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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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REDDI BRAKE SUPPLY CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:
_______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
_______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
[ ] 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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[REDDI BRAKE SUPPLY CORPORATION LETTERHEAD]
September ___, 1996
TO OUR SHAREHOLDERS:
I am writing to advise you of a Special Meeting of Shareholders (the
"Meeting") of Reddi Brake Supply Corporation ("Reddi Brake") scheduled for
10:00 a.m. on Thursday, October 24, 1996. In particular, I am writing to
explain the purpose of this Meeting and to urge you to attend. Enclosed with
this letter are a Notice of Special Meeting, Proxy Statement and Proxy Card
describing in more detail information relevant to such Meeting.
The formal item of business to be considered at the Meeting is Reddi
Brake's proposal to amend its Articles of Incorporation to increase its number
of shares of authorized Common Stock from 35,000,000 to 75,000,000 (the
"Amendment"). There are several reasons for this proposed Amendment. First,
this will make available sufficient shares of Common Stock in reserve to meet
existing obligations of Reddi Brake under outstanding options, warrants,
preferred stock and convertible notes. Further, Reddi Brake currently intends
to raise additional capital for its operations, including infrastructure
improvements and the development of marketing programs, by offering shares of
its Common Stock. Adoption of the Amendment will provide the shares necessary
to conduct such an offering and will enable Reddi Brake to take advantage of
financing, acquisition or investment activities which may arise in the future.
Accordingly, we recommend that you approve adoption of the Amendment.
I am also writing to urge you to attend this Meeting in person.
Management and Board representatives will be present to discuss Reddi Brake's
recent events, operational changes and strategic planning. We will also be
available to address your questions and concerns. Your new management team has
pledged to maintain frequent and informative communications with Reddi Brake's
shareholders. This Meeting offers an important opportunity for such
communications. If you cannot attend in person, of course, we urge that you
promptly return the enclosed proxy card. I look forward to seeing you on
October 24th.
Sincerely,
Richard McGorrian
Chief Executive Officer
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PRELIMINARY PROXY MATERIALS
REDDI BRAKE SUPPLY CORPORATION
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 24, 1996
To the Stockholders of Reddi Brake Supply Corporation:
A Special Meeting of Stockholders of Reddi Brake Supply Corporation, a
Nevada corporation ("Reddi Brake"), will be held on Thursday, October 24, 1996,
at 10:00 a.m., P.S.T., at [the Crowne Plaza Hotel, 5985 West Century Boulevard,
Los Angeles, California], for the following purposes:
(1) To consider and vote upon a proposal to amend Reddi Brake's
Articles of Incorporation to increase the number of authorized shares of Common
Stock from 35,000,000 to 75,000,000 shares; and
(2) To transact any other business relating to the foregoing which
may properly come before the meeting.
Only stockholders of record at the close of business on September 20,
1996 are entitled to notice of and to vote at the special meeting and any
adjournments thereof (the "Special Meeting").
All stockholders are cordially invited to attend the Special Meeting
in person. Whether or not you expect to attend the meeting, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
The giving of your proxy will not affect your right to vote in person should
you later decide to attend the Special Meeting.
By Order of the Board of Directors
Reddi Brake Supply Corporation
Ventura, California Richard McGorrian
September 24, 1996 Chief Executive Officer
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PRELIMINARY PROXY MATERIALS
REDDI BRAKE SUPPLY CORPORATION
1376 WALTER STREET
VENTURA, CALIFORNIA 93003
(805) 644-8355
PROXY STATEMENT
SEPTEMBER 24, 1996
INTRODUCTION
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Reddi Brake Supply Corporation ("Reddi
Brake") for use at a Special Meeting of Stockholders to be held on Thursday,
October 24, 1996 and any postponements or adjournments thereof (the "Special
Meeting"). This Proxy Statement and the accompanying Notice of Special Meeting
and form of Proxy were first mailed to stockholders on or about September 24,
1996.
At the Special Meeting, the stockholders of Reddi Brake will be asked
to consider and vote upon a proposal to amend Reddi Brake's Articles of
Incorporation to increase the number of authorized shares of common stock,
$.0001 par value (the "Common Stock"), from 35,000,000 to 75,000,000. The
amendment to Reddi Brake's Articles of Incorporation will not affect the number
of shares of preferred stock authorized, which will remain at 2,500,000.
