<PAGE> 1
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 appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
THE PARTS SOURCE, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C>
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
[ ] 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:
</TABLE>
<PAGE> 2
THE PARTS SOURCE, INC.
(D/B/A ACE AUTO PARTS)
1751 S. MISSOURI AVENUE
CLEARWATER, FLORIDA 34616
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 15, 1997
TO THE SHAREHOLDERS OF THE PARTS SOURCE, INC.
The Annual Meeting of Shareholders of The Parts Source, Inc. will be
held at Holiday Inn Select located at 3535 Ulmerton Road, Clearwater, FL 34622
on May 15, 1997 at 10:00 a.m., Eastern Daylight Time, for the following
purposes:
1. To elect four directors to hold office until the next annual
meeting of shareholders and until their successors have been duly
elected and qualified.
2. To consider and act upon a proposal to amend the Company's 1995
Incentive and Non-Statutory Stock Option Plan to increase the
number of shares issuable pursuant to the exercise of options
granted under said plan from 175,000 to 300,000 shares of the
Common Stock of the Company;
3. To ratify the reappointment of Grant Thornton LLP, the Company's
independent certified public accountants for 1997.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed April 4, 1997 at the close of
business, as the record date for the determination of the shareholders entitled
to notice of and to vote at the annual meeting or any adjournment thereof.
A Proxy Statement and form of Proxy are enclosed.
Shareholders are cordially invited to attend the meeting. Whether or
not you expect to be present, please date, sign and return the Proxy in the
enclosed envelope, which requires no postage if mailed in the United States.
If you are present at the meeting and desire to vote in person, you may revoke
the Proxy.
By order of the Board of Directors
/s/ Robert A. Cox, Jr.
-----------------------------
Robert A. Cox, Jr., Secretary
Dated: April 15, 1997
Clearwater, Florida
<PAGE> 3
THE PARTS SOURCE, INC.
Clearwater, Florida
PROXY STATEMENT
The Proxy enclosed with this statement is solicited by the Board of
Directors of The Parts Source, Inc. (the "Company") for use at the Annual
Meeting of Shareholders, and any adjournments thereof, to be held on May 15,
1997 at 10:00 a.m., Eastern Daylight Time, at Holiday Inn Select located at
3535 Ulmerton Road, Clearwater, FL 34622 for the purposes set forth in the
foregoing Notice of Annual Meeting of Shareholders. All expenses incident to
the solicitation of the Proxies will be borne by the Company.
Shareholders executing Proxies may revoke them at any time prior to
use, by written notice to the Secretary of the Company, by subsequently
executing another Proxy or by specific personal action at the meeting. A Proxy
when executed and not revoked will be voted and, if it contains any
specifications, it will be voted in accordance therewith. If no choice is
specified, shares covered by the Proxy will be voted in favor of the proposal
to be acted upon and in the discretion of the Proxy holder upon such other
matters as may properly come before such meeting or any adjournment thereof.
A copy of the Annual Report for 1996 is enclosed.
SHAREHOLDERS ENTITLED TO VOTE AND PRINCIPAL SHAREHOLDERS
As of the close of business on April 4, 1997, the record date for
determining the shareholders entitled to vote at the annual meeting, there were
issued and outstanding and entitled to vote a total of 3,412,273 shares of the
Company's Common Stock (the only class of securities outstanding), each of
which is entitled to one vote.
The only persons who owned of record or were known by the Company to
own beneficially on April 4, 1997 more than 5% of the outstanding shares of
Common Stock of the Company were the following:
<TABLE>
<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS SHARES OWNED OF CLASS
- ----------------- ------------ --------
<S> <C> <C>
Thomas Cox(1) 940,000 27.5%
Robert Cox(1) 940,000 27.5%
Autoparts Finance, Inc. 227,273 6.7%
c/o APS., Inc.
15710 John F. Kennedy Blvd.
Houston, TX 77032
All Directors and Officers 1,880,000 55.0%
of the Company as a Group
(6 in number)
- ------------
</TABLE>
(1) The address of Messrs. Thomas and Robert Cox is The Parts Source, 1751
S. Missouri Avenue, Clearwater, Florida 34616
<PAGE> 4
VOTING PROCEDURES
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. The
Company's By-laws provide that a quorum is present if the holders of a majority
of the issued and outstanding shares of Common Stock of the Company entitled to
vote at the meeting are present in person or represented by proxy.
