SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the approximate box:
|X| Preliminary proxy statement |_| Confidential for Use for the
Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
TEAM RENTAL GROUP, INC.
(Name of Registrant as Specified in Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(l)(ii), or 14a-6(i)(l).
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $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 (Set forth the amount on which
the filing fee is calculated and state how it was determined.):
(4) Proposed maximum aggregate value of transaction:
<PAGE>
(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:
<PAGE>
TEAM RENTAL GROUP, INC.
125 BASIN STREET
DAYTONA BEACH, FLORIDA 32114
--------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1996
--------------------------------------------
TO THE STOCKHOLDERS OF TEAM RENTAL GROUP, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Team
Rental Group, Inc., a Delaware corporation (the "Company"), will be held at
Team Rental of Dayton, Inc.'s Administrative Headquarters, Dayton
International Airport, Dayton, Ohio on Tuesday, June 18, 1996 at 1:00 p.m.
(local time), for the following purposes:
1. To elect a Board of Directors.
2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation.
3. To approve an amendment to the Company's 1994 Incentive Stock
Option Plan.
4. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
Stockholders of record at the close of business on April 17, 1996 (the
"Stockholders") are entitled to notice of and to vote at the meeting. From
June 8, 1996 until the meeting, a complete list of Stockholders is open for
the examination by any Stockholder for any purpose germane to the meeting,
during ordinary business hours, at the offices of Team Rental of Dayton,
Inc.'s Administrative Headquarters, Dayton International Airport, Dayton,
Ohio.
A copy of the Company's Annual Report to Stockholders for the fiscal
year ended December 31, 1995 is enclosed herewith.
By Order of the Board of Directors,
Sanford Miller,
Chairman of the Board and Chief Executive Officer
Dated: May 19, 1996
Each Stockholder is urged to fill in, sign, date and mail the enclosed
Proxy promptly. If you attend the meeting and vote in person, the Proxy will
not be used. If the Proxy is mailed in the United States in the enclosed
envelope, no postage is required. The prompt return of your Proxy will save
the expense involved in further communication.
<PAGE>
TEAM RENTAL GROUP, INC.
125 BASIN STREET
DAYTONA BEACH, FLORIDA 32114
--------------------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1996
--------------------------------------------
TO THE STOCKHOLDERS: May 19, 1996
This Proxy Statement is furnished to each Stockholder (as defined
below) in connection with the solicitation by the Board of Directors of Team
Rental Group, Inc., a Delaware corporation (the "Company"), of Proxies in the
accompanying form to be used at the Annual Meeting of Stockholders to be held
at the Company's Dayton subsidiary's Administrative Headquarters, Dayton
International Airport, Dayton, Ohio on Tuesday, June 18, 1996 at 1:00 p.m.
(local time) and at any subsequent time that may be necessary by the
adjournment thereof.
The mailing address of the principal executive office of the Company is
125 Basin Street, Daytona Beach, Florida 32114. This Proxy Statement and the
enclosed Proxy are first being mailed to the Stockholders of the Company on or
about May 19, 1996.
All holders of record (the "Stockholders") of the Company's Class A
common stock, par value $.01 per share (the "Class A Common Stock"), and Class
B common stock, par value $.01 per share (the "Class B Common Stock")
(collectively, the "Common Stock"), at the close of business on April 17, 1996
(the "Record Date") are entitled to vote at the meeting and their presence is
desired. If, however, a Stockholder cannot be present in person, a Proxy is
enclosed which the Board of Directors of the Company requests such Stockholder
execute and return as soon as possible. The person who signs a Proxy must be
either (i) the registered Stockholder of such shares of Common Stock or (ii) a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or any other person acting in a fiduciary or representative
capacity on behalf of such registered Stockholder. A Stockholder can, of
course, revoke its Proxy at any time before it is voted if so desired, either
in person at the meeting or by delivery of a duly executed subsequent proxy or
notice of revocation to the Secretary of the Company. All properly executed
proxies delivered pursuant to this solicitation, unless previously revoked,
will be voted in accordance with directions given, if delivered in time to be
voted at the meeting.
The Company is paying all costs of the solicitation of Proxies,
including the expenses of printing and mailing to its Stockholders this Proxy
Statement, the accompanying Notice of Annual Meeting of Stockholders, Proxy
and the Annual Report, a copy of which is enclosed herewith. The Company will
also reimburse brokerage houses and other custodians, nominees and fiduciaries
for their expenses, in accordance with the regulations of the Securities and
Exchange Commission, in sending Proxies and proxy materials to the beneficial
owners of the Common Stock. Officers or employees of the Company may also
solicit Proxies in person, or by mail, telegram or telephone, but such persons
will receive no compensation for such work, other than their normal
compensation as such officers or employees.
At the close of business on April 17, 1996, 5,493,176 shares of Class A
Common Stock and 1,936,600 shares of Class B Common Stock were outstanding and
are entitled to vote at the Annual Meeting. The holders of shares of Class A
Common Stock vote together with the holders of shares of Class B Common Stock
as a single class on all matters, but the holders of Class A Common Stock are
entitled to one vote per share and the holders of Class B Common Stock are
entitled to ten votes per share.
2
<PAGE>
PROXIES AND VOTING
The persons named in the accompanying form of Proxy intend to vote
Proxies for the election of the nominees for director described herein, except
to the extent authority to vote for any such nominee is withheld. In the event
that any nominee at the time of election shall be unable or unwilling to serve
or is otherwise unavailable for election (which contingency is not now
contemplated or foreseen), and as a consequence another individual shall be
nominated, the persons named in the Proxy shall have the discretion and
authority to vote or to refrain from voting in accordance with their judgment
on such other nominations.
The presence in person or by proxy of a majority of the combined voting
power of the Common Stock outstanding and entitled to vote at the meeting is
required for a quorum. If a quorum is present, those nominees receiving the
affirmative vote of a majority of the combined voting power of the Common
Stock represented in person or by proxy at the meeting will be elected.
Similarly, for all other matters being submitted to Stockholders at the
meeting, if a quorum is present the affirmative vote of a majority of the
combined voting power of the Common Stock represented in person or by proxy at
the meeting and entitled to vote is required for approval, except that the
proposed amendment of the Company's Amended and Restated Certificate of
Incorporation will require the affirmative vote of a majority of the combined
voting power of the Common Stock that is outstanding. As a result, shares of
Common Stock represented at the meeting but which abstain from voting will
have the effect of a vote against such matter.
Votes cast by proxy or in person at the annual meeting will be
tabulated by the inspector of elections appointed for the meeting who will
also determine whether a quorum is present for the transaction of business.
