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SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Information Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
</TABLE>
RANKIN AUTOMOTIVE GROUP, INC.
(D/B/A USA AUTO STORES)
- --------------------------------------------------------------------------------
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) 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:
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RANKIN AUTOMOTIVE GROUP, INC.
(D/B/A USA AUTO STORES)
3709 S. MACARTHUR DRIVE
ALEXANDRIA, LA 71302
-------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held July 31, 1998
TO THE SHAREHOLDERS OF RANKIN AUTOMOTIVE GROUP, INC.
The Annual Meeting of Shareholders of Rankin Automotive Group, Inc.
will be held at the Hotel Bentley in Alexandria, Louisiana at 9:00 a.m., Central
Daylight Time, for the following purposes:
1. To elect six directors to hold office until the next annual
meeting of shareholders and until their successors have been
duly elected and qualified.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed June 19, 1998, 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.
By order of the Board of Directors
/s/ Deborah N. Eddlemon
-------------------------------
Deborah N. Eddlemon, Secretary
Dated: June 23, 1998
<PAGE> 3
RANKIN AUTOMOTIVE GROUP, INC.
(d/b/a USA AUTO STORES)
Alexandria, Louisiana
-------------------------
INFORMATION STATEMENT
-----------------------
This Information Statement is being furnished by the Board of Directors
of Rankin Automotive Group, Inc. (the "Company") in connection with the Annual
Meeting of Shareholders, and any adjournments thereof, to be held on July 31,
1998, Central Daylight Time, at 9:00 a.m. at the Hotel Bentley in Alexandria,
Louisiana for the purposes set forth in the foregoing Notice of Annual Meeting
of Shareholders. The Company will bear the costs of preparing, assembling and
mailing the Information Statement and the 1998 Annual Report in connection with
the Annual Meeting.
This Information Statement is first being sent to Shareholders together
with the Notice of Annual Meeting and Annual Report for the fiscal year ended
February 25, 1998, on or about June 23, 1998.
SHAREHOLDERS ENTITLED TO VOTE AND PRINCIPAL SHAREHOLDERS
As of the close of business on June 19, 1998, 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 4,535,000 shares of the
Company's Common Stock (the only class of securities outstanding), each of which
is entitled to one vote.
The only person who owned of record or was known by the Company to own
beneficially on June 19, 1998 more than 5% of the outstanding shares of Common
Stock of the Company was the following:
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<CAPTION>
NUMBER OF PERCENT
NAME AND ADDRESS SHARES OWNED OF CLASS
----------------- ------------ --------
<S> <C> <C>
Randall B. Rankin 2,794,000 61.6%
3709 S. MacArthur Drive
Alexandria, LA 71032
</TABLE>
Mr. Randall B. Rankin, the owner of approximately 62% of the
outstanding shares of Common Stock of the Company, has indicated his intent to
vote in favor of the election of the proposed slate of directors. The vote
represented by shares owned by Mr. Rankin is sufficient for approval. THEREFORE,
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Shareholders are invited to attend the Annual Meeting and can vote in person at
that time.
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ELECTION OF DIRECTORS
The Company currently has six (6) Directors, each of whose term of
office will expire at the Annual Meeting. The Board of Directors has nominated
six persons (each, a "Nominee"), all of whom are currently Directors, to stand
for election as a Director; to serve until the 1999 Annual Meeting of
Shareholders and until his/her successor has been duly elected and qualified.
NOMINEES FOR DIRECTOR
Each Director of the Company serves as a Director for a term of one (1)
year and until his/her successor is duly elected and qualified. The following
sets forth for each Nominee, his/her name and age, positions and/or offices held
with the Company, the period during which each Nominee served in such positions
and/or offices, a description of his/her business experience during the past
five (5) years or more, and other biographical information.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY
SERVED OWNED AS OF
AS JUNE 19, 1998
DIRECTOR -------------
NAME AGE SINCE NO. SHS.(1) % SHS.
