<PAGE> 1
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
CONSUMER PORTFOLIO SERVICES, INC.
2 Ada, Irvine, California 92718
Phone: 714-753-6800
-----------
The annual meeting of the shareholders of Consumer Portfolio Services, Inc. (the
"Company") will be held at 8:30 a.m., local time, on Wednesday, July 31, 1996 at
the Company's offices, 2 Ada, Irvine, California for the following purposes:
1. To elect six directors for a term of one year and until their
successors shall be elected and duly qualified.
2. To ratify the appointment of KPMG Peat Marwick as the Company's
independent auditors for the fiscal year ending December 31, 1996.
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on July 1, 1996 are
entitled to notice of and to vote at the meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED PROXY EXACTLY AS YOUR NAME APPEARS THEREON AND
PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. PROXIES MAY BE REVOKED AT ANY TIME AND, IF YOU ATTEND THE
MEETING IN PERSON, YOUR EXECUTED PROXY WILL BE RETURNED TO YOU UPON REQUEST.
By Order of the Board of Directors
Jeffrey P. Fritz, Secretary
Dated: July 3, 1996
<PAGE> 2
CONSUMER PORTFOLIO SERVICES, INC.
2 ADA
IRVINE, CALIFORNIA 92718
714-753-6800
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 31, 1996
-----------
INTRODUCTION
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Consumer Portfolio Services, Inc. (the
"Company or CPS") for use at the annual meeting of the shareholders to be held
at 8:30 a.m., local time, on Wednesday, July 31, 1996 at the Company's offices,
2 Ada, Irvine, California, and at any adjournment thereof (the "Annual
Meeting").
All shares represented by properly executed proxies received in time
will be voted at the Annual Meeting and, where the manner of voting is specified
on the proxy, will be voted in accordance with such specifications. Shares
represented by properly executed proxies on which no specification has been made
will be voted FOR the election of nominees for director named herein and FOR the
ratification of the appointment of KPMG Peat Marwick as the Company's
independent auditors for the year ending December 31, 1996, and will be deemed
to grant discretionary authority to vote upon any other matters properly coming
before the meeting
Any shareholder who executes and returns a proxy may revoke it at any
time prior to the voting of the proxy by giving written notice to the Secretary
of the Company, by executing a later-dated proxy, or by attending the meeting
and giving oral notice of revocation to the Secretary of the Company.
The Board of Directors of the Company has fixed the close of business
on July 1, 1996 as the record date for determining the holders of outstanding
shares of the Company's Common Stock, without par value ("CPS Common Stock")
entitled to notice of, and to vote at the Annual Meeting. On that date, there
were 13,479,842 shares of CPS Common Stock issued and outstanding. Each such
share of CPS Common Stock is entitled to one vote on all matters to be voted
upon at the meeting, except that holders of CPS Common Stock have cumulative
rights for the election of directors as described in the next paragraph.
In the election of directors, each holder of CPS Common Stock may
cumulate such holder's votes and give any nominee an aggregate number of votes
equal to the number of directors to be elected multiplied by the number of
shares of CPS Common Stock held of record by such holder as of the record date,
or distribute such aggregate number of votes among as many nominees as the
holder thinks fit. However, no such holder shall be entitled to cumulate votes
for any nominee unless such nominee's name has been placed in nomination prior
to the voting and the holder has given notice AT THE ANNUAL MEETING prior to the
voting of the holder's intention to cumulate votes. If any one holder has given
such notice, all holders may cumulate their votes for nominees.
The notice of the Annual Meeting, this proxy statement and the form of proxy are
first being mailed to shareholders of the Company on or about July 3, 1996.
1
<PAGE> 3
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINATIONS
The number of directorships is fixed at six for the coming year. Six
persons have been nominated for election as directors at the Annual Meeting.
Each of the of the Company's six current directors have been nominated and have
agreed to serve as directors if elected. Directors of the Company are elected
annually to serve until the next annual meeting of shareholders and until their
successors are duly elected and qualified. Charles E. Bradley, Sr. is the father
of Charles E. Bradley, Jr., both of whom are nominees.