Abstentions will be treated as shares that are present and entitled to vote
for purposes of determining whether a quorum is present but will not count as
either a vote for or against nominees for purposes of determining the outcome
of voting for directors. Shares held by nominees for beneficial owners will be
counted for purposes of determining whether a quorum is present if the nominee
has the discretion to vote on at least one of the matters presented even if
the nominee may not exercise discretionary voting power with respect to other
matters and voting instructions have not been received from the beneficial
owner (a "Broker Non- vote"). With respect to any matter (other than the
election of directors and the amendment to the Company's Certificate of
Incorporation) that may properly come before the meeting for stockholder
consideration, abstentions will be counted in determining the minimum number
of affirmative votes required for approval of any matter presented for
stockholder consideration and, accordingly, will have the effect of a vote
against any such matter. Broker Non-votes will not be counted as votes for or
against matters presented for stockholder consideration.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company consists of eight members, all of
whom have been nominated for election at the meeting. If elected, such
directors will hold office until the next Annual Meeting of Stockholders and
until their respective successors shall have been elected and qualified, or,
until resignation, removal or death as provided in the ByLaws of the Company.
Messrs. Mirkin and Liker have been nominated to serve as directors under the
terms of an agreement, entered into by the Company in connection with its
acquisition of the Budget franchise for Southern California (the "Los Angeles
Acquisition") pursuant to which the Company agreed to nominate and use its
best efforts to elect to the Board of Directors two persons designated by the
seller of that franchise so long as that seller owns more than 500,000 shares
of Class A Common Stock. All of these nominees have indicated a willingness to
serve on the Board of Directors of the Company. If any of the nominees shall
become unable to serve, or for good cause will not serve, the persons named on
the enclosed proxy card may exercise their discretion to vote for any
substitute nominee or nominees proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
BELOW.
INFORMATION ON NOMINEES
The names of the eight nominees for director, together with certain
information furnished to the Company by each such individual, are set forth
below:
3
<PAGE>
DIRECTOR
NAME AGE SINCE
Sanford Miller............................ 43 1994
John Kennedy.............................. 51 1994
Jeffrey Congdon........................... 53 1994
Ronald D. Agronin......................... 58 1994
Dr. Stephen L. Weber...................... 54 1994
James F. Calvano.......................... 59 1994
Jeffrey R. Mirkin......................... 43 1995
Alan D. Liker............................. 58 1995
Sanford Miller has been the Chairman of the Board of Directors and
Chief Executive Officer of the Company since April 1994. From August 1991
until August 1994 he was Vice President of Tranex Rentals of New York, Inc.
d/b/a Budget Rent a Car of Albany and Rochester ("Tranex") and from December
1991 until August 1994 Vice President of Capital City Leasing, Inc. d/b/a
Budget Rent a Car of Richmond ("Capital City"). Between 1989 and 1991, Mr.
Miller served as Director of Marketing, Special Accounts for Budget Rent a Car
Corporation ("BRAC"). Mr. Miller served as President of the American Car
Rental Association, a nation-wide industry trade association, in 1993 and
Chairman of the Licensee Local Market Advisory Board of the Budget System in
1989 and 1990. Mr. Miller is also a director of MoneyGram Payment Systems,
Inc. and Tomoka State Bank.
John Kennedy has been President, Chief Operating Officer and a director
of the Company since April 1994. From November 1991 until August 1994, he was
President of Metro West, Inc., whose wholly-owned subsidiary owns the
Company's San Diego airport operations. From September 1989 until October
1991, he was an independent consultant to the vehicle rental industry.
Jeffrey Congdon has been Chief Financial Officer, Secretary and a
director of the Company since April 1994. Since December 1990, he has been
Secretary and Treasurer of Tranex Credit Corporation, which provides financing
for purchases of used vehicles. From 1982 to the present, Mr. Congdon has
owned and operated retail new and/or used vehicle sales operations in
Indianapolis, Indiana. Mr. Congdon is also a director of Tomoka State Bank.
Ronald D. Agronin was elected as a director in April 1994. Since 1993,
Mr. Agronin has served as Vice Chairman of Black Clawson Company, a
manufacturer of paper making machinery and as President and Chief Executive
Officer of United Container Machinery, a container manufacturer. He served as
Executive Vice President and Chief Operating Officer of Black Clawson from
1987 until 1993. He serves as a director of both of these companies. Mr.
Agronin is the first cousin of Mr. Miller.
Dr. Stephen L. Weber was elected as a director in April 1994. In August
1995, Dr. Weber was appointed as the Interim Provost at the State University
of New York System Office. Since 1988, he has been President of State
University of New York at Oswego. In July 1996, Dr. Weber will become
President of San Diego State University.
James F. Calvano was elected as a director in August 1994. Since
February 1996, Mr. Calvano has been the President and Chief Executive Officer
of MoneyGram Payment Systems, Inc., a provider of electronic money transfer
services. From February 1991 until February 1996, he was the Executive Vice
President of Marketing for Travelers Group, a subsidiary of Travelers, Inc.
From November 1993 until February 1995, he was Chief Administrative Officer of
Travelers Insurance Companies. From June 1991 until May 1993, Mr. Calvano was
President and Chief Operating Officer of New Valley Corp. Two months before he
assumed this position, New Valley Corp. suspended payments on its publicly
held debt. An involuntary bankruptcy petition under Title 11 of the U.S. Code
was filed against New Valley Corp. in November 1991 and a voluntary bankruptcy
petition under Title 11 was filed by New Valley Corp. in March 1993. From
January 1989 until
4
<PAGE>
December 1990, Mr. Calvano was President and Chief Executive Officer of
Carlson Travel Group and Executive Vice President of Carlson Companies Inc.
From November 1986 until December 1988, he served as President of Commercial
Credit Corp. and Executive Vice President of Primerica Corp. Mr. Calvano
served American Express Travel Related Services Co., Inc. as its Vice
Chairman, President of Payment Systems Division, USA and President of Consumer
Financial Services Division, USA between October 1981 and November 1986. From
1972 to 1981, Mr. Calvano was employed by Avis and served in various
capacities, including President and Chief Executive Officer, Executive Vice
President and Chief Operating Officer and Group Vice President, Western
Hemisphere.
Jeffrey R. Mirkin was elected as a director in October 1995. Since
1985, Mr. Mirkin has been the Chief Executive Officer of Budget Rent-A-Car of
Southern California ("BRAC-SoCal"), a licensee of Budget and through its
wholly owned subsidiary, an operator of Budget locations in Southern
California. Mr. Mirkin currently serves as Vice Chairman of the National
Advisory Counsel of Budget.
Alan D. Liker was elected as a director in October 1995. Since May
1995, Mr. Liker has been the Vice President of and a consultant to BRAC-SoCal.
Mr. Liker has been a private investor for the past five years. Mr. Liker is
also a director of Herbalife International, a health food supplier and Shaklee
Corporation, a health food supplier. Mr. Liker previously was on the faculty
of Harvard Law School.
