<PAGE>
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 (AMENTMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the approximate box:
[ ] Preliminary proxy statement
[ ] Confidential for Use for the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
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):
[ ] $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:
(5) Total fee paid:
- -----------------------------------------------------------------------------
[X] 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,
/s/ Sanford Miller
Sanford Miller,
Chairman of the Board and Chief
Executive Officer
Dated: May 28, 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
-----------------
May 28, 1996
TO THE STOCKHOLDERS:
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 28, 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
1
<PAGE>
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.
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 outstanding Common Stock. 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 Los Angeles, 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 for 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.
2
<PAGE>
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:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE SINCE
- --------------------- ----- ----------
<S> <C> <C>
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
</TABLE>
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.
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
3
<PAGE>
March 1993. From January 1989 until 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 ("SoCal"), a licensee of Budget and through its wholly
owned subsidiary, an operator of Budget locations in Southern California.
Alan D. Liker was elected as a director in October 1995. He has served as
a business advisor to a number of individuals and companies during the past
five years, including as Vice President of SoCal since February 1992. Mr.
Liker is also a director of Herbalife International. Mr. Liker was a director
of Shaklee Corporation and its Japanese affiliate, Shaklee KK until their
sale in 1989. From 1976 to 1980, he was a principal of Xerox Development
Corporation, a strategic planning unit of Xerox Corporation. Mr. Liker was
previously a law professor at the Harvard University, University of
California (Los Angeles) and University of Southern California law schools.
Previously he was a director of First Charter Bank and Shop Television
Network.
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 Mr. Agronin
and Dr. 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 attended 66 2/3 % of the meetings that were held during fiscal 1995.
Non-employee directors receive an annual retainer of $12,000 and are eligible
to participate in the Company's 1994 Directors' Stock Option Plan (the "1994
Directors' Plan"). 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.
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.
4
<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 OF
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) CLASS
- ------------------------- ---------- ----------------------- -----------
<S> <C> <C> <C>
Sanford Miller........... Class A 16,700 *
125 Basin Street Class B 905,800 46.8%
Daytona Beach, FL 32114
John Kennedy............. Class A 8,100 *
45 Riverside Drive Class B 515,400 26.6%
Westport, CT 06880
Jeffrey Congdon.......... Class A 17,950 *
7050 W. Washington Class B 515,400 26.6%
Street
Indianapolis, IN 46265
Jeffrey R. Mirkin........ Class A 1,055,000(3) 19.2%
150 Doheny Drive
Beverly Hills, CA 90211
Ronald Baron............. Class A 454,000(2) 8.26%
450 Park Avenue
New York, NY 10022
</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
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
SoCal. Includes 5,000 shares issuable to Mr. Mirkin upon exercise of
options granted under the 1994 Directors' Plan.
5
<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 OF TOTAL
BENEFICIAL TITLE OF PERCENT OF VOTING POWER OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS CLASS(1) COMMON STOCK
- ------------------------------------ ------------ ---------- ----------- ----------------
<S> <C> <C> <C> <C>
Sanford Miller ...................... 905,800 Class B 46.8% 36.4%
16,700 Class A * *
Jeffrey D. Congdon .................. 515,400 Class B 26.6% 20.7%
17,950 Class A * *
John P. Kennedy ..................... 515,400 Class B 26.6% 20.7%
8,100 Class A * *
Ronald D. Agronin(2) ................ 7,000 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) ................. 83,333 Class A 1.5% *
All directors and officers as a
group (8 persons)(2) ...............1,122,850 Class A 20.4% 4.5%
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'
Plan.
(3) Includes 1,050,000 shares of Class A Common Stock beneficially owned by
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
SoCal.
(4) Includes 78,333 shares of Class A Common Stock that may be acquired by
Mr. Liker from SoCal pursuant to an option granted by SoCal to Mr.
Liker.