The names of the nominees for directorships and of the Company's
executive officers, their principal occupations, and certain other information
regarding them set forth below is based upon information furnished to the
Company's by them. The nominees are indicated by asterisk
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
* Charles E. Bradley, Sr. 66 Chairman of the Board of Directors
* Charles E. Bradley, Jr. 36 President, Chief Executive Officer, and Director
* William B. Roberts 59 Director
* John G. Poole 53 Vice Chairman of the Board of Directors
* Robert A. Simms 57 Director
* Thomas L. Chrystie 63 Director
Eugene J. Warner, Jr. 53 Senior Vice President - Collection Administration
Jeffrey P. Fritz 36 Senior Vice President - Chief Financial Officer and Secretary
William L. Brummund, Jr. 43 Senior Vice President - Systems Administration
Nicholas P. Brockman 51 Senior Vice President - Asset Recovery
Richard P. Trotter 53 Senior Vice President - Contract Originations
Curt K. Powell 39 Senior Vice President - Marketing
</TABLE>
CHARLES E. BRADLEY, SR. has been the Chairman of the Board of the
Company since its formation in March, 1991. Mr. Bradley is one of the founders
of Stanwich Partners, Inc. ("Stanwich"), a Connecticut investment firm which
acquires controlling interests in companies in conjunction with the existing
operating management of such companies, and has been President, a director and a
shareholder of that company since its formation in 1982. He is also President
and director of Reunion Industries, Inc., a publicly held company which
manufactures precision plastic products and provides engineered plastics
services. Mr. Bradley also served as President and a director of CPS Holdings,
Inc., the Company's former parent corporation, from August, 1989 until its
merger into the Company in December, 1995. He currently is a director of
DeVlieg-Bullard, Inc., Chatwins Group, Inc., Texon Energy Corp., General
Housewares Corp., NAB Asset Corporation (38% of whose outstanding shares of
voting stock are held by the Company), Zydeco Exploration, Inc., Sanitas, Inc.
and Triangle Corporation, all of which are publicly-held corporations or are
required to file periodic reports under Section 13 or 15(d) of the Securities
Exchange Act of 1934. Mr. Bradley was an officer of U.S. Metalsource, Inc.
("USM") and DeVlieg, Inc. ("DeVlieg") within two years of the filing by those
companies in 1991 of petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. USM's case is pending in the United States Bankruptcy Court for
the Western District of Pennsylvania, Case No. 91-2919-JLC. DeVlieg's case is
pending in the United States Bankruptcy Court for the Northern District of
Illinois, Case No. 91-B31744. Mr. Bradley received no salary for serving as an
officer of USM and DeVlieg, and was involved with those companies on a part-time
basis only. He is the father of Charles E. Bradley, Jr.
2
<PAGE> 4
CHARLES E. BRADLEY, JR. has been the President and a director of the
Company since its formation in March, 1991. In January, 1992, Mr. Bradley was
appointed Chief Executive Officer of the Company. From March, 1991 until
December, 1995 he served as Vice President and a director of CPS Holdings, Inc.
From April, 1989 to November, 1990, he served as Chief Operating Officer of
Barnard and Company, a private investment firm. From September, 1987 to March,
1989, Mr. Bradley, Jr. was an associate of The Harding Group, a private
investment banking firm. Mr. Bradley, Jr. is currently serving as a director of
NAB Assets Corporation, Chatwins Group, Inc. and Texon Energy Corporation.
Charles E. Bradley, Sr. is his father.
WILLIAM B. ROBERTS has been a director of the Company since its
formation in March, 1991. Since 1981, he has been the President of Monmouth
Capital Corp., an investment firm which specializes in management buyouts. Mr.
Roberts serves on the board of directors of Atlantic City Racing Association, a
publicly-held corporation, which owns and operates a race track.
JOHN G. POOLE has been a director of the Company since November, 1993
and its Vice Chairman since January, 1996. He was a co-founder of Stanwich in
1982 and has been a director, vice president and shareholder of that company
since its formation. Mr. Poole has served as a director of DeVlieg-Bullard, Inc.
since 1986 and served as its Vice President and Secretary from 1986 to December,
1989. He served as a Director and Officer of DeVlieg from 1987 to December,
1989. Mr. Poole received no salary for serving as an officer of DeVlieg, and was
involved with that company on a part-time basis only. He is also a director of
Reunion Industries, Inc., Sanitas, Inc. and Chatwins Group, Inc. Mr. Poole
served as a director and Vice President of CPS Holdings, Inc. from 1993 to 1995.