INFORMATION ON BOARD MEETINGS AND COMMITTEES OF THE BOARD
During the fiscal year ended December 31, 1995 ("fiscal 1995"), the
Board of Directors held three meetings. The Board does not have a nominating
committee. The Board has a Compensation Committee, composed of Messrs. Agronin
and Weber, and an Audit/Finance Committee, composed of Messrs. Agronin and
Calvano. The primary function of the Compensation Committee, which met once
during fiscal 1995, is to establish salaries, incentives and other forms of
compensation for directors, officers and other employees of the Company,
administer various incentive compensation and benefit plans, and recommend
policies relating to such plans. The primary function of the Audit/Finance
Committee, which met once during fiscal 1995, is to review the Company's
accounting practices, internal accounting controls and financial results and
oversee the engagement of the Company's independent auditors. Each director
who is also a nominee for election at the Annual Meeting attended all of the
meetings of the Board of Directors during fiscal 1995, except Mr. Calvano, who
did not attend one meeting that was held during fiscal 1995. Non-employee
directors receive an annual retainer of $12,000 or an equivalent amount of the
Company's securities. The Company also pays the reasonable out-of-pocket
expenses of each director in connection with his attendance at each meeting of
the Board of Directors or any committee thereof. In addition, the Company's
1994 Directors' Option Plan provides for the initial grant of an option for
5,000 shares of the Class A Common Stock on the date on which a non-employee
director is first elected to office.
The Company's Directors' Stock Option Plan (the "1994 Directors' Plan")
provides for the grant to the directors of the Company who are not employees
of the Company of an option to purchase 5,000 shares of Class A Common Stock
on the date on which the director is first elected to office. Because the 1994
Directors' Plan by its terms specifies the class of directors eligible to
receive options, the timing of the grant of options, the number of shares
underlying options to be granted and the exercise price of such options, there
is no discretionary administration with regard to these matters. The Board of
Directors has appointed the Compensation Committee to perform ministerial
duties in connection with the 1994 Directors' Plan. The maximum number of
shares of Class A Common Stock that may be made subject to options granted
pursuant to the 1994 Directors' Plan is 25,000. The exercise price per share
under an option is the fair market value per share as of the date of grant.
Except in the event of a holder's death or disability, no option may be
exercised more than 10 years after its date of grant. The options are
exercisable in full beginning six months after the date of grant. Unless
sooner terminated, the 1994 Directors' Plan will terminate on April 24, 2004.
As of April 30, 1996, options have been granted to Messrs.
Agronin, Weber, Calvano, Mirkin and Liker under the 1994 Directors' Plan.
5
<PAGE>
COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company's records and other information obtained by the Company
indicate that as of April 30, 1996 unless otherwise stated, the following
persons were owners of more than 5% of each class of the Company's voting
securities.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF TITLE OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
- - ------------------------ --------- ----------------------- --------
<S> <C> <C> <C>
Ronald Baron
450 Park Avenue
New York, NY 10022 .......................... Class A 454,000(2) 8.26%
Sanford Miller
125 Basin Street Class A 16,700 *
Daytona Beach, FL 32114............................ Class B 905,800 46.8%
John Kennedy
45 Riverside Drive Class A 7,100 *
Westport, CT 06880................................. Class B 515,400 26.6%
Jeffrey Congdon
7050 W. Washington Street Class A 17,950 *
Indianapolis, IN 46265............................. Class B 515,400 26.6%
Jeffrey R. Mirkin
150 Doheny Drive
Beverly Hills, California 90211.................... Class A 1,055,000(3) 19.2%
</TABLE>
- - ---------
* Less than 1%
(1) To the best of the Company's knowledge, unless otherwise indicated,
nature of beneficial ownership includes sole voting and dispositive
power.
(2) Includes 240,000 shares owned by BAMCO, Inc., a registered investment
advisor controlled by Mr. Baron, in its capacity as an advisor to
clients, which may include registered investment companies; 114,000
shares owned by Baron Capital Management, Inc., a registered
investment company controlled by Mr. Baron; and 100,000 shares owned
by Baron Capital Partners, L.P., an investment partnership of which
Mr. Baron is a general partner. Shared voting and dispositive power
as to 354,000 shares, as to which Mr. Baron disclaims beneficial
ownership. This information is presented in reliance upon a Schedule
13D filed by Mr. Baron with the Securities and Exchange Commission on
or about April 24, 1996.
(3) Includes 1,050,000 shares of Class A Common Stock beneficially owned
by BRAC SoCal, a general partnership, of which Mr. Mirkin is a
general partner. He is also the trustee of certain trusts which are
general partners in BRAC SoCal. Includes 5,000 shares issuable to Mr.
Mirkin upon exercise of options granted under the 1994 Directors'
Stock Option Plan.
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The table below sets forth as of April 30, 1996, certain information
regarding the beneficial ownership of the Common Stock of (i) each of the
directors and executive officers of the Company and (ii) all directors and
executive officers of the Company as a group. Each of the executive officers
of the Company is currently a director.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT PERCENT OF TOTAL
BENEFICIAL OF VOTING POWER OF
NAME OF BENEFICIAL OWNER OWNERSHIP TITLE OF CLASS CLASS (1) COMMON STOCK
- - ------------------------ ----------- -------------- --------- ------------
<S> <C> <C> <C> <C>
Sanford Miller................... 905,800 Class B 46.8% 36.5%
16,700 Class A * *
Jeffrey Congdon.................. 515,400 Class B 26.6% 20.8%
17,950 Class A * *
John Kennedy..................... 515,400 Class B 26.6% 20.8%
7,100 Class A * *
Ronald D. Agronin(2)............. 6,600 Class A * *
Dr. Stephen L. Weber(2).......... 8,100 Class A * *
James F. Calvano(2).............. 5,000 Class A * *
Jeffrey R. Mirkin(2)(3).......... 1,055,000 Class A 19.2% 4.2%
Alan D. Liker(2)(4).............. 85,000 Class A 1.6% *
All directors and officers as a 1,201,450 Class A 21.9% 4.8%
group (8 persons)(2)............. 1,936,600 Class B 100% 78.1%
</TABLE>
- - --------------
* Less than 1%.
(1) In determining the percent of shares beneficially owned, shares
issuable pursuant to options exercisable within 60 days of the date
hereof are deemed outstanding for purposes of determining the total
number of outstanding shares for the holders of such options, but
are not deemed outstanding for such purpose for all other
stockholders.
(2) Share ownership includes 5,000 shares issuable to each non-employee
director upon exercise of options granted under the 1994 Directors'
Stock Option Plan.
(3) Includes 1,050,000 shares of Class A Common Stock beneficially
owned by BRAC SoCal, a general partnership, of which Mr. Mirkin is
a general partner. He is also the trustee of certain trusts which
are general partners of BRAC SoCal.
