SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
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[ ] Preliminary Information Statement [ ] Confidential, for Use of the
[X] Definitive Information Statement Commission Only (as permitted by
Rule 14c-5(d)(2))
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
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(Name of Registrant As Specified in Its Charter)
- --------------------------------------------------------------------------------
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<PAGE>
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
150 Louisiana N.E.
Albuquerque, New Mexico 87108
--------------------
NOTICE AND INFORMATION STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 19, 1997
--------------------
To Our Stockholders:
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of
BOWLIN Outdoor Advertising & Travel Centers Incorporated (the "Company") will be
held at 8:00 a.m., Albuquerque time, on Friday, September 19, 1997, at the
Company's corporate headquarters at 150 Louisiana N.E., Albuquerque, New Mexico
87108 for the following purposes:
1. To elect two directors to the Board of Directors to serve for
three-year terms; and
2. To transact such other business as may properly come before the Annual
Meeting. Management is presently aware of no other business to come
before the meeting.
The Board of Directors has fixed the close of business on Wednesday,
August 6, 1997 as the record date for the determination of stockholders entitled
to receive notice of and to vote at the meeting or any adjournment thereof.
Shares of Common Stock can be voted at the meeting only if the holder is present
at the meeting in person or by valid proxy. Management is not soliciting proxies
in connection with the Annual Meeting and stockholders are requested not to send
proxies to the Company. A copy of the Company's 1997 Annual Report to
Stockholders, which includes certified financial statements, was mailed with
this Notice and Information Statement to all stockholders of record on the
record date. Management cordially invites you to attend the Annual Meeting.
Your attention is directed to the attached Information Statement.
BY ORDER OF THE BOARD OF DIRECTORS
Michael L. Bowlin
Chairman of the Board
Albuquerque, New Mexico
August 7, 1997
<PAGE>
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
150 Louisiana N.E.
Albuquerque, New Mexico 87108
---------------------
INFORMATION STATEMENT
---------------------
This Information Statement is being furnished to the stockholders of
BOWLIN Outdoor Advertising & Travel Centers Incorporated, a Nevada corporation
(the "Company"), in connection with the Annual Meeting of the Stockholders of
the Company to be held on September 19, 1997, at 8:00 a.m., Albuquerque time,
and any adjournment or postponement thereof (the "Annual Meeting"). A copy of
the Notice of the Meeting accompanies this Information Statement. It is
anticipated that the mailing of this Information Statement to stockholders will
commence on August 7, 1997.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
VOTING
Only stockholders of record at the close of business on August 6, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
or any adjournment(s) or postponement(s) thereof. On the Record Date, __________
shares of Common Stock, $.001 par value (the "Common Stock"), were issued and
outstanding. Each holder of Common Stock is entitled to one vote, exercisable in
person or by proxy, for each share of the Company's Common Stock held of record
on the Record Date. Cumulative voting is not permitted.
The Company's Bylaws provide that a majority of all shares of stock
entitled to vote, whether present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the meeting. Abstentions
and broker non-votes will be included in the determination of the number of
shares represented for a quorum. In order to vote their shares in person at the
meeting, stockholders who own their shares in "street name" must obtain a
special proxy card from their broker.
The Board of Directors does not know of any matters other than the
election of directors that are expected to be presented for consideration at the
meeting.
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven members and is
divided into three classes. One class of directors is elected each year to serve
for a term of three years. Each director serves until his successor has been
elected and qualified, or until his earlier resignation or removal. Following is
certain biographical information, as of April 30, 1997, with respect to the
members of and nominees to the Board of Directors.
<PAGE>
DIRECTOR NOMINEE
CLASS I AND CLASS II DIRECTOR -- TERM EXPIRING IN 1997
At the meeting, one Class I director and one Class II director will be
elected to serve for terms of three years and until the election and
qualification of their respective successors. The nominees receiving the
greatest number of votes cast at the annual meeting of stockholders will be
elected to Class I and Class II of the Board of Directors. The Board of
Directors recommends Nina J. Pratz and Harold Van Tongeren be elected Class I
and Class II directors, respectively, to serve until the annual meeting of
stockholders in 2000. Ms. Pratz and Mr. Von Tongeren are currently Class I and
Class II directors, respectively, of the Company whose term of office will
expire at the September 19, 1997 Annual Meeting.