ROBERT A. SIMMS has been a director of the Company since April, 1995.
He has been the Chairman and Chief Executive Officer of Simms Capital
Management, Inc. since 1984. He is also a director of New York Bancorp, The
Halecrest Company, Arrhythmia Research Technology, Inc. and the National
Football Foundation and Hall of Fame. Mr. Simms also serves on the Board of
Overseers of Rutgers University and was formerly a partner in Bear Stearns & Co.
THOMAS L. CHRYSTIE has been a director of the Company since April,
1995. He has been self-employed as an investor since 1988. His previous
experience includes 33 years at Merrill Lynch & Co. in various capacities
including heading Merrill Lynch's investment banking, capital markets and
merchant banking activities. In addition, he served as Merrill Lynch & Co.'s
Chief Financial Officer. He is also a director of Titanium Industries, Eonyx
Corporation and Wyoming Properties.
EUGENE J. WARNER, JR. has been Senior Vice President - Collection
Administration since October, 1991. Mr. Warner joined the Company in April, 1991
as Vice President - Collection Administration. He served as Vice President -
Collection Administration of Far Western Bank, Tustin, California, from August,
1987 to March, 1991. From 1984 to August, 1987, he was Assistant Vice President
and Branch Manager for Heritage Thrift and Loan in Costa Mesa, California.
3
<PAGE> 5
JEFFREY P. FRITZ has been Senior Vice President - Chief Financial
Officer and Secretary of the Company since March 1991. From December, 1988 to
March, 1991, Mr. Fritz was Vice President and Chief Financial Officer of Far
Western Bank. From 1985 to December, 1988, Mr. Fritz was a management consultant
for Price Waterhouse in St. Louis, Missouri.
WILLIAM L. BRUMMUND, JR. has been Senior Vice President - Systems
Administration since March, 1991. From 1986 to March, 1991, Mr. Brummund was
Vice President and Systems Administrator for Far Western Bank.
NICHOLAS P. BROCKMAN has been Senior Vice President - Asset Recovery
since January, 1996. He was Senior Vice President of Contract Originations from
April, 1991 to January, 1996. From 1986 to March, 1991, Mr. Brockman served as a
Vice President and Branch Manager of Far Western Bank.
RICHARD P. TROTTER has been Senior Vice President-Contract Originations
of the Company since January, 1996. He was Senior Vice President of
Administration from May, 1995 to January, 1996 and from January, 1994 to April,
1995 he was Senior Vice President-Marketing of the Company. From December, 1992
to January, 1994, Mr. Trotter was Executive Vice President of Lange Financial
Corporation, Newport Beach, California. From May, 1992 to December, 1992, he was
Executive Director of Fabozzi, Prenovost & Normandin, Santa Ana, California.
From December, 1990 to May, 1992 he was President/Chief Operating Officer of R.
Thomas Ashley, Newport Beach, California. From April, 1984 to December, 1990, he
was President/Chief Executive Officer of Far Western Bank, Tustin, California.
CURTIS K. POWELL has been Senior Vice President - Marketing of the
Company since April, 1995. He joined the Company in January, 1993 as an
independent marketing representative until being appointed Regional Vice
President of Marketing for Southern California in November, 1994. From June,
1985 through January, 1993, Mr. Powell was in the retail automobile sales and
leasing business.
In December, 1990 Far Western Bank was ordered closed by the California
State Banking Department and a receiver was appointed for its business. At that
time, Messrs. Warner, Fritz, Brummund, Brockman, and Trotter were officers of
Far Western Bank.
The Board of Directors has established an Audit Committee and
Compensation and Stock Option Committee. The members of the Audit Committee are
Robert A. Simms, Thomas L. Chrystie and William B. Roberts. The Audit Committee
is empowered by the Board of Directors to review the financial books and records
of the Company in consultation with the Company's accounting and auditing staff
and its independent auditors and to review with the accounting staff and
independent auditors any questions raised with respect to accounting and
auditing policy and procedure.
