SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(c)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
RAMPART CAPITAL CORPORATION
(Name of Registrant as specified in its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Tide of each class of securities to which the transaction
applies: NOT APPLICABLE
(2) Aggregate number of securities to which the transaction applies:
NOT APPLICABLE
(3) Per unit price or other underlying value of the transaction
computed pursuant to Exchange Act Rule 0-11 (set forth amount on
which the filing fee is calculated and state how it was
determined): NOT APPLICABLE
(4) Proposed maximum aggregate value of the transaction: NOT
APPLICABLE
(5) Total fee paid: NOT APPLICABLE
[ ] 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: NOT APPLICABLE
(2) Form, Schedule or Registration Statement Number: NOT APPLICABLE
(3) Filing Party: NOT APPLICABLE
(4) Date Filed: NOT APPLICABLE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 29, 2001
To the Shareholders of
Rampart Capital Corporation:
The annual meeting of Shareholders of Rampart Capital Corporation will be held
at the Newport Golf Club and Conference Center, 16401 Country Club Drive,
Crosby, Texas 77532, on Friday, June 29, 2001 at 3:00 p.m., Houston, Texas time,
for the following purposes:
1. To elect six directors to serve until the 2002 Annual Meeting;
2. To ratify the selection of Pannell Kerr Forster of Texas, P.C. as
independent public accountants for 2001; and,
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors recommends a vote FOR each of the nominees for director
and FOR ratification of the selection of Pannell Kerr Forster of Texas, P.C. as
independent public accountants.
The Board of Directors has fixed the close of business on May 16, 2001 as the
record date for determining Shareholders entitled to notice of and to vote at
the meeting.
You are cordially invited to attend the meeting in person. Even if you plan to
attend the meeting, however, you are requested to mark, sign, date, and return
the accompanying proxy as soon as possible.
By Authorization of the Board of Directors
/s/ CHARLES W. JANKE
Charles W. Janke
Chairman of the Board and
Chief Executive Officer
May 23, 2001
700 Louisiana, Suite 2510
Houston, Texas 77002
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being mailed to
Shareholders beginning on or about May 23, 2001. Proxy Statements are furnished
in connection with the solicitation by the Board of Directors of Rampart Capital
Corporation of proxies from the holders of our Common Stock for use at the 2001
Annual Meeting of Shareholders to be held at the time and place and for the
purposes set forth in the accompanying notice. In addition to the solicitation
of proxies by mail, proxies may also be solicited by telephone, telegram or
personal interview by our regular employees. We will pay all costs of
soliciting proxies. We will also reimburse brokers or other persons holding
stock in their names or in the names of their nominees for their reasonable
expenses in forwarding proxy material to beneficial owners of such stock.
All duly executed proxies received prior to the meeting will be voted in
accordance with the choices specified thereon. As to any matter for which no
choice has been specified in a duly executed proxy, the shares represented
thereby will be voted FOR the election as directors of the nominees listed
herein, FOR approval of the appointment of Pannell Kerr Forster of Texas, P.C.
as our independent public accountants, and at the discretion of the persons
named in the proxy in connection with any other business that may properly come
before the annual meeting. A Shareholder giving a proxy may revoke it at any
time before it is voted at the annual meeting by filing with the Corporate
Secretary an instrument revoking it, by delivering a duly executed proxy bearing
a later date, or by appearing at the annual meeting and voting in person. The
Board of Directors recommends a vote FOR each of the nominees for director and
FOR ratification of the selection of Pannell Kerr Forster of Texas, P.C. as
independent public accountants.
May 16, 2001 is the record date for determining Shareholders entitled to vote at
the annual meeting. On April 23, 2001 we had outstanding and entitled to vote
2,905,143 shares of Common Stock. The Common Stock is the only class of our
stock outstanding at the record date and entitled to vote at the Annual Meeting.
Each share entitles the holder to one vote on each matter submitted to a vote of
Shareholders. Cumulative voting is not permitted. The requirement for a quorum
at the annual meeting is the presence in person or by proxy of holders of a
majority of the outstanding shares of Common Stock.
