<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25, 1996
REGISTRATION NO. 333-14501
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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STREICHER MOBILE FUELING, INC.
(Name of Small Business Issuer in its Charter)
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<TABLE>
<S> <C> <C>
FLORIDA 5172 APPLIED FOR
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
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<TABLE>
<S> <C>
STREICHER MOBILE FUELING, INC. STANLEY H. STREICHER, PRESIDENT
2720 NORTHWEST 55TH COURT 2720 NORTHWEST 55TH COURT
FT. LAUDERDALE, FLORIDA 33309 FT. LAUDERDALE, FLORIDA 33309
(954) 739-3880 (954) 739-3880
(Address and telephone number of principal (Name, address and telephone number of agent for
executive service)
offices and principal place of business)
</TABLE>
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Copies to:
<TABLE>
<S> <C>
KENNETH HOFFMAN, ESQ. ROBERT ALTENBACH, ESQ.
GREENBERG, TRAURIG, HOFFMAN, JOHNSON & MONTGOMERY
LIPOFF, ROSEN & QUENTEL, P.A. 3060 PEACHTREE ROAD,
1221 BRICKELL AVENUE SUITE 400
MIAMI, FLORIDA 33131 ATLANTA, GEORGIA 30303
PHONE NO. (305) 579-0500 PHONE NO. (404) 262-1000
FAX NO. (305) 579-0717 FAX NO. (404) 262-1222
</TABLE>
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C>
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $.01 par value(2)................. $22,298,500 $6,758
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Redeemable Common Stock Purchase
Warrants(3)(4)................................ $ 161,000 $ 48
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Total....................................... $22,459,500 $6,806(5)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
(2) Includes (i) 1,000,000 shares of Common Stock offered hereby, (ii) 1,000,000
shares of Common Stock issuable upon exercise of the Redeemable Common Stock
Purchase Warrants (the "Warrants") offered hereby, (iii) 150,000 shares of
Common Stock subject to the Underwriters' over-allotment option, (iv)
150,000 shares of Common Stock issuable upon exercise of Warrants subject to
Underwriters' over-allotment option, (v) 115,000 shares of Common Stock
issuable upon exercise of Underwriters' Warrants and (vi) 115,000 shares of
Common Stock underlying the Warrants issuable upon exercise of Underwriters'
Warrants.
(3) Includes (i) 1,000,000 Warrants offered hereby, (ii) 150,000 Warrants
subject to the Underwriters' over-allotment option and (iii) 115,000
Warrants subject to the Underwriters' Warrants.
(4) Pursuant to Rule 416, this Registration Statement also covers such
indeterminate number of shares of Common Stock as may be issuable upon
exercise of the Warrants pursuant to antidilution provisions.
(5) The Registrant has previously paid such amount.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM SB-2 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
------------------------------------------ ------------------------------------------
<C> <S> <C>
1. Front of Registration Statement and
Outside Front Cover Page of
Prospectus.............................. Facing Page of Registration Statement;
Cross Reference Sheet; Outside Front Cover
Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus........................... Inside Front and Outside Back of Cover
Pages Prospectus
3. Summary Information and Risk Factors...... Prospectus Summary; The Company; Risk
Factors
4. Use of Proceeds........................... Use of Proceeds
5. Determination of Offering Price........... Risk Factors; Underwriting
6. Dilution.................................. Risk Factors; Dilution
7. Selling Security Holders.................. Principal and Selling Shareholder
8. Plan of Distribution...................... Outside Front and Outside Back Cover Pages
of Prospectus; Underwriting
9. Legal Proceedings......................... Business
10. Directors, Executive Officers, Promoters
and Control Persons..................... Management
11. Security Ownership of Certain Beneficial
Owners and Management................... Principal and Selling Shareholder
12. Description of Securities................. Description of Securities
13. Interest of Named Experts and Counsel..... *
14. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................. *
15. Organization Within Last Five Years....... Certain Transactions
16. Description of Business................... Prospectus Summary; Business
17. Management's Discussion and Analysis or
Plan of Operation....................... Management's Discussion and Analysis of
Financial Condition and Results of
Operations
18. Description of Property................... Business
19. Certain Relationships and Related
Transactions............................ Certain Transactions
20. Market for Common Equity Related
Stockholder Matters..................... Outside Front Cover Page of and
Prospectus; Dividend Policy; Description
of Securities; Shares Eligible for
Future Sale
21. Executive Compensation.................... Management
22. Financial Statements...................... Financial Statements
23. Changes in and Disagreements With
Accountants on Accounting and Financial
Disclosure.............................. *
</TABLE>
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* Not applicable or answer thereto is negative.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED OCTOBER 25, 1996
PROSPECTUS
STREICHER MOBILE FUELING, INC.
1,000,000 SHARES OF COMMON STOCK AND
1,000,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS
Streicher Mobile Fueling, Inc., a Florida corporation (the "Company"),
hereby offers 1,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), and 1,000,000 Redeemable Common Stock Purchase Warrants (the
"Warrants"). The shares of Common Stock and the Warrants offered hereby
(sometimes hereinafter collectively referred to as the "Securities") may be
purchased separately. Each Warrant is transferable immediately upon issuance and
entitles the holder thereof to purchase one share of Common Stock at a price of
$9.00 per share (assuming an initial offering price of $6.00 per share) during
the four-year period commencing on the first anniversary of the effective date
of this Offering (the "First Exercise Date"). The Warrants are redeemable by the
Company at a redemption price of $.01 per Warrant, at any time after the First
Exercise Date, upon thirty days' written notice to the holders thereof, if the
average closing price of the Common Stock equals or exceeds $10.50 per share for
the twenty consecutive trading days ending three days prior to the date of the
notice of redemption. See "Description of Securities."
Prior to this Offering, there has been no public market for the Common
Stock or Warrants and there can be no assurance that any such market will
develop. It is currently anticipated that the initial offering price of the
Common Stock will be between $5 and $7 per share and the initial public offering
price of the Warrants will be $.125 per Warrant. The initial public offering
price of the shares of Common Stock, the Warrants and the exercise price and
other terms of the Warrants have been determined by negotiations between the
Company and Argent Securities, Inc., as representative of the Underwriters (the
"Representative"). See "Underwriting." The Company has applied to include the
shares of Common Stock and Warrants on the Nasdaq SmallCap Market under the
symbols "FUEL" and "FUELW," respectively.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE SUBSTANTIAL DILUTION FROM THE PUBLIC OFFERING PRICE.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER THE
CAPTION "RISK FACTORS" WHICH APPEAR BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNTS COMPANY(2)
AND COMMISSIONS(1)
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Per Share of Common Stock................... $ $ $
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Per Warrant................................. $ $ $
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Total(3)............................... $ $ $
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</TABLE>
(1) Does not reflect additional compensation to be received by the Underwriters
in the form of: (i) a non-accountable expense allowance equal to 3% of the
gross proceeds of this Offering, $ of which has already been paid, and
(ii) an option to purchase up to 100,000 shares of Common Stock at 120% of
the initial public offering price and 100,000 Warrants at an exercise price
of $.01 per Warrant (the "Underwriters' Warrants"), exercisable for a period
of four years, commencing one year after the effective date of the
Registration Statement of which this Prospectus is a part. The Company, the
Selling Shareholder named herein and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses of the Offering payable by the Company estimated
at approximately $634,000, including the Underwriters' nonaccountable
expense allowance (assuming no exercise of the Underwriters' over-allotment
option).
(3) Does not include 150,000 additional shares of Common Stock and Warrants to
cover over-allotments which the Underwriters have an option to purchase for
45 days from the date of this Prospectus at the initial public offering
price, less the Underwriters' discount. If such over-allotment option is
exercised, of the 150,000 shares of Common Stock, the first 75,000 of such
shares will be sold by the Selling Shareholder named herein and the balance
will be sold by the Company. If the Underwriters' over-allotment option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions, Proceeds to Company and Proceeds to Selling Shareholder will be
$ , $ , $ and $ respectively.
The Securities offered by this Prospectus are being offered by the
Underwriters on a "firm commitment" basis subject to prior sale, when, as and if
accepted by the Underwriters, approval of certain legal matters by counsel for
the Underwriters and certain other conditions. The Underwriters reserve the
right to withdraw, cancel or modify such offer without notice and reject any
order in whole or in part. It is expected that delivery of the certificates
representing the Securities will be made in Atlanta, Georgia on or about
December , 1996.
ARGENT SECURITIES, INC.
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE> 4
[INSIDE FRONT COVER]
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OR
WARRANTS OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
The Company intends to furnish to its security holders annual reports
containing audited financial statements and such other periodic reports as the
Company may determine to be appropriate or as may be required by law.
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information, and the financial statements and
notes thereto, appearing elsewhere in this Prospectus. Unless otherwise
indicated, the information in this Prospectus assumes (i) that the Underwriters'
over-allotment option has not been exercised and (ii) that the Underwriters'
Warrants have not been exercised. See "Underwriting." EACH PROSPECTIVE INVESTOR
IS URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.
THE COMPANY
The Company provides mobile fueling services, primarily to customers which
operate large fleets of vehicles (such as national courier services, major
trucking lines, hauling and delivery services, utilities and governmental
agencies). Company-owned custom fuel trucks deliver fuel on a regularly
scheduled or as needed basis directly to vehicles at customers' locations,
assuring the Company's customers a dependable supply of fuel at competitive
rates. The Company utilizes its proprietary electronic fuel management system to
measure, record and track fuel dispensed to each vehicle fueled at a customer
location. This allows the Company to verify the amount of fuel delivered and
provides its customers with customized fleet fuel data for management analysis
and tax reporting. The Company believes that mobile fueling provides several
economic and other advantages to its customers, including eliminating the costs
and potential environmental liabilities associated with equipping and
maintaining fuel storage and dispensing facilities, reducing labor and
administrative costs associated with fueling vehicles and providing centralized
control over fuel inventories and usage. The Company also believes that federal
and state environmental regulations have created a "window of opportunity" for
the Company to convert fleet operators that currently utilize underground fuel
storage tanks to mobile fueling customers. Under current federal regulations,
the owners of such underground storage tanks are required, by December 1998, to
remove or retrofit such tanks to comply with technical requirements pertaining
to their construction and operation. See "Business -- The Mobile Fueling
Industry."
Founded by Stanley H. Streicher, the Company's President and Chief
Executive Officer, the Company's predecessor, Streicher Enterprises, Inc.
("Enterprises"), commenced its mobile fueling operations in 1983. Mr. Streicher
has been involved in the business of mobile fueling of vehicles since 1979. The
Company presently has operations in six locations throughout Florida and in Los
Angeles and San Diego, California, Atlanta and Columbus, Georgia, Chattanooga
and Kingsport, Tennessee and Dallas/Fort Worth, Texas. At July 31, 1996, the
Company operated a fleet of 49 custom fuel trucks and was servicing
approximately 200 customers at more than 500 locations nightly, delivering fuel
at a rate of over 2,000,000 gallons per month.
The Company intends to grow both through internal means and acquisitions.
The Company's internal growth strategy focuses on obtaining contracts to service
large fleets in or near major metropolitan areas, both through extending
existing customer relationships to new geographic areas and marketing its
services to potential new customers. After establishing operations in a new
market area, the Company seeks to build route density and achieve economies of
scale by providing fueling services to small and medium-sized local and regional
companies. The Company also expects to evaluate acquisition opportunities that
will allow strategic entry into new geographic markets or increase its customer
base within existing markets. See "Business -- Growth Strategy."
The Company was incorporated in the State of Florida in October 1996. Prior
to the closing of this Offering, the Company's business has been conducted
through Enterprises, which was incorporated in Florida in 1983. Immediately
prior to the closing of this Offering, Enterprises will complete a corporate
reorganization (the "Reorganization"), which will result in the Company
succeeding to all of Enterprises' mobile fueling assets, liabilities and
operations. Unless otherwise indicated, all references herein to the "Company"
include the mobile fueling business of Enterprises prior to the Reorganization.
See "Certain Transactions" and Note 1 of Notes to Financial Statements. The
Company's principal executive offices are located at 2720 N.W. 55th Court, Fort
Lauderdale, Florida 33309, (954) 739-3880.
3
<PAGE> 6
THE OFFERING
Securities Offered.................. 1,000,000 shares of Common Stock and
1,000,000 Warrants. See "Description
of Securities."
Warrants............................ Each Warrant entitles the holder
thereof to purchase one share of
Common Stock at a price of $9.00 per
share (assuming an initial offering
price of $6.00 per share) during the
four year period commencing on the
first anniversary of the effective
date of this Offering (the "First
Exercise Date"). The Warrants are
each redeemable by the Company at a
redemption price of $.01 per Warrant,
at any time after the First Exercise
Date, upon thirty days' prior written
notice to the holders thereof, if the
average closing price of the Common
Stock equals or exceeds $10.50 per
share, for the twenty consecutive
trading days ending three days prior
to the date of the notice of
redemption. See "Description of
Securities."
Securities Outstanding Prior to the
Offering............................ 1,500,000 shares of Common Stock
Securities Outstanding Subsequent to
the Offering(1)..................... 2,500,000 shares of Common Stock and
1,000,000 Warrants
Use of Proceeds by Company.......... Fuel truck and equipment purchases and
the balance for working capital and
other corporate purposes. See "Use of
Proceeds."
Risk Factors........................ This Offering involves a high degree
of risk and immediate and substantial
dilution. See "Risk Factors" and
"Dilution."
Proposed Nasdaq Symbols(2).......... Common Stock -- FUEL
Warrants -- FUELW
- ---------------
(1) Does not include (i) the 1,000,000 shares of Common Stock issuable upon the
exercise of the Warrants offered hereby, (ii) up to 75,000 shares of Common
Stock and 150,000 Warrants issuable upon exercise of the Underwriters'
over-allotment option, (iii) the 150,000 shares of Common Stock issuable
upon exercise of the Warrants included in the Underwriters' over-allotment
option, (iv) the 230,000 shares of Common Stock issuable upon exercise of
the Underwriters' Warrants (including the Warrants therein), (v) 1,000,000
shares of Common Stock issuable upon the exercise of stock options to be
granted on the effective date of this Offering, or (vi) 100,000 shares of
Common Stock reserved for issuance upon the exercise of stock options that
may be granted under the Company's stock option plan. See
"Management -- Employment Agreement" and "-- Stock Option Plan,"
"Description of Securities" and "Underwriting."
(2) The Company's securities have not yet been approved for quotation on Nasdaq
and there can be no assurance that the Company will be able to meet the
requirements for quotation, or that a public trading market will develop or
that if such market develops, it will be sustained. See "Risk
Factors -- Lack of Prior Market for Securities."
4
<PAGE> 7
SUMMARY FINANCIAL INFORMATION
The following table presents summary historical data of the Company as of
January 31, 1996 and for the two years ended January 31, 1995 and 1996 which
have been derived from the Company's audited financial statements included
elsewhere in this Prospectus, and unaudited historical financial data. The
selected financial data as of July 31, 1996 and for the six month periods ended
July 31, 1995 and 1996 have been derived from the unaudited financial statements
of the Company which include all adjustments, consisting of only normal
recurring adjustments, which the Company considers necessary for a fair
presentation and results of operations for these periods. The summary financial
information should be read in conjunction with "Selected Financial Data,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and the notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTH PERIODS
YEARS ENDED JANUARY 31, ENDED JULY 31,
------------------------- -------------------------
1995 1996 1995 1996
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<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................................. $16,663,371 $23,989,358 $10,776,470 $13,887,855
Gross profit............................ 1,445,426 2,237,008 829,236 1,126,926
Operating expenses...................... 1,328,028 1,750,235 825,491 1,203,353
Income (loss) from operations........... 117,398 486,773 3,745 (76,427)
Interest expense........................ 168,991 343,967 154,062 260,252
Income (loss) before provision for
income taxes......................... (38,089) 176,025 (131,111) (330,292)
Net income (loss)....................... (37,700) 100,009 (85,680) (211,872)
Net income (loss) per share............. (.03) .07 (.06) (.14)
Weighted average number of shares of
common stock outstanding............. 1,500,000 1,500,000 1,500,000 1,500,000
</TABLE>
<TABLE>
<CAPTION>
JULY 31, 1996
---------------------------
AS
JANUARY 31, ADJUSTED
1996 ACTUAL (1)
----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................... $ 725,419 $ 961,886 $ 5,935,294
Total assets............................ 6,444,186 7,248,964 12,222,372
Total liabilities....................... 6,005,300 7,021,950 7,021,950
Shareholders' equity.................... 438,886 227,014 5,200,422
</TABLE>
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(1) Adjusted to give effect to (i) the sale of 1,000,000 shares of Common Stock
and 1,000,000 Warrants offered hereby at assumed initial public offering
prices of $6.00 per share and $0.125 per Warrant, respectively, and the
application of the net proceeds therefrom. See "Use of Proceeds." No effect
has been given to the exercise of (i) the Warrants, (ii) the Underwriters'
over-allotment option or (iii) the Underwriters' Warrants (including the
Warrants therein). See "Underwriting."