The members of the Compensation and Stock Option Committee are Robert
A. Simms, Thomas L. Chrystie and William B. Roberts. This Committee makes
recommendations to the Board of Directors as to general levels of compensation
for all employees of the Company, the annual salary of each of the executive
officers of the Company, authorizes the grants options to employees under the
Company's 1991 Stock Option Plan, and reviews and approves compensation and
benefit plans of the Company.
The Company does not have a Nominating Committee. Shareholders who wish
to suggest individuals for possible future consideration for board positions
should direct recommendations to the Board of Directors at the Company's
principal offices.
4
<PAGE> 6
The Board of Directors held three meetings during the nine months ended
December 31, 1995. The Audit Committee met once during the nine month fiscal
period ended December 31, 1995. The Compensation and Stock Option Committee did
not meet separately during fiscal 1995 as the entire Board acted as such
Committee. Each director attended all of the meetings of the Board and of the
Committees on which he served during such period
The Company pays Messrs. Simms, Chrystie and Roberts a directors fee of
$1,000 per month plus $500 for each meeting attended. Since January 1, 1996, the
Company had been paying salaries to Mr. Bradley, Sr. and Mr. Poole at the annual
rates of $125,000 and $75,000, respectively, for serving as Chairman and Vice
Chairman, respectively
In March, 1993, the Company granted options under its 1991 Stock Option
Plan to Messrs. Bradley, Sr. and Roberts to purchase, respectively, 600,000 and
200,000 shares of the Company's common stock at an option price of $2.50 per
share, which was the fair market value per share on the date of grant. These
options are exercisable at any time until March 1, 1998 when they expire to the
extent not previously exercised. On April 13, 1995, the Company granted options
to Messrs. Simms and Chrystie to purchase 30,000 shares each at $7.25 per share,
which was the fair market value per share on the date of grant. These options
are exercisable at any time until May 1, 2004 when they expire to the extent not
previously exercised.
The six nominees for election as directors at the Annual Meeting who
receive the highest number of votes cast for election shall be duly elected
directors upon completion of the vote tabulation at the meeting, provided a
majority of the outstanding shares of CPS Common Stock as of the record date are
present in person or by proxy at the meeting.
COMPLIANCE WITH SECTION 16 (A) OF THE SECURITIES EXCHANGE ACT OF 1934
William B. Roberts inadvertently failed to file a Form 4 in December,
1995 reporting his acquisition of 5,000 (pre-split) shares of the Company's
Common Stock in November, 1995. He filed the Form 4 in January, 1996. Nicholas
P. Brockman inadvertently failed to file a Form 4 in April, 1995 reporting his
exercise of an option to purchase 7,000 (pre-split) shares of the Company's
Common Stock in March, 1995. Mr. Brockman filed a Form 5 for this transaction in
May, 1996.
5
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid or accrued by
the Company for services rendered during the fiscal years ended March 31, 1995
and 1994 and during the nine month fiscal period ended December 31, 1995 to the
Company's Chief Executive Officer and to its four most highly compensated other
executive officers (the "named executive officers") who were serving as
executive officers at December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
===================================================================================================================================
Long Term Compensation
--------------------------------
Compensation for period shown Awards Payouts
- -----------------------------------------------------------------------------------------------------------------------------------
Restricted
Other fixed Stock Options/ LTIP All other fixed
Name and Principle Salary Bonus Compensation Award(s) SARs Payouts Compensations
Position Period ($) ($) ($) ($) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CHARLES E. BRADLEY, JR. (A) 237,500 217,500 0 0 0 0 0
President, Chief Fiscal 1995 250,000 225,000 0 0 0 0 0
Executive
Officer, and Director Fiscal 1994 204,417 109,000 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
JEFFREY P. FRITZ (A) 91,903 48,750 0 0 0 0 0
Senior Vice President Fiscal 1995 104,834 52,416 0 0 0 0 0
Chief Financial Fiscal 1994 100,800 41,328 0 0 0 0 0
Officer, Secretary
- -----------------------------------------------------------------------------------------------------------------------------------
NICHOLAS P. BROCKMAN (A) 80,372 33,750 0 0 0 0 0
Senior Vice President, Fiscal 1995 99,226 46,636 0 0 0 0 0
