PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
MONACO FINANCE, INC.
(Name of Registrant as Specified in Its Charter)
Jeff Knetsch
Brownstein, Hyatt, Farber & Strickland
410 17th Street, Suite 2200
Denver, Colorado 80202
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
MONACO FINANCE, INC.
1997
PROXY STATEMENT
<PAGE>
MONACO FINANCE, INC.
370 17TH STREET, SUITE 5060
DENVER, COLORADO 80202
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held Tuesday, July 22, 1997
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of Monaco Finance, Inc., a Colorado corporation (the "Company"),
will be held at 370 17th Street, Suite 5060, Denver, Colorado at 10:00 a.m. on
Tuesday, July 22, 1997, for the following purposes:
1. To consider and act upon the election of Morris Ginsburg, Irwin L.
Sandler, Brian M. O'Meara, Craig L. Caukin and David M. Ickovic to the Board
of Directors to serve until the next annual meeting of Shareholders and until
their successors are elected and qualified;
2. To consider and ratify the appointment of Ehrhardt Keefe Steiner &
Hottman P.C. as the Company's certified independent public accountants for the
fiscal year ending December 31, 1997; and
3. To consider and act upon such other matters as may properly come before
the meeting or any adjournment thereof.
Only the holders of record of shares of the Company's Class A Common Stock,
$.01 par value, and Class B Common Stock, $.01 par value, at the close of
business June 1, 1997, are entitled to notice of and to vote at the meeting or
any adjournment thereof.
You are cordially invited to attend the Annual Meeting in person. All
Shareholders, whether or not they plan to attend the Annual Meeting, are
requested to complete, date and sign the enclosed Proxy and return it promptly
in the envelope provided for that purpose. Shareholders who attend the Annual
Meeting may revoke the Proxy and vote their Proxy in person as set forth in
the Proxy Statement.
By Order of the Board of Directors
/s/ Irwin L. Sandler
------------------------------
Irwin L. Sandler, Secretary
April 30, 1997
<PAGE>
MONACO FINANCE, INC.
370 17th Street, Suite 5060
Denver, Colorado 80202
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held July 22, 1997
INTRODUCTION
SOLICITATION, EXERCISE AND REVOCABILITY OF PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Monaco Finance, Inc. (the "Company"), for
use at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on Tuesday, July 22, 1997 at 10:00 a.m. local time, at
the offices of the Company located at 370 17th Street, Suite 5060, Denver,
Colorado 80202. This Proxy Statement, the accompanying form of Proxy and the
Notice of Annual Meeting will be first given or mailed to the Company's
Shareholders on or about June 16, 1997. All costs incurred in connection with
this proxy solicitation will be borne by the Company.
Because many of the Company's Shareholders may be unable to attend the Annual
Meeting in person, the Board of Directors solicits proxies by mail to give
each Shareholder an opportunity to vote on all matters presented at the Annual
Meeting. Shareholders are urged to: (i) read this Proxy Statement carefully;
(ii) specify their choice regarding each matter by marking the appropriate box
on the enclosed form of Proxy; and (iii) sign, date and return the form of
Proxy in the enclosed envelope.
All shares of the Company's Class A Common Stock, $.01 par value, and Class B
Common Stock, $.01 par value (collectively, the "Shares"), represented by
properly executed Proxies received in time for the Annual Meeting will be
voted at the Annual Meeting in accordance with the instructions marked thereon
or otherwise as provided therein, unless such Proxies have previously been
revoked. All Shares represented by valid Proxies will be voted, unless
instructions to the contrary are marked, for the election of the nominees to
the Board of Directors, for the ratification of the appointment of Ehrhardt
Keefe Steiner & Hottman P.C. as the independent public accountants for the
Company for the fiscal year ending December 31, 1997, and, in the discretion
of the persons named as Proxies, on such other matters as may properly come
before the Annual Meeting. However, Proxies voted against a proposal will not
be voted for any adjournment desired by management to afford the Company the
opportunity to seek additional proxies supporting that proposal. Any Proxy
may be revoked at any time prior to the exercise thereof by submitting another
Proxy bearing a later date or by giving written notice of revocation to the
Company at the address indicated above or by voting in person at the Annual
Meeting. Any notice of revocation sent to the Company must include the
Shareholder's name, and must be received prior to the Annual Meeting to be
effective.
VOTING
Only persons holding Shares (referred to herein as the "Shareholders") of
record at the close of business on June 1, 1997 (the "Record Date") will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. Shareholders holding Class A Common Stock will be entitled to one
vote for each Share then held, and Shareholders holding Class B Common Stock
will be entitled to three votes for each Share then held. As of April 20,
1997, there were 5,648,379 Shares of the Company's Class A Common Stock issued
and outstanding having an aggregate of 5,648,379 votes and 1,323,715 Shares of
the Company's Class B Common Stock issued and outstanding having an aggregate
of 3,971,145 votes. The presence, in person or by proxy, of holders of a
majority of Shares entitled to vote at the Meeting constitutes a quorum for
the transaction of business at the Annual Meeting. Shareholders are not
entitled to cumulate their votes in the election of directors.