ELECTION OF DIRECTORS
PROXIES in THE ACCOMPANYING FORM WILL BE VOTED AT THE MEETING, UNLESS
AUTHORITY TO DO SO IS WITHHELD, in FAVOR OF THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED BELOW.
It is proposed that the shareholders elect four directors. The term
of each director elected will be until the next Annual Meeting of Shareholders
or until his successor is duly elected and qualified. It is intended that the
proxies will be voted for the nominees listed below and cannot be voted for
more than nominees. Each nominee is at present available for election, but if
any nominee should become unavailable, the persons voting the accompanying
proxy may, at their discretion, vote for a substitute. Certain information
concerning the nominees is set forth below.
<TABLE>
<CAPTION>
COMMON SHARES
SERVED BENEFICIALLY
AS OWNED AS OF
DIRECTOR APRIL 4, 1997
-------------
NAME AGE SINCE NO. SHS. % SHS.
---- --- ----- -------- ------
<S> <C> <C> <C> <C>
Thomas D. Cox 48 1996 940,000 29.5%
Robert A. Cox 51 1996 940,000 29.5%
James M. Chadwick, Esq.(1) 41 1996 3,000(2) *
M. Steven Sembler(1) 41 1996 3,000(2) *
- -----------------------
</TABLE>
* Less than 1%.
(1) Member of Audit and Compensation Committee
(2) Shares underlying options currently exercisable
THOMAS D. COX has been President of the Company and its predecessors
from 1977 to the present, except for approximately an eighteen month interval
(1991-1993) during which the predecessor company was owned by F. J. M.
Investments Inc. In 1992, Thomas Cox, together with his brother, Robert Cox,
opened an aftermarket auto parts store and caused the Company to be formed. In
1993, the Company purchased the assets and assumed certain of the liabilities
of Ace/Linco. Mr. Thomas Cox has served on numerous warehouse associations and
councils, advising aftermarket manufacturers on the needs of the auto parts
industry.
ROBERT A. COX has been Vice President from 1977 to the present except
for approximately a two-year interval (1991-1993) during which the predecessor
company was owned by F. J. M. Investments, Inc. Mr. Cox has served as Executive
Vice President of the Company since November 1992. From 1971 to May
2
<PAGE> 5
1977, Mr. Cox was Vice President of Florida Outdoor, Inc., a family owned
corporation specializing in billboard advertising.
JAMES M. CHADWICK, ESQ. is a practicing attorney and a partner in the
law firm of Renfrow & Chadwick (since 1983), specializing in representation of
non-profit organizations. He is also president of Carteret Management
Corporation (since 1974) and Vice President of RGR, Inc.(since 1983). Carteret
Management Corporation provides a comprehensive management program for
apartments and skilled-nursing facilities and RGR, Inc. is a housing consulting
firm which has been responsible for the development of over 50 apartment
communities, the majority of which involve independent living for low in come
elderly and/or handicapped individuals.
M. STEVEN SEMBLER has been president and owner of Sembler Investments
since 1988. The company invests and holds interests in shopping centers, mobile
home parks, a medical equipment company and a construction service company.
Non-employee directors receive $500 per meeting attended.
During 1996, the Board of Directors held ten meetings. Each director
attended at least 75% of the meetings held.
COMMITTEES
The Board of Directors has established a Compensation and Audit
Committee. The members of the Compensation and Audit Committee are Messrs.
James Chadwick and M. Steven Sembler. The Compensation Committee reviews
general policy matters relating to compensation and benefits of employees
generally and has responsibility for reviewing and approving compensation and
benefits for all officers of the Company. The Compensation Committee also
administers the Company's Stock Option Plan and recommends grants of the
specific options under the Stock Option Plan.