5
<PAGE> 8
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND SUBSTANTIAL DILUTION AND SHOULD ONLY BE PURCHASED BY INVESTORS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS, PRIOR TO MAKING
AN INVESTMENT, SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE
FACTORS, AS WELL AS OTHER INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS,
ASSOCIATED WITH THIS OFFERING, INCLUDING THE INFORMATION CONTAINED IN THE
FINANCIAL STATEMENTS HEREIN.
LOSSES FROM OPERATIONS; ACCUMULATED DEFICIT; NO ASSURANCES OF PROFITABILITY
Although the Company operated profitably in the fiscal year ended January
31, 1996, the Company experienced net losses in the year ended January 31, 1995
and in the six month period ended July 31, 1996 of $37,700 and $211,872,
respectively, and there can be no assurance that the Company will not incur net
losses in the future. The Company had an accumulated deficit of $33,646 at July
31, 1996. The Company's operating expenses have increased as its business has
grown and can be expected to increase significantly as a result of the Company's
expansion efforts into new markets. There can be no assurance that the Company
will be able to generate sufficient revenue to meet its operating expenditures
or to operate profitably. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
NEED FOR CAPITAL
The mobile fueling business is capital intensive and the Company will
continue to require substantial capital in order to operate and expand its
business. The Company's primary long-term and working capital requirements have
been to fund capital expenditures for custom fuel trucks and related equipment
and working capital for its inventory requirements and the financing of customer
accounts receivable. Historically, the Company has depended primarily on debt
financing for its purchases of custom fuel trucks. If the Company is unable to
obtain additional equity or debt financing in the future, the Company may have
to limit its growth. Following this Offering, the Company expects that its debt
will increase in the future as the Company utilizes borrowed funds to acquire
new vehicles, for acquisitions, working capital or other corporate purposes. The
interest rate on the Company's principal credit facility fluctuates with the
prime lending rate, resulting in greater interest costs to the Company in the
event of rising interest rates. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
GROWTH DEPENDENT UPON EXPANSION; RISKS ASSOCIATED WITH EXPANSION INTO NEW
MARKETS
A significant element of the Company's future growth strategy involves the
expansion of the Company's business into new markets. The Company intends to
expand its business into additional major metropolitan areas. Expansion of the
Company's operations will be dependent on, among other things, the Company's
ability to demonstrate the benefits of mobile fueling to potential new
customers; successfully establish and operate new locations; hire and retain
qualified management; marketing and other personnel; obtain adequate financing
for vehicle purchases and working capital purposes; secure adequate sources of
supply on a timely basis and on commercially reasonable terms and successfully
manage growth (including monitoring operations, controlling costs and
maintaining effective quality controls). The Company's growth prospects will be
largely dependent upon its ability to achieve greater penetration in new
markets. The Company may also seek to expand its operations through the
acquisition of existing companies or their customer bases. There can be no
assurance that the Company will be able to successfully expand its operations.
See "Business -- Growth Strategy."
ACQUISITION AVAILABILITY; DIFFICULTY IN ASSIMILATING ACQUISITIONS
An important element of the Company's future growth strategy involves the
acquisition of fuel distributors in new and existing markets. Although the
Company intends to pursue acquisition opportunities as a means of achieving its
growth objectives, there can be no assurance that the Company will be able to
locate or acquire suitable acquisition candidates on acceptable terms or that
future acquired operations will be
6
<PAGE> 9
effectively and profitably integrated into the Company. Acquisitions involve a
number of risks that could adversely affect the Company's operating results,
including diverting management attention, the assimilation of the operations and
personnel of the acquired operations, the amortization of acquired intangible
assets and the potential loss of key employees of the acquired operations.
Properly managing any growth through acquisitions, avoiding the problems often
attendant therewith, and continuing to operate in the manner which has proven
successful to the Company to date will be important to the future success of the
Company's business. See "Business -- Growth Strategy."
DEPENDENCE ON OFFERING PROCEEDS TO IMPLEMENT PROPOSED EXPANSION;
POSSIBLE NEED FOR ADDITIONAL FINANCING
The Company's capital requirements have been and will continue to be
significant. The Company is dependent on and intends to use a substantial
portion of the proceeds of this Offering to implement its proposed expansion.
The Company anticipates, based on currently proposed plans and assumptions
relating to its operations (including the anticipated costs associated with, and
timetable for, its proposed expansion), that the proceeds of this Offering,
together with cash flow from operations and amounts available under its line of
credit, will be sufficient to satisfy its contemplated cash requirements for at
least 12 months following the consummation of this Offering. In the event that
the Company's plans change, its assumptions change or prove to be inaccurate or
if the proceeds of this Offering or cash flows otherwise prove to be
insufficient to fund expansion (due to unanticipated expenses, delays, problems,
difficulties or otherwise), the Company will be required to minimize cash
expenditures and/or obtain additional financing in order to support its plan of
operations. The Company has no current arrangements with respect to, or sources
of, additional financing and there can be no assurance that any additional
financing will be available to the Company on acceptable terms, or at all.
ABSENCE OF WRITTEN AGREEMENTS
Most of the Company's customers do not have written agreements with the
Company and can terminate the Company's mobile fueling services at any time and
for any reason. If the Company were to experience a high rate of terminations,
the Company's business and financial performance could be materially adversely
affected.
LIMITED AVAILABILITY OF MANAGERIAL PERSONNEL
The Company has experienced significant growth over the past several years.
Since 1993, the Company's service area has expanded from Florida and Tennessee
to include California, Georgia and Texas, and the number of custom fuel trucks
operated by the Company has increased from 14 at February 1, 1993 to 49 at July
31, 1996. In addition, during the past three years, the number of the Company's
full-time employees increased from 26 at February 1, 1993 to approximately 139
at July 31, 1996, and further increases in personnel are anticipated as the
Company expands. For the Company to be able to continue to grow effectively it
will need to continue to improve its operational, financial and other internal
systems, and to attract, train, motivate, manage and retain its employees. If
the Company is unable to manage growth effectively, the Company's results of
operations could be adversely affected.
COMPETITION
The Company competes directly and indirectly with other distributors of
fuel, including several regional distributors and numerous small independent
operators. Some of the Company's competitors have significantly greater
financial or marketing resources than the Company. The Company's competitors
also could introduce services that are superior to the Company's or that achieve
greater market acceptance. The Company also competes for customers whose drivers
fuel their own vehicles at retail gas stations. The Company believes that its
ability to compete depends on a number of factors, including price, reliability,
credit terms, name recognition, delivery time and service and support. There can
be no assurance that the Company will be able to continue to compete
successfully with respect to these factors. See "Business -- Competition."
7
<PAGE> 10
FUEL PRICING; EFFECT ON PROFITABILITY
Gasoline and diesel fuel are commodities and, as such, their wholesale
prices are subject to fluctuations in response to changes in supply or other
market conditions over which the Company has no control. Because the Company
sells fuel to its customers at fixed amounts over its wholesale cost, the
Company's gross profit as a percentage of revenues may fluctuate as a result of
changes in wholesale gasoline and diesel fuel prices. In addition, the Company
may not be able to fully pass on future increases in the wholesale prices of
gasoline or diesel fuel to its customers. See "Management's Discussion and
Analysis of Financial Conditions and Results of Operations."
DEPENDENCE ON SUPPLIERS OF CUSTOM FUEL TRUCKS; FEW SOURCES OF SUPPLY
The Company currently orders and purchases custom fuel trucks from two
manufacturers. Any event adversely affecting the supply and manufacture of these
trucks, including the inability of such manufacturers to meet the Company's
demand for new truck purchases, could have a material adverse effect on the
Company's operations. The Company has no control over the manufacturing process,
quality assurance or the timing of delivery of trucks. The Company also does not
have any contracts or other written agreement with the manufacturers of custom
fuel trucks for the purchase of such vehicles.
Additionally, the Company may from time to time make purchases of
previously owned fuel trucks and convert such trucks to the Company's
specifications. However, there can by no assurance that such trucks will be
available in the market for purchase by the Company. See "Business -- Custom
Fuel Truck Purchases."
OPERATING RISKS MAY NOT BE COVERED BY INSURANCE
The Company's operations are subject to all of the operating hazards and
risks normally incidental to handling, storing and transporting gasoline and
diesel fuel, which are classified as hazardous materials. The Company maintains
insurance policies in such amounts and with such coverages and deductibles as
the Company believes are reasonable and prudent. However, there can be no
assurance that such insurance will be adequate to protect the Company from
liabilities and expenses that may arise from claims for personal and property
damage arising in the ordinary course of business or that such levels of
insurance will be maintained by the Company or will be available at economical
prices.
GOVERNMENTAL REGULATION
The Company's operations are affected by numerous federal, state and local
laws, including those relating to protection of the environment and worker
safety. The transportation of gasoline and diesel fuel is subject to regulation
by various federal, state and local agencies, including the U.S. Department of
Transportation ("DOT"). These regulatory authorities have broad powers, and the
Company is subject to regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating practices or
influencing the demand for, and the cost of providing, its services. The Company
is also subject to the rules and regulations of the Hazardous Materials
Transportation Act. In addition, the Company depends on the supply of gasoline
and diesel fuel from the oil and gas industry and, therefore, is affected by
changing taxes, price controls and other laws and regulations relating to the
oil and gas industry generally. The Company cannot determine the extent to which
its future operations and earnings may be affected by new legislation, new
regulations or changes in existing regulations.
The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of the Company that
were in compliance with all applicable laws at the time such acts were
performed. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and several liability
for remediation of spills and releases of hazardous substances. In addition,
companies may be subject to claims alleging personal injury or property damage
as a result of alleged exposure to hazardous substances, as well as damage to
natural resources.
8
<PAGE> 11
Although the Company believes that it is in substantial compliance with
existing laws and regulations, there can be no assurance that substantial costs
for compliance will not be incurred in the future. Moreover, it is possible that
other developments, such as stricter environmental laws, regulations and
enforcement policies thereunder, could result in additional, presently
unquantifiable, costs or liabilities to the Company. See
"Business -- Governmental Regulation."
CHANGES IN ENVIRONMENTAL REQUIREMENTS
The Company expects to derive a significant amount of its future business
by converting to mobile fueling customers fleet operators that currently utilize
underground fuel storage tanks for their fueling needs. Under current federal
regulations, the owners of such underground storage tanks are required, by
December 1998, to remove or retrofit such tanks to comply with technical
requirements pertaining to their construction and operation. If the date for
compliance with such regulations is extended, or if other, more economical
means, of compliance are developed or adopted by owners of underground storage
tanks, the opportunity for the Company to market its services to such persons
may be adversely affected.
DEPENDENCE ON KEY PERSONNEL
The success of the Company will be largely dependent on the continued
services and efforts of Stanley H. Streicher, the Company's President and Chief
Executive Officer, and other key personnel. The loss of the services of Mr.
Streicher or certain other key personnel could have a material adverse effect on
the Company's business and prospects. The Company currently maintains a $2
million key-man life insurance policy on the life of Mr. Streicher, under which
the Company is the beneficiary. The Company's success and plans for future
growth will also depend on its ability to attract and retain additional
qualified management and other personnel. There can be no assurance that the
Company will be able to hire or retain such personnel on terms satisfactory to
the Company. Mr. Streicher and the Company have entered into an employment
agreement which is automatically renewable unless otherwise terminated. The
Company has no other employment agreements with its other key personnel. See
"Management -- Employment Agreement."
CONTROL BY MANAGEMENT
Upon completion of this Offering, Stanley H. Streicher, the Company's
President and Chief Executive Officer, will beneficially own or have voting
control over approximately 1,500,000 shares of Common Stock, or approximately
60.0% (55.3% if the Underwriters' over-allotment option is exercised in full) of
the then outstanding shares of Common Stock. Mr. Streicher will therefore be in
a position to control the outcome of matters submitted for shareholder approval,
including election of the Company's directors, and could thereby affect the
selection of management and direct the policies of the Company. See "Principal
and Selling Shareholder."
DILUTION
Based upon the net tangible book value of the Company at July 31, 1996,
investors in this Offering will suffer an immediate and substantial dilution of
their investment of approximately $3.99 in net tangible book value per share.
See "Dilution."
LACK OF PRIOR MARKET FOR SECURITIES
Prior to this Offering, there has been no public trading market for the
Securities and there can be no assurances that a public trading market for the
Securities will develop or, if developed, will be sustained. The Company's
Securities have not yet been approved for quotation on the Nasdaq SmallCap
Market and there can be no assurance that a regular trading market for the
Securities will develop for the Securities offered hereby, or, if developed,
that it will be maintained. If for any reason the Company fails to maintain
sufficient qualifications for continued listing on the Nasdaq SmallCap Market or
a public trading market does not develop, purchasers of the Securities may have
difficulty in selling their Securities should they desire to do so. In any
event, because certain restrictions may be placed upon the sale of securities at
prices under $5, unless
9
<PAGE> 12
such securities qualify for an exemption from the "penny stock" rules, such as a
listing on the Nasdaq SmallCap Market, some brokerage firms will not effect
transactions in the Securities if they trade below $5, and it is unlikely that
any bank or financial institution will accept the Securities as collateral,
which could have an adverse effect in developing or sustaining any market for
the Securities. See "Risk Factors -- Listing and Maintenance Criteria for Nasdaq
System; Penny Stock Regulations."
ARBITRARY DETERMINATION OF OFFERING PRICE AND WARRANT EXERCISE PRICE
The initial public offering price of the Common Stock and the Warrants have
been determined by negotiations between the Company and the Representative and
do not necessarily bear any relationship to the Company's assets, net worth or
results of operations, or any other established criteria of value. The offering
price set forth on the cover page of this Prospectus should not be considered an
indication of the actual value of the Securities offered hereby. After
completion of this Offering, such price may vary as a result of market
conditions and other factors. See "Description of Securities" and
"Underwriting."
BROAD DISCRETION IN APPLICATION OF PROCEEDS
While Management of the Company presently intends to limit the application
of the Offering proceeds to the categories set forth in the Use of Proceeds
table, management may adjust the application and allocation of the net proceeds
of this Offering, including funds received upon exercise of the Underwriters'
over-allotment option or the exercise of any Warrants, if such adjustment is
determined to be in the best interests of the Company in order to address
changed circumstances and opportunities. Furthermore, to the extent that the
Company's expenditures are less than projected, the resulting balance will be
retained and used for working capital and corporate purposes. As a result of the
foregoing, the success of the Company will be substantially dependent upon the
judgment of the management of the Company with respect to the application and
allocation of the net proceeds of this Offering. See "Use of Proceeds."
BENEFITS TO AFFILIATES FROM PROCEEDS OF PUBLIC OFFERING
Although the Company's shareholders and management will not receive any of
the Company's proceeds from this Offering, except as described below, certain
benefits will accrue to them as a result of the Offering. To the extent that the
Company applies a portion of the net proceeds of this Offering to reduce the
Company's bank debt, Mr. Streicher will be relieved of his personal guaranty of
such indebtedness. See "Use of Proceeds." In addition, if the Underwriters'
over-allotment option is exercised, Mr. Streicher will be selling up to 75,000
shares of Common Stock for net proceeds to him, after underwriting discounts or
commissions (including the Underwriters' 3% non-accountable expense allowance)
of up to $391,500 (assuming an initial public offering price of $6.00 per share
of Common Stock). The Company will bear the balance of the costs of the
Offering. See "Use of Proceeds" and "Certain Transactions."
CONFLICTS OF INTEREST BETWEEN MAJORITY SHAREHOLDER AND THE COMPANY
Stanley H. Streicher, currently the majority shareholder and sole director
of the Company, and his affiliates have in the past engaged in certain
transactions with the Company. See "Certain Transactions."
CONTROL BY MANAGEMENT
Stanley H. Streicher is currently the sole director of the Company and as
such has sole authority to manage the policies and direction of the Company. The
Company has agreed with the Representative to increase to five the number of
individuals serving on the Board of Directors within 30 days of the closing of
this Offering.
IMPACT ON MARKET OF WARRANT EXERCISE
In the event of the exercise of a substantial number of Warrants within a
reasonably short period of time after the right to exercise commences, the
resulting increase in the amount of Common Stock of the Company
10
<PAGE> 13
in the trading market could substantially affect the market price of the Common
Stock. See "Description of Securities -- Warrants."
ADJUSTMENTS TO WARRANT EXERCISE PRICE AND EXERCISE DATE
The Company, in its sole discretion, may reduce the exercise price of the
Warrants and/or extend the time within which the Warrants may first be
exercised. Further, in the event the Company issues certain securities or makes
certain distributions to its Common Stock shareholders, the exercise price of
the Warrants may be reduced. Any such price reductions (assuming exercise of the
Warrants) will provide less money for the Company and possibly adversely affect
the market price of the Company's securities.