Abstentions, shares with respect to which authority is withheld, and shares held
of record by a broker or its nominee that are voted on any matter are included
in determining whether a quorum is present. For purposes of determining the
outcome of any matter as to which a broker has physically indicated on the proxy
that it does not have discretionary authority to vote, those shares will be
treated as not present and not entitled to vote with respect to that matter
(even though those shares are considered entitled to vote for quorum purposes
and may be entitled to vote on other matters). The director nominees will be
elected by a plurality of the votes cast at the Annual Meeting. All other
matters to be considered at the Annual Meeting require the affirmative vote of a
majority of the votes cast. In a plurality vote, abstentions are not considered
a vote cast and will not affect the outcome. In a majority vote, however,
express abstentions are considered a vote cast and have the effect of a vote
against a particular matter. Broker non-votes will not affect the outcome of
any vote on the matters presented at the Annual Meeting because they are not
considered a vote cast under Texas law. Votes are counted, and an inspector of
elections to be appointed at the Annual Meeting by the Chairman of the Annual
Meeting certifies the count. Information regarding the vote required for
approval of particular matters is set forth in the discussion of those matters
appearing elsewhere in this Proxy Statement.
The Annual Report on Form 10-KSB for the year ended December 31, 2000, has been
mailed to all Shareholders entitled to vote at the Annual Meeting on or before
the date of mailing of this Proxy Statement.
ITEM 1. ELECTION OF DIRECTORS
Our Board of Directors currently consists of five directors with each director
elected annually. In April 2001, our Board of Directors increased the number of
our authorized Directors from five to six. All of the current Directors have
been nominated for re-election and one additional person has been nominated to
fill the additional Director position.
The persons named in the proxy may act with discretionary authority in the event
any nominee should become unavailable for election, although management is not
currently aware of any circumstances likely to result in a nominee becoming
unavailable for election. A Shareholder may, in the manner set forth in the
enclosed proxy card, instruct the proxy holder not to vote the Shareholder's
shares for one or more of the named nominees.
1
NOMINEES - The following summaries set forth information concerning the six
nominees for election as directors at the Annual Meeting, including each
nominee's age, position with Rampart, if any, and business experience during at
least the last five years.
CHARLES W. JANKE, age 56, has been Chairman, Chief Executive Officer, and a
director of Rampart since its organization in March 1994. He also served as
Rampart's President from its organization until January 1, 1999, when he
relinquished that position to Mr. Carpenter. Prior to the organization of
Rampart, Mr. Janke's primary activity was private investments. During 1992 and
1993, Mr. Janke invested in Laidlaw Holdings, Inc., a securities investment
firm. During this period he provided mezzanine and bridge financing for several
firms, all of which became listed on the Nasdaq Stock Market. Mr. Janke's
ownership in Laidlaw Holdings, Inc. was less than 1% and he has no current
ownership. During the period 1989 through 1992, Mr. Janke provided acquisition
funding for a company that acquired in excess of $400 million in residential
mortgage portfolios in association with a major securities firm. After a brief
retirement, he funded the start-up of Rampart and became active in our
management. For the period 1975 through 1985, Mr. Janke was a shareholder and
officer of Centurian National Group, Inc., a cemetery and funeral home holding
company, which was acquired by Service Corporation International, a public
corporation.
J. H. CARPENTER, age 59, was elected President and Chief Operating Officer
effective January 1, 1999. He has been Vice President and a director since the
organization of Rampart in March 1994. For the period October 1991 through
March 1994, Mr. Carpenter was a shareholder and president of two closely held
corporations that acquired commercial debt from the Resolution Trust Corporation
and the Federal Deposit Insurance Corporation. During the period 1989 to
October 1991, Mr. Carpenter was associated with a company that acquired, in
conjunction with a major securities firm, and sold over $400 million in
residential mortgage portfolios. From 1970 through 1981, Mr. Carpenter was Vice
President and Treasurer of Camco, Incorporated, a publicly traded oil tool
manufacturing company.
JAMES W. CHRISTIAN, age 47, was elected a director of Rampart effective January
1, 1999. Mr. Christian is a member of the Houston, Texas law firm of Christian
& Smith L.L.P. where he has practiced since 1990. Mr. Christian specializes in
litigation, corporate and real estate law.
JAMES J. JANKE, age 47, was elected a director of Rampart in 1996. Mr. Janke is
Vice President and General Manager of a top 100 Ford dealership where he has
been employed since 1976. He serves on the board of directors of the Texas Auto
Dealers Association, the Houston Livestock Show and Rodeo, a charitable
organization, and the Better Business Bureau of Houston. Charles W. Janke and
James J. Janke are brothers.