(4) Includes 80,000 shares of Class A Common Stock that may be acquired
by Mr. Liker from BRAC SoCal pursuant to an option granted by BRAC
SoCal to Mr. Liker.
7
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Messrs. Miller, Kennedy and Congdon have guaranteed the performance
of some or all of the Company's subsidiaries under their respective franchise
agreements. In connection with the Company's initial public offering in August
1994, the Company's franchisors agreed to release these individuals from their
guarantees under the Company's franchise agreements and substitute the
Company's guarantee therefor, provided that the Company maintains tangible net
worth of $15 million. In the event that the Company's net worth falls below
these levels, the Company has the option to provide the franchisors with a $5
million letter of credit that could be drawn on in the event of a monetary
default under the Company's franchise agreements or, in the alternative, to
allow the personal guarantees to be reinstated.
The Company's Richmond, Virginia airport facility is leased from a
partnership formed by Mr. Miller and an employee of the Company (the "Richmond
Partnership"). This lease terminates in 1998, subject to renewal. Rental
payments under the lease agreement amounted to approximately $64,000 in 1995.
The monthly base rent under this lease (approximately $8,300 in 1995)
escalates by approximately 3% per annum. The Company has entered into another
lease for a non-airport facility located in Chesterfield County, Virginia that
is owned by the Richmond Partnership. This lease commenced in June 1994 and
terminates in May 1999, subject to renewal. Rental payments under the lease
agreement amounted to approximately $33,000 in 1995. The monthly base rent under
this lease (approximately $3,600 in 1995) escalates by approximately 3% per
annum. The Company's Rochester, New York airport facility is leased from a
partnership formed by Mr. Miller and a former employee of the Company (the
"Rochester Partnership"). This lease terminates in 2003, subject to renewal. The
monthly based rent under this lease (approximately $6,700 in 1995) escalates by
5% per annum until August 30, 1996 and thereafter annualincreases will be the
higher of 5% or the amount of the increase in the consumer price index. Rental
payments under the lease amounted to $77,470 in 1995. All of these leases are on
a triple net basis (i.e., the Company is responsible for the payment of taxes
and insurance, utilities and for the general maintenance of these facilities in
addition to its obligations to pay base rent). All of these leases provide for
an initial term of ten years and two five year renewal terms. The Company
believes that these leases are on terms no less favorable to the Company than
could be obtained from unaffiliated third parties.
The Company's Philadelphia, Pennsylvania retail vehicle sales
facility, regional administrative headquarters and vehicle maintenance
facility are leased from MCK Real Estate Corporation ("MCK"), which is owned
by Messrs. Miller, Congdon and Kennedy. This lease terminates in September
2002, subject to renewal. Rental payments under the lease were approximately
$168,000 for 1995. The monthly base rent (approximately $26,000 per month in
1995) escalates by 3% per annum. The Company's Richmond, Virginia retail
vehicle sales facility is leased from MCK. This lease terminates in October
2000, subject to renewal. Rental payments under this lease were approximately
$10,000 for 1995. The monthly base rent under this lease (approximately
$10,000 per month in 1995) escalates by 3% per annum. Both of these leases are
on a triple net basis. The Company believes that these leases are on terms no
less favorable than could be obtained from unaffiliated third parties.
In September 1995, MCK purchased an approximately two acre property
in Dayton, Ohio with the intent of leasing it to one of the Company's
subsidiaries for use as a retail vehicle sales facility. The terms of this
lease have not yet been finalized and are anticipated to be on terms no less
favorable to the Company than could be obtained from unaffiliated third
parties.
In connection with the Los Angeles Acquisition in October 1995, the
Company agreed to pay to the seller, BRAC SoCal, a royalty of 5% of the
monthly gross rental revenues derived from those operations, subject to a
minimum amount. In addition, the Company issued a note to BRAC SoCal in the
principal amount of approximately $4,750,000 (the "BRAC SoCal Note"). Jeffrey
R. Mirkin is the Chief Executive Officer and a general partner of BRAC SoCal
and upon consummation of the Los Angeles Acquisition, became a director of the
Company. The Company operates as a sub- franchisee of BRAC SoCal in the San
Diego territory and pays royalty fees to BRAC SoCal based on rental revenues
for vehicles other than trucks. In 1995, the Company paid BRAC SoCal
approximately $1,080,950 in royalty fees. Except as described above, prior to
the Los Angeles Acquisition, there was no material relationship between the
Company and BRAC SoCal. The BRAC SoCal Note was repaid in April 1996,
together, with accrued interest of $4,853,906.
8
<PAGE>
Sanford Miller and Jeffrey Congdon, executive officers and directors
of the Company, are each members of the board of directors of Tomoka State
Bank in Ormond Beach, Florida. The Company maintains a checking account at
that bank with an average balance of $100,000.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
NAME AGE POSITION
Sanford Miller 43 Chairman of the Board of Directors and
Chief Executive Officer
John Kennedy 51 President and Chief Operating Officer
Jeffrey Congdon 53 Chief Financial Officer and Secretary
Officers are elected annually and hold office until their successors are
elected and qualified.
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of the compensation paid by
the Company during the last three fiscal years to the Chief Executive Officer
and the other executive officers of the Company.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
NAME AND OTHER ANNUAL SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR SALARY COMPENSATION OPTIONS
- - ------------------ ---- -------- ------------ -------
<S> <C> <C> <C> <C>
Sanford Miller............................ 1995 $183,667 $ - 30,000
Chairman of the Board and Chief 1994 $ 91,108(1) $ 14,067(2) -
Executive Officer 1993 $ 30,000(1) $ 17,918(2) -
John P. Kennedy........................... 1995 $173,333 $ - 25,000
President and Chief 1994 $ 94,558 $ - -
Operating Officer 1993 $111,900 $ - -
Jeffrey D. Congdon....................... 1995 $173,333 $ - 25,000
Chief Financial Officer 1994 $ 26,250(3) $ - -
and Secretary 1993 $ - $ - -
</TABLE>
- - ---------------
(1) Does not include $6,924 and $27,696 of corporate dividends paid by
Tranex and Capital City to Mr. Miller in 1994 and 1993, respectively.
(2) Other annual compensation consists of $12,476 and $15,192 of payments
made by the Company with respect to vehicles used by Mr. Miller in
1994 and 1993, respectively, and $1,591 and $2,726 of gasoline
expenses in connection with the use of these vehicles in 1994 and
1993, respectively.
(3) Represents salary for the period from August 24, 1994 through the end
of 1994.