POSSIBLE RESTRICTIONS ON MARKET MAKING ACTIVITIES IN THE SECURITIES
Although they have no legal obligation to do so, the Underwriters from time
to time may act as market makers and otherwise effect transactions in the
Securities. Unless granted an exemption by the Commission from Rule 10b-6 under
the Securities Exchange Act of 1934 (the "Exchange Act"), the Underwriters will
be prohibited from engaging in any market making activities or solicited
brokerage activities with respect to the Securities for the period from nine
business days prior to any solicitation of the exercise of any Warrant or nine
business days prior to the exercise of any Warrant based on a prior solicitation
until the later of the termination of such solicitation activity or the
termination (by waiver or otherwise) of any right the Underwriters may have to
receive such a fee for the exercise of the Warrants following such solicitation.
As a result, the Underwriters may be unable to continue to provide a market for
the Securities during certain periods while the Warrants are exercisable. The
prices and liquidity of the Securities may be materially and adversely affected
by the cessation of the Underwriters' market making activities. In addition,
there is no assurance that the Underwriters will continue to be market makers in
the Securities. The prices and liquidity of the Securities may be affected
significantly by the degree, if any, of the Underwriters' participation in the
market. The Underwriters may voluntarily discontinue such participation at any
time. Further, the market for, and liquidity of, the Securities may be adversely
affected by the fact that a significant amount of the Securities may be sold to
customers of the Underwriters. See "Underwriting."
REDEMPTION OF REDEEMABLE WARRANTS
The Warrants are subject to redemption by the Company, at any time after
the First Exercise Date at a price of $.01 per Warrant at any time after the
First Exercise Date, upon thirty days' prior written notice to the holders
thereof, if the average closing bid price for the Common Stock equals or exceeds
$10.50 per share (assuming an initial offering price of $6.00 per share) for the
twenty consecutive trading days ending on the third day prior to the date of
notice of redemption. In the event that the Warrants are called for redemption
by the Company, Warrantholders will have thirty days during which they may
exercise their rights to purchase shares of Common Stock. In the event a current
prospectus is not available, the Warrants may not be exercised and the Company
will be precluded from redeeming the Warrants. If holders of the Warrants elect
not to exercise them upon notice of redemption thereof, and the Warrants are
subsequently redeemed prior to exercise, the holders thereof would lose the
benefit of the difference between the market price of the underlying Common
Stock as of such date and the exercise price of such Warrants, as well as any
possible future price appreciation in the Common Stock. As a result of an
exercise of the Warrants, existing shareholders would be diluted and the market
price of the Common Stock may be adversely affected. If a Warrantholder fails to
exercise his rights under the Warrants prior to the date set for redemption,
then the Warrantholder will be entitled to receive only the redemption price,
$.01 per Warrant. See "Description of Securities -- Warrants."
CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION IN CONNECTION WITH THE
EXERCISE OF THE WARRANTS
The Company will be able to issue shares of its Common Stock upon the
exercise of the Warrants only if (i) there is a current prospectus relating to
the Common Stock issuable upon exercise of the Warrants under an effective
registration statement filed with the Commission, and (ii) such Common Stock is
then qualified for sale or exempt therefrom under applicable state securities
laws of the jurisdictions in which the various
11
<PAGE> 14
holders of Warrants reside. Although the Company has undertaken to use its best
efforts to maintain the effectiveness of a current prospectus covering the
Common Stock subject to the Warrants offered hereby, there can be no assurance
that the Company will be successful in doing so. After a registration statement
becomes effective, it may require continuous updating by the filing of
post-effective amendments. A post-effective amendment is required (i) when, for
a prospectus that is used more than 9 months after the effective date of the
registration statement, the information contained therein (including the
certified financial statements) is as of a date more than 16 months prior to the
use of the prospectus, (ii) when facts or events have occurred which represent a
fundamental change in the information contained in the registration statement,
or (iii) when any material change occurs in the information relating to the plan
of distribution of the securities registered by such registration statement. The
Company anticipates that this Registration Statement will remain effective for
at least nine months following the date of this Prospectus, assuming a post-
effective amendment is not filed by the Company. The Company intends to qualify
the sale of the Securities in a limited number of states, although certain
exemptions under certain state securities laws may permit the Warrants to be
transferred to purchasers in states other than those in which the Warrants were
initially qualified. The Company will be prevented, however, from issuing Common
Stock upon exercise of the Warrants in those states where exemptions are
unavailable and the Company has failed to qualify the Common Stock issuable upon
exercise of the Warrants. The Company may decide not to seek, or may not be able
to obtain qualification of the issuance of such Common Stock in all of the
states in which the ultimate purchasers of the Warrants reside. In such a case,
the Warrants of those purchasers will expire and have no value if such Warrants
cannot be exercised or sold. Accordingly, the market for the Warrants may be
limited because of the foregoing requirements. See "Description of Securities".
UNDERWRITERS' WARRANTS
In connection with the Offering, the Company will sell to the Underwriters,
for nominal consideration, warrants to purchase an aggregate of 115,000 shares
of Common Stock and 115,000 Warrants (assuming 1,000,000 shares of Common Stock
and 1,000,000 Warrants are sold and assuming the Underwriters' over-allotment is
exercised) (the "Underwriters' Warrants"). The Underwriters' Warrants will be
exercisable for a period of four years, commencing one year after the date of
closing of this Offering, at an exercise price of 120% of the initial public
offering price of the Common Stock and Warrants. The terms of the Warrants
underlying such Underwriters' Warrants will be the same as those offered to the
public hereby. The holders of the Underwriters' Warrants will have the
opportunity to profit from a rise in the market price of the Securities, if any,
without assuming the risk of ownership. The Company may find it more difficult
to raise additional equity capital if it should be needed for the business of
the Company while the Underwriters' Warrants are outstanding. At any time when
the holders thereof might be expected to exercise them, the Company would
probably be able to obtain additional capital on terms more favorable than those
provided by the Underwriters' Warrants.
The Underwriters have "piggyback" and demand registration rights with
respect to the Common Stock, the Warrants and the underlying Common Stock
subject to the Underwriters' Warrants. Any future exercise of these registration
rights may cause the Company to incur substantial expense and could impair the
Company's ability to raise capital through the public sale of its securities.
See "Dilution," "Shares Eligible for Future Sale" and "Underwriting."
LISTING AND MAINTENANCE CRITERIA FOR NASDAQ SYSTEM; "PENNY STOCK" REGULATIONS
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers Nasdaq, requires that, in order for a company's securities to be
listed on the Nasdaq SmallCap Market, the Company must have $4,000,000 in total
assets, a $1,000,000 market value of the public float and $2,000,000 in total
capital and surplus. Further, initial listing requires two market makers and a
minimum bid price of $3.00 per share. Continued inclusion on the Nasdaq SmallCap
Market currently requires two market makers and a minimum bid price of $1.00 per
share; provided, however, if the Company falls below the minimum bid price, it
will remain eligible for continued inclusion if the market value of the public
float is at least $1,000,000 and the Company has $2,000,000 in capital and
surplus. If the Company fails to maintain the Nasdaq minimum
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<PAGE> 15
threshold requirements, it would lose its Nasdaq listing and trading, if any, in
the securities would be conducted in the over-the-counter market known as the
NASD OTC Electronic Bulletin Board. As a result, an investor may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Company's Common Stock.
The Commission has adopted regulations which generally define "penny stock"
to be any equity security that has a market price (as defined) less than $5 per
share or an exercise price of less than $5 per share subject to certain
exceptions. Since the Securities have been accepted for quotation on Nasdaq,
they will initially be exempt from the definition of "penny stock". If the
Securities are later removed from listing by Nasdaq, and are traded at a price
below $5, the Securities may become subject to rules that impose additional
sales practice requirements on broker-dealers who sell such Securities to
persons other than established customers and institutional accredited investors.
For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such Securities and have received
the purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
rules require the delivery, prior to the transaction, of a disclosure schedule
prepared by the Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the Securities, and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell the Securities and may affect the ability of purchasers in this Offering
to sell the Securities in the secondary market.
FUTURE SALES OF COMMON STOCK PURSUANT TO RULE 144
The 1,500,000 shares of Common Stock issued prior to this Offering are
"restricted securities" as that term is defined by Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act"), and, in the future, may be sold
in compliance with Rule 144 or pursuant to an effective registration statement.
Of such shares, the 1,426,500 shares presently owned by Stanley H. Streicher and
73,500 owned by another shareholder are subject to the provisions of lock-up
agreements between Mr. Streicher, the shareholder and the Representative.
Ordinarily, under Rule 144, a person who is an affiliate of the Company (as that
term is defined in Rule 144) and has beneficially owned restricted securities
for a period of two years may, every three months, sell in brokerage
transactions an amount that does not exceed the greater of (i) 1% of the
outstanding number of shares of a particular class of such securities, or (ii)
the average weekly trading volume in such securities on all national exchanges
and/or reported through the automated quotation system of a registered
securities association during the four weeks prior to the filing of a notice of
sale by a securities holder. A person who is not an affiliate of the Company who
beneficially owns restricted securities and who has held such securities for at
least two years is also subject to the foregoing limitation pursuant to Rule
144(k). In the future, sales of restricted stock pursuant to Rule 144 may have
an adverse effect on the market price of the Company's Common Stock should a
public trading market develop for such shares.
In addition to the restrictions under Rule 144, the 1,426,500 shares of
Common Stock owned by Mr. Streicher upon completion of the Offering will be
subject to a lock-up period of 60 months, subject to earlier release if
consented to by the Representative or upon the Company's achievement of certain
performance goals. Of the shares subject to the lock-up (i) 75,000 shares shall
be released from the lock-up restrictions in the event such shares are not sold
pursuant to the over-allotment option and (ii) thereafter 40,000 shares shall be
released from the lock-up restrictions on each of the second, third and fourth
anniversary dates of the closing of the offering. Regardless of the Company's
performance, any shares held by Mr. Streicher remaining subject to lock-up shall
be released on February 1, 2002. The 73,500 shares owned by another shareholder
upon completion of the Offering will be subject to a lock-up period based upon
the same terms and conditions as Mr. Streicher unless otherwise agreed to by the
Representative. See "Shares Available for Future Sale."
Prior to this Offering, there has been no market for the Common Stock. The
Company can make no prediction as to the effect, if any, that sales of shares of
Common Stock, or the availability of such shares for sale, will have on the
market price of Common Stock prevailing from time to time. Nevertheless, sales
of substantial amounts of Common Stock in the public market could adversely
affect prevailing market prices.
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<PAGE> 16
NO DIVIDENDS ANTICIPATED
The Company intends to retain all future earnings for use in the
development of its business and does not anticipate paying any cash dividends on
the Common Stock in the foreseeable future. In addition, the payment of cash
dividends on the Common Stock is restricted by financial covenants in the
Company's loan agreements. See "Dividend Policy."
EFFECT OF ANTI-TAKEOVER LEGISLATION; POSSIBLE ADVERSE EFFECT OF ISSUANCE OF
PREFERRED STOCK ON MARKET PRICE AND RIGHTS OF COMMON STOCK
The State of Florida has enacted legislation that may deter or frustrate
takeovers of Florida corporations. The Florida Control Share Act generally
provides that shares acquired in excess of certain specified thresholds will not
possess any voting rights unless such voting rights are approved by a majority
vote of a corporation's disinterested shareholders. The Florida Affiliated
Transactions Act generally requires supermajority approval by disinterested
directors or shareholders of certain specified transactions between a public
corporation and holders of more than 10% of the outstanding voting shares of the
corporation (or their affiliates). The Company's Articles of Incorporation
authorize the issuance of 1,000,000 shares of "blank check" Preferred Stock
("Preferred Stock") with such designations, rights and preferences as may be
determined from time to time by the Board of Directors. Accordingly, the Board
of Directors is empowered, without shareholder approval, to issue Preferred
Stock with dividend, liquidation, conversion, voting or other rights that could
adversely affect the voting power or other rights of the holders of the Common
Stock. The issuance of any series of Preferred Stock having rights superior to
those of the Common Stock may result in a decrease in the value or market price
of the Common Stock. Holders of Preferred Stock to be issued in the future may
have the right to receive dividends and certain preferences in liquidation and
conversion rights. The issuance of such Preferred Stock could make the possible
takeover of the Company or the removal of management of the Company more
difficult, discourage hostile bids for control of the Company in which
shareholders may receive premiums for their Common Stock and adversely affect
the voting and other rights of the holders of the Common Stock. The Company may
in the future issue additional shares of its Preferred Stock. See "Description
of Securities."
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
The Company's Articles of Incorporation provide that shareholders seeking
to bring business before an annual meeting of shareholders, or to nominate
candidates for election as directors at an annual or special meeting of
shareholders, must provide timely notice thereof in writing. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 60 days nor more than
90 days prior to the meeting; provided, however, that in the event that less
than 80 day's notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder, to be timely, must be
received no later than the close of business on the 10th day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever is first. The Bylaws of the Company also specify
certain requirements for a shareholder's notice to be in proper written form.
These provisions may preclude shareholders from bringing matters before the
shareholders at an annual or special meeting or from making nominations for
directors at an annual or special meeting.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK
Management believes that this prospectus contains forward looking
statements, including statements regarding, among other items, the Company's
future plans and growth strategies and anticipated trends in the industry in
which the Company operates. These forward-looking statements are based largely
on the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control. Actual results
could differ materially from these forward-looking statements as a result of the
factors described herein, including, among others, regulatory or economic
influences. In light of these risks and uncertainties, there can be no assurance
that the forward-looking information contained in this Prospectus will in fact
transpire or prove to be accurate.
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<PAGE> 17
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the shares
of Common Stock and Warrants offered by the Company hereby are estimated to be
approximately $4,973,000, based on an assumed initial public offering price of
$6.00 per share of Common Stock and $.125 per Warrant (approximately $5,381,000
if the Underwriters' over-allotment option is exercised in full). The Company
expects such net proceeds (assuming no exercise of the Underwriters'
over-allotment option) to be utilized approximately as follows:
<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE PERCENTAGE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
------------------------------------------------------- ------------- -------------
<S> <C> <C>
Purchases Of Custom Fuel Trucks(1)..................... $ 2,400,000 48.0
Working Capital & Other Corporate Purposes(2).......... 2,573,000 52.0
------------- ------
Total............................................. $ 4,973,000 100.0%
============= ============
</TABLE>
- ---------------
(1) During the next 12 months, the Company plans to acquire approximately 15
custom fuel trucks at a cost of approximately $160,000 each. A portion of
the cost of the trucks will be paid in cash by the Company and the balance
will be financed. The Company is unable to accurately estimate the amount
of cash which will be required to purchase such trucks, because such amount
will be dependent upon the terms and conditions of financing available to
the Company at the time of purchase.
(2) A portion of the net proceeds allocated to working capital and other
corporate purposes may be used for acquisitions. The Company presently has
no agreements or commitments with respect to any acquisitions. Pending the
application of the proceeds from this Offering for other purposes, the
Company may apply a portion of the net proceeds to reduce temporarily the
outstanding amount borrowed under the Company's line of credit. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and Note 4 of Notes to
Financial Statements for a description of the terms of the line of credit.
The foregoing represents the Company's current estimate of its allocation
of the net proceeds of this Offering based upon the current status of its
business operations, its current plans, and current economic and industry
conditions. Future events, as well as changes in economic or competitive
conditions or the Company's business and the results of the Company's sales and
marketing activities may make shifts in the allocation of funds within or
between each of the items referred to above necessary or desirable. While
management of the Company presently intends to limit the application of the
Offering proceeds to the categories set forth above, should a reapportionment or
redirection of funds be determined by management to be in the best interests of
the Company, the actual amount expended to finance any category of expenses may
be increased or decreased.
If the Underwriters exercise the over-allotment option in full, the Company
will realize additional net proceeds of approximately $408,000, which will be
added to the Company's working capital. The Company will not realize any
proceeds from the sale by the Selling Shareholder of up to 75,000 shares of
Common Stock subject to the Underwriters' over-allotment option. See
"Underwriting."
The Company believes that the proceeds of this Offering, together with cash
flow from operations, will be sufficient to satisfy its contemplated cash
requirements for at least 12 months following the consummation of this Offering.
The Company's financial requirements will depend upon, among other things, the
number of additional custom fuel trucks acquired, the growth rate of the
Company's business, the amount of cash flow generated by operations and the
Company's ability to borrow funds or enter into lease or purchase financing
arrangements for the acquisition of new vehicles or for working capital
purposes. Should the Company require additional debt or equity financing to
support its operations, there can be no assurance that such additional financing
will be available to the Company on commercially reasonable terms, or at all.
Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest-bearing
investments.
The Company anticipates that the proceeds, if any, received from any
exercise of the Warrants or the Underwriters' Warrants (including the Warrants
therein) will be utilized for working capital and other corporate purposes.