Asset Recovery Fiscal 1994 94,500 38745 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
WILLIAM L. BRUMMUND, JR. (A) 80,372 33,750 0 0 0 0 0
Senior Vice Fiscal 1995 99,226 49,612 0 0 0 0 0
President, Systems
Fiscal 1994 94,500 38,745 0 0 0 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
CURTIS K. POWELL (A) 81,000 41,250 0 0 0 0 0
Senior Vice Fiscal 1995 51,080 10,000 0 0 0 0 0
President, Marketing
Fiscal 1994 N/A N/A 0 0 0 0 0
===================================================================================================================================
</TABLE>
(A) = NINE MONTHS ENDED, DECEMBER 31, 1995
6
<PAGE> 8
OPTION AND SAR GRANTS
The following table sets forth all options granted to executive
officers by the Company during the nine month fiscal period ended December 31,
1995. All such options were granted under the 1991 Stock Option Plan. No stock
appreciation rights (SAR's) were granted by the Company during the nine months
ended December 31, 1995. All options were for the purchase of shares of the
Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
===========================================================================================================================
% of Total
Options Granted
to Employees in Exercise or
Option Granted Nine months ended Base Price Grant Expiration
Name (No. of Shares) December 31, 1995 ($/Sh) Date Date Exercisable
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Charles E. Bradley, Jr. 8,400 8.5% $7.25 4/13/1995 12/15/2004 a
- ---------------------------------------------------------------------------------------------------------------------------
William L. Brummund, Jr. 7,600 7.7% $11.00 10/18/1995 10/31/2004 b
- ---------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Fritz 7,600 7.7% $11.00 10/18/1995 10/31/2004 b
- ---------------------------------------------------------------------------------------------------------------------------
Eugene J. Warner, Jr. 7,600 7.7% $ 7.25 4/13/1995 3/31/2005 b
- ---------------------------------------------------------------------------------------------------------------------------
Curtis K. Powell 47,600 47.9% $ 7.25 4/13/1995 10/31/2004 c
===========================================================================================================================
</TABLE>
a. 5,380 exercisable on May 1, 2003, 3020 exercisable on May, 2004.
b. Fully exercisable on May 1, 2001.
c. 4,650 exercisable on each of May 1, 1995, 1996, 1997, 1998 and 1999.
13,600 exercisable on May 1, 2000 and 10,750 exercisable on May 1,
2001.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUE TABLE
The following table sets forth, as of the end of the nine month fiscal
period ended December 31, 1995 the number of unexercised options held by each
executive officer named in the preceding table, the number of shares subject to
then exercisable and unexercisable options held by such persons and the December
31, 1995 value of all unexercised options held by such persons. Each option
referred to in the table was granted under the Company's 1991 Stock Option Plan
at an option price per share equal to the fair market value per share on the
date of grant.
<TABLE>
<CAPTION>
==================================================================================================================
Value of Unexercised
No. of Unexercised In-the-Money
Number of Value Options at December 31, Options at December 31,
Shares Acquired Realized 1995 1995($)
Name on Exercise $ Exercisable/Unexercisable (1)Exercisable/Unexercisable
==================================================================================================================
<S> <C> <C> <C> <C>
Charles E. Bradley, Jr. 0 0 100,440 / 149,800 623,283 / 545,923
- ------------------------------------------------------------------------------------------------------------------
Nicholas P. Brockman 5,000 31,875 53,960 / 87,040 357,485 / 477,648
- ------------------------------------------------------------------------------------------------------------------
William L. Brummund, Jr. 20,000 127,500 52,960 / 94,640 350,860 / 463,238
- ------------------------------------------------------------------------------------------------------------------
Jeffrey P. Fritz 19,000 121,125 53,960 / 94,640 357,485 / 463,238
- ------------------------------------------------------------------------------------------------------------------
Curtis K. Powell 0 0 14,650 / 82,950 33,669 / 180,331
==================================================================================================================
</TABLE>
(1) Based on the last reported sales price as reported by Nasdaq on
December 31, 1995.
7
<PAGE> 9
BONUS PLAN
Messrs. Charles E. Bradley, Jr., Jeffrey P. Fritz, Nicholas P.