ROBERT A. SHUEY, III, age 46, was elected as a director of Rampart in September
1999, pursuant to the underwriters' agreement, dated January 1999, entered into
in connection with our initial public offering. He is the managing director of
corporate finance for Rushmore Financial Group, Inc. He was a director and
Chief Executive Officer of Institutional Equity Holdings, Inc. (formerly
Euromed, Inc.), which owned all of the outstanding stock of Institutional Equity
Corporation (formerly Redstone Securities, Inc.), the representative of the
underwriters in our initial public offering. Mr. Shuey was a director of
Institutional Equity Holdings from July 1996 until December 2000 and its Chief
Executive Officer from December 1998 until December 2000. Prior to that time,
he had been Manager of Investment Banking with Tejas Securities Group, Inc.
since September 1997. He has been in the investment banking business for more
than five years, with National Securities Corporation from September 1996 until
August 1997, with La Jolla Securities Corporation from April 1995 until August
1996, with Dillon Gage Securities Corporation from January 1994 until April 1995
and with Dickinson & Co. from March 1993 to December 1993. Mr. Shuey is a
member of the Board of Directors of AutoBond Corporation, Westower Corporation,
Institutional Equity Holdings, Inc., Bio Agua, Streamedia, and Transnational
Financial Corporation.
W. F. MOSLEY, age 52, is being nominated for a director's position. He has been
a principal and director of W. F. Mosley, Inc., a certified public accounting
firm, since 1981. Mr. Mosley is a Certified Public Accountant and is a tax
practitioner. He is also a director and investor in Southwest Commerce
Partners, Inc., which invests in various business opportunities.
COMPENSATION OF DIRECTORS - Directors who are also employees do not receive any
remuneration in their capacity as directors. Non-employee directors received
travel expense reimbursement and $1,000 per meeting attended, $500 per meeting
telephonically attended, and $1,500 for the Annual Meeting of Shareholders and
the board meeting immediately following.
2
On January 11, 2000, each non-employee director was granted a five-year
non-qualified stock option to purchase 1,000 shares of common stock for a price
per share equal to the closing price, as quoted on the American Stock Exchange,
on the date granted. The closing price per share on January 11, 2000 was $3.75.
On October 13, 2000, directors James Janke and Robert Shuey were granted stock
options to purchase 9,000 shares of common stock and James W. Christian was
granted an option to purchase 14,000 shares of common stock for a share price
equal to $3.50 per share. The closing share price, as quoted on the American
Stock Exchange for October 13, 2000, was $1.75. The October 13, 2000 options
expire March 31, 2001.
STANDING COMMITTEES, BOARD ORGANIZATION AND MEETINGS - The Board of Directors
has two committees, the Audit and Compensation Committees. These committees
report their actions, if any, to the full Board of Directors at its next regular
meeting. The Compensation Committee and the Audit Committee are composed of the
three non-employee directors - Messrs. Christian, Shuey and Janke (James J.).
Mr. Christian qualifies as an independent director and Messrs. Shuey and Janke
(James J.) do not qualify as independent directors under the listing standards
for the American Stock Exchange. We continue to seek qualified independent
persons with financial experience who are willing to serve on our Board of
Directors. If elected, Mr. Mosley, will replace Mr. Janke (James J.) on the
Audit and Compensation Committees, thereby increasing the number of independent
directors on those committees.
The duties and functions of the Audit Committee are to: (1) examine the
activities of our independent auditors to determine whether their activities are
reasonably designed to assure the soundness of accounting and financial
procedures; (2) review our accounting policies and the objectivity of our
financial reporting; and (3) consider annually the qualifications of our
independent auditors and the scope of their audit and make recommendations to
the Board of Directors as to its selection. The Audit Committee operates under
a written charter adopted by the Board of Directors, a copy of which is included
as Appendix A to this Proxy Statement.