9
<PAGE>
OPTION GRANTS DURING FISCAL 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
------------------------------------ --------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR PER SHARE DATE 5% 10%
- - ---- --------- ------------- ----------- ------ ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Miller................. 30,000 41.7% $9.50 March 1, 2005 $179,235 $454,217
Mr. Kennedy................ 25,000 12.5% $9.50 March 1, 2005 $149,362 $378,514
Mr. Congdon................ 25,000 12.5% $9.50 March 1, 2005 $149,362 $378,514
</TABLE>
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1995 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR-END
NAME (EXERCISABLE/UNEXERCISEABLE)
----------------------------
Mr. Miller 0(E)/30,000(U)
Mr. Kennedy 0(E)/25,000(U)
Mr. Congdon 0(E)/25,000(U)
No options were exercised in 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Mr. Agronin and Dr. Weber,
neither of whom has ever (i) been an officer or employee of the Company or any
of its subsidiaries or (ii) entered into a related-party transaction with the
Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee endeavors to ensure that the compensation
program for executive officers of the Company is effective in attracting and
retaining key executives responsible for the success of the Company and is
tailored to promote the long-term interests of the Company and its
stockholders. The Company's executive officer compensation program in its last
completed fiscal year was principally comprised of base salary and stock
options. The Compensation Committee believes that the base salaries of its
executive officers are somewhat below average and that
10
<PAGE>
its executive officers are primarily incentivized by their equity stakes in
the Company. With this in mind, the Company's 1994 Incentive Stock Option Plan
(the "Option Plan") was put in place in 1994 to provide additional long-term
compensation to the Company's executive officers. The Compensation Committee
believes that the mutuality of interest between the executive officers and the
Company's stockholders is strengthened by increasing the executive officers'
ownership of Common Stock through the Option Plan. The Compensation Committee
granted 80,000 options to key management employees under the Option Plan in
fiscal 1995.
The Compensation Committee takes into account various qualitative and
quantitative indicators of corporate and individual performance in determining
the level and composition of compensation for the Company's Chief Executive
officer and his recommendations regarding the other executive officers, In
particular, the Compensation Committee considers several financial performance
measures, including revenue growth and net income. However, the Compensation
Committee does not apply any specific quantitative formula in making
compensation decisions. The Committee also considers achievements that, while
difficult to quantify, are important to the Company's long-term success.
Notwithstanding the foregoing, given the Company's growth plans
salary levels for the Company's executive officers will no doubt be
significantly influenced by the need to attract and retain additional
management employees with high levels of expertise. In each case,
consideration will be given both to personal factors, such as the individual's
experience, responsibilities and work performance, and to external factors,
such as salaries paid to similarly situated executive officers by comparable
companies in the industry. Therefore, in the future it will be critical that
the Company provide base salaries that are competitive in the vehicle and
rental industry. With respect to the personal factors, the Compensation
Committee makes salary decisions in an annual review based on the
recommendations of the Chief Executive Officer. This annual review considers
the decision-making responsibilities of each position as well as the
experience and work performance of each executive. The Chief Executive Officer
views work performance as the single most important measurement factor.
THE COMPENSATION COMMITTEE
Ronald D. Agronin
Dr. Stephen L. Weber
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage change in
the cumulative total stockholder return on the Company's Class A Common Stock
against the cumulative total return of the Nasdaq Composite Index and a peer
group index consisting of seven public companies whose principal business
consists of vehicle finance and leasing. The performance graph assumes $100
was invested on April 18, 1994 and measures the return thereon through
December 31, 1995.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
8/18/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95 12/31/95
<S> <C> <C> <C> <C> <C> <C> <C>
Team Rental Group, Inc. $100 $124 $100 $ 87 $ 76 $105 $ 89
Peer Group $100 $ 97 $ 89 $ 99 $100 $103 $107
Nasdaq Composite Index $100 $103 $102 $111 $127 $142 $144
</TABLE>
11
<PAGE>
The peer group includes the following companies: Amerco, National Auto Credit
Inc., Oxford Resources Corp., Pacific International Services Corp., Phh Corp.,
Rollins Truck Leasing and Ryder System Inc. The Company is not included in the
peer group because management believes that by excluding the Company,
investors will have a more accurate view of the Company's performance relative
to its peers.
PROPOSAL NO. 2 -- AMENDMENT TO THE AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
The Board has approved and recommends to the Stockholders for their
approval a proposal to amend the Company's Certificate of Incorporation to
delete Section EIGHTH. Section EIGHTH generally provides that in certain
circumstances, a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or the stockholders or class of
stockholders of the Company may agree to a compromise or arrangement and to
any reorganization of the Company as a consequence of such compromise or
arrangement. Such actions, if sanctioned by a court of competent jurisdiction,
would be binding on all the creditors or class of creditors, and/or the
stockholders or class of stockholders of the Company. The text of Section
EIGHTH of the Certificate of Incorporation is set forth in Annex A to this
Proxy Statement.
In connection with the Company's acquisition of the Budget franchise
for the Phoenix, Arizona area on February 27, 1996, the Company borrowed $7
million from NationsBank, N.A. (South). In connection with that acquisition,
the Company agreed with NationsBank to delete Section EIGHTH. In addition, the
Board of Directors believes that the failure to delete Section EIGHTH could
materially impair its ability to raise capital in the future.
The proposed amendment will be adopted upon receiving the affirmative
vote of a majority of the combined voting power of the shares of Common Stock
that is outstanding. Proxies will be voted in accordance with the
specifications marked thereon, and if no specification is made, will be voted
"AGAINST" adoption of the proposed amendment to the Amended and Restated
Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT
TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
PROPOSAL NO. 3 -- PROPOSED AMENDMENT TO THE COMPANY'S
1994 INCENTIVE STOCK OPTION PLAN
The Board has approved and recommends to the stockholders that they
approve a proposal to amend the Company's 1994 Incentive Stock Option Plan
(the "Plan") to (i) increase the number of shares of Common Stock available
for grant under such plan from 260,000 to 760,000, an increase of 500,000
shares of Common Stock, (ii) provide that the committee that administers the
Plan must be comprised of "outside directors" and that the option price for
all options to be granted under the Plan may not be less than the fair market
value of Common Stock on the day the option is granted in order to qualify the
Plan for an exception to the $1,000,000 renumeration deduction limitation
imposed under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") and (iii) permit the grant of options to purchase shares of Class
B Common Stock. As of May 1, 1996, there were outstanding 204,600 options to
purchase Common Stock under the Plan. Therefore, in the event that the
proposed amendment is approved, 555,400 options would remain available for
grant under the Plan. Messrs. Miller, Congdon and Kennedy abstained from
voting with respect to the proposed amendment in light of their potential
interests in the amendment to the Plan. The text of the proposed amendment to
the Plan is set forth in Annex B to this Proxy Statement.
