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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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Form 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 1998
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RITCHIE BROS. AUCTIONEERS INCORPORATED
9200 Bridgeport Road
Richmond, BC, Canada
V6X 1S1
(604) 273 7564
(Address of principal executive offices)
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[indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F]
Form 20-F X Form 40-F __
[indicate by check mark whether the registrant by furnishing information
contained
in this Form is also thereby furnishing the information to the Commission
pursuant to
rule 12g3-2(b) under the Securities Exchange Act of 1934]
Yes __ No X
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This form 6-K incorporates the Information Circular distributed to the
Company's shareholders of record as of May 12, 1998. The Information Circular
was provided to shareholders in connection with the Company's annual general
meeting to be held on June 17, 1998.
<PAGE> 3
RITCHIE BROS. AUCTIONEERS INCORPORATED
ANNUAL GENERAL MEETING OF SHAREHOLDERS
INFORMATION CIRCULAR
Unless otherwise provided, the information herein is given as of May 12,
1998.
SOLICITATION OF PROXIES
THIS INFORMATION CIRCULAR IS BEING FURNISHED TO THE SHAREHOLDERS OF THE
COMPANY IN CONNECTION WITH THE SOLICITATION OF PROXIES FOR USE AT THE MEETING BY
MANAGEMENT OF THE COMPANY. THE SOLICITATION WILL BE PRIMARILY BY MAIL, HOWEVER,
PROXIES MAY ALSO BE SOLICITED PERSONALLY OR BY TELEPHONE BY THE DIRECTORS,
OFFICERS OR EMPLOYEES OF THE COMPANY. THE COMPANY MAY ALSO PAY BROKERS OR OTHER
PERSONS HOLDING COMMON SHARES OF THE COMPANY IN THEIR OWN NAMES OR IN THE NAMES
OF NOMINEES FOR THEIR REASONABLE EXPENSES OF SENDING PROXIES AND PROXY MATERIALS
TO BENEFICIAL SHAREHOLDERS FOR THE PURPOSES OF OBTAINING THEIR PROXIES.
PARTICULARS OF MATTERS TO BE ACTED UPON AT THE MEETING
ELECTION OF DIRECTORS
Under the Articles of the Company, the number of directors of the Company
is set at a minimum of three and a maximum of ten. The Company currently has
three directors. Each director of the Company is elected annually and holds
office until the next annual meeting of the Company unless he or she sooner
ceases to hold office. Management of the Company intends to request the
shareholders to elect FIVE directors at the Meeting and to nominate each of the
persons listed below for election as a director of the Company. The persons
named in the enclosed form of proxy intend to vote for the election of such
nominees.
<TABLE>
<CAPTION>
NAME AND POSITION WITH PRINCIPAL OCCUPATION PREVIOUS SERVICE NUMBER OF
MUNICIPALITY OF RESIDENCE THE COMPANY OR EMPLOYMENT AS A DIRECTOR COMMON SHARES(2)
- ------------------------- ------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
David Edward Ritchie Chairman of the Board, Chairman of the Board Director since 4,938,223(3)
Leduc, Alberta Chief Executive Officer and Chief Executive December 12, 1997
and a Director Officer of the Company (date of amalgamation
of the Company)
Chairman and Managing
Director of predecessor
entities to the Company
from 1993 to end of 1997
Clifford Russell Cmolik President and Chief President and Chief Director since 2,098,802(4)
Surrey, B.C. Operating Officer and a Operating Officer and a December 12, 1997
Director Director of the Company (date of amalgamation
of the Company)
President of predecessor
entities to the Company
from 1993 to the end of
1997
Peter James Blake Vice-President, Finance Vice-President, Finance Director since 106,666
Vancouver, B.C. and Chief Financial and Chief Financial December 12, 1997
Officer and a Director Officer and a Director (date of amalgamation
of the Company of the Company)
Controller and/or Vice-
President, Finance of
predecessor entities to
the Company from 1993 to
end of 1997
</TABLE>
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<TABLE>
<CAPTION>
NAME AND POSITION WITH PRINCIPAL OCCUPATION PREVIOUS SERVICE NUMBER OF
MUNICIPALITY OF RESIDENCE THE COMPANY OR EMPLOYMENT AS A DIRECTOR COMMON SHARES(2)