15
<PAGE> 18
DILUTION
The difference between the initial public offering price per share of
Common Stock and the pro forma net tangible book value per share of Common Stock
after this Offering constitutes the dilution to investors in this Offering. Net
tangible book value per share is determined by dividing the net tangible book
value of the Company (total assets less intangible assets and liabilities) by
the total number of shares of Common Stock outstanding.
At July 31, 1996, the net tangible book value of the Company was $59,565,
or approximately $0.04 per share. After giving effect to the sale by the Company
of the 1,000,000 shares of Common Stock (at an assumed initial offering price of
$6.00 per share) and the Company's use of the estimated net proceeds therefrom
as set forth under "Use of Proceeds," the pro forma net tangible book value of
the Common Stock at July 31, 1996 would have been $5,032,565, or approximately
$2.01 per share. This represents an immediate increase in pro forma net tangible
book value of $1.97 per share to the Company's present shareholders and an
immediate dilution of $3.99 per share to the purchasers of shares of Common
Stock in this Offering. The following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Initial public offering price (per share of Common Stock)(1)....... $6.00
Net tangible book value at July 31, 1996........................... $0.04
Increase per share attributable to shares offered hereby........... 1.97
-----
Pro forma net tangible book value per share after Offering......... 2.01
-----
Dilution of net tangible book value per share to purchasers in this
Offering(2)...................................................... $3.99
=====
</TABLE>
- ---------------
(1) Represents the anticipated initial public offering price per share of Common
Stock (excluding Warrants) before deduction of underwriting discounts and
commissions and estimated expenses of the Offering.
(2) Assuming no exercise of Warrants or the Underwriters' over-allotment option.
See "Description of Securities" and "Underwriting."
The following table sets forth on a pro forma basis as of July 31, 1996 the
number and percentage of shares of Common Stock issued, and the amount and
percentage of consideration and average price per share paid by existing
shareholders of the Company, and to be paid by purchasers pursuant to this
Offering (based upon an assumed initial public offering price of $6.00 per share
of Common Stock and before deducting underwriting discounts and commissions and
estimated expenses of this Offering):
<TABLE>
<CAPTION>
OWNERSHIP
-------------------- CONSIDERATION
NUMBER OF -------------------- AVERAGE PRICE
SHARES PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing Shareholders................. 1,500,000 60.0 % $ 253,588 4.0 % $0.17
New Shareholders...................... 1,000,000 40.0 % $6,000,000 96.0 % $6.00
------- ---------- -------
Total............................ 2,500,000 100.00 % $6,253,588 100.00 %
======= ========= =======
</TABLE>
The foregoing table gives effect to the sale of the shares of Common Stock
offered hereby and does not give effect to the exercise of the Underwriters'
over-allotment option, any Warrants or the Underwriters' Warrants.
16
<PAGE> 19
CAPITALIZATION
The following table sets forth the capitalization of the Company as of July
31, 1996 and as adjusted giving effect to the sale by the Company of the
1,000,000 shares of Common Stock and 1,000,000 Warrants offered hereby and the
application of estimated net proceeds therefrom as set forth under "Use of
Proceeds." The table has not been adjusted to give effect to the exercise of the
Underwriters' over-allotment option, the exercise of the Warrants, or the
exercise of the Underwriters' Warrants. This table should be read in conjunction
with the Financial Statements, including the notes thereto, appearing elsewhere
in this Prospectus.
<TABLE>
<CAPTION>
JULY 31, 1996
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED
---------- -----------
<S> <C> <C>
Long-term borrowings:
Line of credit borrowings....................................... $2,471,398 $2,471,398
Long-term debt, excluding current portion....................... 1,394,404 1,394,404
Capital lease obligations, excluding current portion............ 168,415 168,415
---------- ----------
4,034,217 4,034,217
---------- ----------
Shareholders' equity:
Preferred Stock, $.01 par value, 1,000,000 shares authorized,
none issued and outstanding.................................. -- --
Common Stock, $.01 par value, (20,000,000 shares authorized,
1,500,000 shares issued and outstanding; as adjusted,
2,500,000 shares issued and outstanding)(1).................. 15,000 25,000
Additional paid-in capital........................................ 238,588 5,201,996
Unrealized gain on investment..................................... 7,072 7,072
Retained earnings (deficit)....................................... (33,646) (33,646)
---------- ----------
Total shareholders' equity.............................. 227,014 5,200,422
---------- ----------
Total capitalization.................................... $4,261,231 $9,234,639
========== ==========
</TABLE>
- ---------------
(1) Does not include (i) the 1,000,000 shares of Common Stock issuable upon the
exercise of the Warrants offered hereby, (ii) up to 75,000 shares of Common
Stock and 150,000 Warrants issuable upon exercise of the Underwriters'
over-allotment option, (iii) the 150,000 shares of Common Stock issuable
upon exercise of the Warrants included in the Underwriters' over-allotment
option, (iv) the 230,000 shares of Common Stock issuable upon exercise of
the Underwriters' Warrants (including the Warrants therein), (v) 1,000,000
shares of Common Stock issuable upon the exercise of stock options to be
granted on the effective date of this Offering, or (vi) 100,000 shares of
Common Stock reserved for issuance upon the exercise of stock options that
may be granted under the Company's stock option plan. See
"Management -- Employment Agreement" and "-- Stock Option Plan,"
"Description of Securities" and "Underwriting."
DIVIDEND POLICY
The Company intends to retain any future earnings for the operation and
expansion of its business and does not anticipate paying any cash dividends in
the foreseeable future. In addition, the payment of cash dividends on the Common
Stock is restricted by financial covenants in the Company's loan agreements. Any
future determination as to the payment of cash dividends will depend upon a
number of factors, including the Company's earnings, capital requirements,
financial condition and other factors considered relevant by the Company's Board
of Directors.
17
<PAGE> 20
SELECTED FINANCIAL DATA
The following table presents selected financial data as of and for each of
the fiscal years ended January 31, 1996 which have been derived from the
Company's audited financial statements included elsewhere in this Prospectus.
The selected financial data as of July 31, 1996 and for the six month periods
ended July 31, 1995 and 1996 have been derived from the unaudited financial
statements of the Company which include all adjustments, consisting of only
normal recurring adjustments, which the Company considers necessary for a fair
presentation and results of operations for these periods. The results of
operations for the six months ended July 31, 1996 are not indicative of results
that may be expected for the full year. The information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Financial Statements and the related notes
thereto. The Company has not paid dividends on its Common Stock during any of
the periods presented below.
<TABLE>
<CAPTION>
SIX MONTH PERIODS
YEARS ENDED JANUARY 31, ENDED JULY 31,
------------------------- -------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................................. $16,663,371 $23,989,358 $10,776,470 $13,887,855
Cost of sales........................... 15,217,945 21,752,350 9,947,234 12,760,929
Operating expenses...................... 1,328,028 1,750,235 825,491 1,203,353
Income (loss) from operations........... 117,398 486,773 3,745 (76,427)
Interest expense........................ 168,991 343,967 154,062 260,252
Income (loss) before provision for
income taxes......................... (38,089) 176,025 (131,111) (330,292)
Net income (loss)....................... (37,700) 100,009 (85,680) (211,872)
Net income (loss) per share............. (.03) .07 (.06) (.14)
Average number of common shares
outstanding (1)...................... 1,500,000 1,500,000 1,500,000 1,500,000
</TABLE>
<TABLE>
<CAPTION>
JULY 31, 1996
---------------------------
AS
JANUARY 31, ADJUSTED
1996 ACTUAL (2)
----------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................... $ 725,419 $ 961,886 $ 5,935,294
Current assets.......................... 3,151,793 3,543,430 8,516,838
Total assets............................ 6,444,186 7,248,964 12,222,372
Current liabilities..................... 2,426,374 2,581,544 2,581,544
Long-term borrowings.................... 3,172,737 4,034,217 4,034,217
Total liabilities....................... 6,005,300 7,021,950 7,021,950
Shareholders' equity.................... 438,886 227,014 5,200,422
</TABLE>
- ---------------
(1) The average number of shares used in the calculation of earnings per share
includes all shares outstanding during the periods presented. Such number
does not include (i) the 1,000,000 shares of Common Stock offered by the
Company hereby, (ii) the 1,000,000 shares of Common Stock issuable upon
exercise of the Warrants offered hereby, (iii) up to 75,000 shares of
Common Stock issuable by the Company upon exercise of the Underwriters'
over-allotment option, (iv) the 150,000 shares of Common Stock issuable
upon exercise of the Warrants included in the Underwriters' over-allotment
option, (v) the 230,000 shares of Common Stock issuable upon exercise of
the Underwriters' Warrants (including the Warrants therein), (vi) 1,000,000
shares of Common Stock issuable upon the exercise of stock options to be
granted on the effective date of this Offering, and (vii) 100,000 shares of
Common Stock reserved for issuance upon the exercise of options that may be
granted under the Company's stock option plan, none of which has been
granted to date. See "Management -- Employment Agreement" and "-- Stock
Option Plan" and "Description of Securities."
(2) Adjusted to give effect to (i) the sale of 1,000,000 shares of Common Stock
and 1,000,000 Warrants offered hereby at assumed initial public offering
prices of $6.00 per share and $0.125 per Warrant, respectively, and the
application of the net proceeds therefrom. See "Use of Proceeds". No effect
has been given to the exercise of the (i) Warrants, (ii) Underwriters'
over-allotment option, (iii) Underwriters' Warrants (including the Warrants
therein). See "Underwriting."
18
<PAGE> 21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following analysis of the Company's financial condition as of July 31,
1996 and the Company's results of operations for the years ended January 31,
1995 and 1996 and the six month periods ended July 31, 1995 and 1996 should be
read in conjunction with the Company's financial statements and notes thereto
included elsewhere in this Prospectus. The following discussion contains
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ significantly from the results discussed in the
forward-looking statements.
OVERVIEW
The Company derives all of its revenue from providing mobile fueling
services. Revenue is comprised principally of sales of gasoline and diesel fuel
and related service charges. Cost of sales is comprised principally of the cost
of fuel and transportation costs (primarily payroll). Included in both revenue
and cost of sales is federal and state excise taxes on fuel, which are collected
by the Company from its customers, when required, and remitted to the
appropriate taxing authority.
RESULTS OF OPERATIONS
Year Ended January 31, 1995 compared to Year Ended January 31, 1996
Revenue increased $7,326,000, or 44.0%, for the year ended January 31, 1996
("fiscal 1996") compared to the year ended January 31, 1995 ("fiscal 1995").
Excluding fuel taxes, revenue increased $5,099,000, or 47.7%. The increase in
revenue resulted from a higher volume of fuel sales due to increased services to
existing customers, acquisition of new customers in existing locations and the
introduction of mobile fueling operations into additional metropolitan areas.
Gross profit increased $792,000, or 54.8%, in fiscal 1996 compared to
fiscal 1995, primarily as a result of the increase in revenue. As a percentage
of revenue, gross profit increased from 8.7% in fiscal 1995 to 9.3% in fiscal
1996, primarily as a result of increased route efficiency due to expanded
operations and increased pricing of the Company's fuel and service charges in
the second half of fiscal 1996.
Operating expenses increased $422,000, or 31.8%, in fiscal 1996 compared to
fiscal 1995. As a percentage of revenue, operating expenses decreased from 8.0%
in fiscal 1995 to 7.3% in fiscal 1996. The Company continued to expand its route
system within existing geographic service areas, resulting in more efficient
operations.
Interest expense increased $175,000, or 103.6%, in fiscal 1996 compared to
fiscal 1995 as a result of increased borrowings to fund the Company's expansion
into new markets and to acquire new custom fuel trucks for existing and new
locations.
The Company recorded an income tax benefit of less than $1,000 in fiscal
1995 compared to an income tax provision of $76,000 in fiscal 1996.
The Company had a net loss of $38,000, or $.03 per share, in fiscal 1995
and net income of $100,000, or $.07 per share, in fiscal 1996. The Company's
profitability in fiscal 1996 resulted from the above-mentioned efficiency and
pricing improvements.
Six Months Ended July 31, 1995 Compared to Six Months Ended July 31, 1996
Revenue increased $3,111,000, or 28.9%, in the first six months of fiscal
1997 compared to the same period in fiscal 1996. Excluding fuel taxes, revenue
increased by $3,348,000, or 48.0%. Sales to several large customers which are
exempt from certain fuel taxes resulted in the significantly higher percentage
increase in revenue excluding fuel taxes. The increase in revenue resulted from
a higher volume of fuel sales due to increased services to existing customers,
acquisition of new customers in existing locations and the introduction of
mobile fueling operations into additional metropolitan areas.
19
<PAGE> 22
Gross profit increased $298,000, or 35.9%, in the first six months of
fiscal 1997 compared to the first six moths of fiscal 1996. As a percentage of
revenue, gross profit increased from 7.7% in the first six months of fiscal 1996
to 8.1% in the corresponding period of fiscal 1997. The Company increased the
pricing of its fuel sales and service charges in the second half of fiscal 1996.
However, the Company's gross margin percentage decreased in the six month period
ended July 31, 1996 from the year ended January 31, 1996 due to the addition of
new lower margin services to certain customers.
Operating expenses increased $378,000, or 45.8%, in the first six months of
fiscal 1997 compared to the same period in fiscal 1996. As a percentage of
revenue, operating expenses increased from 7.7% in the first six months of
fiscal 1996 to 8.7% in corresponding period of fiscal 1997. The increase in
operating expenses resulted from the continued expansion of existing locations,
additional expenses incurred at recently opened locations and an overall
increase in insurance expense.
Interest expense increased $106,000, or 68.8%, in the first six months of
fiscal 1997 compared with the corresponding period in fiscal 1996 as a result of
an increase in borrowings to fund the Company's acquisition of new trucks,
primarily for existing locations.
The Company had an income tax benefit of $45,000 in the first six months of
fiscal 1996 and $118,000 in the first six months of fiscal 1997.
The Company had a net loss of $86,000, or $.06 per share, for the first six
months of fiscal 1996 and $212,000, or $.14 per share, for the first six months
of fiscal 1997. Net losses for both periods resulted primarily from additional
operating expenses and interest expense relating to expansion of the Company's
operations.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which
requires adoption by the Company in fiscal 1997. SFAS No. 121 establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used, and for long-lived assets and certain identifiable intangibles to be
disposed of. The adoption of SFAS No. 121 did not have a material effect on the
Company's financial condition or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had working capital of $725,000 as of January 31, 1996 and
$962,000 as of July 31, 1996. The Company's primary long-term and working
capital requirements have been to fund capital expenditures for custom fuel
trucks and related equipment and working capital for its inventory requirements
and the financing of customer accounts receivable. The Company's expansion over
the past several years and its negative cash flows from operating activities
have been financed by additional bank borrowings and lease financing. The
Company's cash and unrestricted investments totalled $38,000 as of July 31,
1996. In addition, at July 31, 1996, the Company had $229,000 available under
its revolving line of credit.
The Company has a credit facility with BankAtlantic providing for a $2.7
million revolving line of credit which the Company utilizes to purchase custom
fuel trucks and for working capital. Borrowings are subject to a borrowing base
determined by eligible accounts receivable and bear interest at 1.5% per annum
over the prime rate. The facility is secured by substantially all of the
Company's assets (including accounts receivables). The credit facility contains
covenants that, among other things, include the maintenance of a minimum
tangible net worth of $375,000, restrict mergers, dispositions of assets and
certain business acquisitions. Subsequent to January 31, 1996, the Company was
not in compliance with the tangible net worth covenant of its line of credit
agreement and obtained a waiver from the bank of such covenant through August 1,
1997. See Note 4 of Notes to Financial Statements.
Cash flows provided by (used in) operating activities totalled $234,000 in
fiscal 1995, ($212,000) in fiscal 1996, ($352,000) for the six months ended July
31, 1995 and ($567,000) for the six months ended July 31, 1996. Cash flows from
operating activities have been adversely affected by the Company's net losses as
well as the funding of continually increasing accounts receivable resulting from
the Company's expansion. The
20
<PAGE> 23
Company recently has taken steps to improve its cash flows from operating
activities, including improving accounts receivable collection methods;
increasing the prices of certain of the Company's services; introducing a new
daytime delivery service at an hourly rate; eliminating certain unprofitable
services; and revising certain routes to increase truck utilization.
Cash flows used in investing activities totalled $1,581,000 in fiscal 1995,
$1,174,000 in fiscal 1996, $690,000 for the six months ended July 31, 1995 and
$390,000 for the six months ended July 31, 1996. Cash flows used in investing
activities in all periods principally represents expenditures for the purchase
of custom fuel trucks and related equipment.
Cash flows from financing activities totalled $1,277,000 in fiscal 1995,
$1,318,000 in fiscal 1996, $842,000 for the six months ended July 31, 1995 and
$774,000 for the six months ended July 31, 1996. Cash flows from investing
activities in each period principally represent the increase in net borrowings
under the Company's line of credit and the repayment of obligations for
equipment under capital leases.