The duties and functions performed by the Compensation Committee are: (1) to
review and recommend to the Board of Directors, or determine, the annual salary,
bonus, stock options and other benefits, direct and indirect, of the executive
officers; (2) review new executive compensation programs; (3) review on a
periodic basis the operations of our executive compensation programs to
determine whether they are properly coordinated; (4) establish and periodically
review policies for the administration of executive compensation programs; (5)
modify any executive compensation programs that yield payments and benefits that
are not reasonably related to executive performance; (6) establish and
periodically review policies in the area of management perquisites; and (7) to
exercise all of the powers of the Board of Directors with respect to any other
matters involving the compensation of our employees and employee benefits as may
be delegated to the Compensation Committee from time to time.
During 2000, the Board of Directors held 5 meetings and acted once by written
consent. During 2000, all members of the Board of Directors attended at least
75% of the aggregate of all meetings of the Board of Directors and committees of
the Board to which they belong. There were three audit committee meetings and
two compensation committee meetings in 2000.
AUDIT COMMITTEE REPORT
Management is responsible for Rampart's internal controls and the financial
reporting process. The independent accountants are responsible for performing
an independent audit of Rampart's financial statements in accordance with
auditing standards generally accepted in the United States of America and to
issue a report thereon. The Committee's responsibility is to monitor and
oversee these processes.
In this context, the Committee has met and held discussions with management and
the independent accountants. Management represented to the Committee that
Rampart's financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America, and the Committee
has reviewed and discussed the financial statements with management and the
independent accountants. The Committee discussed with the independent
accountants the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).
Rampart's independent accountants also provided to the Committee the written
disclosures and letter required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent accountants that firm's independence.
Based on the Committee's discussions with management and the independent
accountants and the Committee's review of the representations of management and
the report of the independent accountants to the Committee, the Committee
recommended that the Board of Directors include the audited financial statements
3
in the Company's Annual Report on Form 10-KSB for the year ended December 31,
2000, filed with the Securities and Exchange Commission. The Committee also
recommended reselection of Pannell Kerr Forster of Texas, P.C. as Rampart's
independent accountants and the Board of Directors concurred in such
recommendation.
Members of the Audit Committee:
James W. Christian
James J. Janke
Robert A Shuey, III
COMPENSATION OF INDEPENDENT PUBLIC ACCOUNTANTS - Audit Fees. During 2000, we
paid Pannell Kerr Forster of Texas, P.C., our independent public accountants,
$62,724.24 in compensation for services related to auditing and public
reporting. All Other Fees. During 2000, we also paid our independent public
accountants $3,000.00 for services performed in reviewing records of other
entities on our behalf.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - The following
table sets forth as of April 18, 2001, information with respect to (a) each
person (including any "group" as the term is used in section 13(d)(3) of the
Securities Exchange Act of 1934) who we know to be the beneficial owner of more
than 5% of our outstanding Common Stock and (b) the number of shares and
percentage of our Common Stock owned by nominees for director and by each of
our directors and executive officers individually and as a group. We believe
that, unless otherwise indicated, each of the shareholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws where applicable.
SHARES OF COMMON STOCK
-------------------
BENEFICIALLY OWNED
-------------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1) NUMBER PERCENT
- ----------------------------------------------------------- --------- --------
Charles W. Janke (2) 1,500,000 51.6%
700 Louisiana, Suite 2510, Houston, Texas 77002
J. H. Carpenter (3) 760,000 26.1%
700 Louisiana, Suite 2510, Houston, Texas 77002
Robert A. Shuey, III (4) 37,000 1.3%
Charles F. Presley (5) 28,000 *
James J. Janke (6) 11,000 *
James W. Christian (6) 11,000 *
W. F. Mosley 4,700 *
- ----------------------------------------------------------- --------- --------
All Executive Officers and Directors as a group (7 persons) 2,351,700 79.5%
- ----------------------
<FN>
* LESS THAN ONE PERCENT OF OUTSTANDING SHARES.
(1) The table is based on information supplied by the officers, directors, and
principal shareholders and reporting forms, if any, filed with the
Securities and Exchange Commission on behalf of such persons. A person is
deemed to beneficially own shares of common stock underlying options,
warrants or other convertible securities if the person can acquire the
stock within sixty days of the date of this proxy statement.
(2) 1,500,000 of Mr. Janke's shares are owned by a family limited partnership
of which Mr. Janke is the general partner.
(3) The majority of Mr. Carpenter's shares (600,000 shares) are owned by a
family limited partnership, the general partner of which is a closely held
corporation whose stock is owned by trusts for the benefit of Mr.