NINA J. PRATZ. Ms. Pratz, age 45, has served as the Company's Treasurer
since 1977 and as Chief Administrative Officer since 1988. In addition, Ms.
Pratz has served as a member of the Company's Board of Directors since 1976. She
has been employed by the Company for over 20 years. Ms. Pratz holds a bachelor's
degree in Business Administration from New Mexico State University.
HAROLD VAN TONGEREN. Mr. Van Tongeren, age 74, has served as a member
of the Board of Directors of the Company since 1988. Mr. Van Tongeren has also
served as Chairman of the Board of Directors and President of Herk and
Associates, a representative of domestic gift and jewelry wholesales, since
1952. In addition, Mr. Van Tongeren serves as a key contact to the Company
regarding potential acquisition opportunities in the travel and tourism
industry. Mr. Van Tongeren attended Hope College and Dennison University, and
served as a First Sergeant in the United States Marine Corps for four years.
Approval of the election of the director nominees will require the
affirmative vote of a plurality of the votes cast by the stockholders entitled
to vote. Messrs. Michael L. Bowlin and C. Christopher Bess, who collectively
have voting power over a majority in interest of the outstanding shares of
Common Stock, have indicated they will vote FOR election of the director
nominees as set forth above. Accordingly, it is expected that the director
nominees will be reelected to Class I of the Board of Directors.
CONTINUING DIRECTORS
CLASS II DIRECTORS -- TERMS EXPIRING IN 1998
C. CHRISTOPHER BESS. Mr. Bess, age 50, has served as the Company's
Executive Vice President and Chief Operating Officer since 1983. Mr. Bess has
served as a member of the Company's Board of Directors since 1974. During his 24
years with the Company, Mr. Bess has also served in such capacities as internal
auditor, Merchandiser for Retail Operations, Retail Operations Manager and as
Development Manager. Mr. Bess is a certified public accountant and holds a
Bachelor's degree in Business Administration from the University of New Mexico.
JAMES A. CLARK. Mr. Clark, age 67, has served as a member of the Board
of Directors of the Company since December 1996. Mr. Clark is currently retired
from full-time employment. Mr. Clark served as President and Chief Executive
Officer of First Interstate Bank of Albuquerque from 1985 to 1991. Prior to
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1991, Mr. Clark served in several capacities at various banking and financial
services entities for over 25 years. Mr. Clark holds a Certificate of Graduation
from the Stonier Graduate School of Banking at Rutgers University.
CLASS III DIRECTORS -- TERMS EXPIRING IN 1999
MICHAEL L. BOWLIN. Mr. Bowlin, age 54, has served as Chairman of the
Board and Chief Executive Officer of the Company since 1991 and as President
since 1983. Mr. Bowlin has been employed by the Company since 1968. Mr. Bowlin's
father, Claude M. Bowlin, Sr., founded the business in 1912. Mr. Bowlin
currently is Chairman of the Board for the OAAA and serves on the Board for the
American Council of Highway Advertisers. Mr. Bowlin also serves as President and
a member of the Board of Directors of Stuckey's Incorporated, a restaurant and
specialty store franchisor (including specialty stores located at four of the
Company's travel centers); however, substantially all of Mr. Bowlin's
professional time is devoted to his duties at the Company. Mr. Bowlin holds a
Bachelor's degree in Business Administration from Arizona State University.
ROBERT L. BECKETT. Mr. Beckett, age 72, has served as a member of the
Board of Directors of the Company since 1974. Mr. Beckett has also been
President and a Director of The Cooper Agency, Inc., a consumer loan company,
since 1964. In addition to serving as a Director and executive officer of
various private entities, Mr. Beckett formerly served as Mayor of the City of
Deming, New Mexico.
BRIAN MCCARTY. Mr. McCarty, age 61, has served as a member of the Board
of Directors of the Company since December 1996. Mr. McCarty has served since
1994 as Chairman of the Board and Chief Executive Officer of Business Location
Research, a company specializing in the design and development of advanced
geographic information systems. From 1990 to 1993, Mr. McCarty served as
President and Chief Executive Officer of Naegele Outdoor Advertising
("Naegele"). Prior to his employment at Naegele, Mr. McCarty served as President
of Ackerley Communications, a publicly traded company engaged in the operation
of outdoor advertising, radio and television broadcasting properties. Mr.