At any meeting where a quorum is present, action may be taken by the
affirmative vote by the holders of a majority of the shares represented at the
meeting and entitled to vote thereat. Votes cast by proxy will be tabulated
by an automatic system administered by the Company's transfer agent. Votes
cast by proxy or in person at the Annual Meeting will be counted by the
persons appointed by the Company to act as election inspectors for the Annual
Meeting. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting. Each is tabulated
separately. Abstentions are counted in tabulations of the votes cast on
proposals presented to Shareholders and will have the same effect as negative
votes, whereas broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
As of April 20, 1997, Messrs. Ginsburg and Sandler beneficially owned shares
of Class A and Class B Common Stock having in the aggregate approximately
43.93% of the voting power of both classes. Messrs. Ginsburg and Sandler have
indicated their intention to vote the shares of common stock beneficially
owned by them in favor of all proposals contained in this Proxy Statement.
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors currently consists of five members, all of whom have
been nominated for re-election: Morris Ginsburg, Irwin L. Sandler, Brian M.
O'Meara, Craig L. Caukin and David M. Ickovic. The entire Board of Directors
is elected to serve until the next Annual Meeting of the Shareholders and
until their successors have been elected and qualify. It is intended that the
Shares represented by properly executed Proxies will be voted FOR the five
nominees listed below except where authority has been withheld as to a
particular nominee or as to all nominees. If any candidate nominated in this
Proxy Statement should for any reason become unavailable for election, Proxies
may be voted with discretionary authority for any substitute designated by the
Board of Directors. The election of directors requires a majority of the
votes entitled to be cast at the Annual Meeting.
<PAGE>DIRECTOR NOMINEES AND EXECUTIVE OFFICERS
The executive officers and director nominees of the Company are as follows:
Name Age Position
Morris Ginsburg 66 Chairman of the Board, President, Chief Executive
Officer and Director
Iwrin L. Sandler 51 Executive Vice President, Secretary/Treasurer and
Director
Craig L. Caukin 42 Executive Vice President and Director
Brian M. O'Meara 48 Director
David M. Ickovic 49 Director
Michael Feinstein 61 Senior Vice President and Chief Financial Officer
Robert Rolfson 45 Vice President
Mark Gengozian 43 Vice President
There are no family relationships among any of the executive officers or
directors of the Company.
Morris Ginsburg - Mr. Ginsburg has been Chairman of the Board, President and
Chief Executive Officer of the Company since June 1, 1988. From 1955 to 1979,
Mr. Ginsburg was Chairman of the Board, President, Chief Executive Officer and
owner of Bluhill American, a producer of condiments for the food service
industry. Mr. Ginsburg sold Bluhill to the Kellogg Company in 1979 and served
as a director of Fearn International, a division of Kellogg, from 1979 through
1983. In 1983, Mr. Ginsburg repurchased Bluhill from Kellogg and shortly
thereafter resold it to Dean Foods. In 1981, Mr. Ginsburg formed Container
Industries, Inc., a food container company in Denver, Colorado for which he
serves as Chairman of the Board. Since 1984, Mr. Ginsburg has been President,
Chief Executive Officer and owner of Ginsburg Investments, an asset lending
company.
Irwin L. Sandler - Mr. Sandler has been Executive Vice President of the
Company since April 1, 1993 and Senior Vice President, Secretary, Treasurer
and a Director of the Company since June 1, 1988. Since 1972, Mr. Sandler has
been in the private practice of law in Denver, Colorado emphasizing
securities, corporate, contract and general business law. From 1982 through
1985, Mr. Sandler served as President and a Director of a publicly held
company engaged in both oil and gas exploration and the investment banking
business. Mr. Sandler received his B.A. degree in 1967 and Juris Doctorate
degree in 1971 from the State University of New York at Buffalo.
Brian M. O'Meara - Mr. O'Meara has served as a Director of the Company since
July 1990. Mr. O'Meara has been involved in various aspects of the automobile
business through family-owned businesses in the Denver, Colorado area since
May 1968. Since November 1979, he has served as President of O'Meara Ford.
Mr. O'Meara earned a Bachelors Degree in Business from the University of
Denver in 1971.
Craig L. Caukin - Mr. Caukin has been Executive Vice President and a Director
of the Company since April 1, 1995. Mr. Caukin's responsibilities include
risk management and the acquisition of debt and equity for the Company. Mr.
Caukin joined the Company as Vice President in January 1991 and was promoted
to the position of Senior Vice President in April 1993. From February 1982
through December 1990, Mr. Caukin was employed at Guaranty Bank and Trust
Company in Denver where he was Senior Vice President responsible for all
lending. From November 1977 to January 1982, Mr. Caukin served as Branch
Manager/Officer of Old Kent Bank and Trust Company in Grand Rapids, Michigan.
Mr. Caukin received his B.S. degree in math and finance from Alma College,
Alma, Michigan, in 1976.
David M. Ickovic - Mr. Ickovic has been a Director of the Company since July
1996. Since 1976, Mr. Ickovic has been president of Ickovic & Associates,
P.C., Denver, Colorado, engaged in the business of accounting and business
consultation. From 1969 to 1976, Mr. Ickovic was a supervisor with Ernst &
Young. Mr. Ickovic has over 27 years of professional experience in the
provision of business and tax consulting services, including the tax
structuring of executive employment agreements, merger and acquisition
transactions, and business valuations for purposes of designing buy/sell
agreements, negotiating purchases and sales of businesses, and litigation. Mr.