The Company believes that the proceeds of this Offering, together with cash
flow from operations, will be sufficient to satisfy its contemplated cash
requirements for at least 12 months following the consummation of this Offering.
The Company's financial requirements will depend upon, among other things, the
number of additional custom fuel trucks acquired, the growth rate of the
Company's business, the amount of cash flow generated by operations and the
Company's ability to borrow funds or enter into lease or purchase financing
arrangements for the acquisition of new trucks or for working capital purposes.
Should the Company require additional debt or equity financing to support its
operations, there can be no assurance that such additional financing will be
available to the Company on commercially reasonable terms, or at all.
NEW ACCOUNTING PRONOUNCEMENTS
In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation,"
was issued. SFAS No. 123 establishes a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company intends to account for stock option grants in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees,"
and, accordingly, will not recognize compensation expense for stock option
grants made at an exercise price equal to or in excess of the fair market value
at the date of grant. Changes in the accounting for stock-based compensation are
optional and the Company intends to adopt only the disclosure requirements of
SFAS No. 123 as of January 31, 1997.
21
<PAGE> 24
BUSINESS
The Company provides mobile fueling services, primarily to customers which
operate large fleets of vehicles (such as national courier services, major
trucking lines, hauling and delivery services, utilities and governmental
agencies). Company-owned custom fuel trucks deliver fuel on a regularly
scheduled or as needed basis directly to vehicles at customers' locations,
assuring the Company's customers a dependable supply of fuel at competitive
rates. The Company utilizes its proprietary electronic fuel management system to
measure, record and track fuel dispensed to each vehicle fueled at a customer
location. This allows the Company to verify the amount of fuel delivered and
provides its customers with customized fleet fuel data for management analysis
and tax reporting. Additionally, the Company's fuel management system reduces
the risk of employee theft by dispensing fuel only to authorized vehicles. The
Company believes that mobile fueling provides several economic and other
advantages to its customers, including eliminating the costs and potential
environmental liabilities associated with equipping and maintaining fuel storage
and dispensing facilities, reducing labor and administrative costs associated
with fueling vehicles and providing centralized control over fuel inventories
and usage. The Company also believes that federal and state environmental
regulations have created a "window of opportunity" for the Company to convert
fleet operators that currently utilize underground storage tanks to mobile
fueling customers. See "-- The Mobile Fueling Industry."
Founded by Stanley H. Streicher, the Company's President and Chief
Executive Officer, the Company's predecessor commenced its mobile fueling
operations in 1983. The Company presently has operations in six locations
throughout Florida and in Los Angeles and San Diego, California, Atlanta and
Columbus, Georgia, Chattanooga and Kingsport, Tennessee and Dallas/Fort Worth,
Texas. At July 31, 1996, the Company operated a fleet of 49 custom fuel trucks
and was servicing approximately 200 customers at more than 500 locations
nightly, delivering fuel at a rate of over 2,000,000 gallons per month.
THE MOBILE FUELING INDUSTRY
Traditionally, business and other entities that operate large fleets of
vehicles have met their fueling requirements by either maintaining their own
supply of fuel in on-site storage tanks or fueling vehicles with credit card
purchases or other credit arrangements at local retail gas stations. On-site
storage tanks and fueling facilities can be expensive to construct and maintain
and expose the property owner and operator to potential liability associated
with fuel leaks or spills. In addition, increasingly stringent federal and state
environmental regulation of underground storage tanks will require businesses
that maintain their own fuel supplies to spend significant amounts to remove or
retrofit underground storage tanks to meet regulatory standards. For example,
federal regulations designed to protect the nation's soil and groundwater from
contamination by leaking underground petroleum storage tanks currently require
that all new storage tanks and, by December 1998, all existing storage tanks
comply with certain construction standards and contain leak detection systems.
Some states, including Florida, have promulgated their own detailed criteria for
new underground storage tanks and the retrofitting of older underground storage
tanks, and in some instances such criteria are more stringent than the federal
regulations. The Company believes that many fleet operators currently utilizing
underground storage tanks will choose to meet their fueling requirements by
other means, including mobile fueling, instead of investing in upgrading
existing facilities.
Fueling fleet vehicles at retail gas stations is an inefficient use of
employee time, creates a significant amount of unnecessary paperwork and exposes
the fleet operator to an increased risk of employee fraud. In addition, while
large users often are able to negotiate favorable fuel pricing from retail gas
stations, the labor time expended by having employees fuel their own vehicles as
well as the costs associated with management and administration of fuel
purchases can exceed the benefits associated with price discounts.
22
<PAGE> 25
Mobile fueling services, such as those provided by the Company, offer
several benefits over traditional fueling methods:
- Reduced Operating Costs and Increased Labor Productivity. Mobile fueling
enables businesses to reduce operating costs by eliminating the need for
company employees to fuel vehicles either on-site or at local retail gas
stations. Overnight fueling prepares fleet vehicles for operation at the
beginning of each work day and increases labor productivity by allowing
employees to use their vehicles during time that would otherwise be spent
fueling. Mobile fueling also reduces the administrative burden required
to oversee and administer fuel purchases and inventories.
- Provides Centralized Inventory Control and Management. The Company's
fuel management system provides customers with weekly reports detailing,
among other things, the location, description and daily and weekly fuel
consumption of each vehicle fueled by the Company. This eliminates
customers' need to invest working capital to maintain adequate fuel
supplies, and allows customers to centralize their fuel inventory
controls and track and analyze vehicle movement and fuel consumption for
management and tax reporting purposes.
- Provides Tax Reporting Benefits. The Company's fuel management system's
ability to track fuel consumption to specific vehicles and fuel tanks
provides tax benefits to customers who consume fuel in uses that are
tax-exempt, such as for off-road vehicles, government-owned vehicles and
fuel used to run refrigerator units on vehicles. For such uses, the
customers receive reports which provide them with the information
required to substantiate such tax exemptions.
- Eliminates Expenses and Liabilities of On-site Storage. Fleet operators
who previously satisfied their fuel requirements using on-site storage
tanks can eliminate the capital expenditures and operating costs required
to equip and maintain fuel storage and dispensing facilities and
inventory and to comply with increasingly stringent environmental
regulations. In addition, by removing on-site storage tanks and relying
on mobile fueling, customers avoid potential liabilities associated with
the handling and storage of fuel.
- Prevents Fuel Theft. Fleet operators that rely on employees to fuel
vehicles, whether at on-site facilities or at retail gas stations, often
experience shrinkage of fuel inventories or excess fuel purchases due to
employee fraud. The Company's fuel management system reduces the risk of
employee theft by dispensing fuel only to authorized vehicles. Utilizing
an independent contractor such as the Company for fueling services rather
than allowing employees to purchase fuel at local retail stations also
eliminates employee fraud due to credit card abuse.
- Emergency Fuel Supplies. Emergency preparedness, including fuel
availability, is critical to the operation of utilities, delivery
services and other fleet operators. The Company provides access to
emergency fuel supplies to allow customers to respond more effectively to
severe local weather conditions or other emergency situations.
- Comparable Pricing. The Company generally prices its fueling services at
rates comparable to the market price of gasoline and diesel fuel. This
has proven to be an effective inducement to cause customers to convert to
mobile fueling services from on-site and credit card based fueling
methods.
GROWTH STRATEGY
The Company intends to grow by consolidating its position in its existing
markets and expanding into additional geographic markets. The long-term
objective of the Company is to become a major national supplier of gasoline and
diesel fuel for vehicle fleets. The Company intends to implement its strategy
through (i) internal market development by which it builds route densities to
become the lowest cost operator and (ii) seeking strategic acquisition
opportunities to enter new market areas or increase its customer base in an
existing market.
Internal Market Development. The Company typically has entered new markets
only after securing contracts to service large fleets in or near major
metropolitan areas, typically through existing customer
23
<PAGE> 26
relationships. After establishing operations in a new market area, the Company
attempts to increase its customer base and achieve economies of scale by
providing fueling services to small and medium-sized local and regional
companies.
Strategic Acquisitions. The Company believes that opportunities exist for
the Company to enter new geographic markets through the acquisition of smaller
local or regional fuel distributors. The Company also intends to seek
acquisition opportunities in existing market areas to increase the Company's
customer base and complement its existing operations. Such acquisitions would
likely involve the purchase of mobile fueling equipment and customer lists and
require little additional administrative expense to operate. The Company
believes that it can introduce operating efficiencies into existing business by
integrating their operations with its own and that it can increase the sales
potential of acquired operations by providing their existing and potential
customers the additional benefits associated with the deployment of the
Company's fuel management system.
MARKETING AND CUSTOMERS
The Company markets its services primarily to customers which operate large
fleets of vehicles in connection with their business (such as national courier
corporations, major trucking lines, hauling and delivery services, utilities and
governmental agencies). The Company also seeks to obtain the business of smaller
fleet operators which are in physical proximity to its larger customers. Once
engaged to provide fueling services, the Company is usually the exclusive
service for the fueling of a customer's entire fleet or a particular yard of
vehicles. For potential customers with larger fleets, the Company generally
obtains approval from regional corporate offices to supply fuel within a newly
designated area. Whereas large fleet operators offer immediate market
penetration on a regional basis, small fleet operators are equally important
accounts because they provide geographic density which optimizes fuel delivery
efficiency and reduces cost.
The Company's sales representatives focus their marketing efforts on fleet
operators within the Company's established service areas. The Company's sales
representatives identify and directly contact candidates for the Company's
services. Many of the Company's sales presentations, particularly to major fleet
operators, are conducted by Stanley H. Streicher, the Company's President.
Direct marketing, including telephone solicitation, has played a primary role in
the Company's development of new business. Another important marketing source
has been referrals from existing customers.
The Company distributes gas and diesel fuel to over 200 customers. Florida
Power & Light Company ("FP&L") accounted for more than 10% of the Company's
revenue in the years ended January 31, 1995 and 1996; and in the six months
ended July 31, 1996, FP&L and the United States Postal Service each accounted
for more than 10% of the Company's revenues. Although the Company has contracts
to provide mobile fueling services to several of its larger customers, generally
the Company does not obtain written agreements with its customers. See "Risk
Factors -- Absence of Written Agreements."
24
<PAGE> 27
The following table identifies certain of the Company's customers, along
with the number of customer locations serviced and the states in which the
Company provides mobile fueling services.
<TABLE>
<CAPTION>
CUSTOMER NAME NUMBER OF LOCATIONS STATES
- ------------------------------ ------------------------------ ------------------------------
<S> <C> <C>
ABF Freight 13 California, Florida, Georgia
Tennessee & Texas
AT&T 1 California
Coca Cola 13 California and Florida
Consolidated Freight 4 Florida
Conway Southern Express 6 Florida
Emery Freight 5 Florida and Tennessee
Federal Express 22 Florida
Florida Power Corp. 2 Florida
Florida Power & Light Co. 108 Florida
Frito-Lay, Inc. 8 Florida
Old Dominion Freight 3 California and Florida
Overnite Transportation 3 Florida
Roadway Express 6 California and Florida
SouthEastern Freight 4 Florida and Texas
BellSouth 108 Florida
USF Holland 2 Florida, Georgia and Tennessee
USF Dugan 5 Florida, Georgia and Texas
U.S. Postal Service 163 Florida
</TABLE>
OPERATIONS
The Company currently operates from 13 locations in California, Florida,
Georgia, Tennessee and Texas. The Company delivers fuel utilizing its own fleet
of 49 custom fuel trucks, each of which is equipped with the Company's
proprietary electronic fuel tracking and reporting system. The Company's
vehicles have fuel capacities ranging from 2,800 to 4,200 gallons. Each vehicle
services generally between five and 15 customer locations per day or night,
depending on size of the customers, market density and the individual customers'
fuel requirements. Generally, the custom fuel trucks acquire fuel inventory
daily at local port facilities or large wholesale gas distributor locations and
are assigned to a specified delivery route. The Company conducts all dispatch
and billing functions from corporate headquarters. Route drivers and service
personnel operate from all the Company's offices.
The Company's fuel management system derives its data from the Fuel
Tracking Controller (the "FTC Computer"), which is a computer installed on a
customized fuel truck. The FTC Computer can be programmed to control a variety
of truck configurations; single, dual, or triple storage container trucks; and
any number of pumps and hoses attached to the fuel truck. The FTC Computer
details fueling from the Company's trucks to each vehicle in the customer's
vehicle fleet to a measurement of 1/100 of a gallon by reading the
state-calibrated meter installed on the fuel trucks. To accomplish this
measurement, the FTC Computer interfaces with hand-held devices operated by the
Company's driver or operator.
To permit the Company's customers to track their use of fuel, each fleet
vehicle or piece of equipment fueled by the Company is electronically identified
from a list of the customer's asset number previously registered in the
Company's computer. For security and tracking purposes, the FTC Computer will
not permit fuel to be dispensed from the Company's truck unless both the fleet
yard and the individual vehicle to be fueled electronically correspond to the
FTC Computer registration. A hand-held radio connected to a scanning device
links the operator or driver of the fuel truck with the FTC Computer. Only after
verification of both the yard and the truck or piece of equipment will the FTC
Computer allow operation of the fuel pump on the fuel truck to dispense fuel.
All fuel dispensing from a fuel truck is recorded by the FTC Computer and
stored in a tamper free solid state memory cartridge ("SSC") for downloading at
an operations control center where the data is assimilated
25
<PAGE> 28
into reports and invoices for the customer. The FTC Computer will not allow fuel
to be dispensed unless this removable SSC cartridge is inserted into the FTC
Computer. The SSC has no moving parts and is not susceptible to damage or data
loss under normal conditions. The SSC also is protected by a dual battery back-
up system and a dual disk system to protect data. The Company also maintains a
backup computer system in the event of failure of the primary system.
The Company also has adapted its FTC Computer for use with fixed site
tanks. Upon conversion of a customer tank, the Company services and manages fuel
delivery to the tank and provides the customer with reports detailing fuel
dispensed by the customer from the tank into each fleet vehicle.
FUEL SUPPLY
Gas and diesel fuel are commodities which are processed and sold by various
sources. The Company purchases fuel from several suppliers at spot market prices
and often qualifies for volume discounts. The Company is currently purchasing
fuel from major suppliers. The Company monitors fuel prices and price trends in
each of its markets on a daily basis and seeks to purchase at the lowest
available prices with the best terms satisfactory to the Company.
CUSTOM FUEL TRUCK PURCHASES
The Company presently orders and purchases custom fuel trucks from two
manufacturers of trucks suitable for the Company's operations. These companies
provide their customers with the option of purchasing standard equipment fuel
trucks or custom designing a fuel truck to particular specifications.
The typical configuration of the Company's custom fuel trucks is a Ford
L-9000 with a 4400 gallon multi-compartment aluminum tank, a vapor recovery
system and the Company's proprietary FTC Computer, which records and regulates
fuel flow from the storage compartments.
For maintenance of the fuel trucks, the Company relies upon equipment
warranties, fixed fee service contracts and on-site repairs. To date, the
Company has not experienced significant down-time on any of its customized fuel
trucks.
COMPETITION
The Company competes with other distributors of fuel, including several
regional distributors and numerous small independent operators. Some of the
Company's competitors have significantly greater financial or marketing
resources than the Company. The Company's competitors also could introduce
services that are superior to the Company's or that achieve greater market
acceptance. The Company also competes for customers whose drivers fuel their own
vehicles at retail gas stations. The Company believes that its ability to
compete depends on a number of factors, including price, reliability, credit
terms, name recognition, delivery time and service and support. There can be no
assurance that the Company will be able to continue to compete successfully with
respect to these factors.
EMPLOYEES
At July 31, 1996, the Company had 139 full-time employees, of whom 20 were
involved in executive, managerial, supervisory and sales capacities, 98 were
route drivers and 21 served in various clerical and other capacities. None of
the Company's employees is covered by a collective bargaining agreement or is a
member of a union. The Company considers its relationship with its employees to
be good.
PROPERTIES
The Company's corporate headquarters are located in a 10,000 square foot
facility in Fort Lauderdale, Florida. This facility accommodates the Company's
corporate, administrative, marketing and sales personnel, as well as truck yard
space and warehouse space. The lease expires July 31, 2014, and the fixed annual
rent is $51,000. The Company also leases service and supply depots at the
following locations: California (San Diego and Gardenia); Florida (Ft. Myers,
Tampa, Melbourne, Orlando and Jacksonville); Georgia (Atlanta and
26
<PAGE> 29
Columbus); Tennessee (Kingsport and Chattanooga); and Texas (Dallas/Fort Worth).
Certain of the Company's facilities are leased from Stanley H. Streicher, the
Company's President and Chief Executive Officer. See "Certain Transactions." The
Company believes that its existing facilities are adequate for its current needs
and that additional facilities in its existing service areas are available to
meet future needs.