- ------------------------- ------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Charles Edward Croft Nominee President and director -- NIL
Vancouver, B.C. of Falcon Pacific
Financial Corp. and its
subsidiaries (all are
private investment
companies)
George Edward Moul Nominee Director and officer of -- 500(5)
West Vancouver, B.C. The McEmcy Company of
Canada Ltd., (a real
estate holding company),
director and officer of
Peace Portal Properties
Ltd. (a golf course
operating company),
director of Inland
Energy Corp. (a
financing subsidiary of
B.C. Gas Inc.), director
of Tokyu Canada
Corporation (a
subsidiary of Tokyu
Corporation and operator
of a hotel) and director
and/or officer of
certain other private
real estate holding
companies
</TABLE>
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NOTES:
(1) This information, to the extent not within the knowledge of the Company or
otherwise previously disclosed in an Information Circular of the Company,
has been provided by the respective nominee.
(2) The number of Common Shares held includes Common Shares of the Company
beneficially owned, directly or indirectly, or over which control or
direction is exercised by the proposed nominee.
(3) 3,345,375 of such shares are held by D.E.R. Auctions Ltd. and 1,592,748 of
such shares are held by Davcorp Investments Ltd. Both D.E.R. Auctions Ltd.
and Davcorp Investments Ltd. are controlled by David Edward Ritchie.
(4) 1,421,784 of such shares are held by C.R.C. Auctions Ltd. and 676,918 of
such shares are held by Cmolik Enterprises Ltd. Both C.R.C. Auctions Ltd.
and Cmolik Enterprises Ltd. are controlled by Clifford Russell Cmolik.
(5) Such shares are held by Kensington Holding Ltd., a company 100% owned by G.
Edward Moul and his spouse.
The management of the Company is not aware that any of the above nominees
will be unable or unwilling to serve, however, should management become aware of
such an occurrence before the election of directors takes place at the Meeting,
if one of the persons named in the enclosed form of proxy is appointed as
proxyholder, it is intended that the discretionary power granted under such
proxy will be used to vote for any substitute nominee or nominees whom
management, in its discretion, may select.
APPOINTMENT OF AUDITORS
Management proposes that KPMG, Chartered Accountants of Vancouver, British
Columbia, be appointed as Auditors of the Company for the ensuing year and that
the directors be authorized to fix their remuneration. KPMG has been the
Auditors of the Company and its predecessors since 1974.
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OTHER INFORMATION REGARDING THE COMPANY
EXECUTIVE COMPENSATION
COMPENSATION
The Company and its predecessors went through a corporate reorganization
(the "Reorganization") in 1997. Out of the four individuals serving as Chief
Executive Officer, President and Chief Operating Officer, Secretary and
Vice-President, Finance and Chief Financial Officer (together the "Executive
Officers"), only Peter Blake (the Vice-President, Finance and Chief Financial
Officer) was paid a salary and bonus during the financial year ended April 30,
1997. The other Executive Officers received distributions based on their
interests in the predecessor entities to the Company in their capacities as
partners and shareholders. Now that the Reorganization has been completed, the
Executive Officers are each paid an annual salary and participate with other
officers and employees of the Company in the Company's performance bonus
program, which considers both Company and individual performance for a given
year. During the eight months ended December 31, 1997, Peter Blake was paid a
salary and bonus for the full eight months and the other executive officers were
paid a salary and bonus for approximately four of the eight months. Normalized
salary and bonus compensation to the Executive Officers for the financial year
ended April 30, 1997 and the eight month period ended December 31, 1997 would
have been approximately U.S.$1.3 million and U.S.$1.2 million, respectively, if
the Reorganization had been effected prior to May 1, 1996.
