
THE MEMBERS OF THE AUDIT COMMITTEE
RANDALL L-W. CAUDILL, Chairman
ROBERT WITT
HAROLD SOMERSET
------------------------
(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.
16
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to PLM with respect
to beneficial ownership of the common stock by (a) each stockholder known by PLM
to be the beneficial owner of more than 5% of the common stock, (b) each of its
directors and the named executive officers identified in the Summary
Compensation Table below, and (c) all directors and executive officers of PLM as
a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK(1) COMMON STOCK(1)
------------------------------------ ------------------- ---------------
<S> <C> <C>
Steel Partners II, L.P(2)................................... 1,337,300 17.7%
150 E. 52nd Street, 21st Floor
New York, New York 10027
Dimensional Fund Advisors, Inc.(3).......................... 501,600 6.64%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Oak Forest Investment Management, Inc.(4)................... 464,200 6.14%
6701 Democracy Blvd., Ste. 402
Bethesda, MD 20817
Stephen M. Bess(5).......................................... 60,021 *
Randall L-W. Caudill(6)..................................... 21,999 *
Donald R. Dugan............................................. 39,106 *
Douglas P. Goodrich(7)...................................... 240,477 3.15%
Warren G. Lichtenstein(8)................................... 1,347,299 17.81%
150 E. 52nd Street, 21st Floor
New York, New York 10027
Howard M. Lorber(9)......................................... 9,999 *
Susan C. Santo(10).......................................... 42,500 *
Harold R. Somerset(11)...................................... 55,999 *
Robert N. Tidball(12)....................................... 414,005 5.4%
Robert L. Witt(13).......................................... 24,999 *
All directors and executive officers as a group (11 2,302,821 29.04%
people)(14).................................................
</TABLE>
------------------------
* Represents less than 1% of the outstanding shares.
(1) Computed on the basis of 7,554,510 shares of common stock outstanding
(excluding treasury stock) as of December 28, 2000. Beneficial ownership as
reported in the above table has been determined in accordance with
Rule 13d-3 under the Exchange Act.
(2) As reported on Schedule 13D/A Amendment 6 filed with the Securities and
Exchange Commission ("SEC") on April 30, 1998, Steel Partners II, L.P.
holds 1,337,300 shares. The general partner of Steel Partners II, L.P. is
Steel Partners L.L.C., of which Mr. Lichtenstein is the chief executive
officer, and Steel Partners II, L.P. reports that Mr. Lichtenstein may be
deemed to be the beneficial owner of all of such shares by virtue of his
power to vote and dispose of such shares.
(3) As reported on Schedule 13G filed with the SEC on February 3, 2000,
Dimensional Fund Advisors Inc. ("Dimensional") holds 501,600 shares as
investment advisor and investment manager on behalf of four investment
companies registered under the Investment Company Act of 1940 and other
investment vehicles, including commingled group trusts. In its role as
investment advisor and investment manager, Dimensional reports that it
possesses both voting and investment power over the shares, and Dimensional
disclaims beneficial ownership of all such shares.
17
<PAGE>
(4) As reported on Schedule 13G/A filed with the SEC on February 8, 2000, Oak
Forest Investment Management, Inc. holds 464,200 shares as an investment
advisor registered under the Investment Company Act of 1940. In its role as
investment advisor, Oak Forest Investment Management, Inc. reports that it
possesses both the power to vote and to dispose or direct the disposition
of all such shares.
(5) Includes 20,000 shares of common stock issuable to Mr. Bess pursuant to
options exercisable within 60 days of December 28, 2000.
(6) Includes 19,999 shares of common stock issuable to Mr. Caudill pursuant to
options exercisable within 60 days of December 28, 2000.
(7) Includes 85,000 shares of common stock issuable to Mr. Goodrich pursuant to
options exercisable within 60 days of December 28, 2000.
(8) Includes 1,337,300 shares held by Steel Partners II, L.P. The general
partner of Steel Partners II, L.P. is Steel Partners L.L.C., of which
Mr. Lichtenstein is the Chief Executive Officer. Mr. Lichtenstein may be
deemed to be the beneficial owner of all of such shares by virtue of his
power to vote and dispose of such shares. Also includes 9,999 shares of
common stock issuable to Mr. Lichtenstein pursuant to options exercisable
within 60 days of December 28, 2000.