The Audit Committee represents the Board in discharging its
responsibilities relating to the accounting, reporting and financial control
practices of the Company. The Audit Committee has general responsibility for
surveillance of financial controls, as well as for accounting and audit
activities of the Company. The Audit Committee annually reviews the
qualifications of the independent certified public accountants, makes
recommendations to the Board as to their selection, reviews the scope, fees and
results of their audit and approves their non-audit services and related fees.
The Audit Committee meets periodically with management and with the Company's
independent auditors to determine the adequacy of internal controls and other
financial reporting matters.
3
<PAGE> 6
REMUNERATION OF EXECUTIVE OFFICERS
The following table sets forth certain information relating to the
compensation earned by the Chief Executive Officer of the Company and each of
the other executive officers of the Company whose total cash compensation for
the past year exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (SALARY)
- --------------------------- ---- -------------------
<S> <C> <C>
Thomas Cox, President 1996 $112,575
1995 91,898
Robert A. Cox, Jr., Vice President 1996 $112,275
1995 91,898
</TABLE>
Messrs. Thomas and Robert Cox have entered into two year employment
agreements, which commenced in April 1996, pursuant to which each person
receives an annual compensation of $120,000.
STOCK OPTION PLAN
Under the Company's Stock Option Plan (the "Plan") 175,000 shares of
Common Stock are currently reserved for issuance upon exercise of stock
options. The Plan is designed as a means to retain and motivate key employees.
The Stock Option Committee administers and interprets the Plan. Options may be
granted to all eligible employees of the Company, including officers sand
non-employee directors and others who perform services for the Company.
The Plan provides for granting of both incentive stock options (as
defined in Section 422 of the Internal Revenue Code) and non-statutory stock
options. Options are granted under the Plan on such terms and at such prices
as determined by the Board of Directors, except that the per share exercise
price of the options cannot be less than the fair market value of the Common
stock on The date of the grant. Each option is exercisable after the period or
periods specified in the option agreement, but no option may be exercisable
after the expiration of ten years from the date of grant. Options granted under
the Plan are not transferable other than by will or by the laws of descent and
distribution. The Company has granted incentive stock options to purchase an
aggregate of 139,000 shares of Common Stock to certain officers and key
employees of the Company. The Company granted to Messrs. Robert Morgan and
Frank Kelly options to purchase 40,000 shares each, and granted to 39 employees
options to purchase an additional 59,000 shares. All options expire five years
from the date of grant. The options granted to Messrs. Morgan and Kelly are
exercisable at the rate of 40% at the end of the second year and 20% at the end
of each of other succeeding three years and the options granted to employees
are exercisable in full at the end of the second year. The Company also
granted options to purchase 3,000 shares of Common stock to each of the
non-employee directors. The options are exercisable in full one year from the
date of grant and expire five years from the date of grant. In November 1996,
the Company issued options to purchase 30,000 shares of Common Stock in
connection with an acquisition. Such option is exercisable 20% per year
commencing in November 1997. All options granted are exercisable at prices
ranging from $8.00 per share to $12.00 per share.
4
<PAGE> 7
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to the creation of the Compensation Committee in March 1996,
decisions on executive compensation were made by Thomas Cox, the Company's
Chief Executive Officer, and Robert Cox, Executive Vice President. Since April
1996, Messrs. Thomas and Robert Cox have been employed under the employment
agreements described under the Summary Compensation Table.
CERTAIN TRANSACTIONS
In connection with the acquisition of Ace in 1993, the Company assumed
a note payable to the father of Thomas and Robert Cox in the amount of
$779,157. In December, 1993, Messrs. Thomas and Robert Cox substituted their
personal note for the assumed note. The note had been reduced to $551,932 and
the Company issued a new note to Thomas and Robert Cox for the outstanding
balance. The note is a demand note bearing interest at the rate of nine
percent (9%) per annum through May 2006. As of December 31, 1995 the balance
outstanding was $475,734. In addition, as of December 31, 1995 there was a
receivable due the Company from Thomas and Robert Cox of $152,222 for monies
advanced to them. At the time of the public offering in April 1996, the
parties offset the receivable against the note, as a result of which the
balance due on the note was reduced to $323,512. At December 31, 1996, the
balance due was $197,292.