STOCK OPTIONS GRANTED IN THE 1997 FINANCIAL YEAR
No stock options were granted to any directors or Executive Officers during
the Company's financial year ended December 31, 1997.
EXERCISE OF OPTIONS
No options were exercised by Executive Officers during the financial year
ended December 31, 1997.
STOCK OPTIONS OUTSTANDING
The following table summarizes the options outstanding under the Company's
Stock Option Plan as at the date of this Information Circular:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE EXPIRY DATE
CLASS OF OPTIONS COMMON SHARES FOR SHARE OF OPTION
- ---------------- ------------- -------------- -------------
<S> <C> <C> <C>
Executive Officers, as a group (total number:
Nil)........................................... NIL -- --
Other employees of the Company or its
subsidiaries................................... 196,333 U.S.$0.10 July 30, 2004
</TABLE>
TERMINATION OF EMPLOYMENT, CHANGES IN RESPONSIBILITY AND EMPLOYMENT CONTRACTS
The Company, through a wholly-owned operating subsidiary, has an employment
agreement with each of David E. Ritchie, C. Russell Cmolik, Peter J. Blake and
John T. Wild. All such employment agreements may be terminated with notice, or
payment in lieu of notice.
The Company has no compensatory plan or arrangement in respect of
compensation received or that may be received by the Executive Officers for the
most recently completed or current financial year to compensate such Executive
Officers in the event of the termination of employment (resignation, retirement,
change of control) or in the event of a change in responsibilities following a
change in control, except for usual notice or payment in lieu of notice
requirements in the employment agreements of such Executive Officers in the
event of termination without just cause.
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COMPENSATION COMMITTEE
The Company has not established a compensation committee. During the most
recently completed financial year, the function of the compensation committee
was performed by the Board of Directors. The Company intends to form a
Compensation Committee with at least two independent directors as members.
REPORT ON EXECUTIVE COMPENSATION
The Company's policy with respect to the compensation of the Chairman and
Chief Executive Officer and the other Executive Officers and other officers of
the Company is based upon the principles that compensation must: (1) be
competitive in order to help attract and retain the talent needed to lead and
grow the Company's business; (2) provide a strong incentive for other executives
and key employees to work towards the achievement of the Company's goals; and
(3) ensure that the interests of management and the Company's shareholders are
aligned.
The compensation paid to the Chairman and Chief Executive Officer and the
other Executive Officers of the Company consists of base salary and
performance-oriented bonus. The payment of the bonus is contingent upon the
performance of the Company and the individual's contribution toward that
performance. The quantum of such bonuses depends on the financial performance of
the Company and is not subject to any minimum or maximum amount.
Base salary levels for the Executive Officers are normally determined
primarily on the basis of (i) the Board of Directors' assessment of each
Executive Officer's performance during the prior year and (ii) the Board of
Directors' understanding of normal and appropriate salary levels for executives
with responsibilities and experience comparable to that of the Executive
Officers of the Company. In making such determination, external sources are
consulted when deemed necessary by the Board of Directors.
Awards of bonuses depend upon whether the Company and its principal
subsidiaries have met or exceeded targets established for the applicable year.
The Board also considers other criteria, including the contribution of
individuals toward the Company's performance, in determining the range of any
bonuses to be awarded. It is anticipated that bonuses paid to the Company's
Executive Officers in future years may be paid in part by the issuance of stock
options.
As the Company went through a major reorganization in 1997, the amount of
salaries and other forms of compensation paid to the Chairman of the Board and
the Chief Executive Officer and other Executive Officers in the financial year
ended December 31, 1997 does not reflect the current executive compensation
arrangements of the Company.
DIRECTORS COMPENSATION
Except for reimbursement of reasonable travel and lodging expenses, there
were no plans, arrangements or agreements pursuant to which directors were
compensated by the Company for their services as directors during the most
recently completed financial year.