(9) Comprised of 9,999 shares of common stock issuable to Mr. Lorber pursuant
to options exercisable within 60 days of December 28, 2000.
(10) Includes 40,000 shares of common stock issuable to Ms. Santo pursuant to
options exercisable within 60 days of December 28, 2000.
(11) Includes 19,999 shares of common stock issuable to Mr. Somerset pursuant to
options exercisable within 60 days of December 28, 2000.
(12) Includes 110,000 shares of common stock issuable to Mr. Tidball pursuant to
options exercisable within 60 days of December 28, 2000.
(13) Includes 19,999 shares of common stock issuable to Mr. Witt pursuant to
options exercisable within 60 days of December 28, 2000.
(14) Includes 374,995 shares of common stock issuable to members of the Board of
Directors and executive officers pursuant to options exercisable within
60 days of December 28, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and regulations of the SEC thereunder
require PLM's executive officers and directors and persons who own more than ten
percent of PLM's stock, as well as certain affiliates of such persons, to file
initial reports of ownership and changes in ownership with the SEC. Executive
officers, directors and persons owning more than ten percent of PLM s stock are
required by the SEC's regulations to furnish PLM with copies of all
Section 16(a) forms they file. Based solely on its review of the copies of Forms
3, 4 and 5 and amendments thereto received by PLM and written representations
that no other reports were required for those persons, PLM believes that, during
the fiscal year ended December 31, 1999, all filing requirements applicable to
its executive officers, directors and owners of more than ten percent of PLM's
stock were complied with on a timely basis.
18
<PAGE>
APPENDIX 1
PLM INTERNATIONAL, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors.
- Provide an avenue of communication among the independent auditors,
management, and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Company's expense, special legal, account, or
other consultants or experts it deems necessary in the performance of its
duties.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
Audit Committee members shall meet the requirements of the American Stock
Exchange. The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgment. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of the Committee shall
have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board on recommendation of
the Nominating Committee. If an Audit Committee Chair is not designated or
present, the members of the Committee may designate a Chair by majority vote of
the Committee membership.
The Committee shall meet at least two times annually, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or approve an
agenda in advance of each meeting. The Committee should meet privately in
executive session at least annually with management, the independent auditors,
and as a committee to discuss any matters that the Committee or each of these
groups believe should be discussed. In addition, the Committee, or at least its
Chair, should communicate with management and the independent auditors quarterly
to review the Company's financial statements and significant findings based upon
the auditors limited review procedures.
III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
REVIEW PROCEDURES
1. Review and reassess the adequacy of this Charter at least annually.
Submit the Charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2. Review the Company's annual audited financial statements prior to filing
or distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting
principles, practices and judgments.
3. In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting processes and
controls. Discuss significant financial risk exposures
<PAGE>
and the steps management has taken to monitor, control and report such
exposure. Review significant findings prepared by the independent
auditors together with management's responses.
4. Review with financial management and the independent auditors the
Company's quarterly financial results prior to the release of earnings
and/or the Company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the Company's accounting
principles and any items required to be communicated by the independent
auditors in accordance with SAS 61 (see item 9). The Chair of the
Committee may represent the entire Audit Committee for purposes of this
review.
INDEPENDENT AUDITORS
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit committee shall review
the independence and performance of the auditors and annually recommend
to the Board of Directors the appointment of the independent auditors or
approve any discharge of auditors which circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8. Review the independent auditors audit plan--discuss scope, staffing,
locations, reliance upon management, and internal audit and general audit
approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required to
be communicated to audit committees in accordance with AICPA SAS 61.
10. Consider the independent auditor's judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
OTHER AUDIT COMMITTEE RESPONSIBILITIES
11. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the Company's
annual proxy statement.
12. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems necessary
or appropriate.
13. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
2
<PAGE>
ANNEX B
December 21, 2000
The Board of Directors
PLM INTERNATIONAL, INC.