GOVERNMENTAL REGULATION
The Company's operations are affected by numerous federal, state and local
laws, including those relating to protection of the environment and worker
safety. The transportation of gasoline and diesel fuel is subject to regulation
by various federal, state and local agencies, including the U.S. Department of
Transportation ("DOT"). These regulatory authorities have broad powers, and the
Company is subject to regulatory and legislative changes that can affect the
economics of the industry by requiring changes in operating practices or
influencing the demand for, and the cost of providing, its services. The Company
is also subject to the rules and regulations of the Hazardous Materials
Transportation Act. In addition, the Company depends on the supply of gasoline
and diesel fuel from the oil and gas industry and, therefore, is affected by
changing taxes, price controls and other laws and regulations relating to the
oil and gas industry generally. The Company cannot determine the extent to which
its future operations and earnings may be affected by new legislation, new
regulations or changes in existing regulations.
The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of the Company that
were in compliance with all applicable laws at the time such acts were
performed. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and several liability
for remediation of spills and releases of hazardous substances. In addition,
companies may be subject to claims alleging personal injury or property damage
as a result of alleged exposure to hazardous substances, as well as damage to
natural resources.
Although the Company believes that it is in substantial compliance with
existing laws and regulations, there can be no assurance that substantial costs
for compliance will not be incurred in the future. Moreover, it is possible that
other developments, such as stricter environmental laws, regulations and
enforcement policies thereunder, could result in additional, presently
unquantifiable, costs or liabilities to the Company. See
"Business -- Governmental Regulation."
LEGAL PROCEEDINGS
The Company has no material legal proceedings pending. From time to time,
the Company may become a party to litigation incidental to its business. There
can be no assurance that any future legal proceedings will not have a material
adverse effect on the Company's business, reputation, financial condition or
results of operations.
27
<PAGE> 30
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages, addresses and positions
with the Company as of the date of this Prospectus of all of the officers and
directors of the Company. Also set forth below is information as to the
principal occupation and background for each person in the table.
<TABLE>
<CAPTION>
NAME AND ADDRESS AGE POSITION AND OFFICE
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Stanley H. Streicher.......... 53 President, Chief Executive Officer, Director and
Founder
Timothy Koshollek............. 32 Vice President of Marketing and Operations
Kenneth C. Day................ 66 Controller, Chief Financial Officer
</TABLE>
Mr. Streicher has served as President and Chief Executive Officer of the
Company since its inception. Mr. Streicher has also served as the President and
Chief Executive Officer of Enterprises, the Company's predecessor, since its
inception in 1983. During the period 1979 to 1983, Mr. Streicher operated a
mobile fueling business which became the Company's predecessor. From 1972 to
1979, Mr. Streicher served as supervisor of receiving of AT&T's Montgomery
Material Management Center, where he designed systems to expedite material and
equipment handling. From 1965 to 1972, Mr. Streicher served to the rank of
Captain in the United States Military in various leadership capacities,
including the command of an aviation division together with the responsibility
for scheduling aircraft and their refueling.
Mr. Koshollek has served as the Vice President of Marketing and Operations
of Enterprises since 1994. From 1991 to 1994, Mr. Koshollek was responsible for
sales and management of a wholesale seafood company. From 1989 to 1991, he was
the operations manager of Enterprises responsible for its Southeast division
fuel delivery operations.
Mr. Day has served as the Controller and the Company's Chief Financial
Officer of the Company since May 1994. From 1987 to 1994 he was Controller and
Treasurer of Century Elevator Company, a manufacturer of elevators. From 1983 to
1986 he was the Controller of Ski Rixen International, Inc., a distributor of
waterskiing accessories. From 1978 to 1982, he served as a finance officer at
Sikes Tile Distributors, Inc., a distributor of tiles in South Florida. From
1972 to 1978, he was Controller at Fremont Company, a national distributor of
food products.
The Company has agreed with the Representative that, within 30 days after
the completion of this Offering, the Company will increase to five the number of
individuals serving on the Company's Board of Directors, at least two of whom
will be independent directors. The Company has also agreed that, for a period of
five years following the completion of this Offering, it will use its best
efforts to cause the election to its Board of Directors, one designee of the
Representative, provided that such designee is reasonably acceptable to and
approved by the Company. Alternatively, the Representative may appoint an
observer to attend all meetings of the Board of Directors during such period. As
of this date, no person has been identified by the Representative for election
as a director or for appointment as an observer.
The Company's directors will be reimbursed for any out-of-pocket expenses
incurred by them for attendance at meetings of the Board of Directors or
committees thereof. The Board of Directors intends to establish and form a
Compensation Committee and Audit Committee upon the completion of this Offering.
The Board of Directors also intends to compensate non-employee Directors $1,000
per meeting of the Board attended by such Director.
28
<PAGE> 31
EXECUTIVE COMPENSATION
The following table sets forth compensation paid to the Company's Chief
Executive Officer during the fiscal years ended January 31, 1996, 1995 and 1994.
No other executive officer's salary and bonus equaled or exceeded $100,000 for
services rendered to the Company during such years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
--------------------------------- ------------
FISCAL YEAR ALL OTHER
NAME AND PRINCIPAL POSITION ENDED 1/31 SALARY BONUS COMPENSATION
- ------------------------------------------------------------ -------- -------- ------------
<S> <C> <C> <C> <C>
Stanley H. Streicher............................. 1996 $150,113 -- --
President & Chief 1995 150,021 -- --
Executive Officer 1994 110,000 -- --
</TABLE>
- ---------------
(1) The Company provides certain perquisites and personal benefits to the
President and Chief Executive Officer, the aggregate amount of which does
not exceed $50,000 or 10% of such officer's total annual salary and bonus.
EMPLOYMENT AGREEMENT
The Company intends to enter into an employment agreement with Stanley H.
Streicher effective upon completion of this Offering, pursuant to which Mr.
Streicher will serve as President and Chief Executive Officer of the Company.
The term of the agreement is five years. The term of agreement will
automatically renew for two successive two-year terms, unless notice of
termination is given prior to a renewal period. The agreement provides that Mr.
Streicher shall receive an initial annual base salary of $275,000 which shall be
increased to reflect the change of the cost of living, based upon the change,
from the preceding January 1, in the consumer price index for All Urban
Consumers, as published by the U.S. Bureau of Labor Statistics. In addition to
salary, Mr. Streicher will be eligible to participate in a bonus pool which will
provide him additional compensation of up to 10% of the Company's pre-tax
earnings.
The agreement provides that if Mr. Streicher's employment is terminated as
a result of his death or disability, he or his estate will receive for a period
of six months his base salary in effect as of the date of termination and a
prorated amount of any bonuses. The agreement also provides that in the event
Mr. Streicher's employment is terminated "without cause" or for "good reason,"
Mr. Streicher will receive, in addition to any salary, bonus and other
compensation accrued through the date of termination, a lump sum equal to the
greater of the full amount of salary, bonuses and other compensation due under
the agreement for the remainder of the term and three times the then-existing
salary and most recent annual bonus. The agreement further provides that Mr.
Streicher will not compete with the Company (i) while employed by the Company,
and (ii) for a period of two years following termination of employment. In the
event that his employment is terminated without cause, as a result of his death
or disability, or upon a change of control (as defined in the employment
agreement), all options to purchase Common Stock held by Mr. Streicher shall
become immediately exercisable.
The agreement further provides Mr. Streicher with stock options that will
enable him to acquire up to an aggregate of 1,000,000 shares of Common Stock at
the initial offering price of the Company following the closing of this
Offering. The exercise of the stock options is contingent upon the Company
achieving either a specified earnings per share level or a specified stock price
level (the "performance threshold"), for the corresponding fiscal year-end.
Commencing with fiscal year-ended January 31, 1997 and at each of the five
fiscal year ends thereafter, provided the performance threshold is met, 200,000
of such options will become exercisable at an exercise price equal to the
initial public offering price. Regardless of the Company's performance, all of
the stock options granted to Mr. Streicher shall vest and become exercisable ten
years from the date of the grant.
29
<PAGE> 32
STOCK OPTION PLAN
The Company has adopted a Stock Option Plan (the "Plan"), under which
100,000 shares of Common Stock are reserved for issuance upon exercise of
options. The Plan is designed to serve as an incentive for retaining qualified
and competent employees. The Company's Board of Directors, or a committee
thereof (the "Committee"), administers and interprets the Plan and is authorized
to grant options thereunder to all eligible employees of the Company, including
officers and directors (whether or not employees) of the Company and
Consultants.
The Plan provides for the granting of both "incentive stock options" (as
defined in Section 422A of the Internal Revenue Code) and nonqualified stock
options. Options are granted under the Plan on such terms and at such prices as
determined by the Committee, except that the per share exercise price of
incentive stock options cannot be less than the fair market value of the Common
Stock on the date of grant and the per share exercise price of nonqualified
stock options will not be less than 85% of the fair market value on the date of
grant. Each option is exercisable after the period or periods specified in the
option agreement, but no option can be exercised until six months after the date
of grant or after the expiration of 10 years from the date of grant. Options
granted under the Plan are not transferable other than by will or by the laws of
descent and distribution. The Plan also authorizes the Company to make loans to
optionees to enable them to exercise their options and to allow them to use
Common Stock to pay for the exercise of their options. Such loans must (i)
provide for recourse to the optionee, (ii) bear interest at a rate no less than
the rate of interest payable by the Company to its principal lender at the time
the loan is made, and (iii) be secured by the shares of Common Stock purchased.
To date, no options have been granted under the Plan.
30
<PAGE> 33
PRINCIPAL AND SELLING SHAREHOLDER
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock immediately prior to this
Offering, and as adjusted to reflect the sale of the shares of Common Stock
offered by the Company by (i) each person known by the Company to beneficially
own more than five percent of the Common Stock, (ii) each director and the
Company's Chief Executive Officer and (iii) all directors and executive officers
of the Company as a group. Except as otherwise indicated, the address of each
beneficial owner of five percent of such Common Stock is the same as the
Company. See "Management."
<TABLE>
<CAPTION>
COMMON STOCK
COMMON STOCK BENEFICIALLY OWNED BENEFICIALLY
PRIOR TO THE OFFERING OWNED AFTER THE
-------------------------------- OFFERING
SHARES ----------------------
NUMBER OF BEING NUMBER OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES PERCENT OFFERED SHARES PERCENT(1)
- -------------------------------------- --------- -------- ------- --------- ----------
<S> <C> <C> <C> <C> <C>
Stanley H. Streicher.................. 1,500,000(3) 100% --(2) 1,500,000 60.0%
All directors and executive officers
as a group (3 persons).............. 1,500,000(3) 100% --(2) 1,500,000 60.0%
</TABLE>
- ---------------
(1) Assumes the Underwriters' over-allotment option is not exercised.
(2) Does not reflect the possible sale by Mr. Streicher of up to 75,000 shares
of Common Stock pursuant to the Underwriters' over-allotment option. See
"Underwriting."
(3) Of such shares, (i) 1,426,500 are owned by Enterprises, of which Stanley H.
Streicher owns 100% of the outstanding capital stock and (ii) 73,500 shares
are subject to a voting trust agreement pursuant to which Mr. Streicher has
been granted a proxy to vote such shares.
CERTAIN TRANSACTIONS
The Company leases its Fort Lauderdale, Florida headquarters from Stanley
H. Streicher pursuant to a lease expiring on July 31, 2014 for $4,000 per month.
Rent expense on this facility totaled $42,000 and $51,000 for the fiscal years
ended January 31, 1995 and 1996, respectively. The Company also leases its
Jacksonville, Florida facilities from Mr. Streicher pursuant to a lease expiring
on August 31, 2015 for $1,000 per month. Rent expense for this facility totaled
$5,000 for the year ended January 31, 1995 and $13,000 for the year ended
January 31, 1996. See Note 7 of Notes to Financial Statements.
Mr. Streicher has personally guaranteed the Company's $2.7 million bank
line of credit and has received no compensation for such guaranty. To the extent
that the Company applies a portion of the net proceeds of this Offering to
reduce the Company's bank debt, Mr. Streicher will be relieved of his personal
guaranty of such indebtedness. See "Use of Proceeds." Pursuant to the employment
agreement to be entered into by the Company and Mr. Streicher upon completion of
this Offering, the Company will use its best efforts to remove and cause to be
terminated all guarantees provided by Mr. Streicher. If the Company is unable to
do so prior to July 31, 1997, the Company will compensate Mr. Streicher for
providing such guarantees. See "Management -- Employment Agreements."
Prior to the closing of this Offering, the Company's business has been
conducted through Enterprises. Immediately prior to the closing of this
Offering, Enterprises will complete a corporate reorganization, which will
result in the Company succeeding to all of Enterprises' mobile fueling assets,
liabilities and operations. In exchange therefore, Enterprises will receive 100%
of the Common Stock of the Company.
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, $0.01 par value, and 1,000,000 shares of Preferred Stock, $0.01
par value. As of the date of this Prospectus, 1,500,000 shares of Common Stock
were issued and outstanding and no shares of Preferred Stock were outstanding.
31
<PAGE> 34
COMMON STOCK
Holders of Common Stock are entitled to one vote per share. The holders of
Common Stock are entitled to receive ratably such dividends, if any, as may be
declared by the Board of Directors out of legally available funds. Upon
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets of the Company which are
legally available for distribution, after payment of or provisions for all debts
and liabilities and the liquidation preferences of any outstanding shares of
Preferred Stock. Holders of Common Stock have no preemptive, subscription, or
redemption rights. The shares of Common Stock offered hereby will be, when and
if issued, fully paid and nonassessable.
PREFERRED STOCK
The Company is authorized to issue Preferred Stock with such designations,
rights and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without shareholder
approval, to issue Preferred Stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the value or market price of
the Common Stock and voting power or other rights of the holders of Common
Stock. In the event of issuance, the Preferred Stock could be utilized, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the Company. See "-- Certain Effects of Authorized but
Unissued Stock."
WARRANTS
Each Warrant entitles the holder thereof to purchase one share of Common
Stock at a price of $9.00 per share (assuming an initial offering price of $6.00
per share) for a period of four years commencing on the first anniversary of the
effective date of this Offering (the "First Exercise Date"). Each Warrant is
redeemable by the Company at a redemption price of $0.01 per Warrant, at any
time after the First Exercise Date, upon thirty days' prior written notice to
the holders thereof, if the average closing bid price of the Common Stock, as
reported on the principal exchange on which the Common Stock is traded, equals
or exceeds $10.50 per share for twenty consecutive trading days ending three
days prior to the date of the notice of redemption. Pursuant to applicable
federal and state securities laws, in the event a current prospectus is not
available, the Warrants may not be exercised by the holders thereof and the
Company will be precluded from redeeming the Warrants. There can be no assurance
that the Company will not be prevented by financial or other considerations from
maintaining a current prospectus. Any Warrant holder who does not exercise prior
to the redemption date, as set forth in the Company's notice of redemption, will
forfeit the right to purchase the Common Stock underlying the Warrants, and
after the redemption date or upon conclusion of the exercise period any
outstanding Warrants will become void and be of no further force or effect,
unless extended by the Board of Directors of the Company. See "Underwriting" for
the terms of the Warrants issuable pursuant to the Underwriters' Warrants.
The number of shares of Common Stock that may be purchased is subject to
adjustment upon the occurrence of certain events including a dividend
distribution to the Company's shareholders, or a subdivision, combination or
reclassification of the outstanding shares of Common Stock. Further, the Warrant
exercise price is subject to adjustment in the event the Company issues
additional stock or rights to acquire stock at a price per share than is less
than the current market price per share of Common Stock on the record date
established for the issuance of additional stock or rights to acquire stock. The
term "current market price" is defined as the average of the daily closing
prices for the twenty consecutive trading days ending three days prior to the
record date. However, the Warrant exercise price will not be adjusted in the
case of the issuance or exercise of options pursuant to the Company's stock
option plans, the issuance or exercise of the Underwriters' Warrants (or the
Warrants included therein) or any other options or warrants outstanding as of
the date of this Offering. The Warrant exercise price is also subject to
adjustment in the event of a consolidation or merger where a distribution by the
Company is made to its stockholders of the Company's assets or evidences of
indebtedness (other than cash or stock dividends) or pursuant to certain
subscription rights or other rights to acquire Common Stock.
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<PAGE> 35
The Company may at any time, and from time to time, extend the exercise
period of the Warrants, provided that written notice of such extension is given
to the Warrant holders prior to the expiration of the date then in effect. Also,
the Company may reduce the exercise price of the Warrants for limited periods or
through the end of the exercise period if deemed appropriate by the Board of
Directors. Any extension of the term and/or reduction of the exercise price of
the Warrants will be subject to compliance with Rule 13e-4 under the Exchange
Act including the filing of a Schedule 13E-4. Notice of any extension of the
exercise period and/or reduction of the exercise price will be given to the
Warrant holders. The Company does not presently contemplate any extension of the
exercise period nor does it contemplate any reduction in the exercise price of
the Warrants. The Warrants are also subject to price adjustment upon the
occurrence of certain events including subdivisions or combinations of the
Common Stock.