Carpenter's children and grandchildren. Mr. Carpenter is sole director and
officer of that corporation and has voting power over its stock. A solely
owned corporation controlled by Mr. Carpenter owns 150,000 shares. Mr.
Carpenter personally owns 10,000 shares.
(4) Includes 1,000 shares underlying common stock options granted to each
non-employee director and 36,000 shares underlying underwriter's warrants
issued in connection with our initial public offering.
(5) Mr. Presley owns 8,800 shares and Mr. Presley's Simple IRA owns 4,900
shares and 14,300 publicly traded warrants.
4
(6) Shares shown represent 1,000 common stock options granted to each
non-employee director and direct or beneficial ownership of 10,000 shares
of common stock.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT - Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our
directors, executive officers and persons who beneficially own 10% or more of
our Common Stock to file with the SEC initial reports of ownership and reports
of changes in ownership of Common Stock. Based solely on our review of copies
of such reports and written representations that no other reports were required,
we believe that during 2000 all our directors and executive officers and 10% or
greater shareholders complied on a timely basis with all applicable filing
requirements under Section 16(a) of the Exchange Act.
EXECUTIVE COMPENSATION - The following table sets forth the compensation awarded
to, earned by, or paid to the Chief Executive Officer and the other officers of
Rampart who received compensation of over $100,000 for the fiscal years ended
December 31, 2000, 1999 and 1998 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
NAME AND FISCAL ------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- ----------------------- ---- -------- --------- --------------
Charles W. Janke 2000 $200,000 -- $ 6,000(1)
Chairman of the Board 1999 159,886 -- --
Chief Executive Officer 1998 132,886 -- --
- ------------------------------------------------------------------
J. H. Carpenter 2000 $202,659 $6,000(1)
President 1999 158,659 -- --
Chief Operating Officer 1998 131,659 -- --
- ------------------------------------------------------------------
Charles F. Presley 2000 $125,000 -- $ 5,640(2)
Vice-President 1999 116,845 -- --
Chief Financial Officer 1998 83,872 -- --
___________
(1) Rampart matching contribution to retirement plan.
(2) Rampart matching contribution to retirement plan of $3,750
and $1,890 of reimbursements for medical insurance premiums.
EMPLOYMENT AGREEMENTS - We do not have written employment contracts with any of
our Named Executive Officers. However, since 1996, in addition to his other
duties, Charles Presley has performed, and continues to perform, services for
Rampart to facilitate the collection of certain defaulted obligations owned by
Rampart and to facilitate realization from other assets. Mr. Presley has an
oral arrangement with Rampart whereby he is entitled to receive from one to five
percent, net of costs, of any amounts realized by Rampart with respect to such
assets. During 2000 and 1999, Mr. Presley received an aggregate of $52,920.50
under this arrangement.
OPTION GRANTS IN LAST FISCAL YEAR - On October 13, 2000, options were granted to
our key employees and Directors. The options had an exercise price of $3.50
and expired March 31, 2001. The closing price per share on October 13, 2000, as
quoted on the American Stock Exchange, was $1.75. Grants to Named Executive
Officers were as follows:
OPTION GRANTS IN LAST FISCAL YEAR
(Individual Grants)
- --------------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL EXERCISE
SHARES OPTIONS GRANTED OR BASE
UNDERLYING TO EMPLOYEES IN PRICE
NAME THE OPTIONS FISCAL YEAR ($/SHARE) EXPIRATION DATE
- ------------------ ----------- ----------------- ---------- ---------------
Charles W. Janke 78,334 23.0% $ 3.50 March 31, 2001
J. H. Carpenter 161,666 47.6% $ 3.50 March 31, 2001
Charles F. Presley 85,000 25.0% $ 3.50 March 31, 2001
AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES - None of the Named
Executive Officers exercised any stock options in 2000 and none of the stock
options owned by the Named Executive Officers were in-the-money at 2000 fiscal
year-end.
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RETIREMENT PLAN - Effective January 1, 2000, all of our employees may
participate in an IRS Section 408(p) SIMPLE (Savings Incentive Match Plan for
Employees of Small Employers). We elected to match participating employee
contributions to the plan up to a maximum of 3% of the employee's compensation.