Ickovic received a bachelor of science degree in accounting from Southern
Illinois University in 1969 and is licensed as a certified public accountant
with the State of Colorado. He has also received a designation as a personal
financial specialist with the American Institute of CPAs and a certified
financial planner with the International Board of Certified Financial
Planners.
Michael Feinstein - Mr. Feinstein has been Chief Financial Officer/Senior Vice
President of the Company since July 1995. From September 1993 to June 1995,
Mr. Feinstein served initially as Executive Vice President and subsequently as
acting President and Chief Executive Officer of American Southwest Financial
Corporation, a company engaged in the securitization and administration of
mortgage-backed bonds and certificates. From January 1983 through September
1993, Mr. Feinstein served in various senior management positions, including,
at different times, Chief Financial Officer, Treasurer, Chief Operating
Officer, and Executive and Senior Vice President of Asset Investors
Corporation, a New York Stock Exchange-listed REIT, and MDC Holdings Inc., a
New York Stock Exchange-listed national homebuilder. Prior to 1983, Mr.
Feinstein was a partner in the public accounting firm now known as Deloitte &
Touche. Mr. Feinstein has a B.S. degree in economics from the Wharton School
of the University of Pennsylvania.
Robert Rolfson - Mr. Rolfson has been employed by the Company since March
1993. He held the position of Controller of the Company until being promoted
to Vice President in charge of risk analysis and scorecard development in
March 1995. Mr. Rolfson has 23 years of corporate financial analysis and
management experience. From 1977 to 1982, Mr. Rolfson served as
secretary/treasurer and controller for Petro-Chem, an energy related company
with operations in 17 states, and, from April 1988 to March 1993, as
controller for Bianary Data Supply, a multi-state computer products
distributor which merged with Corporate Express in 1993.
Mark Gengozian - Mr. Gengozian has been Vice President, Information Systems
Director of the Company since August 1995. His previous work experience as
Vice President, MIS Director and consultant include directing major systems
conversions with Capital Associates International, Inc. (April 1990 to August
1995), USWEST Financial Services (January 1989 to April 1990), Citicorp, N.A.
(July 1987 to January 1989), Security Pacific Leasing (July 1987 to January
1989) and Great Western Financial (July 1987 to January 1989). Mr.
Gengozian's twenty-two years of experience encompass software, hardware,
communications and network expertise on most computer systems.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") and the rules
thereunder require the Company's executive officers and directors, and any
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission ("SEC"). Officers, directors and
greater than ten-percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of Form 3s, Form 4s and Form 5s
received by it, or written representations from a reporting person that no
Form 5 is required for that person, the Company believes that, during the last
fiscal year, all Section 16(a) filing requirements applicable to its executive
officers, directors and ten-percent or more beneficial owners, were complied
with.
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended December 31, 1996, the Board of Directors held
one meeting and took action by unanimous written consent on eight (8)
occasions. Significant matters were informally discussed among the directors
before the consents were signed. Since a consent to action does not afford the
same degree of interaction as does a formal meeting of the board of directors,
management expects that the Company in the future will take most significant
board actions at duly convened meetings rather than by unanimous written
consent.
The Board of Directors has a Stock Option Committee but does not currently
have standing audit, nominating or compensation committees. The full Board of
Directors performs the functions of the audit committee. The Company's
executive committee, which has broad powers to act on behalf of the Company,
consists of Messrs. Ginsburg and Sandler. The executive committee meets
informally on a regular basis.
Stock Option Committee. The current members of the Stock Option Committee are
Brian M. O'Meara and David M. Ickovic. The Stock Option Committee was
established on June 30, 1992, and held no meetings in 1996. The Stock Option
Committee took action by unanimous written consent on two (2) occasions in
1996. The Stock Option Committee administers and interprets the Company's
1992 Stock Option Plan and has authority to determine which persons shall be
granted options under the Company's 1992 Stock Option Plan and the terms and
conditions of the stock options granted.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE TO GRANT
AUTHORITY "FOR" THE PROPOSAL TO ELECT MESSRS. GINSBURG, SANDLER, O'MEARA,
CAUKIN AND ICKOVIC AS DIRECTORS OF THE COMPANY.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning cash
compensation paid to the Company's Chief Executive Officer and any other
executive officer whose total annual compensation exceeded $100,000 for the
fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
-------------
Annual Compensation Awards
------------------- -------------
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options (#)
- --------------------------- ------------------- ------------- ------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Morris Ginsburg 1996 $ 200,000 $37,891 $ 8,750 50,000(1)
President and 1995 $ 200,000 $37,891 $ 6,790 0
Chief Executive Officer 1994 $ 200,000 $42,048 $ 9,046 0
1993 $ 172,150 $ 0 $ 0 0
Irwin L. Sandler 1996 $ 150,000 $27,410 $ 10,632 50,000(1)
Executive Vice President 1995 $ 150,000 $28,418 $ 9,373 0
Secretary and Treasurer 1994 $ 150,000 $29,408 $ 9,146 0
1993 $ 120,400 $ 0 $ 0 0
Craig L. Caukin 1996 $ 125,000 $18,381 $ 6,350 50,000(1)
Executive Vice President 1995 $ 118,750 $18,945 $ 5,921 0
1994 $ 100,000 $20,761 $ 5,017 50,000(1)
1993 $ 85,000 $ 0 $ 0 0
Michael Feinstein 1996 $ 100,000 $14,993 $ 7,579 10,000 (1)
Senior Vice President 1995 $ 48,333 $ 0 $ 0 0
Chief Financial Officer
Mark Gengozian 1996 $ 96,875 $ 9,045 $ 0 15,000(1)
Vice President 1995 $ 36,939 $ 0 $ 0 0
=========================== =================== ============= ======= ============= ===========
<FN>
(1) Options to purchase Class A Common Stock of the Company.