McCarty holds a Bachelor's degree in Marketing from Lewis University.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended January 31, 1997, the Board of Directors
of the Company met on two occasions. Each of the Directors attended 75% or more
of the meetings of the Board of Directors and of the meetings held by such
committees of the Board on which he served.
The Audit Committee, which is currently comprised of Messrs. Bowlin,
Clark and Beckett, is responsible for reviewing and making recommendations to
the Board concerning the selection of outside auditors, the annual audit of the
Company's financial statements and the Company's internal accounting controls,
practices and policies. The Audit Committee, which was formed immediately
following completion of the Company's initial public offering in December 1996,
has had no meetings to date.
The Compensation Committee, which is currently comprised of Messrs.
Bowlin, McCarty and Von Tongeren, makes recommendations to the Board of
Directors regarding option grants under the Company's 1996 Stock Option Plan and
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addresses matters relating to executive compensation. The Compensation
Committee, which was formed immediately following completion of the Company's
initial public offering in December 1996, has had no meetings to date.
The Company's Board of Directors does not maintain a standing
nominating committee or other committees performing similar functions.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are entitled to receive
$1,000 per each meeting of the Board of Directors, or any committee thereof,
attended plus reimbursement of reasonable expenses. Non-employees also receive
an option to purchase 6,000 shares of Common Stock upon their election to the
Board of Directors and an annual option grant of 2,000 shares of Common Stock
during each year of service, all under the Company's 1996 Stock Option Plan. To
date, no fees have been paid by the Company. Directors do not receive any other
compensation for such services.
EXECUTIVE COMPENSATION
The following table summarizes all compensation to the Company's Chief
Executive Officer and to the Company's other most highly compensated executive
officers other than the Chief Executive Officer whose total annual salary and
bonus exceeded $100,000 (collectively, the "Named Officers"), for services
rendered to the Company for each of the years ended January 31, 1997 and 1996.
SUMMARY COMPENSATION TABLE
Annual Compensation
------------------------------------------
Name And Other Annual
Principal Position Year Salary(1)($) Bonus(2)($) Compensation($)
------------------ ---- ------------ ----------- ---------------
Michael L. Bowlin 1997 93,000 (3) -- 16,133 (4)(5)
Chairman of the Board, 1996 78,000 (3) 150,050 14,452 (4)(5)
President and
Chief Executive Officer
C. Christopher Bess 1997 78,000 (3) -- 6,876 (4)(6)
Executive Vice President and 1996 78,000 (3) 150,375 7,998 (4)(6)
Chief Operating Officer
Anita J. Vachon 1997 52,855 -- 3,336 (7)
Senior Vice President - 1996 43,250 75,075 4,731 (7)
Retail Operations
- ----------
(1) Includes amounts deferred at the election of each officer to be contributed
to his or her respective 401(k) Profit Sharing Plan account.
(2) The Company decided not to pay discretionary cash bonuses in fiscal 1997
and to grant stock options to its executive officers in lieu thereof. On
September 27, 1996, Messrs. Bowlin and Bess and Ms. Vachon were each
granted options to purchase 50,000, 40,000 and 30,000 shares of Common
Stock, respectively, under the 1996 Stock Option Plan.
(3) On September 27, 1996, the Company entered into employment agreements with
Messrs. Bowlin and Bess which provide for annual base salaries of $195,000
and $145,000, respectively, effective as of February 1, 1997. See
"--Employment Contracts."
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(4) See the discussion under the caption "CEmployment Contracts" regarding
certain other compensation the named officer may be entitled to upon
certain specified events, including a change in control of the Company.