Brockman, William L. Brummund, Jr., Eugene J. Warner, Jr., Richard P. Trotter,
and Curtis K. Powell participate in a management bonus plan (the "Bonus Plan"),
pursuant to which such employees are entitled to earn cash bonuses, if the
Company achieves certain net income levels or goals established by the Board of
Directors. The amount of bonus payable to each officer is determined by the
Board of Directors in its discretion
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
CPS Common Stock (its only class of voting securities) owned beneficially as of
May 31, 1996 (i) by each person known to the Company to own beneficially more
than 5% of the outstanding Common Stock, (ii) by each director and named
executive officer of the Company, and (iii) by all directors and executive
officers of the Company as a group. Except as otherwise indicated, and subject
to applicable community property and similar laws, each of the persons named has
sole voting and investment power with respect to the shares shown as
beneficially owned by such persons.
<TABLE>
<CAPTION>
==============================================================================================================================
Name & Address of Amount & Nature
Beneficial Owner of Beneficial Percent
Owner (1) of
Class
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Charles E. Bradley, Sr.
c/o Stanwich Partners, Inc., 62 Southfield Avenue, Stamford, CT 06902 2,895,138(2) 20.73%
- ------------------------------------------------------------------------------------------------------------------------------
William B. Roberts
Monmouth Capital Corp., 126 East 56th Street, Tower 56 - 12th Floor, New York, NY 10022 1,233,982 9.10%
- ------------------------------------------------------------------------------------------------------------------------------
John G. Poole
c/o Stanwich Partners, Inc., 62 Southfield Avenue, Stamford, CT 06902 284,360(3) 2.13%
- ------------------------------------------------------------------------------------------------------------------------------
Thomas L. Chrystie, P.O. Box 640, Wilson, WY 83014 42,000(4) *
- ------------------------------------------------------------------------------------------------------------------------------
Robert A. Simms, 55 Railroad Ave., Plaza Suite, Greenwich, CT 06830 170,244(5) 1.27%
- ------------------------------------------------------------------------------------------------------------------------------
Charles E. Bradley, Jr., c/o Consumer Portfolio Services, Inc. 2 Ada, Suite 100, Irvine,
CA 92718 754,320(6) 5.60%
- ------------------------------------------------------------------------------------------------------------------------------
Nicholas P. Brockman, c/o Consumer Portfolio Services, Inc. 2 Ada, Suite 100, Irvine, CA
92718 72,200 *
- ------------------------------------------------------------------------------------------------------------------------------
Jeffrey P. Fritz, c/o Consumer Portfolio Services, Inc. 2 Ada, Suite 100, Irvine, CA 92718 72,200 *
- ------------------------------------------------------------------------------------------------------------------------------
William L. Brummund, Jr., c/o Consumer Portfolio Services, Inc. 2 Ada, Suite 100, Irvine, CA
92718 71,200 *
- ------------------------------------------------------------------------------------------------------------------------------
Curtis K. Powell, c/o Consumer Portfolio Services, Inc. 2 Ada, Suite 100, Irvine, CA 92718 29,300 *
- ------------------------------------------------------------------------------------------------------------------------------
All officers and directors as a group (twelve persons) 5,700,544 39.02%
- ------------------------------------------------------------------------------------------------------------------------------
Sun Life Insurance Company of America
One Sun America Center, 38th Floor, Century City, CA 90067 1,013,332(7) 7.32%
- ------------------------------------------------------------------------------------------------------------------------------
Robert T. Gilhuly and Kimball J. Bradley, Trustees, c/o Cummings & Lockwood
Two Greenwich Plaza, Box 2505, Greenwich, CT 06830 1,058,818(8) 7.92%
==============================================================================================================================
</TABLE>
* Less than 1%
8
<PAGE> 10
(1) Includes the following shares which are not currently outstanding but
which the named individuals have the right to acquire currently or
within 60 days of May 31, 1996 upon exercise of options: Charles E.
Bradley, Sr. - 600,000 shares; William B. Roberts - 200,000 shares;
Thomas L. Chrystie - 20,000 shares; Robert B. Simms - 20,000 shares;
Jeffrey P. Fritz - 72,200 shares; William L. Brummund, Jr. - 71,200
shares; Curtis K. Powell - 29,300 shares; and all directors and
executive officers as a group (12 persons) - 1,295,140 shares. The
shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned
by such persons individually and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage of ownership of
any other person.