</TABLE>
<PAGE>
The Company granted the following stock options to its named executive
officers during the fiscal year ended December 31, 1996:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<S> <C> <C> <C> <C>
NAME NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE EXPIRATION
GRANTED (#) FISCAL YEAR PRICE DATE
Morris Ginsburg, 50,000 18% $ 1.875 July 29, 2006
President and Chief Executive Officer
Irwin L. Sandler, 50,000 18% $ 1.875 July 29, 2006
Executive Vice President, Secretary & Treasurer
Craig Caukin, 50,000 18% $ 1.875 July 29, 2006
Executive Vice President
Mark Gengozian, 15,000 6% $ 1.875 July 29, 2006
Vice President
Michael Feinstein, 10,000 4% $ 1.875 July 29, 2006
Senior Vice President and Chief Financial Officer
<FN>
</TABLE>
<PAGE>
The following table sets forth the individual stock option exercises by
Messrs. Ginsburg, Sandler, Caukin and during the fiscal year ended December
31, 1996, and the stock option values at the end of such fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-The-Money Options
at FY-End (#) at FY-End ($)
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Morris Ginsburg 0 0 225,000 0 $ 50,000 0
Irwin L. Sandler 0 0 225,000 0 $ 50,000 0
Craig L. Caukin 0 0 150,000 0 $ 40,625 0
Mark Gengozian 0 0 15,000 0 $ 9,375 0
Michael Feinstein 0 0 10,000 0 $ 6,250 0
================= ============ ============ ==================== ===================== ============ =============
<FN>
</TABLE>
The Company's executive compensation is currently not affected by the
limitations on the deductibility of executive compensation amounts in excess
of $1,000,000 imposed by Section 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"). However, in the future the Company intends to take
any actions it deems necessary with respect to executive compensation in
consideration of Section 162(m) of the Code.
EMPLOYMENT AGREEMENTS
Messrs. Ginsburg and Sandler have each entered into employment agreements
("Employment Agreements") with the Company pursuant to which they received
annual compensation of $200,000 and $150,000, respectively, for the fiscal
year ended December 31, 1996, and will receive annual base salaries of
$200,000 and $150,000, respectively, for the fiscal year ending December 31,
1997. In addition, both Mr. Ginsburg and Mr. Sandler are eligible to receive
discretionary bonuses, compensation increases, death and disability benefits,
life insurance with premiums payable by the Company, and two years' regular
salary in the event of certain business combinations or changes in control of
the Company.
A "business combination" generally means any merger or similar transaction in
which the voting power of the stockholders prior to the transaction is diluted
by more than 30%. A "change in control" generally means the acquisition by any
person (other than a stockholder existing when the Employment Agreements were
signed in 1990) of beneficial ownership of more than 30% of the outstanding
securities of the Company entitled to vote in the election of directors. Upon
a business combination or change in control, the employee is entitled to two
years' regular salary at the rate then in effect (currently $200,000 per year
with respect to Mr. Ginsburg and $150,000 per year with respect to Mr.
Sandler) unless the employee is reasonably assured of continuation of his
position, duties, salary and benefits with the Company or any surviving entity
for a period of at least two years.
The Employment Agreements had initial terms of five years commencing December
15, 1990 and are automatically renewed for consecutive one-year terms unless
terminated by either party. The Company or the employee may terminate an
Employment Agreement for cause upon thirty (30) days' prior written notice.
Both of these individuals have agreed not to compete with the Company for a
period of two years following the termination of his relationship with the
Company under his respective Employment Agreement.
DIRECTOR COMPENSATION
Except as to Mr. Ickovic and Mr. O'Meara, directors are currently not paid a
fee for attending meetings of the Board of Directors. However, they are
reimbursed for actual travel and other expenses incurred in attending such
meetings. The Company may determine to pay other outside directors a fee for
attending Board meetings in the future.
For their services as Directors, the Company has agreed to pay Mr. Ickovic and
Mr. O'Meara each a fee of $250 per month plus $700 per quarterly Board meeting
attended by each of them. In addition, as members of the Stock Option
Committee, Messrs. Ickovic and O'Meara will be eligible to participate in the
Company's 1992 Stock Option Plan. In addition, for their services as members
of the special committee appointed to review and opine on the proposed
transaction between the Company and Pacific USA Holdings Corp., Mr. Ickovic
and Mr. O'Meara each received a fee of $10,000.