The Company leases ten of its traditional stores and one battery
distribution center from entities affiliated through the common ownership of
Messrs. Thomas and Robert Cox. One traditional store which contains the
corporate offices is leased from Mrs. Joan Z. Cox, Trustee, the mother of
Thomas and Robert Cox. Each of the leases expire December 31, 2000. Rent
expense under such leases aggregated $504,731 and $502,818 in 1995 and 1996,
respectively. The Company believes that the lease terms are at least as
comparable to those that could be obtained from unaffiliated third parties.
In connection with the purchase of Ace by the Company in 1993, the
Company borrowed approximately $3,250,000 from AFCO (approximately $2.5 million
at December 31, 1995), which amount was evidenced by a promissory note bearing
interest at prime plus 2% (currently 10.25%) per annum. In addition, in June
1994, in connection with the Company's purchase of four wholesale locations
from APS, the Company financed the purchase by giving AFCO a promissory note in
the amount of $2,850,000, bearing interest at prime plus 2% (currently 10.25%)
per annum. Each of the notes was payable in monthly installments of principal
and interest, the final payment being due September 15, 2010. The two notes
were secured by substantially all of the assets of the Company and were
guaranteed by Thomas and Robert Cox. A portion of the proceeds of the public
offering were used to pay such notes, thereby eliminating Thomas and Robert
Cox's obligation under their guaranty. Thomas and Robert Cox continue as
personal guarantors on Company trade payables which was approximately
$2,150,000 at December 31, 1996.
Prior to the public offering the Company acted as a guarantor of
mortgage notes issued to an unaffiliated lending institution, in the
approximate amount of $4,100,000 at December 31, 1995, by Linco and Cozer
Enterprises. Each are real estate holding entities owned by Thomas and Robert
Cox which lease ten of the Ace Auto Parts stores and the battery distribution
center to the Company. Upon consummation of the offering, the lending
institution released the Company from its guarantee based on Thomas and Robert
Cox pledging as collateral shares of Common Stock of the Company held by them
having a value of $1,000,000.
5
<PAGE> 8
On December 31, 1995, Messrs. Thomas and Robert Cox transferred to the
Company substantially all of the assets ($128,261) and certain liabilities
($128,261) of The Battery Source, a division of Linco and a distributor of
automotive batteries, for a nominal consideration ($1.00).
All transactions between the Company and its officers, directors and
5% shareholders will be on terms no less favorable than could be obtained from
unaffiliated third parties and will be approved by a majority of the
independent, disinterested directors of the Company.
PROPOSAL TO AMEND THE
1995 INCENTIVE AND
NON-STATUTORY STOCK OPTION PLAN
The Company maintains a 1995 Incentive and Non-Statutory Stock Option
Plan (the "Plan") under which incentive and non-qualified options may be
granted to employees, directors and certain key affiliates. Under the Plan,
options may be granted at not less than the fair market value on the date of
grant. Options may be subject to a vesting schedule and expire ten years after
grant.
The 1995 Plan originally reserved 175,000 shares of the Company's
Common Stock for issuance thereunder. Currently, all of the 175,000 options
authorized are outstanding. The Company has in the past utilized and wishes in
the future to utilize the Plan to attract, maintain and develop management by
encouraging ownership of the Company's Common Stock by key employees, directors
and others.
Options under the Plan are either "incentive options" ("ISOs") under
Section 422A of the Internal Revenue Code of 1986, as amended, or
"non-qualified stock options" ("NQOs") which are not intended to so qualify.
On April 1, 1997, the Board of Directors approved and recommends to
the shareholders that they approve a proposal to amend the Company's Plan to
increase the number of shares of Common Stock available for grant under the
Plan from 175,000 to 300,000. The proposed amendment will cause Section 3.1 of
the Plan to be replaced with the following revised Section 3.1:
3.1 Shares Subject to Plan. The stock subject to the options
granted under the Plan shall be shares of the Company's authorized but
unissued common stock, par value $.01 per share ("Common Stock"). the
total number of shares that may be issued pursuant to options granted
under the Plan shall not exceed 300,000 shares of Common Stock.