(2) Includes 207,490 shares owned by Mr. Bradley's spouse as to which he
has no voting or investment power.
(3) Includes 2,000 shares held by Mr. Poole as custodian for his children.
(4) Includes 2,000 shares held by the Thomas L. Chrystie Living Trust.
(5) Includes 16,944 shares owned by Mr. Simms' spouse as to which he has no
voting or investment power.
(6) Includes 211,738 shares held by a trust of which Mr. Bradley is the
beneficiary, as to which he has no voting or investment power.
(7) Includes shares which would be issued upon the conversion of a
$3,000,000 Convertible Note dated November 16, 1993 into 480,000 shares
of Common Stock.
(8) These shares are held in trusts of which the beneficiaries are Charles
E. Bradley, Sr.'s adult children, including, among others, Charles E.
Bradley, Jr., (as to 211,738 shares) and Kimball J. Bradley (as to
211,802 shares).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 1, 1992, the Company and Stanwich (an affiliate of the
Company) entered into a written agreement confirming their prior understanding
of the engagement of Stanwich by the Company, pursuant to which Stanwich served
as a consultant to the Company for the five-year period ended December 31, 1995.
Pursuant to the consulting agreement, the Company was obligated to and did pay
to Stanwich monthly consulting fees of approximately $29,167 during the period
from January 1, 1992 through December 31, 1995. On January 3, 1996, the Company
and Stanwich entered into an agreement pursuant to which Stanwich provides
consulting services on a non-exclusive basis for a three year period ended
December 31, 1998 for fee of $75,000 per year.
In August 1992, the Company granted CPS Holdings, Inc., an option to
purchase 1,800,000 shares of Common Stock at an exercise price of $2.50 per
share. The option was exercised on December 6, 1995. On December 11, 1995, CPS
Holdings, Inc. was merged into the Company. Messrs. Bradley, Sr., Bradley Jr.,
Poole and Roberts were directors and stockholders of CPS Holdings, Inc. prior to
such merger.
On March 15, 1995 the Company redeemed, for an aggregate price of $3.4
million, all of the outstanding shares of its Series A Preferred Stock, which
shares were held by CPS Holdings, Inc. and William B. Roberts at the time of
their redemption. The redemption price of $3.4 million was equal to the amount
authorized for redemption by the Company's Articles of Incorporation and also
equal to the amount the Company initially received in exchange for the shares.
The agreements and arrangements described above were not entered into
between parties negotiating or dealing on an arm's length basis, but were
entered into by the Company with the parties
9
<PAGE> 11
who personally benefited from such transactions and who had a control or
fiduciary relationship with the Company.
PROPOSAL NO. 2
RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the accounting firm of KPMG Peat
Marwick to be its independent auditors for the year ending December 31, 1996.
A proposal to ratify that appointment will be presented to shareholders
at the Annual Meeting. If the shareholders do not ratify the selection of KPMG
Peat Marwick another firm of independent public accountants will be selected by
the Board of Directors at the Annual Meeting. Representatives of KPMG Peat
Marwick will be present at the Annual Meeting. Such representatives will have an
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions from shareholders in attendance. The Board
recommends that you vote FOR this proposal.
VOTING OF PROXIES, VOTING PROCEDURES, AND EXPENSES
The Board of Directors recommends that an affirmative vote be cast on
favor of each of the proposals listed on the proxy card.
The Board of Directors knows of no other matters that may be brought
before the meeting which require submission to a vote of the shareholders. If
any other matters are properly brought before the meeting, however, the persons
named in the enclosed proxy or their substitutes will vote in accordance with
their best judgment on such matters.
Votes will be tabulated by American Stock Transfer & Trust Co., the
transfer agent and register for the CPS Common Stock, and by the inspector of
election who is required to resolve impartially any interpretive questions as to
the conduct of the vote.
Expenses incurred in connection with the solicitation of proxies will
be paid by the Company. The proxies are being solicited principally by mail. In
addition, directors, officers and regular employees of the Company may solicit
proxies personally or by telephone, for which they will receive no consideration
other than their regular compensation. The Company will also request brokerage
houses, nominees, custodians and fiduciaries to forward soliciting material to
the beneficial owners of Common Stock of the Company and will reimburse such
persons for their expenses so incurred.