DIRECTORS AND SENIOR EXECUTIVES LIABILITY INSURANCE
The Company maintains directors and senior executives liability insurance
which, subject to the provisions contained in the policy, protects the directors
and senior executives, as such, against certain claims made against them during
their term of office. Such insurance provides for an aggregate of U.S.$20
million (less a deductible of U.S.$250,000) annual protection against liability.
The annual premium paid by the Company for this insurance is U.S.$133,071.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
Other than as set out herein and other than indebtedness that has already
been fully repaid, none of the directors, executive officers or senior officers
of the Company, no proposed nominee for election as director of the Company, and
no associate or affiliate of any of them, is or has been indebted to the Company
or its
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subsidiaries, and none has had indebtedness to another entity which is or was at
any time since January 1, 1997 the subject of a guarantee, support agreement,
letter of credit or other similar arrangement provided by the Company or any of
its subsidiaries.
MANAGEMENT CONTRACTS
There are no management functions of the Company or a subsidiary thereof
which are to any substantial degree performed by a person other than a director
or senior officer of the Company or a subsidiary thereof.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
Other than as set out herein, no insider or any associate or affiliate of
any insider, has had or has any material interest, direct or indirect, in any
transaction since January 1, 1997 or in any proposed transaction which, in
either case, has materially affected or will materially affect the Company or
any of its subsidiaries.
For each of the 12-month periods ending April 30, 1995, 1996, 1997 and
1998, the Company has entered into agreements with D.E.R. Resorts Ltd.
("Resorts"), a corporation controlled by David E. Ritchie, a co-founder and the
Chairman and Chief Executive Officer of the Company, pursuant to which Resorts
agreed to provide meeting rooms, accommodations, meals and recreational
activities at its facilities on Stuart Island in British Columbia, Canada, for
certain customers of the Company. The agreements set forth the maximum number of
excursions to be provided during a given year and the fees and costs per
excursion. The Company paid to Resorts $308,000, $315,000 and $312,000 under the
agreements in its financial years ended April 30, 1995, 1996 and 1997,
respectively. During the eight months ended December 31, 1997, a period which
includes the only months of the calendar year during which the Company makes use
of Resorts' facilities, the Company paid Resorts $366,000. Management believes
that the terms of these agreements are at least as favourable to the Company as
could have been obtained from a third party. The Company and Resorts intend to
enter into similar agreements in the future.
The Company went through a corporate reorganization (the "Reorganization")
in 1997. By virtue of the Reorganization, the Company holds, directly or
indirectly, 100% interest in subsidiaries that conduct the business operations
and own all of the assets historically owned by a group of affiliated
partnerships and companies that were the predecessor entities to the Company
(together the "Ritchie Bros. Group"). The 15 key employees of the Company who
were beneficial owners of those predecessor entities beneficially were issued
Common Shares of the Company in amounts proportionate to their interests in the
predecessor entities. The Reorganization was completed during December 1997. The
purpose of the Reorganization was to transform the Ritchie Bros. Group into a
corporate form that would facilitate the future growth and expansion of the
business and provide an appropriate vehicle for raising capital. To effect the
Reorganization, a number of agreements were made between the Company, various
companies in the Ritchie Bros. Group and the 15 key employees or corporations
controlled by them implementing the following transactions: (i) the business of
the partnerships was transferred into corporations, (ii) the existing
partnerships were transformed into corporations, (iii) the shares of the newly
incorporated operations of the partnerships were exchanged for shares of the
Company, and (iv) the owners of the predecessor entities became shareholders of
the Company, which operates as a holding company.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of the directors or senior officers of the Company, none of the
persons who have been directors or senior officers of the Company since January
1, 1997 and no associate or affiliate of any of the foregoing has any material
interest, direct or indirect, by way of beneficial ownership of securities or
otherwise, in any matter to be acted upon at the Meeting other than as disclosed
elsewhere in this Information Circular.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Company is currently authorized to issue an unlimited number of Common
Shares, an unlimited number of junior preferred shares without par value and an
unlimited number of senior preferred shares without par value. As at May 12,
1998 according to the records of The Trust Company of Bank of Montreal,
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<PAGE> 8
the registrar and transfer agent of the Company, there are 16,548,666 Common
Shares and no preferred shares of the Company issued and outstanding. Holders of
Common Shares are entitled to one vote for each Common Share held. Holders of
Common Shares of record at the close of business on May 12, 1998 are entitled to
receive notice of and to vote at the Meeting.