The Company's 1992 Stock Option Plan provides that options for the purchase of
5,000 shares of Class A Common Stock shall be granted automatically each year
immediately following the annual meeting of the Company's shareholders to each
director who is a member of the Stock Option Committee on such date. The
options shall be fully exercisable six months following the date of grant and
shall be exercisable for ten years after the date of grant. The exercise
price of such options shall equal the closing bid price of the stock as quoted
on the Nasdaq Stock Market on the date of grant. Options have not been issued
to members of the Stock Option Committee for the years 1993 through 1995.
5,000 options were issued to Messrs. Ickovic & O'Meara in 1996.<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of April 20, 1997, with respect
to the beneficial ownership of shares of Class A Common Stock and Class B
Common Stock of the Company by (a) each person known by the Company to be the
beneficial owner of more than five percent of the outstanding shares of Class
A and Class B Common Stock; (b) each executive officer and director; and (c)
all executive officers and directors as a group. Except as noted below, each
person has sole voting and investment power over the shares indicated:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF % OF COMMON STOCK % OF VOTING
BENEFICIAL OWNERSHIP(1) OWNERSHIP POWER
<S> <C> <C> <C> <C> <C>
NAME AND ADDRESS
OF BENEFICIAL OWNER CLASS A CLASS B COMBINED(2) CLASS B COMBINED(3)
Morris Ginsburg 225,000(4) 826,858(5) 14.62% 62.46% 27.48%
370 17th Street
Denver, CO 80202
Irwin L. Sandler 227,070(6) 496,857(5) 10.06% 37.54% 17.45%
370 17th Street
Denver, CO 80202
Craig L. Caukin 152,118(7) - 2.14% - 1.56%
370 17th Street
Denver, CO 80202
Brian M. O'Meara 35,000(8) - 0.50% - 0.36%
400 W. 104th Avenue
Denver, CO 80234
David M. Ickovic 5,000(9) - 0.07% - 0.05%
6025 So. Quebec St., #220
Englewood, CO 80111
Robert Rolfson 35,000(10) - 0.50% - 0.36%
370 17th Street
Denver, CO 80202
Mark Gengozian 15,000 (11) - 0.21% - 0.16%
370 17th Street
Denver, CO 80202
Michael Feinstein 10,000(12) - 0.14% - 0.10%
370 17th Street
Denver, CO 80202
William Harris Investors, Inc. 498,467(13) - 6.76% - 4.97%
William Harris & Co.
Employee Profit
Sharing Trust
Irving B. Harris
Steven A. Hirsh
Jerome Kahn, Jr.
2 North LaSalle Street
Suite 505
Chicago, IL 60602
Black Diamond Advisors, Inc. 1,716,667(14) - 19.76% - 15.14%
230 Park Avenue
New York, NY 10169
Heller Financial, Inc. 359,235(15) - 4.9% - 3.6%
500 West Monroe Street
Chicago, IL 60661
Bud Karsh - 493,715(5) -(5) -(5) -(5)
10000 E. Yale #60
Denver, CO 80231
All executive officers and
directors as a group (8 persons) 704,188 1,323,715 26.43% 100% 45.31%
<FN>
* Represents less than one percent.
(1) Shares are considered beneficially owned, for purposes of this table, only if held by the person
indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to
direct the disposition of, such security, or if the person has the right to acquire beneficial ownership within 60
days, unless otherwise indicated. All shares are owned of record unless otherwise indicated.
(2) Includes all shares of Class A Common Stock and Class B Common Stock outstanding and assumes exercise of
all outstanding options and warrants and conversion of all outstanding debentures beneficially owned by the
indicated person.
(3) Includes all shares of Class A Common Stock and Class B Common Stock outstanding. Each share of Class A
Common Stock has one vote per share while each share of Class B Common Stock has three votes per share. The Class
B Common Stock may be converted into Class A Common Stock on a share for share basis at the option of the holder
thereof, and shall automatically be converted in the event of its sale or transfer (whether by sale, assignment,
gift, bequest, appointment or otherwise) or upon death of the holder. Excluded, however, from the automatic
conversion are transfers of the Class B Common Stock for estate planning purposes to or for the benefit of the
original holder or members of his immediate family, provided that the original holder retains both voting and
investment power over the stock so transferred.
(4) Includes options to purchase 50,000 shares of Class A Common Stock at $2.125 per share, exercisable at any
time until January 3, 2002; options to purchase 125,000 shares of Class A Common Stock at $3.00 per share,
exercisable at any time prior to June 30, 2002; and options to purchase 50,000 shares of Class A Common Stock at
$1.875 per share exercisable at any time prior to July 29, 2006.
(5) Messrs. Ginsburg, Sandler and Karsh entered into an Agreement Among Certain Shareholders of Monaco
Finance, Inc., dated April 9, 1992, in which Mr. Karsh appointed Messrs. Ginsburg and Sandler as his proxy and
attorney-in-fact to each vote 50% of his Class B Common Stock. Messrs. Ginsburg and Sandler are each deemed to
beneficially own 246,857.5 shares of Mr. Karsh's Class B Common Stock as to which they have voting rights pursuant
to the proxies.