The Warrants will be issued pursuant to the terms and conditions of a
Warrant Agreement between the Company and American Stock Transfer & Trust
Company.
ANTI-TAKEOVER PROVISIONS OF FLORIDA LAW
Florida has enacted legislation that may deter or frustrate takeovers of
Florida corporations. The "Control Share Acquisitions" section of the Florida
Business Corporation Act ("FBCA") generally provides that shares acquired in
excess of certain specified thresholds, beginning at 20% of a corporation's
outstanding voting shares, will not possess any voting rights unless such voting
rights are approved by a majority vote of a corporation's disinterested
shareholders. The "Affiliated Transactions" section of the FBCA generally
requires majority approval by disinterested directors or supermajority approval
of disinterested shareholders of certain specified transactions (such as a
merger, consolidation, sale of assets, issuance of transfer of shares or
reclassifications of securities) between a corporation and a holder of more than
10% of the outstanding shares of the corporation, or any affiliate of such
shareholder.
The directors of the Company are subject to the "general standards for
directors" provisions set forth in the FBCA. These provisions provide that in
discharging his or her duties and determining what is in the best interests of
the Company, a director may consider such factors as the director deems
relevant, including the long-term prospects and interests of the Company and its
shareholders and the social, economic, legal or other effects of any proposed
action on the employees, suppliers or customers of the Company, the community in
which the Company operates and the economy in general. Consequently, in
connection with any proposed action, the Board of Directors is empowered to
consider interests of other constituencies in addition to the Company's
shareholders, and directors who take into account these other factors may make
decisions which are less beneficial to some, or a majority, of the shareholders
than if the law did not permit consideration of such other factors.
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
The Company's Articles of Incorporation provide that shareholders seeking
to bring business before an annual meeting of shareholders, or to nominate
candidates for election as directors at an annual or special meeting of
shareholders, must provide timely notice thereof in writing. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Company not less than 60 days nor more than
90 days prior to the meeting; provided, however, that in the event that less
than 80 day's notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder, to be timely, must be
received no later than the close of business on the 10th day following the day
on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever is first. The Bylaws of the Company also specify
certain requirements for a shareholder's notice to be in proper written form.
These provisions may preclude shareholders from bringing matters before the
shareholders at an annual or special meeting or from making nominations for
directors at an annual or special meeting.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
The authorized but unissued shares of Common Stock and Preferred Stock are
available for future issuance without shareholder approval. These additional
shares may be utilized for a variety of corporate
33
<PAGE> 36
purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans.
The existence of authorized but unissued and unreserved Common Stock and
Preferred Stock may enable the Board of Directors to issue shares to persons
friendly to current management which could render more difficult or discourage
an attempt to obtain control of the Company by means of a proxy contest, tender
offer, merger, or otherwise, and thereby protect the continuity of the Company's
management.
LIMITED LIABILITY AND INDEMNIFICATION
Under the FBCA, a director is not personally liable for monetary damages to
the corporation or any other person for any statement, vote, decision, or
failure to act unless (i) the director breached or failed to perform his duties
as a director and (ii) a director's breach of, or failure to perform, those
duties constitutes (1) a violation of the criminal law, unless the director had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful, (2) a transaction from which the director
derived an improper personal benefit, either directly or indirectly, (3) a
circumstance under which an unlawful distribution is made, (4) in a proceeding
by or in the right of the corporation or procure a judgment in its favor or by
or in the right of a shareholder, conscious disregard for the best interest of
the corporation or willful misconduct, or (5) in a proceeding by or in the right
of someone other than the corporation or a shareholder, recklessness or an act
or omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety, or
property. A corporation may purchase and maintain insurance on behalf of any
director or officer against any liability asserted against him and incurred by
him in his capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the FBCA.
The Articles and Bylaws of the Company provide that the Company shall, to
the fullest extent permitted by applicable law, as amended from time to time,
indemnify all directors of the Company, as well as any officers or employees of
the Company to whom the Company has agreed to grant indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Securities is American Stock
Transfer and Trust Company.
SHARES AVAILABLE FOR FUTURE SALE
Upon completion of the Offering, the Company will have outstanding
2,500,000 shares of Common Stock. Of these shares, the 1,000,000 shares of
Common Stock offered hereby will be freely tradeable by persons other than
"affiliates" of the Company without restriction or further registration under
the Securities Act.
Persons who are deemed affiliates of the Company are generally entitled
under Rule 144 as currently in effect to sell within any three-month period a
number of shares that does not exceed 1% of the number of shares of the Common
Stock then outstanding or the average weekly trading volume of Common Stock
during the four calendar weeks preceding the making of a filing with the
Securities and Exchange Commission (the "Commission") with respect to such sale.
Such sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about the Company. The Company is unable to estimate accurately the number of
shares of Common Stock that ultimately will be sold under Rule 144 because the
number of shares will depend in part on the market price for the Common Stock,
the personal circumstances of the sellers and other factors. In addition to the
restrictions under Rule 144, Stanley H. Streicher the Company's President has
agreed, subject to certain limitations, not to sell any of the 1,426,500 shares
of Common Stock, presently owned by him, or securities convertible into or
34
<PAGE> 37
exchangeable for Common Stock, for a period of 60 months after the date of this
Prospectus without the prior consent of the Representative. See "Underwriting."
Additionally, the owner of 73,500 shares has agreed, subject to certain
limitations, not to sell any shares of Common Stock, or securities convertible
into or exchangeable for Common Stock under the same terms and conditions as Mr.
Streicher unless otherwise agreed to by the Representative.
In addition to the restrictions under Rule 144, the 1,426,500 shares of
Common Stock owned by Mr. Streicher upon completion of the Offering will be
subject to a lock-up period of 60 months, subject to earlier release if
consented to by the Representative or upon the Company's achievement of certain
performance goals. Of the shares subject to the lock-up (i) 75,000 shares shall
be released from the lock-up restrictions in the event such shares are not sold
pursuant to the over-allotment option and (ii) thereafter 40,000 shares shall be
released from the lock-up restrictions on each of the second, third and fourth
anniversary dates of the closing of the offering. Regardless of the Company's
performance, any shares held by Mr. Streicher remaining subject to lock-up shall
be released on February 1, 2002. The 73,500 shares owned by another shareholder
upon completion of the Offering will be subject to a lock-up period under the
same terms and conditions as Mr. Streicher unless otherwise agreed to by the
Representative. See "Shares Available for Future Sale."
Beginning with the fiscal year ended January 31, 1999, if the Company
achieves earnings per share of $.43, $.52, $.62 and $.74 for the fiscal years
ended January 31, 1999, 2000, 2001 and 2002, respectively, (or cumulative
earnings per share after fiscal 1996 of $.94, $1.46, $2.08 and $2.82,
respectively,) or the closing bid price of the Company's Common Stock on the
last trading day prior to such fiscal year end is $8.75, $10.50, $12.50 and
$15.50, respectively, or the Company has cumulative net income of $3 million, $4
million, $5 million and $6 million, respectively, then one-quarter of any shares
not previously released shall be released in each fiscal year from the lock-up
restrictions. For any fiscal year after January 31, 1996 in which the Company
attains the foregoing earnings per share, stock price or cumulative net income
targets, any shares eligible for release in prior fiscal years which were not
released because the targets for such fiscal years were not achieved, shall also
be released. Regardless of whether the foregoing earnings per share, stock
price, or cumulative net income targets are achieved all of the shares subject
to the lock-up restrictions shall be released February 1, 2002.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, a copy
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, the Company has agreed to sell to the Underwriters, and
the Underwriters, severally and not jointly, have agreed to purchase from the
Company, on a "firm commitment" basis, if any are purchased, the number of
shares of Common Stock and Warrants (exclusive of shares of Common Stock and
Warrants issuable upon exercise of the Underwriters' over-allotment option) set
forth opposite their respective names below:
<TABLE>
<CAPTION>
SHARES OF
UNDERWRITERS COMMON STOCK WARRANTS
- ---------------------------------------------------------------- ------------ ---------
<S> <C> <C>
Argent Securities, Inc..........................................
--------- ---------
Total................................................. 1,000,000 1,000,000
========= =========
</TABLE>
The Company has agreed to sell the shares of Common Stock and Warrants to
the Underwriters at a discount of ten percent of the initial public price
thereof. The Underwriters will offer the shares of Common Stock and Warrants to
the public at $ per share of Common Stock and $ per Warrant as set forth
on the cover page of this Prospectus and may allow to certain dealers who are
National Association of Securities Dealers, Inc. ("NASD") members concessions
not to exceed $ per share of Common Stock and Warrant, of which not in
excess of $ per share of Common Stock and $ per Warrant may be
35
<PAGE> 38
reallowed to other dealers who are members of the NASD. After the initial public
offering, the public offering price, concession and reallowances may be changed
by the Underwriters.
Prior to this Offering, there has not been any public market for the Common
Stock or the Warrants. The initial public offering prices of the shares of
Common Stock and the Warrants and the exercise price and other terms of the
Warrants were determined by negotiations between the Company and the
Representative and do not necessarily relate to the assets, book value or
results of operations of the Company or any other established criteria of value.
The Company and the Selling Shareholder have granted an option to the
Underwriters, exercisable during the 45-day period from the date of this
Prospectus, to purchase in the aggregate up to a maximum of 150,000 additional
shares of Common Stock and Warrants at the price set forth on the cover page of
this Prospectus, minus the underwriting discount and commissions. Of the 150,000
shares of Common Stock which are subject to the Underwriters' over-allotment
option, the first 75,000 shares will be sold by the Selling Shareholder and
75,000 shares will be sold by the Company. All of the 150,000 Warrants subject
to the over-allotment option will be offered by the Company. The Underwriters'
over-allotment option is exercisable upon the same terms and conditions as are
applicable to the sale of the shares of Common Stock and Warrants offered
hereby.
The Underwriting Agreement provides for reciprocal indemnification between
the Company, the Selling Shareholder and the Underwriters against certain
liabilities in connection with the Registration Statement, including liabilities
under the Securities Act. Pursuant to the Underwriting Agreement, the Selling
Shareholder's indemnification is limited to the amount of proceeds received from
the sale of his shares. Insofar as indemnification for liabilities arising under
the Securities Act may be provided to officers, directors or persons controlling
the Company, the Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy and is therefore unenforceable.
The Company has agreed to pay certain blue sky legal fees of the
Underwriters and to pay to the Underwriters at the closing of the Offering a
non-accountable expense allowance of 3% of the aggregate offering price of the
shares of Common Stock and Warrants offered hereby (including any shares of
Common Stock and Warrants purchased pursuant to the Underwriters' over-allotment
option), of which $ has been paid on account.
The Company has agreed to sell to the Underwriters, or their respective
designees, for an aggregate purchase price of $1,000, an option (the
"Underwriters' Warrant") to purchase up to an aggregate of 100,000 shares of
Common Stock and Warrants (an aggregate of 115,000 shares of Common Stock and
115,000 Warrants assuming the exercise of the Underwriters' over-allotment
option) exercisable at 120% of the initial public offering price of the
securities. The Underwriters' Warrant shall be exercisable during a four-year
period commencing one year after the closing date of this Offering. The
Underwriters' Warrant may not be assigned, transferred, sold or hypothecated by
the Underwriters until twelve months after the Effective Date, except to
officers or partners of the Underwriters, to a successor to the Underwriters, to
a purchaser of substantially all of the assets of the Underwriters, or by
operation of law. Any profits realized by the Underwriters upon the sale of the
Common Stock and Warrants (or the underlying Securities) issuable upon exercise
of the Underwriters' Warrants may be deemed to be additional underwriting
compensation. The exercise price of the Warrants issuable upon exercise of the
Underwriters' Warrants during the period of exercisability shall be $9.00 per
Warrant (assuming an initial offering price of $6.00 per share). The exercise of
the Warrants subject to the Underwriters' Warrants and the number of shares of
Common Stock covered thereby are subject to adjustment in certain events to
prevent dilution. For the life of the Underwriters' Warrant, the holders thereof
are given, at a nominal cost, the opportunity to profit from a rise in the
market price of the Securities with a resulting dilution in the interest of
other shareholders. The Company may find it more difficult to raise capital for
its business if the need should arise while the Underwriters' Warrant is
outstanding. At any time when the holders of the Underwriters' Warrant might be
expected to exercise it, the Company would probably be able to obtain additional
capital on more favorable terms.
The Company has agreed with the Underwriters that the Company will pay to
the Underwriters a warrant solicitation fee (the "Warrant Solicitation Fee")
equal to 5% of the exercise price of the Warrants exercised
36
<PAGE> 39
beginning one year after the Effective Date and to the extent not inconsistent
with the guidelines of the NASD and the rules and regulations of the Commission
(including NASD Notice to Members 81-38). Such Warrant Solicitation Fee will be
paid to the Underwriters if (a) the market price of the Common Stock on the date
that any Warrant is exercised is greater than the exercise price of the Warrant;
(b) the exercise of such Warrant was solicited by the Underwriters; (c) prior
specific written approval for exercise is received from the customer if the
Warrant is held in a discretionary account; (d) disclosure of this compensation
agreement is made prior to or upon the exercise of such Warrant; (e)
solicitation of the exercise is not in violation of Rule 10b-6 of the Exchange
Act; (f) the Underwriter provided bona fide services in exchange for the Warrant
Solicitation Fee; and (g) the Underwriter has been specifically designated in
writing by the holders of the Warrants as the broker. In addition, unless
granted an exemption by the Commission from Rule 10b-6 under the Exchange Act,
the Underwriters will be prohibited from engaging in any market making
activities or solicited brokerage activities with respect to the Securities for
the period from nine business days prior to any solicitation of the exercise of
any Warrant or nine business days prior to the exercise of any Warrant based on
a prior solicitation until the later of the termination of such solicitation
activity or the termination (by waiver or otherwise) of any right the
Underwriters may have to receive such a fee for the exercise of the Warrants
following such solicitation. As a result, the Underwriters may be unable to
continue to provide a market for the Securities during certain periods while the
Warrants are exercisable.
The Underwriters have been given certain "piggyback" and demand
registration rights with respect to the Common Stock underlying the
Underwriters' Warrants for a period of four years commencing one year from the
date of this Prospectus. The exercise of any such registration rights by the
Underwriters may result in dilution to the interest of the Company's
shareholders, hinder efforts by the Company to arrange future financing of the
Company and/or have an adverse effect on the market price of the Securities.
The Company has agreed that for a period of 24 months commencing on the
Effective Date, it will not issue or sell, directly or indirectly, any shares of
its capital stock, or sell or grant options, warrants or rights to purchase any
shares of its capital stock, without the written consent of the Representative,
except for issuances pursuant to (i) the public offering of the Company's
securities as described herein, (ii) the exercise of the Warrants and the
Underwriters' Warrants, and the Common Stock issuable thereunder, (iii)
outstanding convertible securities or contractual obligations disclosed in this
Prospectus, (iv) the grant of options and the issuance of shares issued upon
exercise of options to be granted under the Company's Stock Option Plan, and (v)
an acquisition, merger or similar transaction provided that the acquirer of such
capital stock does not receive, and will not be entitled to demand, registered
securities during such 24-month period. The Company has granted the Underwriters
a two year preferential right with respect to future financing relating to the
offering of the Company's securities. In addition, Mr. Streicher and all of the
holders of the Common Stock as of the Effective Date, have agreed with the
Representative in writing not to sell, assign, or transfer any of their shares
of the Company's securities without the Representative's prior written consent
prior to February 1,2002 and in the case of Mr. Streicher, subject to earlier
release upon the achievement of performance goals. See "Shares Available for
Future Sale."
The Company has entered into a consulting agreement with the
Representative, effective as of August 1, 1996, pursuant to which various
executive and staff personnel of the Representative will provide financial and
investor relation services, public relations services and corporate
communications services for a period of two years at the rate of $4,166 per
month. From August 1, 1996 to December 1, 1996, the monthly payments are accrued
and not payable until December 31, 1996, provided that the agreement has not
been cancelled or rendered void. If the Company does not have shareholder equity
of at least $4 million by December 15, 1996, the agreement is null and void.
However, if termination is after December 31, 1996, the Representative shall not
be required to perform additional services under the agreement and the remainder
of the unpaid balance of funds due to the Representative shall be earned and
shall be immediately due and payable. At the Representative's election, all of
the fees pursuant to the agreement shall be prepaid when the Company attains $4
million in shareholder's equity.
The Company has agreed that, for a period of five years following the
completion of this Offering, it will use its best efforts to cause the election
to its Board of Directors one designee of the Representative, provided that such
designee is reasonably acceptable to and approved by the Company. Alternatively,
the Representa-
37
<PAGE> 40
tive may appoint an observer to attend all meetings of the Board of Directors
during such period. As of this date, no person has been identified by the
Representative for election as a director or for appointment as an observer.