VOTING
Only stockholders of record of Common Stock as of the close of
business on September 20, 1996 are entitled to receive notice of and to vote at
the Special Meeting. On that date, Reddi Brake had outstanding [24,800,127]
shares of Common Stock, held by [435] holders of record.
Stockholders of record on the record date are entitled to one vote per
share of Common Stock on the proposal to amend Reddi Brake's Articles of
Incorporation and on any other matter which may properly come before the
Special Meeting. The presence, either in person or by proxy, of the holders of
a majority of the shares of Common Stock outstanding on the record date is
necessary to constitute a quorum at the Special Meeting. The affirmative vote
of the holders of a majority of shares of Common Stock voting on the proposal
is required to approve the amendment to Reddi Brake's Articles of
Incorporation, provided that the total number of votes cast represents at least
a majority of the shares of Common Stock outstanding on the record date.
Abstentions and broker non-votes (which occur if a broker or other
nominee does not have discretionary authority and has not received voting
instructions from the beneficial owner with respect to the particular item) are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Abstentions and broker non-votes are also counted in
tabulations of the votes cast on proposals presented to the stockholders and
have the same legal effect as a vote against a particular proposal.
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PROXIES
Unless such proxies have been previously revoked, shares of Common
Stock represented by properly executed proxies will be voted in accordance with
the instructions indicated on such proxies. IF NO INSTRUCTIONS ARE INDICATED,
PROXIES WILL BE VOTED "FOR" THE PROPOSAL TO AMEND REDDI BRAKE'S ARTICLES OF
INCORPORATION. Any stockholder who has given a proxy may revoke it at any time
before it is voted by filing with the Secretary of Reddi Brake, at Reddi
Brake's address set forth above, written notice of revocation or a duly
executed proxy bearing a later date or by attending the Special Meeting and
voting in person (although attendance at the Special Meeting will not in and of
itself constitute revocation of a proxy). The execution and return of the
enclosed proxy will not in any way affect a stockholder's right to attend the
Special Meeting and vote in person.
If sufficient votes in favor of the amendment to Reddi Brake's
Articles of Incorporation are not received by the date of the Special Meeting,
the persons named as proxies may propose one or more adjournments of the
Special Meeting to permit further solicitations of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares of Common Stock present in person or by proxy at the Special
Meeting. The persons named as proxies will vote in favor of any such
adjournment.
The cost of preparing, printing and mailing the Proxy Statement, the
Notice and the enclosed form of Proxy, as well as the cost of soliciting
proxies relating to the Special Meeting, will be borne by Reddi Brake. The
original solicitation of proxies by mail may be supplemented by telephone,
telegram and personal solicitation by officers and other regular employees of
Reddi Brake, but no additional compensation will be paid to such individuals on
account of such activities. Reddi Brake will reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding proxy materials to their principals. Reddi Brake also has engaged
Corporate Investor Communications, Inc. ("CIC"), a firm specializing in proxy
solicitation, to solicit proxies and distribute materials to brokerage houses,
banks and other custodians, nominees and fiduciaries. Reddi Brake will pay CIC
approximately $4,000 for these services and will reimburse CIC for its
out-of-pocket expenses.
Your cooperation in promptly returning the enclosed proxy will reduce
Reddi Brake's expenses and enable its management and employees to continue
their normal duties for your benefit with minimum interruption for follow-up
proxy solicitation.
OWNERSHIP OF COMMON STOCK
The following table sets forth, as of September 20, 1996, certain
information with respect to (i) each person who is known by Reddi Brake to be
the beneficial owner of more than five percent (5%) of the outstanding Common
Stock, (ii) each director of Reddi Brake, (iii) each executive officer of Reddi
Brake expected to be named in the summary compensation table in Reddi Brake's
next annual proxy statement and (iv) all directors and executive officers as a
group.