In no event may our contribution on behalf of any employee exceed the limit set
by the IRS (currently $6,000 per year). The employee's elective contributions
are made on a pre-tax basis and each employee may choose the equities in which
to invest both the employee's and Rampart's contributions. Both the employee and
Rampart's contributions are immediately vested and are payable to the employee
or their designated beneficiary upon termination of employment.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until September 1999, the Janke Family Partnership, Ltd. pledged certificates of
deposit as collateral for our bank financing. We could not have received the
amount of financing without this pledge. In order to compensate the family
limited partnership for the reduced yield on the money invested in the
certificates and pledged as collateral, we have paid an additional 6% interest
per year on the certificates pledged. These pledged certificates of deposit
were released by the bank under the terms of the renewal of our revolving credit
facility in September 1999. We paid additional interest of $22,500 in 1999.
In 1998 we sold a property for $525,000 to a consortium of buyers consisting of
Mr. Carpenter, Mr. Janke (Charles W.), trusts for two of Mr. Janke's children,
and the Janke Family Partnership, Ltd. The sales price was equal to the highest
third party offer received on the property. We took 10% interest bearing notes
that mature in three years as payment for the property. We purchased the
property in 1994 as part of a debt portfolio purchased from the FDIC and
allocated a cost basis of $100,000 to the property. In July 1999, the buyers as
a group prepaid $150,000 comprised of $78,750 in interest and $71,250 in
principal reduction on the loan balance.
On February 1, 1999, we acquired through Rampart Properties Corporation, our
wholly owned subsidiary, the real estate and other assets from the bankruptcy
estate of Newport Partners, LLC for $2,875,000. The Janke Family Partnership,
Ltd. loaned $1,400,000 to Rampart Properties Corporation to provide a portion of
the funding for the purchase. The balance of the purchase price was advanced by
Southwest Bank of Texas, N.A. against our revolving line of credit. The Janke
Family Partnership, Ltd. real estate note was secured by a deed of trust, which
was secondary to the security interest of Southwest Bank. The real estate note
provides for monthly payments of interest only at a 10% annual interest rate,
commencing March 31, 1999. The maturity date of the note was December 31, 1999.
We retired the Janke Family Partnership, Ltd. Note in September 1999 from the
proceeds of our initial public offering. During 1999, we paid interest of
$92,440 on this note.
Robert A. Shuey, III was an officer and director of Redstone Securities, Inc.,
which participated as an underwriter in our initial public offering in September
1999. In return for services provided by Mr. Shuey to Redstone Securities in
connection with this public offering, Mr. Shuey received 12,000 underwriters'
warrants. The underwriters' warrants allow the purchase of 12,000 units
exercisable at $31.35 per unit. Each unit consists of 2 shares of common stock
and a warrant to purchase a share of common at an exercise price of $13.82 per
share. The underwriters' warrants were exercisable beginning in September 2000.
James W. Christian has agreements with Rampart whereby he is entitled to receive
a fixed percentage of the net profits realized from two real properties
purchased by Rampart Properties Corporation. The agreements provide for 6% of
net profits realized by Rampart from its Newport property and a variable
percentage of net profits realized by Rampart from its Webster property. The
net profits interest on the Webster property has expired. During 2000 and 1999,
Mr. Christian did not receive any benefit from these agreements.
We believe that all of the foregoing transactions were on terms no less
favorable than would have been received at the time of the transaction if
transacted with unaffiliated third parties. Any future transactions between
Rampart and its officers and directors, principal shareholders and affiliates,
will be approved by a majority of the board of directors, including a majority
of the independent, disinterested outside directors. These future transactions
will be on terms no less favorable to Rampart than could be obtained from
unaffiliated third parties.
6
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Pannell Kerr Forster of Texas, P.C. as our
independent public accountants to conduct an audit of our financial statements
for the year 2001, and has further directed that management submit the selection
of the independent accountants for ratification by our shareholders at the
annual meeting. This firm has acted as independent public accountants for us
for the past five fiscal years. Representatives of Pannell Kerr Forster of
Texas, P.C. are not expected to be present at the Annual Meeting. Its
representatives will not be able to make a statement at the Annual Meeting and
are not expected to be available to respond to questions.