---- --- ----- ----------- ------
<S> <C> <C> <C> <C>
Randall B. Rankin 48 1978 2,794,000 61.6%
Ricky D. Gunn 39 1996 5,000 *
Harris Lake Smith, Jr 41 1996 -- *
Ricky L. Sooter, Esq.(2) 45 1996 3,000 *
Otis Al Cannon, Jr.(2) 42 1996 3,000 *
Deborah Eddlemon 42 1997 -- *
</TABLE>
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* Less than 1%.
(1) Includes shares underlying options currently exercisable or exercisable
within sixty days.
(2) Member of Audit Committee
RANDALL B. RANKIN has been President of the Company since its inception
in 1978. Prior thereto, he operated the business as a sole proprietorship since
its founding in 1968. He has essentially spent his entire adult life in various
sales, marketing, and administrative capacities with the Company. Mr. Rankin has
served on numerous warehouse associations and councils, advising aftermarket
manufacturers on the needs of the auto parts industry. He is Chairman of the
Board of the Louisiana Auto Parts Association.
RICKY D. GUNN is Vice President of Operations for the Company. Mr. Gunn
began his automotive aftermarket experience in February 1976 with Motor Supply
Company in Monroe, Louisiana. In 1987 he joined APS, and became Division Manager
of the Monroe stores when that company was acquired by APS. He joined the
Company in May 1993 as Vice President when the Monroe stores were acquired by
the Company. Mr. Gunn is active on many advisory councils throughout the auto
parts industry including the "Big A" Jobber Council.
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<PAGE> 5
HARRIS LAKE SMITH is Vice President of Sales and Marketing for the
Company. He began his employment with the Company in 1974 as an outside sales
person covering the East Texas market. He started the Lufkin, Texas operation in
1991 and opened the Nacogdoches, Texas operation in early 1992. Mr. Smith is
active on several advisory councils including the "Big A" Jobber Council. He is
also active in the Texas Auto Parts Association.
RICKY L. SOOTER, ESQ. is a practicing attorney and shareholder at the
law firm of Provosty, Sadler & DeLaunay in Alexandria, Louisiana. His
concentrations are in the areas of real estate, banking, collection and
creditors' rights, business transactions and workers' compensation. Mr. Sooter
received his J. D. Degree in 1977 from Louisiana State University.
OTIS AL CANNON, JR. has owned and operated Automotive & Industrial
Warehouse, a wholesale automotive distribution company in the Shreveport,
Louisiana metropolitan area, for the past 17 years. He has served on several
advisory councils in the automotive parts distribution industry over the years.
Mr. Cannon holds an MBA from Louisiana State University in Baton Rouge, LA.
DEBORAH N. EDDLEMON is Senior Vice-President of Finance and
Administration. She has over twenty-one years of experience in both public and
private accounting. This includes nine years with a certified public accounting
firm in which she ultimately became a partner. Ms. Eddlemon was the CFO for a
group of fourteen privately held companies. She is a member of the board of
directors for a bank and serves on the executive and audit committees. Ms.
Eddlemon also serves as the Chief Financial Officer and Secretary of the
Company. She became a director of the Company in August, 1997.
Non-employee directors receive $500 per meeting attended.
During the fiscal year ended February 25, 1998, the Board of Directors
held six meetings. All of the directors attended at least seventy-five percent
(75%) of the meetings held except for Mr. Cannon who attended two of the
meetings and Mr. Sooter who attended four meetings. The Audit Committee met once
during fiscal 1998.