(5) Amount for 1997 includes (i) $4,750 of the Company's discretionary matching
contributions allocated to Mr. Bowlin's 401(k) Profit Sharing Plan account;
(ii) $10,156 for premiums on term life, auto and disability insurance
policies of which Mr. Bowlin or his wife is the owner (the "Bowlin
insurance policies"); and (iii) $1,227 for Mr. Bowlin's use of a Company
owned vehicle. Amount for 1996 includes (i) $5,487 of the Company's
discretionary matching contributions allocated to Mr. Bowlin's 401(k)
Profit Sharing Plan account; (ii) $7,723 for premiums on the Bowlin
insurance policies; and (iii) $1,242 for Mr. Bowlin's use of a Company
owned vehicle.
(6) Amount for 1997 includes $4,415 of the Company's discretionary matching
contributions allocated to Mr. Bess' 401(k) Profit Sharing Plan account and
$2,461 for premiums on auto and disability insurance policies of which Mr.
Bess is the owner (the "Bess insurance policies"). Amount for 1996 includes
$5,582 of the Company's discretionary matching contributions allocated to
Mr. Bess' 401(k) Profit Sharing Plan account and $2,416 for premiums on the
Bess insurance policies.
(7) Amount for 1997 includes $2,966 of the Company's discretionary matching
contributions allocated to Ms. Vachon's 401(k) Profit Sharing Plan account
and $370 for premiums on a disability policy of which Ms. Vachon is the
owner (the "Vachon insurance policy"). Amount for 1996 includes $4,497 of
the Company's discretionary matching contributions allocated to Ms.
Vachon's 401(k) Profit Sharing Plan account and $234 for premiums on the
Vachon insurance policy.
The following table sets forth information concerning individual grants
of stock options made to the Named Officers during the fiscal year ended January
31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in
Granted Fiscal Exercise Price
Name (#)(1) Year ($/SH)(2) Expiration Date
---- ---------- ------------ -------------- ---------------
Michael L. Bowlin 50,000 14.8% $8.80 9/27/2006
C. Christopher Bess 40,000 11.8% 8.80 9/27/2006
Anita J. Vachon 30,000 8.9% 8.00 9/27/2006
- ----------
(1) Options were granted under the Company's 1996 Stock Option Plan (the "1996
Plan"). The 1996 Plan authorizes the Board to grant options to Directors
and employees of the Company to purchase in the aggregate an amount of
shares of Common Stock equal to 10% of the shares of Common Stock issued
and outstanding from time to time. The 1996 Plan provides for adjustment to
reflect future stock dividends, stock splits and other relevant
capitalization changes. Options to be granted under the 1996 Plan may be
either "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, or nonqualified options, and
will be exercisable within 10 years after the date of grant (five years for
incentive stock options granted to holders of more than 10% of the
outstanding Common Stock). The option price is 100% of the fair market
value of the shares on the date the option was granted (or 110% of the fair
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market value in the case of incentive stock options granted to holders of
more than 10% of the outstanding Common Stock). No option may be granted at
a per share price less than $8.00, the initial public offering price of the
Common Stock, and no option may be granted after August 23, 2006. Unvested
options generally terminate upon the death or termination of employment of
the optionee.
(2) All options were granted at the initial public offering price of the
Company's Common Stock.
The following table sets forth certain information concerning each
exercise of stock options during the year ended January 31, 1997 by the Named
Officers and the aggregated fiscal year-end value of the unexercised options
held by the Named Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUE AS OF JANUARY 31, 1997
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised Options In-the-Money
Name Shares Value at Fiscal Year End (#) Options at Fiscal Year End($)
---- Acquired Realized Upon ------------------------------ ------------------------------
on Exercise(#) Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
-------------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael L. Bowlin -0- -0- -0- 50,000 $ -0- $ -0-
C. Christopher Bess -0- -0- -0- 40,000 -0- -0-
Anita J. Vachon -0- -0- -0- 30,000 -0- -0-
</TABLE>
EMPLOYMENT AGREEMENTS
On August 23, 1996, the Board of Directors approved employment
agreements with Michael L. Bowlin for services as Chairman of the Board,
President and Chief Executive Officer and with C. Christopher Bess for services
as Executive Vice President and Chief Operating Officer (Messrs. Bowlin and Bess
are sometimes collectively referred to herein as the "Employee"). These
agreements provide for base annual salaries, effective as of February 1, 1997,
for Messrs. Bowlin and Bess of $195,000 and $145,000, respectively, subject to
annual increases at the discretion of the Board of Directors, but at least equal
to the corresponding increase in the Consumer Price Index. In addition, the
Employee is entitled to receive bonuses at the discretion of the Board of
Directors in accordance with the Company's bonus plans in effect from time to
time. Each of the agreements has a perpetual five-year term, such that on any
given date, each agreement has a five-year remaining term. The agreements may
not be unilaterally terminated by the Company, except for "Cause," which
includes (i) conviction of a felony that substantially impairs the Employee's
ability to perform his duties to the Company or (ii) willful failure to
diligently cure a specified deficiency in the Employee's performance for 30
days.