Shareholder ratification of the selection of Pannell Kerr Forster of Texas, P.C.
as our independent public accountants is not required by our bylaws or
otherwise. If our shareholders fail to ratify the selection, the Board will
reconsider whether to retain that firm. Even if the selection is ratified, the
Board, in its discretion, may direct the appointment of a different independent
accounting firm at any time during the year if the Board believes that such a
change would be in the best interest of Rampart. The affirmative vote of the
holders of a majority of the shares of Common Stock present or represented by
proxy at the annual meeting is required to ratify the selection of Pannell Kerr
Forster of Texas, P.C.
ITEM 3. OTHER BUSINESS
Management does not intend to bring any other business before the annual meeting
and has not been informed that any other matters are to be presented by others.
If, however, any other matters properly come before the meeting, it is intended
that the persons named in the accompanying proxy will vote pursuant to the
discretionary authority granted in the proxy in accordance with their best
judgment on such matters. The discretionary authority includes matters that the
Board of Directors does not know are to be presented by others.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS - Rule 14a-8 under the Securities and Exchange Act of
1934, as amended, addresses when a company must include a Shareholder's proposal
in its Proxy Statement and identify the proposal in its form of proxy when the
company holds an annual or special meeting of Shareholders. Under Rule 14a-8, we
must receive proposals for the 2002 Annual Meeting of Shareholders no later than
January 23, 2002 for such proposals to be included in next year's Proxy
Statement and proxy card. However, if the date of the 2002 Annual Meeting of
Shareholders changes by more than 30 days from the date of the 2001 Annual
Meeting of Shareholders, the deadline is a reasonable time before we begin to
print and mail our proxy materials, which deadline will be set forth in a
Quarterly Report on Form 10-QSB or will otherwise be communicated to
Shareholders. Shareholder proposals must also be otherwise eligible for
inclusion. If we do not receive notice of any other matter that shareholders
wish to raise at the 2002 Annual Meeting of Shareholders by April 8, 2002, and
that matter is raised at the meeting, the proxy holders will have discretionary
authority to vote on the matter. All proposals and notifications should be
addressed to our Chief Executive Officer at the address listed on the front page
of this Proxy Statement.
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APPENDIX A - AUDIT COMMITTEE CHARTER
------------------------------------
RAMPART CAPITAL CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS'
CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the
Corporation to any governmental body or the public; the Corporation's
systems of internal controls regarding finance, accounting, and legal
compliance that management and the Board have established; and the
Corporation's auditing, accounting and financial reporting processes.
Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the
Corporation's policies, procedures and practices at all levels. The Audit
Committee's primary duties and responsibilities are to:
- Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
system.
- Review and appraise the audit efforts of the Corporation's
independent accountants.
- Provide an open avenue of communication among the independent
accountants, financial and senior management and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of two or more directors as
determined by the Board, the majority of whom shall be independent
directors, and free from any relationship that, in the opinion of the
Board, would interfere with the exercise of his or her independent judgment
as a member of the Committee. A director will not be considered independent
if, among other things, the director (1) has been employed by the
Corporation or its affiliates in the current or past three years; (2)
accepted any compensation from the Corporation or its affiliates in excess
of $60,000 during the previous fiscal year (except for board service,
benefits under a tax-qualified retirement plan, or non-discretionary
compensation); (3) is an immediate family member of an individual who is,
or has been in the past three years, employed by the Corporation or its
affiliates as an executive officer; (4) is a partner in, or a controlling
shareholder or an executive officer of, any for-profit business
organization to which the Corporation made, or from which it received,
payments (other than those which arise solely from investments in the
Corporation's securities) that exceed five percent of the organization's
consolidated gross revenues for the year, or $200,000, whichever is more,
in any of the past three years; or (5) who is employed as an executive of
another entity where any of the Corporation's executives serve on that
entity's compensation committee.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
Committee membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of their job to foster open
communications, the Committee should meet at least annually with management
and the independent accountants in separate executive sessions to discuss
any matters that the Committee or each or these groups believe should be
discussed privately. In addition, the Committee or at least its Chair
should meet with the independent accountants and management quarterly to
review the Corporation's financials (consistent with IV.3. below).
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IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
- -------------------------
1. Review and reassess the adequacy of this Charter annually and report to the
Board any recommended changes to this Charter. The Committee shall submit
the Charter to the full Board for approval and have the document published
at least every three years in accordance with the Regulations of the
Securities and Exchange Commission.