One Market
Steuart Street Tower, Eighth Floor
San Francisco, California 94105
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to the shareholders of PLM International, Inc. (the "Company"), of the
aggregate consideration to be received by the shareholders of the Company in
connection with the sale of the common stock of the Company (the "Transaction")
to a newly formed corporation affiliated with Equis Financial Group (the
"Buyer"). Pursuant to the Transaction, the Buyer will tender cash consideration
equal to $3.46 per share (the "Consideration") for 100% of the outstanding
shares of the Company. The tender offer is conditioned upon the Buyer receiving
at least 50.1% of the outstanding shares of the Company. Upon a successful
tender, the Buyer will subsequently merge with the Company and will pay the
remaining shareholders the Consideration.
In connection with the rendering of this opinion, we have:
(i) analyzed certain historical business and financial information relating
to the Company, including the Company's Form 10-K for the year ended
December 31, 1999 and the Company's Form 10-Q for the period ended
September 30, 2000;
(ii) reviewed certain financial forecasts and other data provided to us by
the Company, including business plans prepared by senior management of
the Company;
(iii) conducted discussions with members of senior management of the Company
with respect to the historical operations, businesses and prospects of
the Company, the strategic objectives of the Company and possible
benefits which might be realized from the Transaction;
(iv) reviewed public information with respect to certain other companies
with financial profiles which we deemed to be relevant;
(v) reviewed the historical market prices and trading activity for the
Company's common stock and compared them with those of certain publicly
traded companies which we deemed to be relevant;
(vi) prepared and delivered to over 200 potential financial and strategic
buyers an executive summary describing the Company and subsequently
prepared and delivered to over 50 interested parties a confidential
information memorandum describing the Company;
(vii) reviewed four written letters of interest to purchase the shares of the
Company; and
(viii) conducted such other financial studies, analyses and investigation as
we deemed appropriate.
With your consent, we have relied upon the accuracy and completeness of the
foregoing financial and other information and have not assumed responsibility
for independent verification of such information or conducted any independent
valuation or appraisal of any assets of the Company, nor have we been furnished
with any such appraisals. With respect to the financial forecasts, we have
assumed, with your consent, that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of management of
the Company as to the future financial performance of the Company. We have also
relied upon the assurances of senior management of the Company that they are
unaware of any facts that would make the information or financial forecasts
provided to us incomplete or misleading. We assume no responsibility for, and
express no view as to such forecasts or the assumptions on which they are based.
<PAGE>
Our opinion expressed herein is directed to the Board of Directors of the
Company only, and our opinion is rendered in connection with the sale of the
common stock of the Company to the Buyer. This opinion does not constitute a
recommendation to any holder of common stock as to whether such holder should
tender his shares to the Buyer. This opinion does not address the business
decision of the basis for recommendation in Schedule 14D-9 to engage in the
Transaction or address the relative merits of any alternatives discussed by the
Board of Directors. No opinion is expressed herein, nor should one be implied,
as to the fair market value of the Company's common stock or the prices at which
it may trade at any time. It is understood that this opinion may not be
disclosed or otherwise referred to or used for any other purpose without our
prior written consent, except as may otherwise be required by law or by a court
of competent jurisdiction; provided, however, that this opinion may be
reproduced in full in the Schedule 14D-9 related to the Transaction.
In the ordinary course of its business and in accordance with applicable
state and federal securities laws, Imperial Capital, LLC may trade the
securities of the Company for its own account and for the accounts of customers
and, accordingly, may at any time hold long or short positions in such
securities.
Imperial Capital, LLC is currently acting as financial advisor to the Board
of Directors of the Company in connection with the sale of the Company and will
receive a fee in connection with the rendering of this opinion and upon the sale
of the Company. Additionally, Imperial Capital, LLC has performed investment
banking services for affiliates of the Buyer in the past.
Based on and subject to the foregoing, we are of the opinion that as of the
date hereof, the Consideration to be received by the shareholders of the Company
in the Transaction is fair to such shareholders from a financial point of view.
This opinion replaces in its entirety our opinion issued on December 13, 2000
with respect to the Transaction.
Very truly yours,
Imperial Capital, LLC
2