The proposed amendment to the Plan will be adopted upon receiving the
affirmative vote of holders of a majority of the shares present or represented
by proxy at the meeting. Proxies will be voted in accordance with the
specifications marked thereon, and if no specification is made, will be voted
"FOR" adoption of the proposed
12
<PAGE>
amendment to the Plan. The Board has determined that the amendment to the Plan
is in the best interests of the Company and its stockholders. The proposed
amendment would provide additional shares for grant to employees of the
Company. The Board believes that grants of stock options are an effective
method to attract and retain employees and that the availability of shares for
future grants under the Plan is important to the Company's business prospects
and operations. Except for such amendment, if approved by holders of a
majority of the shares present in person or represented by proxy at the annual
meeting, the Plan will remain unchanged.
The following description of the Plan, giving effect to the proposed
amendment, is a summary and is qualified in its entirety by reference to the
text of the Plan.
Stock Subject To The Plan. The Plan provides for the issuance of
either incentive stock options within the meaning of Section 422 of the Code
(the "Incentive Options") or nonqualified stock options (intended not to
qualify as incentive stock options) (the "Nonqualified Options" and
collectively, with the Incentive Options, the "Options") to key employees of
the Company. Upon amendment of the Plan, the maximum number of shares of
Common Stock that may be made subject to options granted pursuant to the Plan
is 760,000. Prior to amendment, the maximum number of shares of Common Stock
that may be made subject to options granted pursuant to the Plan is 260,000.
Administration. The Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"), which has the authority
to grant Options under the Plan and to determine the terms and conditions of
all Options so granted. The Board of Directors has the right to amend or
terminate the Plan in certain circumstances, provided that any amendment or
modification must comply with applicable law, the requirements of Rule 16b-3
under the Securities Exchange Act of 1934 and the requirements under Section
162(m) of the Code.
The Committee determines the key employees to whom Options are to be
granted, the times at which Options are granted, the number of shares of
Common Stock subject to each Option, whether each Option is an Incentive
Option or a Nonqualified Option, the exercise price per share, and the maximum
term of each Option; provided, however, that the maximum number of shares for
which a recipient may be granted an Option in any three year period is 75,000.
The Committee shall also have the power to interpret and construe the Plan and
to determine the terms and provisions of each agreement evidencing an Option
(an "Agreement") and to make all other determinations the Committee deems
necessary or advisable in administering the Plan.
Eligibility. Awards can be made to key employees (as determined by
the Committee) of the Company or its subsidiaries. In making determinations
under the Plan, the Committee may take into account the nature of the services
rendered by the respective employees, their present and potential
contributions to the success of the Company and its subsidiaries, and such
other factors as the Committee deems relevant.
Options. The purchase price per share of Common Stock under each
Option is determined by the Committee and set forth in the applicable
Agreement, but may not be less than the fair market value of the Common Stock
on the day the Option is granted. Prior to amendment, in the case of a
Nonqualified Option, the purchase price per share of Common Stock may not be
less than 85% of the fair market value of the Common Stock on the day the
Nonqualified Option is granted or, if greater, the book value of the Common
Stock on that date. Fair market value is calculated as the last sales price
reported for the Common Stock on the trading day immediately preceding the
date of grant as reported by the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System. The term of each Option
may be for such period as the Committee determines, but not more than 10 years
from the date of grant. No Incentive Option can be granted to an employee who,
at the time the Incentive Option is granted, owns, or is considered as owning
within the meaning of Section 424(d) of the Code, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company
or of a subsidiary, unless at the time the Incentive Option is granted, the
option price is at least 110% of such fair market value of the Common Stock
subject to the Incentive Option and the Incentive Option by its terms is not
exercisable after the expiration of 5 years from the date it is granted.
Subsequent to the grant of an Option but before its expiration, the Committee
may accelerate the exercise period in whole or in part (without reducing the
term of such Option). No Option is exercisable before six months after it is
13
<PAGE>
granted or may be exercised as to fewer than 100 shares of Common Stock or, if
less, the total number of shares of Common Stock remaining unexercised under
the Option.
Payment of the Option purchase price may be made (i) in cash; (ii) in
whole shares of Common Stock currently owned by the holder; (iii) in a
combination of cash and Common Stock; or (iv) upon delivery of a written
exercise notice, including irrevocable instructions to the Company to deliver
the stock certificates directly to a broker named in the notice that has
agreed to participate in a "cashless" exercise on behalf or the optionee.
Termination of Employment. If the optionee ceases to be an employee
of the Company in certain circumstances, the optionee may, at any time within
a period of 90 days following the date of such termination, exercise such
Option to the extent that the Option was exercisable on the date the optionee
ceased to be an employee. If the optionee ceases to be an employee by reason
of retirement under the Company's retirement plan then the optionee may, at
any time within a period of 90 days following the date of such termination,
exercise each Option held by the optionee on such date to the full extent of
the Option.
If the optionee's employment terminates by reason of death or
permanent and total disability, each outstanding Option granted to such
employee under the Plan will become immediately exercisable in full in respect
of the aggregate number of shares covered thereby for a period of one year
following the date of the optionee's death or disability.
If the optionee ceases to be an employee for any other reason, each
Option immediately terminates and may not be exercised thereafter.
Additional Provisions. In the event of a stock split, stock dividend,
stock combination, recapitalization, merger, consolidation or other similar
transaction which affects the character or amount of the outstanding Common
Stock, the purchase price of each Option will be equitably adjusted. The
number of shares subject to such Option, and the number of shares for which
Options may be granted under the Plan, also shall be appropriately adjusted.
The aggregate fair market value, determined as of the date an
Incentive Option is granted, of the shares with respect to which Incentive
Options are exercisable for the first time by an employee during any calendar
year shall not exceed $100,000. If an Incentive Option is granted pursuant to
which the aggregate fair market value of shares with respect to which it first
becomes exercisable in any calendar year by an employee exceeds the
aforementioned $100,000 limitation, the portion of such Option which is in
excess of the $100,000 limitation shall be treated a Nonqualified Option
pursuant to Code Section 422(d)(1). In the event that an employee is eligible
to participate in any other stock option plan of the Company or a subsidiary
which is also intended to comply with the provisions of Code Section 422, the
$100,000 limitation shall apply to the aggregate number of shares for which
Incentive Options may be granted under all such plans.
Change in Control. All outstanding Incentive Options and Nonqualified
Options held by all optionees pursuant to the Plan become immediately
exercisable in full upon the occurrence of (i) the sale by the Company of all
or substantially all of its assets, or all or substantially all of the assets
of its subsidiaries, taken as a whole; (ii) an election of new directors if
immediately following such election a majority of the Directors consists of
persons who were not nominated by the Board or nominating committee thereof to
stand for election as Directors in such election; or (iii) (a) the sale of 50%
or more of the outstanding shares of Common Stock of the Company in a single
transaction or related series of transactions; (b) the consummation of a
tender offer (by a party other than the Company) for more than 50% of the
outstanding shares of Common Stock of the Company; or (c) subject to the
provision described below, the consummation of a merger or consolidation
involving the Company (provided that in (a) through (c) immediately following
such event, a majority of the directors consists of persons who were not
directors immediately prior to the date of such event). In the event of a
merger or consolidation to which the Company is a party but is not the
surviving company, the Committee, in its discretion, may vote to negate and
give no effect to the acceleration of the Options, provided that the executed
agreement of merger or consolidation provides that the optionee will receive
the same merger consideration as the optionee would have received had the
Options been accelerated and exercised in full prior to the merger or
consolidation.