To the knowledge of the directors and senior officers of the Company, the
only persons who beneficially own, directly or indirectly, or exercise control
or direction over, Common Shares carrying more than 10% of the voting rights
attached to all voting shares of the Company are:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
NAME COMMON SHARE(S)(1) COMMON SHARES
---- ------------------ -------------
<S> <C> <C>
David E. Ritchie(2)(5)................................... 4,938,223 29.8%
C. Russell Cmolik(3)(5).................................. 2,098,802 12.7%
CEDE & Co.(4)............................................ 9,511,641 57.5%
</TABLE>
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NOTES:
(1) This information, to the extent not within the knowledge of the Company, has
been furnished by the person named.
(2) 3,345,375 of such shares are held by D.E.R. Auctions Ltd. and 1,592,748 of
such shares are held by Davcorp Investments Ltd., both of which are
controlled by Mr. Ritchie, the Chairman of the Board and Chief Executive
Officer of the Company.
(3) 1,421,784 of such shares are held by C.R.C. Auctions Ltd. and 676,918 of
such shares are held by Cmolik Enterprises Ltd., both of which are
controlled by Mr. Cmolik.
(4) The registered shareholder is a nominee holder for certain financial
institutions and their clients. Other than shares beneficially owned or over
which control or direction is exercised by the directors of the Company or
the proposed nominees for election, the Company is unaware of the beneficial
ownership of these shares.
(5) Mr. Ritchie and Mr. Cmolik also own a company which has entered into
agreements with various employees of the Company to acquire from such
employees certain common shares or stock options of the Company held by them
at nominal value if such persons cease to be employees of the Company within
certain prescribed time or under other specified circumstances.
GENERAL PROXY INFORMATION
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy for use at the Meeting are
directors of the Company.
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON TO ATTEND AND ACT AS
PROXYHOLDER ON THE SHAREHOLDER'S BEHALF AT THE MEETING OTHER THAN THE PERSONS
NAMED IN THE ENCLOSED FORM OF PROXY. IF A SHAREHOLDER DOES NOT WISH TO APPOINT
EITHER PERSON SO NAMED, THE SHAREHOLDER SHOULD STRIKE OUT THE NAMES OF THE
PROXYHOLDERS SO INDICATED AND INSERT IN THE BLANK SPACE PROVIDED THE NAME AND
ADDRESS OF THE PERSON WHOM THE SHAREHOLDER WISHES TO APPOINT AS PROXYHOLDER.
THAT PERSON NEED NOT BE A SHAREHOLDER OF THE COMPANY.
A shareholder who has given a proxy may revoke it by: (a) signing a proxy
bearing a later date and depositing it as provided under "Deposit of Proxy"
below; (b) signing and dating a written notice of revocation (in the same manner
as required for the enclosed form of proxy to be executed, as set out under
"Validity of Proxy" below) and delivering such notice to the registered office
of the Company at any time up to and including the last business day preceding
the day of the Meeting or to the Chairman of the Meeting on the day of the
Meeting; (c) attending the Meeting in person and registering with the scrutineer
thereat as a shareholder present in person and signing and dating a written
notice of revocation; or (d) any other manner permitted at law. Any such
revocation will have effect only in respect of those matters upon which a vote
has not already been cast pursuant to the authority conferred by a previously
deposited proxy.
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VOTING OF SHARES REPRESENTED BY PROXY
A proxy in the form of the enclosed form of proxy will confer discretionary
authority upon the proxyholder named therein with respect to the matters
identified in the enclosed Notice of the Meeting and in the form of proxy for
which no choice is specified (and with respect to amendments and variations
thereto and any other matter that may properly be brought before the Meeting).