COMMITTEES
The Board of Directors has established an Audit Committee. The members
of the Audit Committee are Messrs. Sooter and Cannon. 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.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
all executive officers, directors, and each person who is the beneficial owner
of more than 10% of the common shares of a company that files reports pursuant
to Section 12 of the Exchange Act, are required to report the ownership of such
commons shares, options, and stock appreciation rights (other than certain
cash-only rights), and any changes in that ownership, with the Securities and
Exchange Commission (the "SEC"). Specific due dates for these reports have been
established, and the Company is required to report, in this Information
Statement, any failure to comply therewith during the last year. The Company
believes that all of these filing requirements were satisfied except as follows:
Mr. Randall B. Rankin filed two late Form 4 reports covering two transactions
disclosing purchases of shares of the Company's Common Stock and Mr. Ricky D.
Gunn filed one late Form 4 covering one transaction disclosing the purchase of
shares of the Company's Common Stock.
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
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<CAPTION>
ANNUAL
NAME AND PRINCIPAL POSITION YEAR COMPENSATION
--------------------------- ---- ------------
<S> <C> <C>
Randall B. Rankin
President and Chief Executive Officer 1998 $120,000
1997 $120,000
Deborah N. Eddlemon
Senior Vice-President and Chief Financial Officer 1998 $103,000
</TABLE>
- ----------
Mr. Rankin has entered into a two-year employment agreement commencing November
18, 1996, pursuant to which he receives annual compensation of $120,000.
STOCK OPTION PLAN
Under the Company's Stock Option Plan (the "Plan") 250,000 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 and 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
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<PAGE> 7
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. In 1996, the Company 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. The options are exercisable at $10.00 per share. In 1998, the
Company 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 the grant. The options are
exercisable at $3.1875 per share. In addition, in 1998, the Company granted
options to purchase 10,000 shares each to Lake Smith, Ricky Gunn and Deborah
Eddlemon. The options are exercisable 20% per year and expire five (5) years
from the date of grant. The options are exercisable at $3.1875 per share. The
exercise price for each of the options granted was equal to the fair market
value of the Company's Common Stock on the date of grant.
CERTAIN TRANSACTIONS
The Company leases three of its stores, a machine shop, a storage
facility and its administrative offices, from Mr. Randall B. Rankin. With the
exception of one lease, which expires in 2006, each of the leases expire in 2001
and require monthly rentals ranging from $1,200 to $2,300. The lease which
expires in 2006 covers a 38,000 sq. ft. building and requires a monthly rental
of $15,000 per month. The Company utilizes approximately 6,600 square feet of
the building as a traditional store, 20,000 sq. ft. as a wholesale store and
redistribution facility and 3,000 sq. ft. as corporate offices. The Company
subleases the remaining 8,400 sq. ft. to an unaffiliated third party. The
aggregate rent paid to Mr. Rankin for each of the years ended February 25, 1997
and 1998 was $244,000 and $262,000, respectively, and the Company realized
rental income of approximately $15,000 and $31,000, respectively, from its
subleases. The Company believes that the current lease terms are at least as
comparable to those that could be obtained from unaffiliated third parties.
All transactions between the Company and its officers, directors and 5%
shareholders must be on terms no less favorable than could be obtained from
unaffiliated third parties approved by a majority of the independent,
disinterested directors of the Company.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Certified Public Accounting firm of Deloitte & Touche LLP, the
Company's independent accountant for fiscal 1998, has been selected as the
Company's independent accountant for fiscal 1999. A representative of the
accounting firm will be present at the meeting with the opportunity to make a
statement and respond to appropriate questions.
5
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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 will require a vote of a majority of the shares present at the
meeting.
OTHER MATTERS
At the time of the preparation of this Information Statement, the Board
of Directors of the Company had not been informed of any matters which would be
presented for action at the Annual Meeting, other than the proposals
specifically set forth in the Notice of Annual Meeting of Shareholders and
referred to herein.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
In order to be included in the proxy materials for the 1999 Annual
Meeting of Shareholders of the Company, shareholder proposals must be received
by the Company not later than February 22, 1999.
RANKIN AUTOMOTIVE GROUP, INC.
/s/ Deborah N. Eddlemon
------------------------
Deborah N. Eddlemon, Secretary
Date: June 23, 1998
6