14
<PAGE>
The Plan is not subject to any of the requirements of ERISA. The Plan
is not, nor is it intended to be, "qualified" under Section 401(a) of the
Code.
Certain Federal Income Tax Consequences
The rules concerning the federal income tax consequences with respect
to Options granted and to be granted pursuant to the Plan are quite technical.
Moreover, the applicable statutory provisions are subject to change, as are
their interpretations and applications, which may vary in individual
circumstances. Therefore, the following is designed to provide a general
understanding of the federal income tax consequences. The following discussion
does not set forth (i) any federal tax consequences other than income or (ii)
any state or local tax consequences that may be applicable.
Incentive Options. In general, an employee will not recognize taxable
income upon either the grant or the exercise of an Incentive Option and the
Company will not have an income tax deduction at either such time. If the
employee does not sell the Common Stock received pursuant to the exercise of
the Incentive Option within either (i) two years after the date of the grant
of the Incentive Option or (ii) one year after the date of exercise, a
subsequent sale of the Common Stock will result in long-term capital gain or
loss to the employee and will not result in a tax deduction to the Company.
If the employee disposes of the Common Stock acquired upon exercise
of the Incentive Option within either of the above mentioned time periods, the
employee generally will recognize as ordinary income an amount equal to the
lesser of (i) the fair market value of the Common Stock on the date of
exercise over the option price, or (ii) the amount realized upon disposition
over the option price. In such event, the Company generally will be entitled
to an income tax deduction equal to the amount recognized as ordinary income.
Any gain in excess of such amount recognized by the employee as ordinary
income would be taxed as short-term or long-term capital gain (depending on
the applicable holding period).
In addition, (i) officers and directors of the Company subject to
Section 16(b) of the Securities Exchange Act of 1934 may be subject to special
rules regarding the income tax consequences concerning their Incentive
Options, (ii) any entitlement to an income tax deduction on the part of the
Company is subject to applicable federal tax rules, (iii) the exercise of an
Incentive Option may have implications in the computation of alternative
minimum taxable income, (iv) in the event that the exercisability or vesting
of any Option is accelerated because of a change of control, compensation
relating to the Option (or a portion thereof), either alone or together with
certain other compensation, may constitute parachute payments under Section
280G of the Code, pursuant to which the Company is disallowed any income tax
deduction for "excess" parachute payments, and in connection with which an
employee receiving excess parachute payments may be subject to an excise tax
under Code Section 4999, and (v) special rules apply to an employee who
exercises an Incentive Option by paying the option price, in whole or in part,
by transfer of shares of Common Stock to the Company.
Nonqualified Options. An employee will not recognize any taxable
income upon the grant of a Nonqualified Option and the Company will not
receive an income tax deduction at the time of such grant, unless such Option
has a readily ascertainable fair market value (as determined under applicable
tax law) at the time of grant. Upon exercise of a Nonqualified Option, the
employee generally will recognize ordinary income in an amount equal to the
excess of the fair market value of the Common Stock on the date of exercise
over the exercise price. Upon a subsequent sale of the Common Stock by the
employee, the employee will recognize short-term or long-term capital gain or
loss depending upon his or her holding period for the Common Stock. The
Company generally will be allowed a deduction equal to the amount recognized
by the employee as ordinary income.
In addition, (i) officers and directors of the Company subject to
Section 16(b) of the Securities Exchange Act of 1934 may be subject to special
tax rules regarding the income tax consequences concerning their Nonqualified
Options, (ii) any entitlement to an income tax deduction on the part of the
Company is subject to applicable federal tax rules, (iii) in the event that
the exercisability or vesting of any Option is accelerated because of a change
of control, compensation relating to the Option (or a portion thereof), either
alone or together with certain other compensation, may constitute
15
<PAGE>
parachute payments under Section 280G of the Code, pursuant to which the
Company is disallowed any income tax deduction for excess parachute payments,
and in connection with which an employee receiving excess parachute payments
may be subject to an excise tax under Code Section 4999, and (iv) special
rules apply to an employee who exercises a Nonqualified Option by paying the
option price, in whole or in part, by the transfer of shares of Common Stock
to the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT
TO THE STOCK OPTION PLAN.
INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as auditors
of the Company for fiscal 1996. Should this firm be unable to perform the
requested services for any reason or not be ratified by the shareholders, the
Directors will appoint other independent auditors to serve for the remainder
of the year. Representatives of Deloitte & Touche LLP will be present at the
annual meeting, will have the opportunity to make a statement if they so
desire, and will be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors
and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. For fiscal year 1995, Messrs. Mirkin and Liker each filed one report
late to each report two transactions.
All reportable transactions for all directors and officers are now properly
reflected in their most recent filings under Section 16(a) of the Exchange
Act.
EXECUTIVE OFFICERS
The following table sets forth information as of April 30, 1996 with
respect to each person who is an executive officer or key employee of the
Company.
NAME AGE POSITIONS WITH THE COMPANY
Sanford Miller 43 Chairman of the Board of Directors,
Chief Executive Officer and Director
John P. Kennedy 51 President, Chief Operating Officer
and Director
Jeffrey D. Congdon 53 Chief Financial Officer and Director
Donald J. Norwalk 31 Vice President and Treasurer
Scott Tiemann 37 Vice President and Corporate Controller
Jeffrey D. Widholm 32 Vice President--Corporate Development
16
<PAGE>
For descriptions of Messrs. Miller, Congdon and Kennedy's business
experience, see "Election of Directors."
Donald J. Norwalk has been Vice President and Treasurer of the
Company since July 1994. From January 1994 until July 1994, he was the SEC
Reporting and Compliance Officer for FFLC Bancorp, Inc., a bank holding
company. From January 1989 to January 1994, he was an auditor for Deloitte &
Touche serving clients primarily in the financial, manufacturing and real
estate industries.
Scott Tiemann has been Vice President and Controller of the Company
since July 1994. From March 1992 until July 1994, he was employed by BRAC as
the Business Manager for Freedom River. From November 1989 until March 1992,
he was a city controller for BRAC.
Jeffrey D. Widholm has been Vice President of Corporate Development
of the Company since August 1995. From January 1987 until August 1995, he was
a corporate banking officer for Bank One, Indianapolis, N.A., where he was
responsible for a loan portfolio of middle market and large corporate clients.