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<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF COMMON STOCK(1)
----------------------------------
NAME AND ADDRESS SHARES OWNED PERCENT OF CLASS
---------------- ------------ ----------------
<S> <C> <C>
Allen J. Sheerin(2) . . . . . . . . . . . . . . . . . . 2,752,257 10.87%
2657 Windmill Parkway
Henderson, NV 89014
Eric Openshaw(3) . . . . . . . . . . . . . . . . . . . 25,000 *
748 South Walnut Avenue
San Dimas, CA 91773
Richard McGorrian(4) . . . . . . . . . . . . . . . . . 150,000 *
1376 Walter Street
Ventura, CA 93003
S. Gerald Birin(4) . . . . . . . . . . . . . . . . . . 83,333 *
1376 Walter Street
Ventura, CA 93003
Martin E. Janis(3)(5) . . . . . . . . . . . . . . . . . 175,000 *
919 North Michigan Avenue
Chicago, IL 60611
William M. Leider(6) . . . . . . . . . . . . . . . . . 75,000 *
4676 Admiralty Way, Suite 300
Marina del Rey, CA 90292
All directors and executive officers as a group
(4 persons)(3)(4)(5) . . . . . . . . . . . . . . . . . 433,333 1.72%
- ---------------------------------
</TABLE>
* Less than 1%.
(1) Based on an aggregate of [24,800,127] shares of Common Stock
outstanding and, with respect to particular persons, shares underlying
options or warrants exercisable now or within the next 60 days. Except
as otherwise indicated in this and the following footnotes, (a) no
effect has been given to shares issuable upon exercise of outstanding
warrants or options or upon the conversion of outstanding convertible
securities, and (b) each of the persons listed in the above table has
sole voting and investment power with respect to his shares indicated
therein.
(2) Includes (a) 50,000 shares held by the AJS Charitable Trust, (b)
362,500 shares of Common Stock issuable upon exercise of 50,000 Class
C Common Stock Purchase Warrants ("Class C Warrants") and 312,500
Class D Common Stock Purchase Warrants ("Class D Warrants"), at
exercise prices of $2.50 and $3.50 per share, respectively, and (c)
170,000 shares of Common Stock issuable upon exercise of five-year
stock options, at an exercise price of $4.41 per share, granted in
connection with Mr. Sheerin's resignation as Chief Executive Officer
and President. Further, this includes 197,895 shares held by Irene
Sheerin, Successor Trustee of the Kanamaru Family Trust, Trust B, as
to which shares Mr. Sheerin disclaims beneficial ownership.
(3) Includes up to 25,000 shares of Common Stock issuable upon exercise of
the stock options granted to each of Messrs. Openshaw and Janis, under
the Reddi Brake Supply Corporation 1994 Directors' Stock Option Plan.
(4) Includes up to 150,000 shares issuable to Mr. McGorrian, at an
exercise price of $1.50 per share, upon the exercise of presently
exercisable stock options under the 1991 Incentive Stock Option
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Plan, and up to 83,333 shares issuable to Mr. Birin, at an exercise
price of $1.65 per share, upon the exercise of presently exercisable
stock options under the 1992 Incentive Stock Option Plan.
(5) Includes up to 150,000 shares issuable to Martin E. Janis & Company, a
public relations firm of which Mr. Janis is a principal, upon its
exercise of a three-year warrant, at an exercise price of $3.00 per
share, granted in consideration of public relations services provided
to Reddi Brake by Martin E. Janis & Company.
(6) Includes up to 25,000 shares issuable at an exercise price of $3.00
per share, up to 25,000 shares issuable at an exercise price of $5.00
per share, and up to 25,000 shares issuable at an exercise price of
$7.00 per share upon the exercise of presently exercisable options
granted to Mr. Leider in connection with his resignation as Chief
Executive Officer and President in February 1996.
APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
GENERAL
The Board of Directors believes that it is in the best interests of
Reddi Brake and its stockholders to amend Reddi Brake's Articles of
Incorporation to increase the number of authorized shares of Common Stock from
35,000,000 to 75,000,000 shares. Accordingly, the Board of Directors has
approved, and recommends that the stockholders of Reddi Brake approve, an
amendment to Reddi Brake's Articles of Incorporation to effect the increase in
the number of authorized shares of Common Stock. The additional shares of
Common Stock for which authorization is sought would be identical to the shares
of Common Stock of Reddi Brake now authorized. Holders of Common Stock do not
have preemptive rights to subscribe to additional securities which may be
issued by Reddi Brake. The following description of the proposed amendment to
the Articles of Incorporation (the "Amendment") is merely a summary, is not
intended to be complete and is qualified in its entirety by reference to the
copy of the resolution approving the Amendment which is attached hereto as
Appendix A.
PURPOSES OF THE INCREASE IN THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
Reddi Brake's Articles of Incorporation currently authorize the
issuance of 35,000,000 shares of Common Stock, par value $.0001 per share, of
which [24,800,127] shares were issued and outstanding as of September 20, 1996.