For the fiscal year ended January 31, 1998, in the interest of
maintaining the Company's profitability and capital, Messrs. Bowlin and Bess
have agreed to accept base annual salaries of $127,530 and $91,000,
respectively.
Each of the agreements provides that if the Employee is terminated by
the Company other than for Cause or disability, or by the Employee for good
reason (as defined in the agreements), which includes certain changes in the
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Employee's duties following a change in control of the Company, the Company
shall pay to the Employee (i) his salary through the termination date plus any
accrued but unpaid bonuses and (ii) a payment equal to the sum of five years of
the Employee's annual salary and an amount equal to all bonuses paid to the
Employee in the five years immediately preceding termination, which the Company
has the option to pay over five years. In addition, the Company must maintain
until the first to occur of (i) the Employee's attainment of substitute
employment or (ii) five years from the date of termination, the Employee's
benefits under the Company's benefit plans to which the Employee and his
eligible beneficiaries were entitled immediately prior to the date of
termination. If the Employee requests, the Company must also assign to the
Employee any assignable insurance policy on the life of the Employee owned by
the Company at the end of the period of coverage. In addition, all options or
warrants to purchase Common Stock held by the Employee on the date of
termination become exercisable on the date of termination, regardless of any
vesting provisions, and remain exercisable for the longer of one year from the
date of termination or the then remaining unexpired term of such warrants or
options. If the Employee is terminated for Cause or if the Employee terminates
his employment other than for good reason (as defined in the agreement), the
Company's only obligation is to pay the Employee his base salary and accrued
vacation pay through the date of termination.
If the Employee is incapacitated due to physical or mental illness
during the term of his employment, the agreements provide that the Company shall
pay to the Employee a lump sum equal to two years of the Employee's base
compensation and all bonuses paid to the Employee in the two years preceding the
date of termination due to illness. If the Employee dies during his employment,
his salary through the date of his death, any accrued but unpaid bonuses and any
benefits payable pursuant to the Company's survivor's benefits insurance and
other applicable programs and plans then in effect are payable to his estate.
If the Employee's employment is terminated, the Company has agreed to
indemnify the Employee for claims and expenses associated with certain personal
guarantees, if any, made by the Employee. The Company also has agreed to use its
best efforts to secure the release of such personal guarantees following the
Offering. In addition, the Company has agreed to indemnify the Employee against
all costs incurred in enforcing his rights under the agreement following a
change in control of the Company. See "CERTAIN TRANSACTIONS."
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and Directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, Directors and greater than 10% stockholders are also required
to furnish the Company with copies of all Section 16(a) forms they file.
The Company filed a Form SB-2 with the SEC on September 27, 1996, which
became effective under the Securities Act of 1933, as amended, on December 17,
1996. The Company's officers, Directors and persons who beneficially own 10% or
more of the Company's Common Stock were required to file initial statements of
beneficial ownership on Form 3's with the SEC on or before the effective date of
the Form SB-2.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of April 30, 1997, the beneficial
ownership of shares of Common Stock of the Company by (i) each person known by
the Company to beneficially own more than 5% of the Company's Common Stock; (ii)
each Director; (iii) each of the Named Officers; and (iv) all Directors and
executive officers of the Company as a group.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficially Ownership(1) Common Stock
---------------- ------------------------- ------------
Michael L. Bowlin(2).................... 1,735,513 39.6%
C. Christopher Bess(3).................. 533,081 12.2%
Anita J. Vachon ........................ 42,200 *
Nina J. Pratz .......................... 122,802 2.8%
Robert L. Beckett ...................... 123,646 2.8%
Harold Van Tongeren(4).................. 44,099 1.0%
Brian McCarty .......................... -- --
James A. Clark ......................... 2,000 *
Monica A. Bowlin(5)..................... 1,735,513 39.6%
Valkyrie L. Bowlin ..................... 171,332 3.9%
Kimberly M. Bowlin ..................... 171,332 3.9%
Emily M. Bowlin ........................ 171,332 3.9%
The Francis W. McClure and Evelyn
Hope McClure Revocable Trust ......... 403,124 9.2%
All directors and executive officers as 2,689,262 61.3%
a group (10 persons)(2)(3)(4)(5)(6)....