ANNUAL REPORT TO STOCKHOLDERS
The Company's 1995 Annual Report to Stockholders is being furnished
with this proxy to stockholders of record as of April 17, 1996.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which
are to be brought before the meeting. If any other matters should be presented
for proper action, it is the intention of the persons named in the Proxy to
vote in accordance with their discretion pursuant to the terms of the Proxy.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the 1997 Annual
Meeting of Stockholders must be received at the Company's executive offices on
or before December 30, 1996, for inclusion in the Company's Proxy Statement
and form of Proxy with respect to such meeting.
By Order of the Board of Directors,
SANFORD MILLER,
Chairman of the Board and Chief Executive Officer
IT IS IMPORTANT THE PROXIES BE RETURNED PROMPTLY. THEREFORE,
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
FILL IN, SIGN, DATE AND RETURN THE ENCLOSED PROXY.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1995, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE (EXCEPT FOR EXHIBITS TO SUCH ANNUAL
REPORT, WHICH WILL BE FURNISHED UPON PAYMENT OF THE COMPANY'S REASONABLE
EXPENSES IN FURNISHING SUCH EXHIBITS) BY WRITING TO: DONALD J. NORWALK,
TREASURER, TEAM RENTAL GROUP, INC., 125 BASIN STREET, DAYTONA BEACH, FLORIDA
32114.
17
<PAGE>
ANNEX A
TEXT OF SECTION EIGHTH OF THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
EIGHTH: Reorganization. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may, on the
application in a summary way of this Corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this Corporation under the provisions of Section 291 of Title 8
of the Delaware Code or on the application of trustees in dissolution or of
any receiver or receivers appointed for this Corporation under the provisions
of Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths (3/4) in value of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
19
<PAGE>
ANNEX B
FIRST AMENDMENT TO
TEAM RENTAL GROUP, INC.
1994 INCENTIVE STOCK OPTION PLAN
THIS FIRST AMENDMENT is effective the ___ day of June, 1996, and is
made by TEAM RENTAL GROUP, INC. a corporation organized and doing business
under the laws of the State of Delaware (the "Company").
W I T N E S S E T H:
WHEREAS, the Company has previously adopted the Team Rental Group,
Inc. 1994 Incentive Stock Option Plan (the "Plan");
WHEREAS, the disinterested members of the Board of Directors of the
Company and the stockholders of the Company have approved an increase in the
number of shares available for grant pursuant to the Plan from 260,000 to
760,000; and
WHEREAS, the disinterested members of the Board of Directors of the
Company and the stockholders of the Company have approved appropriate
amendments to the Plan to qualify the Plan for the qualified performance-based
compensation exception to the remuneration deduction limitation imposed under
Section 162(m) of the Internal Revenue Code.
NOW THEREFORE, the Plan is hereby amended as follows:
1.
Section 2(4) of the Plan is hereby amended by deleting Section 2(4)
of such Plan in its entirety, and replacing it with the following:
"(4) Common Stock means the Class A common stock, par value $.01
per share, and the Class B common stock, par value $.01 per
share, of the Company."
2.
Section 4 of the Plan is hereby amended by deleting Section 4 of such
Plan in its entirety, and replacing it with the following:
"4. Stock Subject to Plan. The maximum aggregate number of
shares of Common Stock that may be made subject to Options
granted hereunder is 760,000 shares, which number shall be
adjusted in accordance with Section 9 in the event of any
change in the Company's capital structure. Shares of Common
Stock issued to the Plan may consist, in whole or in part,
of either authorized and unissued shares or issued shares
held in the Company's treasury. Any shares subject to an
Option that for any reason expires or is terminated
unexercised as to such shares may again be the subject of an
Option under the Plan."
20
<PAGE>
3.
Section 5 of the Plan is hereby amended by deleting the first
sentence of such section, and replacing it with the following: "The Plan shall
be administered by a Committee appointed by the Board consisting of not fewer
than two individuals who are Directors, who are not Employees and who are
Disinterested Persons and "outside directors" within the meaning of Code
Section 162(m)."
4.
Section 7(1) of the Plan is hereby amended by deleting the first
sentence of such section, and replacing it with the following:
"Subject to the conditions on Incentive Options contained in Section
8(2), if applicable, the purchase price per share of Common Stock
payable upon the exercise of each Option granted hereunder shall be
as determined by the Committee in its discretion but shall not be
less than the fair market value of the Common Stock on the day the
Option is granted."
5.
Except as specifically amended by this First Amendment, the
Plan shall remain in full force and effect as prior to this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
executed on the day and year first above written.
TEAM RENTAL GROUP, INC.
By:__________________________
Title:________________________
ATTEST:
By:______________________
Title:____________________
[Corporate Seal]
21
<PAGE>
TEAM RENTAL GROUP, INC.
PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
ON JUNE 18, 1996
The undersigned hereby appoints Sanford Miller and John Kennedy and
each of them, proxies, with full power of substitution and resubstitution, for
and in the name of the undersigned, to vote all shares of Common Stock of Team
Rental Group, Inc. which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders to be held on
Tuesday, June 18, 1996, at 1:00 p.m., local time, at Team Rental of Dayton,
Inc.'s Administrative Headquarters, Dayton International Airport, Dayton,
Ohio, or at any adjournment thereof, upon the matters described in the
accompanying Notice of Annual Meeting of Stockholders and Proxy Statement,
receipt of which is hereby acknowledged, and upon any other business that may
properly come before the Annual Meeting of Stockholders or any adjournment
thereof. Said proxies are directed to vote on the matters described in the
Notice of Annual Meeting of Stockholders and Proxy Statement as follows, and
otherwise in their discretion upon such other business as may properly come
before the Annual Meeting of Stockholders or any adjournment thereof.
Proposal 1 -- Election of the following nominees as Directors:
<TABLE>
<CAPTION>
<S> <C> <C>
FOR all nominees listed WITHHOLD Sanford Miller, John P. Kennedy, Jeffrey D.
(except as marked below AUTHORITY Congdon, Ronald D. Agronin, Stephen L.
to the contrary) to vote for all Weber, James F. Calvano, Jeffrey R. Mirkin,
nominees listed Alan D. Liker.
herein
[ ] [ ]
(Instruction: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided
below)
--------------------------------------------
--------------------------------------------
</TABLE>
Proposal 2 -- Approval of an Amendment to the Company's Amended and
Restated Certificate of Incorporation.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<PAGE>
Proposal 3 -- Approval of an amendment to the Company's 1994 Incentive
Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR THE ABOVE-STATED PROPOSALS.
Date: ________________________________ , 1996
________________________________________________
_______________________________________________
Please sign exactly as your name or names appear
hereon. For more than one owner as shown above,
each should sign. When signing in a fiduciary or
representative capacity, please give full title.
If this proxy is submitted by a corporation, it
should be executed in the full corporate name by
a duly authorized officer and, if a partnership,
please sign in partnership name by an authorized
person.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING ON
JUNE 18, 1996. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU
WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