If the instructions as to voting indicated on a proxy in the enclosed form
and deposited as provided for herein are certain, all of the shares represented
by such proxy will be voted or withheld from voting in accordance with the
instructions of the shareholder on any ballot that may be called for.
IF NO CHOICE IS SPECIFIED BY A SHAREHOLDER IN A PROXY IN THE FORM OF THE
ENCLOSED FORM OF PROXY AND ONE OF THE PERSONS NAMED IN THE ENCLOSED FORM OF
PROXY IS APPOINTED AS PROXYHOLDER, THE SHARES REPRESENTED BY THE PROXY WILL BE
VOTED "FOR" EACH OF THE OTHER MATTERS IDENTIFIED THEREIN.
AMENDMENTS OR VARIATIONS AND OTHER MATTERS
Management of the Company is not now aware of any amendments to or
variations of any of the matters identified in the enclosed notice of the
Meeting nor of any other matter which may be brought before the Meeting.
However, a proxy in the form of the enclosed form will confer discretionary
authority upon a proxyholder named therein to vote on any amendments to or
variations of any of the matters identified in the enclosed Notice and on any
other matter which may properly be brought before the Meeting in respect of
which such proxy has been granted.
VALIDITY OF PROXY
A FORM OF PROXY WILL NOT BE VALID UNLESS IT IS DATED AND SIGNED BY THE
SHAREHOLDER OR BY THE SHAREHOLDER'S ATTORNEY DULY AUTHORIZED IN WRITING. IN THE
CASE OF A SHAREHOLDER THAT IS A CORPORATION, A PROXY WILL NOT BE VALID UNLESS IT
IS EXECUTED UNDER ITS SEAL OR BY A DULY AUTHORIZED OFFICER OR AGENT OF, OR
ATTORNEY FOR, SUCH CORPORATE SHAREHOLDER. If a proxy is executed by an attorney
or agent for an individual shareholder, or by an officer, attorney, agent or
authorized representative of a corporate shareholder, the instrument empowering
the officer, attorney, agent or representative, as the case may be, or a
notarial copy thereof, must be deposited along with the proxy.
A vote cast in accordance with the terms of a proxy will be valid
notwithstanding the previous death, incapacity or bankruptcy of the shareholder
or intermediary on whose behalf the proxy was given or the revocation of the
appointment, unless written notice of such death, incapacity, bankruptcy or
revocation is received by the Chairman of the Meeting at any time before the
vote is cast.
DEPOSIT OF PROXY
IN ORDER TO BE VALID AND EFFECTIVE, AN INSTRUMENT APPOINTING A PROXY HOLDER
MUST BE DEPOSITED WITH THE TRUST COMPANY OF BANK OF MONTREAL, ATTENTION: PROXY
DEPARTMENT AT 595 BURRARD STREET, VANCOUVER, BRITISH COLUMBIA OR AT P.O. BOX
6002 STATION PLACE D'ARMES, MONTREAL, QUEBEC, H2Y 3S8, BY NO LATER THAN 48 HOURS
(EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS) BEFORE THE TIME OF THE MEETING OR
ANY ADJOURNMENT THEREOF.
All non-registered shareholders who receive these materials through a
broker or other intermediary should complete and return the materials in
accordance with the instructions provided to them by their broker or other
intermediary.
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APPROVAL OF CIRCULAR
The contents and sending of this Information Circular have been approved by
the Board of Directors of the Company.
Dated at Vancouver, British Columbia, this 12th day of May, 1998.
By Order of the Board of Directors
John T. Wild
Secretary
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
RITCHIE BROS. AUCTIONEERS INCORPORATED
(Registrant)
Date May 29, 1998 By /s/ PETER J. BLAKE
----------------------------------------------
Peter J. Blake, Vice President Finance
and Chief Financial Officer
</TABLE>
9