10
<PAGE> 12
SHAREHOLDER PROPOSALS
The Company expects to hold its 1997 Annual Meeting of Shareholders in
June, 1997. In order to be considered for inclusion in the Company's Proxy
statement and form of proxy for the 1997 Annual Meeting, any proposals by
shareholders intended to be presented at such meeting must be received by the
Secretary of the Company at 2 Ada, Irvine, California 92718 by no later than
April 1, 1997.
BY THE ORDER OF THE BOARD OF DIRECTORS
Jeffrey P. Fritz
Secretary
Dated: July 3,1996
Irvine, California
11
<PAGE> 13
CONSUMER PORTFOLIO SERVICES, INC.
2 ADA, SUITE 100, IRVINE, CALIFORNIA 92718
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John G. Poole and Charles E. Bradley,
Jr., and each or either of them, as Proxies, each with the power to appoint his
own substitute, and hereby authorizes them to represent and to vote as
designated on the reverse side, all shares of Common Stock of Consumer
Portfolio Services, Inc. held of record by the undersigned on July 1, 1996, at
the Annual Meeting of Stockholders to be held on July 31, 1996 or any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE> 14
Please mark your
A /X/ votes as in this
example.
The Directors Recommend a vote FOR Each of the following Proposals:
1. ELECTION OF DIRECTORS
/ / FOR all nominees NOMINEES: Charles E. Bradley, Sr.
listed at right Charles E. Bradley, Jr.
(except as marked William B. Roberts
to the contrary) John G. Poole
Thomas L. Chrystie
/ / WITHHOLD Robert A. Simms
AUTHORITY
(Instructions: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
_________________________________________________________________________
2. Proposal to ratify the appointment of KPMG Peat Marwick as independent
accountants for the fiscal year ending December 31, 1995.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner directed herein
by the Stockholder. If no contrary specification is made, this proxy will be
voted FOR the election of nominees for directors and FOR ratification of the
appointment of the independent accountants.
Please mark, sign, date and return this proxy promptly using the enclosed
envelope.
SIGNATURE ___________________________________________ DATE ___________________
SIGNATURE ___________________________________________ DATE ___________________
NOTE: Please sign exactly as name appears herein. When shares are held by joint
tenants, both must sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in the full corporate name by president or other
authorized officer. If a partnership, please sign in the partnership name
by authorized person.
<PAGE> 15
CONSUMER PORTFOLIO SERVICES, INC.
2 ADA, SUITE 100, IRVINE, CALIFORNIA 92718
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John G. Poole and Charles E. Bradley,
Jr., and each or either of them, as Proxies, each with the power to appoint his
own substitute, and hereby authorizes them to represent and to vote as
designated on the reverse side, all shares of Common Stock of Consumer
Portfolio Services, Inc. held of record by the undersigned on July 1, 1996, at
the Annual Meeting of Stockholders to be held on July 31, 1996 or any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
PLEASE MARK YOUR
A [X] VOTES AS IN THIS
EXAMPLE.
FOR ALL NOMINEES LISTED
AT RIGHT (EXCEPT AS WITHHOLD
MARKED TO THE CONTRARY) AUTHORITY
1. ELECTION OF DIRECTORS [ ] [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- ------------------------------------------------------------------------------
THE DIRECTORS RECOMMEND A VOTE FOR EACH OF THE FOLLOWING PROPOSALS:
NOMINEES: Charles E. Bradley, Sr.
Charles E. Bradley, Jr.
William B. Roberts
John G. Poole
Thomas L. Chrystie
Robert A Simms
2. Proposal to ratify the appointment of KPMG Peat Marwick as independent
accountants for the fiscal year ending December 31, 1995.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE STOCKHOLDER. IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF NOMINEES FOR DIRECTORS AND FOR RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE DATE
------------------------------ -----------
SIGNATURE DATE
------------------------------ -----------
NOTE: Please sign exactly as name appear hereon. When shares are held by joint
tenants, both must sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such if a corporation, please
sign in the full corporate name by president or other authorized officer. If a
partnership, please sign in the partnership name by authorized person.