- ----------
* Less than 1%
(1) Each stockholder possesses sole voting and investment power with respect to
the shares listed, except as otherwise indicated or under applicable laws.
In accordance with the rules of the Commission, each stockholder is deemed
to beneficially own any shares subject to stock options which are currently
exercisable or which will become exercisable or convertible within 60 days
after March 31, 1997. The inclusion herein of shares listed as beneficially
owned does not constitute an admission of beneficial ownership. Unless
otherwise noted, the business address of each of the beneficial owners is
c/o the Company, 150 Louisiana N.E., Albuquerque, New Mexico 87108.
(2) Includes 425,687 shares held by Mr. Bowlin's wife and 171,332 shares held
by each of three daughters. Mr. Bowlin disclaims beneficial ownership of an
aggregate of 342,664 of such shares, which are held by two of his
daughters.
(3) Includes 73,006 shares held by Mr. Bess' wife and 19,623 shares held by Mr.
Bess' minor daughter.
(4) All of such 44,099 shares are held by Mr. Van Tongeren jointly with his
wife.
(5) Includes 795,830 shares held by Mrs. Bowlin's husband and 171,332 shares
held by each of three daughters. Mrs. Bowlin disclaims beneficial ownership
of an aggregate of 342,664 of such shares, which are held by two of her
daughters.
(6) Includes an aggregate of 800 shares held by three separate trusts of which
one executive officer is the sole trustee and an aggregate of 400 shares
held by four members of another executive officer's immediate family. Each
of such executive officers disclaims beneficial ownership of any such
shares.
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CERTAIN TRANSACTIONS AND RELATIONSHIPS
Michael L. Bowlin is the President and Chairman of the Board of, and a 25%
stockholder in, Stuckey's Corporation ("Stuckey's"), a franchisor of restaurants
and specialty stores, including specialty stores located at four of the
Company's travel centers. In each of fiscal years 1997 and 1996, aggregate
franchise and other related fees paid by the Company to Stuckey's equalled
approximately $33,500 and $36,600, respectively.
Michael L. Bowlin and C. Christopher Bess each have perpetual five-year
employment agreements with the Company that provide for an annual base salary,
effective as of February 1, 1997, of $195,000 and $145,000, respectively, during
their terms of employment, as well as certain rights to indemnification. See
"EXECUTIVE COMPENSATIONCEmployment Contracts."
Approximately $3.5 million of the proceeds received by the Company from its
initial public offering completed in December 1996 were used to repay
indebtedness to various lenders, most of which indebtedness had been personally
guaranteed by Michael L. Bowlin.
On August 23, 1996, the Company obtained a term loan from a commercial bank
with an aggregate principal amount of approximately $535,000 that was used to
prepay promissory notes payable to certain officers and Directors of the Company
and their respective affiliates. This loan matured on February 28, 1997 and
accrued interest at a rate of prime plus 1% per annum. This loan was paid off on
January 31, 1997.
Since February 1, 1994, C. Christopher Bess made several loans to the
Company in an aggregate principal amount of $261,000. Each of these loans was
evidenced by a promissory note made payable by the Company to Mr. Bess, which
accrues interest on the unpaid principal amounts at a rate of 10% per annum, and
matured or matures at various dates from April 1996 until October 2005. One of
such notes is also secured by a real estate mortgage. All of the proceeds from
such loans were used by the Company for working capital or the acquisition of
assets in the ordinary course of business. As of the date of this Information
Statement, all of such loans, together with accrued interest, have been repaid
in their entirety.