6
<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 $97,000
in 1995. The monthly base rent under this lease (approximately $8,100 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 $3,500 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 $6,800 in 1995) escalates by 5% per annum until August 30,
1996 and thereafter annual increases will be the higher of 5% or the amount
of the increase in the consumer price index. Rental payments under the lease
amounted to approximately $81,000 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. The Company's second
Dayton, Ohio retail car sales facility, which opened in April 1996, is leased
from MCK. This lease terminates in March 2001, subject to renewal. The
monthly base rent under this lease (approximately $10,000 per month in 1996)
escalates by 3% per annum. All 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 connection with the Los Angeles Acquisition, the Company entered into a
Franchise Agreement with SoCal, under which the Company agreed to pay to the
seller, 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 SoCal in the principal amount of approximately $4,750,000
(the "SoCal Note"), assumed the obligations of SoCal under a note in the
principal amount of approximately $4,700,000 which was secured by the
personal guaranty of Jeffrey R. Mirkin (the "SoCal Bank Note"). Mr. Mirkin is
the Chief Executive Officer and a general partner of SoCal and upon
consummation of the Los Angeles Acquisition, became a director of the
Company. The Company operates as a sub-franchisee of SoCal in the San Diego
territory and pays royalty fees to SoCal based on rental revenues for
vehicles other than trucks. In 1993, 1994 and 1995, the Company paid SoCal
approximately $1,100,000, $1,000,000 and $1,200,000 in royalty fees,
respectively. Except as described above, prior to the Los Angeles
Acquisition,
7
<PAGE>
there was no material relationship between the Company and SoCal. The SoCal
Note together with accrued interest of $103,906, and the SoCal Bank Note were
repaid in April 1996. There is approximately $700,000 of other indebtedness
currently payable by the Company to SoCal.
Sanford Miller is a member 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:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------- ----- -------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
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
----------------------------
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION OPTION
- ---------------------------- ---- ----- ------------ ----------
<S> <C> <C> <C> <C>
Sanford Miller............... 1995 $183,667 $ -- 30,000
Chairman of the Board and 1994 $ 91,108(1)$ 14,067(2) --
Chief 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 and 1994 $ 26,250(3) -- --
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.
8
<PAGE>
OPTION GRANTS DURING FISCAL 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------- POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM
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>
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS AT
NAME DECEMBER 31, 1995
- -------------- ------------------------------
EXERCISABLE UNEXERCISABLE
------------- ---------------
<S> <C> <C>
Mr. Miller .... -- 30,000
Mr. Kennedy .. -- 25,000
Mr. Congdon .. -- 25,000
</TABLE>
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 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.
9
<PAGE>
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 August 18, 1994 and measures the return thereon through
December 31, 1995.
#############################################################################
COMPARISON OF CUMULATIVE TOTAL REUTRN GRAPHIC TO COME
#############################################################################
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.
10
<PAGE>
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 "FOR" 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 192,600
options to purchase Common Stock under the Plan. Therefore, in the event that
the proposed amendment is approved, 567,400 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 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.
11
<PAGE>
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
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.
12
<PAGE>
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.
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
13
<PAGE>
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 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.
14
<PAGE>
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. Miller, Congdon, Kennedy, Norwalk and Tiemann filed
one report late to each report one transaction and Messrs. Mirkin and Liker
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 a significant employee
of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
- ------------------ ----- ----------------------------------------------------------
<S> <C> <C>
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, Secretary 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
</TABLE>
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.
15
<PAGE>
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,
/S/ SANFORD MILLER
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.
16
<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.
A-1
<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."
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."
B-1
<PAGE>
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]
B-2
<PAGE>
TEAM RENTAL GROUP, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS 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.
P
R
O
X
Y
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE
SIDE
(Continued and to be signed on the other side)
[SOLID TRIANGLE] FOLD AND DETACH HERE [SOLID TRIANGLE]
<PAGE>
X
Please mark
your votes
like this in blue
or black ink
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND
"FOR" ITEMS 2 AND 3
<TABLE>
<CAPTION>
<S> <C> <C>
FOR all WITHOLD authority to
Nominees vote for all nominees
1.ELECTION OF [ ] [ ]
DIRECTORS:
SANFORD MILLER
JOHN P. KENNEDY
JEFFREY D. CONGDON
RONALD D. AGRONIN
STEPHEN L. WEBER
JAMES F. CALVANO
JEFFREY R. MIRKIN
ALAN D. LIKER
</TABLE>
WITHHELD for the following only: [Write the name of
the nominee(s) in the space below.]
<TABLE>
<CAPTION>
<S> <C>
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION.
</TABLE>
-----------------------------------------------------------------------------
3. APPROVAL OF AN AMENDMENT TO THE
COMPANY'S
1994 INCENTIVE STOCK OPTION PLAN.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Signature(s) Date FOR AGAINST ABSTAIN
[ ] [ ] [ ]
- -----------------------------------------------------------------------------
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.
[SOLID TRIANGLE] FOLD AND DETACH HERE [SOLID TRIANGLE]