(6) Includes options to purchase 50,000 shares of Class A Common Stock at $2.125 per share, exercisable at any
time until January 3, 2002; options to purchase 125,000 shares of Class A Common Stock at $3.00 per share,
exercisable at any time prior to June 30, 2002; and options to purchase 50,000 shares of Class A Common Stock at
$1.875 per share, exercisable at any time prior to July 29, 2006. Of the remaining shares listed for Irwin L.
Sandler, 2,070 shares were purchased by Mr. Sandler through the custodial account of his Keogh Plan. Mr. Sandler
may be deemed the beneficial owner of these shares.
(7) Includes 2,118 shares of Class A Common Stock owned of record, options to purchase 25,000 shares of Class
A Common Stock at $2.125 per share any time until January 2, 2002, options to purchase 25,000 shares of Class A
Common Stock at $3.00 per share, exercisable at any time prior to June 30, 2002; options to purchase 50,000 shares
of Class A Common Stock at $6.125 per share any time until June 28, 2004; and options to purchase 50,000 shares of
Class A Common Stock at $1.875 per share, exercisable at any time prior to July 29, 2006.
(8) Includes options to purchase up to 25,000 restricted shares of the Company's Class A Common Stock at $3.00
per share exercisable any time until July 9, 2000; provided, however, that Mr. O'Meara be a director of the
Company on the date of any such exercise. Also includes options to purchase 5,000 shares of Class A Common Stock
at $3.00 per share exercisable at any time prior to June 30, 2002. Also includes options to purchase 5,000 shares
of Class A Common Stock at $1.875 per share any time until July 29, 2006.
(9) Consists of options to purchase 5,000 shares of Class A Common Stock at $1.875 per share any time until
July 29, 2006.
(10) Consists of options to purchase 10,000 shares of Class A Common Stock at $4.375 per share anytime until
March 25, 2003; options to purchase 10,000 shares of Class A Common Stock at $4.50 per share anytime until May 5,
2005; and options to purchase 15,000 shares of Class A Common Stock at $1.875 per share, exercisable at any time
prior to July 26, 2006.
(11) Consists of options to purchase 15,000 shares of Class A Common Stock at $1.875 per share any time prior
to July 29, 2006.
(12) Consists of options to purchase 10,000 shares of Class A Common Stock at $1.875 per share any time prior
to July 29, 2006.
(13) Represents 404,971 shares of Class A Common Stock issuable upon conversion of the Company's 7%
Convertible Subordinated Notes due March 1, 1998, at a conversion price of $3.42 per share. Of the securities
beneficially owned by the group (within the meaning of Rule 13d-5 promulgated under the Securities Exchange Act of
1934, as amended) listed in the table, William Harris Investors, Inc. may be deemed to beneficially own and to
have shared voting power with respect to 187,761 shares; William Harris & Co. Employee Profit Sharing Trust may be
deemed to beneficially own and to have shared voting power with respect to 175,438 shares; Irving B. Harris may be
deemed to beneficially own and to have shared voting power with respect to 175,864 shares; Steven A. Hirsh may be
deemed to beneficially own 288,011 shares, to have sole voting power with respect to 112,573 shares, and to have
shared voting power with respect to 175,430 shares; and Jerome Kahn, Jr. may be deemed to beneficially own 385,894
shares, to have sole voting power with respect to 22,695 shares, and to have shared voting power with respect to
363,199 shares.
(14) The information contained in the table and in this footnote is derived from a Schedule 13D dated June 28,
1996, filed by Black Diamond Advisors, Inc. ("BDA") and others with the Securities and Exchange Commission with
respect to the issuance by the Company on January 9, 1996, of $5 million in principal amount of 12% Convertible
Subordinated Senior Notes due 2001 ("Convertible Notes"), convertible at any time into approximately 1,250,000
shares of the Company's Class A Common Stock at a conversion price of $4.00 per share. Concurrently, the Company
agreed to issue up to an additional $5 million in principal amount of Convertible Notes (the "Additional Notes")
at a conversion price of $3.00 per share. If the Additional Notes had been issued on December 31, 1996, the
Additional Notes would have been convertible into 1,666,667 shares of Class A Common Stock (the "Additional
Shares"). In the Schedule 13D, BDA claims that it is the beneficial owner of the Additional Shares. The Company
expresses no opinion with respect to this position. In addition, certain of the purchasers of the Notes have
entered into a profit-sharing agreement with BDA. Also, BDA has the right to purchase the Notes (and in one case
the shares of Class A Common Stock issuable upon conversion of the Notes) under certain circumstances not
presently applicable.
Includes 50,000 shares of Class A Common Stock issuable upon conversion of Convertible Notes owned of record by
BDA and 1,666,667 Additional Shares assuming all of the Additional Notes are issued and the conversion price of
the Additional Notes is $3.00 per share. Stephen H. Deckoff and James E. Walker III each is an officer, director
and 50% shareholder of BDA. Each of Messrs. Deckoff and Walker disclaims beneficial ownership of the shares of
Class A Common Stock beneficially owned by BDA.