Since February 1, 1994, Michael L. Bowlin made three loans to the Company
in an aggregate principal amount of $180,000. Each of these loans was evidenced
by a promissory note made payable by the Company to Mr. Bowlin, which accrues
interest at a rate of 10% per annum, and matured or matures at various dates
from January 1996 until January 1998. All of the proceeds of these loans were
used for general working capital purposes of the Company. As of the date of this
Information Statement, all of such loans, together with accrued interest, have
been repaid in their entirety.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
The Board of Directors, upon the recommendation of its Audit Committee, has
selected KPMG Peat Marwick LLP as its independent auditors to audit the
consolidated financial statements of the Company for the fiscal year ending
January 31, 1998, and to perform other accounting services as requested by the
Company.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
1997 Annual Meeting, will be available to respond to appropriate questions, and
will have the opportunity to make a statement if they desire to do so.
The Company engaged KPMG Peat Marwick LLP as its independent auditors for
the fiscal year ended January 31, 1996 and the fiscal year ended January 31,
1997, to replace the firm of Arthur Andersen LLP, which was dismissed as the
Company's independent auditors effective as of August 19, 1996. The report of
Arthur Andersen LLP on the Company's financial statements for the past fiscal
year did not contain an adverse financial opinion or a disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope, or accounting
principles. In connection with the audit of the Company's financial statements
for the fiscal year ended January 31, 1996, and in subsequent interim periods,
there were no disagreements with Arthur Andersen LLP on any matters of
accounting principles or practices, financial statement disclosure or auditing
scope and procedure which, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused Arthur Andersen LLP to make reference to the
matter in their report. The Company has authorized Arthur Andersen LLP to
respond fully to any inquiries from KPMG Peat Marwick LLP. The Company requested
Arthur Andersen LLP to furnish in a letter addressed to the Commission stating
whether it agrees with the above statements. A copy of that letter, dated
September 12, 1996, is on file with the Commission as Exhibit 16.1 to the
Company's Registration Statement on Form SB-2 (File No. 333-12957) (the
"Registration Statement"). The consolidated financial statements as of and for
the year ended January 31, 1996 audited by KPMG Peat Marwick LLP reflected no
change from the consolidated financial statements audited by Arthur Andersen LLP
in travel center operations gross sales, outdoor advertising operations gross
income, net income or total stockholders' equity.
The Company engaged Arthur Andersen LLP as its independent auditors for the
fiscal year ended January 31, 1996 to replace the firm of Ricci & Ricci, which
was dismissed as the Company's independent auditors at the same time. The report
of Ricci & Ricci for the fiscal year ended January 31, 1995 did not contain an
adverse financial opinion or a disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope, or accounting principles. In connection
with the audit of the Company's financial statements for the fiscal year ended
January 31, 1995, and in subsequent interim periods, there were no disagreements
with Ricci & Ricci on any matters of accounting principles or practices,
financial statement disclosure or auditing scope and procedure which, if not
resolved to the satisfaction of Ricci & Ricci, would have caused Ricci & Ricci
to make reference to the matter in their report. The Company authorized Ricci &
Ricci to respond fully to any inquiries from Arthur Andersen LLP. The Company
requested Ricci & Ricci to furnish it a letter addressed to the Commission
stating whether it agrees with the above statements. A copy of that letter,
dated September 25, 1996, is on file with the Commission as Exhibit 16.2 to the
Registration Statement.
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STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the Company's next
annual meeting of stockholders must be received by the Company no later than
July 22, 1998, to be evaluated by the Board for inclusion in the information or
proxy statement for that meeting.
OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties.
1997 ANNUAL REPORT ON FORM 10-KSB
The Company files annual reports on Form 10-KSB with the SEC. A copy of the
annual report for the fiscal year ended January 31, 1997 (except for certain
exhibits thereto) may be obtained, free of charge, upon written request by any
stockholder to The Miller Group, 4909 E. McDowell Road, Suite 100, Phoenix,
Arizona 85008, Attention: Bowlin Shareholder Relations. Copies of all exhibits
to the annual report are available upon a similar request, subject to payment of
a charge to reimburse the Company for its expenses in supplying any exhibit.
BY ORDER OF THE BOARD OF DIRECTORS
Michael L. Bowlin
Chairman of the Board
August 7, 1997
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