In addition, as of September 20, 1996, Reddi Brake was obligated to issue the
following shares if and when the indicated exercises or conversions occur: (a)
an aggregate of [3,661,058] shares of Common Stock issuable upon the exercise
of outstanding options and warrants, (b) an aggregate of [8,969,072] shares of
Common Stock issuable upon the conversion of 435,000 outstanding shares of
Class B Preferred Stock, (c) an aggregate of [2,387,543] shares of common stock
issuable upon the conversion of $6,900,000 principal amount of Reddi Brake's
9.0% Adjustable Convertible Subordinated Notes (the "Convertible Notes") and
(d) an aggregate of [689,783] shares of Common Stock issuable upon the exercise
of stock options available for grant under Reddi Brake's employee and director
stock option plans. Accordingly, as of September 20, 1996, Reddi Brake was
obligated to hold in reserve 5,507,583 shares of Common Stock in excess of its
authorized capital. As a result, Reddi Brake needs to increase its number of
authorized shares of Common Stock to provide sufficient shares in reserve to
meet such existing obligations.
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Also, the Board of Directors currently intends to commence one or more
offerings of Common Stock, and/or securities convertible into shares of Common
Stock, in the near future in order to raise additional capital. Reddi Brake
needs to increase its number of authorized shares of Common Stock in order to
conduct any such offerings and to take advantage of financing, acquisition or
investment activities in the future.
EFFECT OF INCREASING THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The future issuance of additional shares of Common Stock may dilute
the existing stockholders' percentage ownership and may have a potential
anti-takeover effect by enhancing the ability of Reddi Brake to issue
additional shares which could be used to dilute the stock ownership of
stockholders seeking to control Reddi Brake. The Board of Directors is not
aware of any present efforts by and persons to accumulate Common Stock or to
obtain control of Reddi Brake, and the increase in the authorized number of
shares of Common Stock is not intended to be an anti-takeover device. The
Board of Directors cannot predict what effect the increase in the authorized
number of shares of Common Stock will have on the market price of the Common
Stock.
APPRAISAL RIGHTS
Pursuant to the Nevada Business Corporations Act, stockholders are not
entitled to dissenters' rights of appraisal with respect to the Amendment to
effect the increase in the authorized number of shares of Common Stock.
Approval of the increase in the authorized number of shares of Common Stock
will not affect any stockholder's percentage ownership interest in Reddi Brake,
proportional voting power or other rights and privileges as holders of Common
Stock. After the effective date of the increase in the authorized number of
shares of Common Stock, and for so long as Reddi Brake continues to meet
applicable minimum listing requirements, the Common Stock will continue to be
listed on The Nasdaq National Market under the symbol "REDI", and the
registration of the Common Stock under Section 12(g) of the Securities Exchange
Act of 1934, as amended, will not be affected.
THE BOARD RECOMMENDS THE STOCKHOLDERS VOTE "FOR" THE INCREASE IN THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK.
MISCELLANEOUS
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1996 Annual
Meeting of Stockholders must be received by Reddi Brake by December 6, 1996 to
be considered for inclusion in Reddi Brake's proxy statement and form of proxy
relating to that meeting. Such proposals should be directed to the attention
of the Secretary, Reddi Brake Supply Corporation, 1376 Walter Street, Ventura,
California 93003.
OTHER MATTERS
Neither Reddi Brake nor any of the persons named as proxies knows of
matters other than those described above to be voted on at the Special Meeting.
However, if any other matters are properly presented at the meeting, it is the
intention of the persons named as proxies to vote in accordance with their
judgment on such matters, subject to direction by the Board of Directors.
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WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY CARD.
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APPENDIX A
RESOLVED, that the Articles of Incorporation of this corporation shall
be amended so that the first sentence of Article IV reads in its entirety as
follows:
ARTICLE IV
CAPITAL STOCK
The aggregate number of shares which this corporation shall have
authority to issue is: Seventy Five Million (75,000,000) shares of $.0001 par
value each, which shares shall be designated "Common Stock"; and Two Million
Five Hundred Thousand (2,500,000) shares of $.0001 par value each, which shares
shall be designated "Preferred Stock" and which may be issued in one or more
series at the discretion of the Board of Directors.
A-1