212,500 shares of Class A Common Stock are issuable upon conversion of Convertible Notes owned of record by BDC
Partners I, L.P. ("BDC Partners I"). Messrs. Deckoff and Walker and James J. Zenni are the only members of Black
Diamond Capital Management L.L.C. ("BDCM"), the sole general partner of BDC Partners I. Accordingly, BDCM and
each of Messrs. Deckoff, Walker and Zenni may be deemed to the beneficial owner of all shares of Class A Common
Stock beneficially owned by BDC Partners I. Also, Messrs. Deckoff, Walker and Zenni beneficially own an additional
62,500, 62,500 and 50,000 shares, respectively, of Class A Common Stock.
(15) Heller Financial, Inc. is the owner of Convertible Notes convertible into 750,000 shares of Class A
Common Stock, or approximately 10.8% of the Company's outstanding common stock. However, pursuant to the terms of
the Indenture, if a holder of Notes is subject to federal banking regulations with respect to the ownership of
common stock, then the Notes held by such holder are only convertible to such extent as would permit such holder
to own at any one time no more common stock of the Company than would constitute 4.9% of the outstanding capital
stock of the Company. Such restrictions do not apply to any transferee of the holder if such transferee is not
subject to such federal banking regulations and such transfer would not otherwise cause such holder to be
otherwise in violation of federal banking regulations. Heller Financial, Inc. has advised the Company that it is
subject to such federal banking regulations and, accordingly, may be deemed to beneficially own only up to 4.9% of
the Company's Class A Common Stock.
</TABLE>
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Effective March 24, 1994, the Company entered into a triple net lease (the
"Lease") with GSC Ltd. Liability Company, a Colorado limited liability company
("GSC"), pursuant to which the Company has agreed to lease from GSC real
property at 890-894 S. Havana, Aurora, Colorado, including two buildings
located thereon with total square footage of approximately 13,375 square feet,
to be used by the Company as an automobile dealership lot. The Lease will
expire on March 23, 2001, unless sooner terminated or extended pursuant to the
terms of the Lease. In September, 1995, the Company amended the lease to
include additional property (vacant land) resulting in an increase in the base
rent payable under the Lease from $12,750 per month to $13,738 per month. The
monthly rent increases to $14,238 for year three; $15,238 for year four;
$16,238 for year five; and $16,738 for years six and seven. Messrs. Sandler,
Caukin and Ginsburg, each a director or executive officer of the Company, are
members of GSC. The Lease was approved by the disinterested members of the
Board of Directors. In the opinion of management, the terms of the Lease are
no less favorable to the Company than the terms which the Company could have
received from nonaffiliated third parties. Effective June 1, 1996, the
Company entered into a sublease agreement for the entire lease term at an
amount approximately equal to the Company's obligation.
A Buy-Sell Agreement dated May 14, 1993, by and among the Company, Morris
Ginsburg and Sandler Family Partners, Ltd. (the "Partnership"), provides that
(i) the Company has the obligation to purchase the shares of the Company's
common stock owned by Mr. Ginsburg or the Partnership upon the death of Mr.
Ginsburg or Irwin L. Sandler, General Partner of the Partnership,
respectively, to the extent of proceeds from insurance policies acquired by
the Company on their lives; (ii) the Company shall maintain insurance policies
in the amount of $2,000,000 each on the lives of Messrs. Ginsburg and Sandler
for the purpose of acquiring shares pursuant to the Buy-Sell Agreement; (iii)
the purchase price for any shares purchased shall be the greater of book value
or 80% of the average of the daily closing prices of the stock for the 30
consecutive trading days commencing 45 trading days prior to the date of death
of the insured; (iv) each of Mr. Ginsburg and the Partnership grant a first
right to the Company to acquire any shares which he or it may desire to sell
other than through Rule 144 under the Securities Act of 1933. In the event
the Company does not purchase any or all of the shares pursuant to such right,
the other shareholder has the option to acquire such shares; and (v) Messrs.
Ginsburg and Sandler appoint each other, upon the incapacity of either of
them, as their true and lawful attorney-in-fact and agent to vote the shares
of common stock of the Company owned by him or it and to exercise all rights
with respect thereto.
In an Agreement Among Certain Shareholders of Monaco Finance, Inc. dated April
9, 1992, Milton Karsh appointed Morris Ginsburg and Irwin L. Sandler, both of
whom are officers and directors of the Company, as his proxy and
attorney-in-fact to each vote 50% of the Company's Class B Common Stock owned
by him. See "Security Ownership of Certain Beneficial Owners and Management."
A Buy-Sell Agreement dated April 30, 1991, by and among Morris Ginsburg, Bud
Karsh and Irwin L. Sandler as General Partner of Sandler Family Partners, Ltd.
(collectively, the "Shareholders" and individually, the "Shareholder"),
provides that (i) each Shareholder grants to the other Shareholders, on a pro
rata basis, a first right to acquire shares of the Company's common stock
owned by him under certain circumstances; and (ii) the Shareholders shall vote
their stock, under certain circumstances, in such a fashion and manner as to
cause each of them to hold positions as members of the Company's board of
directors. Mr. Karsh resigned from the board of directors in 1992.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Ehrhardt Keefe Steiner & Hottman P.C. as
the Company's independent public accountants for the fiscal year ending
December 31, 1997. A representative of Ehrhardt Keefe Steiner & Hottman P.C.
will be present at the Annual Meeting. Such representative will have the
opportunity to make a statement if he desires to do so and will be available
to respond to appropriate questions. An affirmative vote by the holders of a
majority of the votes entitled to be cast at the Annual Meeting is necessary
to ratify the appointment of Ehrhardt Keefe Steiner & Hottman P.C.