2. Review the organization's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered by
the independent accountants.
3. Review with financial management and the independent accountants the 1O-QSB
prior to its filing or prior to the release of earnings. The Chair of the
Committee may represent the entire Committee for purposes of this review.
Independent Accountants
- ------------------------
4. Subject to any action that may be taken by the full Board of Directors,
have the ultimate authority and responsibility to select, evaluate, and,
where appropriate replace the independent accountants, thus making the
independent accountants ultimately accountable to the Audit Committee and
the Board of Directors as representatives of the shareholders.
5. On an annual basis, ensure its receipt from the independent accountants of
a formal written statement delineating all relationships between the
independent accountants and the Corporation consistent with Independence
Standards Board Standard 1 and review and discuss with the independent
accountants all significant relationships they have with the Corporation or
services they provide that could impair the independent accountants'
objectivity and independence.
6. Take appropriate action to oversee the independence of the independent
accountants.
7. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
organizations financial statements.
Financial Reporting Processes
- -------------------------------
8. In consultation with the independent accountants, review the integrity of
the organizations financial reporting processes, both internal and
external.
9. Consider the independent accountants judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
10. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants or management.
Process Improvement
- --------------------
11. Establish regular and separate systems of reporting to the Audit Committee
by each of management, and the internal auditors regarding any significant
judgments made in management's preparation of the financial statements and
the view of each as to appropriateness of such judgments.
12. Following completion of the annual audit, review separately with each of
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
13. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial statements.
14. Review with the independent accountants and management the extent to which
changes or improvements in financial or accounting practices, as approved
by the Audit Committee, have been implemented. (This review should be
conducted at an appropriate time subsequent to implementation of changes or
improvements, as decided by the Committee.)
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Legal Compliance
- -----------------
15. Review, with the Corporation's counsel, legal compliance matters including
corporate securities trading policies.
16. Review, with the Corporation's counsel, any legal matter that could have a
significant impact on the organization's financial statements.
17. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
3
RAMPART CAPITAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR
THE ANNUAL MEETING OF SHAREHOLDERS ON JUNE 29, 2001
The undersigned, hereby revoking all prior proxies, hereby appoints Charles W.
Janke and J. H. Carpenter and each of them individually, as proxies with full
power of substitution, to vote all shares of Common Stock of RAMPART CAPITAL
CORPORATION standing in the name of the undersigned, at the Annual Meeting of
Shareholders of RAMPART CAPITAL CORPORATION to be held at 3:00 p.m., Houston
time, on June 29, 2001 at the Newport Golf Club and Conference Center, 16401
Country Club Drive, Crosby, Texas 77532, or at any adjournment(s) or
postponement(s) thereof, on all matters coming before said meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS AS
STATED BELOW AND, UNLESS A CONTRARY CHOICE IS SPECIFIED, THIS PROXY WILL BE
VOTED FOR EACH OF SUCH PROPOSALS.
1. ELECTION OF SIX DIRECTORS FOR A ONE YEAR TERM ENDING AT THE 2001 ANNUAL
MEETING OF SHAREHOLDERS.
NOMINEES: Charles W. Janke, J.H. Carpenter, James W. Christian, James J.
Janke, Robert A. Shuey, III, and W. F. Mosley.
[ ] VOTE FOR all nominees listed above, except vote withheld from the
following nominees (IF ANY): _______________________________________________
________________________________________________________________________________
[ ] VOTE WITHHELD from all nominees
(THIS PROXY MUST BE DATED AND SIGNED ON THE REVERSE SIDE.)
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(CONTINUED FROM OTHER SIDE)
2. PROPOSAL TO RATIFY PANNELL KERR FORSTER OF TEXAS, P.C. INDEPENDENT PUBLIC
ACCOUNTANTS OF THE COMPANY FOR 2001.
[ ] For [ ] Against [ ] Abstain
NOTE: IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT(S)
THEREOF.
Dated: __________, 2001 ____________________________
Shareholder's Signature
____________________________
Signature if held jointly
(Please sign exactly as your name appears on this card. For joint accounts, each
joint owner should sign.
Executors, administrators, trustees, etc., should also so indicate when
signing.)
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY BY USING THE ENCLOSED ENVELOPE.
5