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.
Except for such amendment, if approved by holders of a majority of the
shares present in person or represented by proxy at the meeting, the Plan will
remain unchanged. The following is a summary of the provisions of the Plan.
This summary is qualified in its entirety by reference to the Plan, a copy of
which may be obtained from the Company.
6
<PAGE> 9
SUMMARY DESCRIPTION OF THE STOCK OPTION PLAN
The Plan is administered by the Board of Directors of the Company and
the Compensation Committee (the "Committee") appointed by the Board of
Directors. Upon the recommendation of the Committee, the Board is authorized to
grant incentive stock options to officers and other key executive and management
employees of the Company. The current members of the Committee appointed by the
Board of Directors are James M. Chadwick, Esq. and M. Steven Sembler. The
Committee establishes rules and regulations for the operation of the Plan,
selects persons to receive options, determines the option price for shares
subject to each option, and determines the number of shares subject to grants.
If there is a stock split, stock dividend, or other relevant change
affecting the Company's shares, appropriate adjustments would be made in the
number of shares that could be issued in the future and in the number of shares
and price under all outstanding grants made before the event. Future options
may also cover such shares as may cease to be under option by reason of total
or partial expiration, termination or voluntary surrender of an option.
The aggregate fair market value (determined at the time an option is
granted) of the Common Stock with respect to which ISOs are exercisable for the
first time by any person during any calendar year under the Plan shall not
exceed $100,000.
The vesting period for options granted under the Plan are set forth in
an option agreement entered into with the optionee. ISOs granted to an
optionee terminate 90 days after retirement. In the event of death or
disability, all vested options expire 180 days from the date of death or
termination of employment due to disability.
Unless otherwise provided in any option, each outstanding option shall
become immediately fully exercisable in the event of : (i) a change of control
of the Company, (ii) a merger, consolidation, reorganization or dissolution in
which the Company does not survive, or (iii) the sale, release, exchange or
disposition of substantially all the property and assets of the Company.
STOCK OPTIONS
The Board of Directors and the Committee may grant options qualifying
as ISOs under the Internal Revenue Code of 1986, as amended, or as NQOs. The
Committee determines the duration of each option; however, the term of an
option cannot exceed ten (10) years from the date of grant and cannot exceed
five (5) years in the case of a greater than 10% shareholder. The option price
for an ISO is the fair market value of a share of the Company's Common Stock on
the date of grant, whereas the option price for an NQO may be more or less than
the fair market value on the date of grant. The grantee can pay the option
price in cash, or if permitted, by delivering to the Company shares of Common
Stock owned by the grantee that have a fair market value equal to the option
price. Shares cannot be issued or transferred upon the exercise of an option
until the option price is paid in full.
During the year ended December 31, 1996, the Company granted options
to purchase 80,000 shares to two officers, 59,000 shares of Common Stock to 39
employees of the Company, 6,000 shares to its two non-employee directors and
30,000 shares in connection with an acquisition. As a result, all of the
options available for issuance under the Plan have been granted. Neither the
number nor value of future option
7
<PAGE> 10
awards to be received by or allocated to particular participants or groups of
participants is presently determinable.
At April 8, 1997, the market value per share of Common Stock was $15 1/2.
FEDERAL INCOME TAX CONSEQUENCES
The holder of an ISO does not realize taxable income upon the grant or
upon the exercise of the option (although the option spread is an item of tax
preference income potentially subject to the alternative minimum tax). If the
stock acquired upon exercise of the option is sold or otherwise disposed of
within two years from the option grant date or within one year from the
exercise date then, in general, gain realized on the sale is treated as
ordinary income to the extent of the option spread at the at the exercise date,
and the Company receives a corresponding deduction. Any remaining gain is
treated as capital gain. If the stock is held for at least two years from the
grant date and one year from the exercise date, then gain or loss realized upon
the sale will be capital gain or loss and the Company will not be entitled to a
deduction. A special basis adjustment applies to reduce the gain for
alternative minimum tax purposes.