There is no legal requirement for submitting this proposal to the
Shareholders. The Board of Directors, however, believes that it is of
sufficient importance to seek ratification. Whether the proposal is approved
or defeated, the Board of Directors may reconsider its appointment of Ehrhardt
Keefe Steiner & Hottman P.C.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF
RATIFYING THE APPOINTMENT OF EHRHARDT KEEFE STEINER & HOTTMAN P.C. AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
SUBMISSION OF PROPOSALS BY SHAREHOLDERS
In order to be eligible for inclusion in the Company's proxy statement for the
1998 annual meeting of Shareholders, any proposal of a Shareholder must be
received by the Company at its principal offices in Denver, Colorado by
January 1, 1998.
PROXY SOLICITATION
In addition to soliciting Proxies by mail, directors, executive officers and
employees of the Company, without receiving additional compensation, may
solicit Proxies by telephone, by telegram or in person. Arrangements will
also be made with brokerage firms and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of
shares of the Class A Common Stock and the Company will reimburse such
brokerage firms and other custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in connection with forwarding such
materials.
ANNUAL REPORT
The Company will, upon written request and without charge, provide to any
person solicited hereunder a copy of the Company's Annual Report on Form
10-KSB, as amended, for the year ended December 31, 1996, as filed with the
Securities and Exchange Commission on March 31, 1997 Company will provide
copies of exhibits to the Form 10-KSB upon payment of a fee of $.03 per page,
which is management's estimate of the Company's reasonable related expenses.
Requests should be addressed to the Corporate Secretary, at the principal
executive office of the Company, 370 17th Street, Suite 5060, Denver, Colorado
80202.
OTHER BUSINESS
The Board of Directors does not know of any business to be presented for
consideration at the Annual Meeting other than that stated in the notice. It
is intended, however, that the persons authorized under the Board's proxies
may, in the absence of instructions to the contrary, vote or act in accordance
with their judgment with respect to any other proposal properly presented for
action at such meeting.
INCORPORATION BY REFERENCE
The following financial information with respect to the Company is
incorporated herein by reference from the Company's Annual Report to
Shareholders, which is being mailed to shareholders with this Proxy Statement:
<PAGE>
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial owners of
the Shares for which proxies are being solicited from you, and, if so, the
number of copies of this Proxy Statement and other soliciting materials you
wish to receive in order to supply copies to the beneficial owners of the
Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON, ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED FOR THAT PURPOSE. BY
RETURNING YOUR PROXY PROMPTLY YOU CAN HELP THE COMPANY AVOID THE EXPENSE OF
FOLLOW-UP MAILINGS TO ENSURE A QUORUM SO THAT THE ANNUAL MEETING CAN BE HELD.
SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE A PRIOR PROXY IN PERSON
AS SET FORTH IN THIS PROXY STATEMENT.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Irwin L. Sandler
Irwin L. Sandler,
Denver, Colorado
April 30, 1997
<PAGE>
PROXY
MONACO FINANCE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
MONACO FINANCE, INC.
The undersigned hereby appoints Morris Ginsburg and Irwin L. Sandler, and each
of them, as proxies for the undersigned, each with full power of appointment
and substitution, and hereby authorizes them to represent and to vote, as
designated below, all shares of the $0.01 par value Class A Common Stock of
Monaco Finance, Inc. (the "Company") which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of the Company to be held on September
10, 1996 (the "Meeting"), or at any postponements, continuations or
adjournments thereof.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned. If no direction is made, this proxy will be voted (i) FOR
the election of Messrs. Ginsburg, Sandler, O'Meara, Caukin and Ickovic to the
Board of Directors of the Company, (ii) FOR the proposal to ratify, confirm
and approve the Purchase Agreement and Indenture, as amended, relating to up
to $10,000,000 in principal amount of 12% Convertible Senior Subordinated
Notes due 2001, (iii) FOR the proposal to ratify the Board of Directors'
appointment of Ehrhardt Keefe Steiner & Hottman P.C. as the Company's
independent public accountants for the fiscal year ending December 31, 1997,
and (iv) on such other matters as may properly come before the Meeting.
1. Election of Directors
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below listed below
Morris Ginsburg Irwin L. Sandler
Brian M. O'Meara David M. Ickovic
Craig L. Caukin
(Instruction: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
2. Proposal to ratify the Board of Directors' appointment of Ehrhardt
Keefe Steiner & Hottman P.C. to serve as the Company's independent public
accountants for the fiscal year ending December 31, 1997.
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting or at any
postponements, continuations or adjournments thereof.
Please sign exactly as your name appears hereon. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign partnership name by authorized person. When signing
as trustee, please give full title as such.
Dated , 1997
Authorized Signature
Title
Please mark boxes /X/ in ink. Sign, date and return this Proxy Card promptly
using the enclosed envelope.