An optionee does not realize taxable income upon the grant of an NQO
if the exercise price is equal to the fair market value. If the exercise price
is less than the fair market value, the optionee will realize income equal to
the difference between the exercise of the NQO in an amount equal to the
difference between the exercise price and the market value on the date of
exercise. The Company is entitled to a deduction at the same time and in a
corresponding amount.
In general, if an optionee delivers previously-owned shares in payment
of the exercise price of an option, no gain or loss will be recognized on the
exchange of the previously-owned shares for an equivalent number of newly
issued shares. However, if the previously-owned shares delivered in payment of
the exercise price were acquired pursuant to the exercise of an ISO and if the
requisite option holding periods are not satisfied (see above), then the
optionee will realize ordinary income on the delivery of the previously-owned
shares as in the case of any other "early" disposition of option-acquired
shares.
RECOMMENDATION OF THE BOARD
The Board of Directors recommends a vote "FOR" the proposal to amend
the Company's Stock Option Plan to increase the number of shares of Common
Stock available for grant from 175,000 to 300,000. Unless a contrary choice is
specified, proxies solicited by the Board of Directors will be voted FOR
approval of such increase.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Certified Public Accounting firm of Grant Thornton LLP, the
Company's independent accountant for 1996, has been selected as the Company's
independent accountant for 1997. A representative of that accounting firm will
be present at the meeting with the opportunity to make a statement and respond
to appropriate questions.
The Board of Directors recommends a vote "FOR" ratification of the
appointment of Grant Thornton LLP as the Company's independent accountant for
the year ending December 31, 1997.
8
<PAGE> 11
VOTE REQUIRED
A majority of the outstanding shares of stock will be necessary to
constitute a quorum for the transaction of business at the meeting. The
election of directors, the adoption of the amendment to the Company's 1995
Incentive and Non-Statutory Stock Option Plan and the ratification of Grant
Thornton LLP, as the Company's independent accountants, will require a vote of a
majority of the shares present in person or by proxy at the meeting.
OTHER MATTERS
Management has no information that any other matters will be brought
before the meeting. If, however, other matters do come before the meeting, it
is the intention of the persons named in the Proxy to vote the shares
represented by the Proxy in accordance with their best judgment, discretionary
authority to do so being included in the Proxy.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
In order to be included in the proxy materials for the 1998 Annual
Meeting of Shareholders of the Company, shareholder proposals must be received
by the Company not later than January 30, 1998.
THE PART SOURCE, INC.
/s/ Robert A. Cox, Jr.
-----------------------------
Robert A. Cox, Jr., Secretary
Date: April 15, 1997
9
<PAGE> 12
APPENDIX
THE PARTS SOURCE, INC.
D/B/A ACE AUTO PARTS, INC.
1751 S. MISSOURI AVENUE
CLEARWATER, FL. 34616
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas D. Cox and Robert A. Cox, Jr.,
as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and vote, as designated below, all the shares of
common stock of The Parts Source, Inc. held of record by the undersigned as of
April 4, 1997 at the Annual Meeting of Shareholders to be held on May 15, 1997
or any adjournment thereof.
1. To elect four Directors to hold office until the next Annual Meeting
of Shareholders.
___ ___.
___ FOR all nominees listed below ___ WITHHOLD AUTHORITY to vote for
(except as marked to the all nominees listed below
contrary below)
Thomas D. Cox
Robert A. Cox, Jr.
James M. Chadwick, Esq.
M. Steven Sembler
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name in the space provided._______________________
2. To amend the Company's 1995 Incentive and Non-Statutory Stock Option
Plan (the "Plan") to increase the number of shares issuable pursuant
to the exercise of options granted under said Plan from 175,000 to
300,000 shares of Common Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Ratification of appointment of Grant Thornton LLP as the Company's
independent accountants for 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In their discretion, the holders of this Proxy are authorized to vote
upon such other business as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy
will be voted for Proposals 1, 2 and 3.
(Continued, and to be signed on the reverse side)
<PAGE> 13
Please sign exactly as name appears below. When shares are hold by joint
tenants, both should sign. When signing as attorney, as executor,
administrator or trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
______________________________
Signature
______________________________
Signature, if held jointly
DATED: _____________, 1997
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