The foregoing includes a summary of certain provisions of the Underwriting
Agreement which has been filed as an exhibit thereto.
LEGAL MATTERS
The validity of the Securities being offered hereby will be passed upon for
the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.,
Miami, Florida. Certain matters are being passed upon for the Underwriters by
Johnson & Montgomery, Atlanta, Georgia.
EXPERTS
The financial statements as of January 31, 1996 and for each of the two
years in the period ended January 31, 1996, that are included in this Prospectus
have been audited by Arthur Andersen LLP, independent certified public
accountants, to the extent and for the period set forth in their report
appearing elsewhere herein, and are included in reliance upon such reports given
upon the authority of said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (together with all
amendments, exhibits and schedules thereto, the "Registration Statement") under
the Securities Act with respect to the Securities offered by this Prospectus.
This Prospectus does not contain all of the information set forth in such
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. Statements contained in this
Prospectus as to the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. For further information,
reference is made to such registration statement, including the exhibits
thereto, which may be inspected without charge at the Commission's principal
office at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; and at the
following Regional Offices of the Commission, except that copies of the exhibits
may not be available at certain of the Regional Offices: Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New
York Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048. Copies of all or any part of such material may be obtained from the
Commission at 450 Fifth Street, N.W. Room 1024, Washington, D.C. 20549, upon
payment of certain fees prescribed by the Commission. The Commission maintains a
World Wide Web site on the Internet at http://www.sec.gov that contains reports,
proxy, information statements, and registration statements and other information
filed electronically with the Commission.
The Company is not presently a reporting company and does not file reports
or other information with the Commission. However, on the effective date of the
Registration Statement, the Company will become a reporting company. Further,
the Company will register its securities under the Securities Exchange Act of
1934 ("Exchange Act"). Accordingly, the Company will become subject to the
additional reporting requirements of the Exchange Act and in accordance
therewith will file reports, proxy statements and other information with the
Commission. In addition, after the completion of this Offering, the Company
intends to furnish its shareholders with annual reports containing audited
financial statements and such interim reports, in each case as it may determine
to furnish or as may be required by law. The fiscal year of the Company ends on
January 31 of each year.
38
<PAGE> 41
STREICHER MOBILE FUELING, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Certified Public Accountants.................................... F-2
Balance Sheets as of January 31, 1996 and July 31, 1996 (unaudited)................... F-3
Statements of Operations for the years ended January 31, 1995 and 1996 and for the six
month periods ended July 31, 1995 and 1996 (unaudited).............................. F-4
Statements of Changes in Shareholders' Equity for the years ended January 31, 1995 and
1996 and the six month period ended July 31, 1996 (unaudited)....................... F-5
Statements of Cash Flows for the years ended January 31, 1995 and 1996 and the six
month periods ended July 31, 1995 and 1996 (unaudited).............................. F-6
Notes to Financial Statements......................................................... F-7
</TABLE>
F-1
<PAGE> 42
After the corporate reorganization discussed in Note (1) to the Company's
financial statements is effected, we expect to be in a position to render the
following auditors' report.
ARTHUR ANDERSEN LLP
October 9, 1996
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To Streicher Mobile Fueling, Inc.:
We have audited the accompanying balance sheet of Streicher Mobile Fueling,
Inc. (the "Company") as of January 31, 1996 and the related statements of
operations, changes in shareholders' equity and cash flows for each of the two
years in the period ended January 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Streicher Mobile Fueling,
Inc. as of January 31, 1996, and the results of its operations and its cash
flows for each of the two years in the period ended January 31, 1996 in
conformity with generally accepted accounting principles.
Fort Lauderdale, Florida,
October 9, 1996.
F-2
<PAGE> 43
STREICHER MOBILE FUELING, INC.
BALANCE SHEETS
JANUARY 31 AND JULY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
1996 1996
----------- -----------
<S> <C> <C>
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................... $ 189,508 $ 7,345
Investments (restricted $63,000 and $64,000, respectively)..... 203,743 94,395
Accounts receivable, net of allowance for doubtful accounts of
$28,000 and $30,000, respectively........................... 2,592,559 3,333,991
Inventories.................................................... 65,193 64,272
Prepaid expenses and other..................................... 100,790 43,427
---------- ----------
Total current assets................................... 3,151,793 3,543,430
PROPERTY AND EQUIPMENT, net...................................... 3,136,665 3,460,388
DUE FROM RELATED PARTIES......................................... 32,298 35,131
OTHER ASSETS..................................................... 123,430 210,015
---------- ----------
Total assets........................................... $6,444,186 $7,248,964
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt.............................. $ 471,404 $ 434,206
Current portion of capital lease obligations................... 131,766 102,422
Accounts payable............................................... 1,322,126 1,633,071
Accrued expenses............................................... 318,931 243,922
Customer deposits.............................................. 163,844 167,923
Due to related parties......................................... 18,303 --
---------- ----------
Total current liabilities.............................. 2,426,374 2,581,544
---------- ----------
LONG-TERM LIABILITIES:
Line of credit borrowings...................................... 1,802,795 2,471,398
Long-term debt, excluding current portion...................... 1,116,701 1,394,404
Capital lease obligations, excluding current portion........... 253,241 168,415
Deferred income taxes.......................................... 406,189 406,189
---------- ----------
Total long-term liabilities............................ 3,578,926 4,440,406
---------- ----------
Total liabilities...................................... 6,005,300 7,021,950
---------- ----------
COMMITMENTS AND CONTINGENCIES(Notes 1, 3, 7, 10 and 11)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
none issued and outstanding................................. -- --
Common stock, $.01 par value, 20,000,000 shares authorized,
1,500,000 shares issued and outstanding..................... 15,000 15,000
Additional paid-in capital..................................... 238,588 238,588
Unrealized gain on investment.................................. 7,072 7,072
Retained earnings (deficit).................................... 178,226 (33,646 )
---------- ----------
Total shareholders' equity............................. 438,886 227,014
---------- ----------
Total liabilities and shareholders' equity............. $6,444,186 $7,248,964
========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
balance sheets.
F-3
<PAGE> 44
STREICHER MOBILE FUELING, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 31, 1995 AND 1996 AND
THE SIX MONTH PERIODS ENDED JULY 31, 1995 AND 1996 (UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTH PERIODS ENDED
JANUARY 31, JULY 31,
--------------------------- ---------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE, including fuel taxes of
$5,968,000, $8,195,000, $3,802,000
and $3,566,000, respectively........ $16,663,371 $23,989,358 $10,776,470 $13,887,855
COST OF SALES......................... 15,217,945 21,752,350 9,947,234 12,760,929
----------- ----------- ----------- -----------
Gross profit..................... 1,445,426 2,237,008 829,236 1,126,926
OPERATING EXPENSES.................... 1,328,028 1,750,235 825,491 1,203,353
----------- ----------- ----------- -----------
Income (loss) from operations.... 117,398 486,773 3,745 (76,427)
INTEREST EXPENSE...................... (168,991) (343,967) (154,062) (260,252)
INTEREST INCOME....................... 13,504 33,219 19,206 6,387
----------- ----------- ----------- -----------
Income (loss) before (provision)
benefit for income taxes....... (38,089) 176,025 (131,111) (330,292)
(PROVISION) BENEFIT FOR INCOME
TAXES............................... 389 (76,016) 45,431 118,420
----------- ----------- ----------- -----------
Net income (loss)................ $ (37,700) $ 100,009 $ (85,680) $ (211,872)
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE........... $ (.03) $ .07 $ (.06) $ (.14)
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING......................... 1,500,000 1,500,000 1,500,000 1,500,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-4
<PAGE> 45
STREICHER MOBILE FUELING, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED JANUARY 31, 1995 AND 1996
AND THE SIX MONTH PERIOD ENDED JULY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL UNREALIZED RETAINED
COMMON PAID-IN GAIN ON EARNINGS
STOCK CAPITAL INVESTMENT (DEFICIT) TOTAL
------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, February 1, 1994............. $15,000 $238,588 $ -- $ 115,917 $ 369,505
Net loss............................ -- -- -- (37,700) (37,700)
Change in unrealized gain on
investment....................... -- -- 2,335 -- 2,335
------- -------- ------ --------- ---------
BALANCE, January 31, 1995............. 15,000 238,588 2,335 78,217 334,140
Net income.......................... -- -- -- 100,009 100,009
Change in unrealized gain on
investment....................... -- -- 4,737 -- 4,737
------- -------- ------ --------- ---------
BALANCE, January 31, 1996............. 15,000 238,588 7,072 178,226 438,886
Net loss (unaudited)................ -- -- -- (211,872) (211,872)
------- -------- ------ --------- ---------
BALANCE, July 31, 1996 (unaudited).... $15,000 $238,588 $7,072 $ (33,646) $ 227,014
======= ======== ====== ========= =========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-5
<PAGE> 46
STREICHER MOBILE FUELING, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 1995 AND 1996 AND
THE SIX MONTH PERIODS ENDED JULY 31, 1995 AND 1996 (UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTH PERIODS
JANUARY 31, ENDED JULY 31,
--------------------------- ------------------------
1995 1996 1995 1996
----------- ----------- --------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................... $ (37,700) $ 100,009 $ (85,680) $ (211,872)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities--
Depreciation and amortization................. 215,502 302,546 148,069 216,397
Deferred income tax provision................. 64,935 111,488 -- --
Changes in operating assets and liabilities:
Accounts receivable......................... (627,727) (1,105,160) (426,093) (741,432)
Inventories................................. (56,074) (9,119) 9,724 921
Prepaid expenses and other.................. (62,251) (14,239) 23,385 57,363
Due from related parties.................... 180,862 85,852 (63,697) (21,136)
Other assets................................ (28,920) (74,055) (83,196) (107,002)
Accounts payable............................ 351,815 353,318 176,449 310,945
Accrued expenses............................ 149,466 36,424 (47,403) (75,009)
Customer deposits........................... 84,034 640 (2,830) 4,079
--------- ----------- --------- ----------
Net cash provided by (used in) operating
activities............................. 233,942 (212,296) (351,272) (566,746)
--------- ----------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment purchases (sales proceeds)........... (102,924) (70,432) (64,408) 109,348
Purchases of property and equipment............. (1,477,636) (1,103,536) (625,878) (499,220)
--------- ----------- --------- ----------
Net cash used in investing activities.... (1,580,560) (1,173,968) (690,286) (389,872)
--------- ----------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit............. 678,110 768,230 416,062 668,603
Borrowings under long-term debt................. 905,331 1,009,433 636,009 1,126,004
Principal payments on long-term debt............ (216,408) (349,901) (108,675) (885,499)
Principal payments on capital lease
obligations................................... (89,755) (110,132) (101,337) (134,653)
--------- ----------- --------- ----------
Net cash provided by financing
activities............................. 1,277,278 1,317,630 842,059 774,455
--------- ----------- --------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS............. (69,340) (68,634) (199,499) (182,163)
CASH AND CASH EQUIVALENTS, beginning of period.... 327,482 258,142 258,142 189,508
--------- ----------- --------- ----------
CASH AND CASH EQUIVALENTS, end of period.......... $ 258,142 $ 189,508 $ 58,643 $ 7,345
========= =========== ========= ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for --
Interest...................................... $ 172,727 $ 326,661 $ 136,952 $ 267,926
========= =========== ========= ==========
Income taxes.................................. $ -- $ 53,916 $ 35,000 $ --
========= =========== ========= ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Capital lease obligations....................... $ 147,578 $ 96,323 $ 96,323 $ 20,483
========= =========== ========= ==========
Unrealized gain on equity investment............ $ 2,335 $ 4,737 $ 4,024 $ --
========= =========== ========= ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-6
<PAGE> 47
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1995 AND 1996 AND
JULY 31, 1995 AND 1996 (UNAUDITED)
(ALL AMOUNTS AND RELATED DISCLOSURES APPLICABLE TO THE
SIX MONTH PERIODS ENDED JULY 31, 1995 AND 1996 ARE UNAUDITED)
(1) NATURE OF OPERATIONS:
Streicher Mobile Fueling, Inc. (the "Company") was incorporated in October
1996. Streicher Enterprises, Inc. ("Enterprises") will complete a corporate
reorganization immediately prior to the closing of the offering discussed in
Note (11) which will result in the transfer of the assets, liabilities and
operations of Enterprises' Mobile Fueling Division to the Company. Such planned
corporate reorganization has been retroactively reflected in the accompanying
financial statements. The Mobile Fueling Division began operations in 1983. The
Company delivers mechanized mobile fleet fueling and electronic fuel management
primarily to customers which operate large fleets of vehicles (such as national
courier services, major trucking lines, hauling and delivery services, utilities
and governmental agencies). The Company has operations in Florida, Georgia,
Tennessee, Southern California and Texas.
A significant element of the Company's future growth strategy involves the
expansion of the Company's business into new markets. Such planned expansion is
dependent on achieving the necessary debt and/or equity financing. Without such
financing the Company may be required to limit its future growth.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Presentation
The accompanying financial statements include the assets, liabilities and
operations of the Mobile Fueling Division of Enterprises on a retroactive basis
as if such transfer had occurred at inception of the Mobile Fueling Division.
Retained earnings (deficit) represents the cumulative results of the Mobile
Fueling Division.
Included in both revenue and cost of sales in the accompanying statements
of operations is federal and state excise taxes. The Company collects such
excise taxes from its customers and remits the taxes to the taxing authorities.
(b) Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
(c) Investments
Investments consist of two certificates of deposit, with a maturity of
greater than three months, and a marketable equity security, each reported at
market value. One certificate of deposit is collateral for an irrevocable letter
of credit issued under an agreement entered into with a vendor, on behalf of a
customer, for the issuance of credit instruments to purchase selected products
and services. The letter of credit and collateralized certificate of deposit are
required until the credit instruments are returned to the vendor for
cancellation.
The equity security is classified as available-for-sale and is presented at
market value. The unrealized gain, net of income taxes, is recorded directly as
a component of shareholders' equity.
(d) Accounts Receivable, net
Accounts receivable are due from companies within a broad range of
industries. The Company provides for credit losses based on management's
evaluation of collectibility and generally are unsecured.
F-7
<PAGE> 48
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(e) Inventories
Inventories, consisting of gasoline and diesel fuel, are carried at cost,
using the moving average method, which approximates the first-in, first-out
method.
(f) Property and Equipment
Property and equipment is stated at cost less accumulated depreciation and
amortization. Ordinary maintenance and repairs are expensed as incurred.
Improvements which significantly increase the value or useful life of property
and equipment are capitalized. Property and equipment is depreciated or
amortized using the straight-line method over the following estimated useful
lives:
<TABLE>
<CAPTION>
YEARS
---------------------
<S> <C>
Auto..................................................... 5
Custom trucks............................................ 10
Mobile fuel tanks........................................ 25
Machinery and equipment.................................. 5
Furniture and fixtures................................... 10
Capital leases and leasehold improvements................ Lesser of lease term
or useful life
</TABLE>
(g) Organizational Costs
Organizational costs relating to the opening of new mobile fueling
locations are capitalized and amortized to operations over 5 years. The carrying
value of organizational costs totalled $86,250 and $160,833 as of January 31 and
July 31, 1996, respectively, and is included in other assets in the accompanying
balance sheets.
(h) Income Taxes
The Company provides federal and state income taxes at the applicable
federal and state statutory rates. Deferred income taxes are recorded to reflect
the tax consequences on future years of differences between the tax bases of
assets and liabilities and the amounts recorded for financial reporting
purposes. Income taxes are provided as if the Company had been a separate
taxable entity since inception of the Mobile Fueling Division.
(i) Revenue Recognition
The Company recognizes revenue at the time services are performed and fuel
is delivered.
(j) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(k) Fair Value of Financial Instruments
The Company's financial instruments, primarily consisting of cash and cash
equivalents, investments, accounts receivable, borrowings, and accounts payable,
approximate fair value due to their short-term nature or interest rates that
approximate market.
F-8
<PAGE> 49
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(l) Accounting Pronouncements
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ", which
requires adoption by the Company in fiscal 1997. SFAS No. 121 establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used, and for long-lived assets and certain identifiable intangibles to be
disposed of. The adoption of SFAS No. 121 did not have a material effect on the
Company's financial condition or results of operations.
In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation",
was issued. SFAS No. 123 establishes a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company intends to account for stock option grants in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees",
and, accordingly, will not recognize compensation expense for stock option
grants made at an exercise price equal to or in excess of the fair market value
at the date of grant. Changes in the accounting for stock-based compensation are
optional and the Company intends to adopt only the disclosure requirements of
SFAS No. 123 as of January 31, 1997.
(m) Net Income (Loss) Per Share
Net income (loss) per share is determined by dividing net income (loss) by
the weighted average common shares outstanding. For all periods presented,
outstanding common shares reflect the reorganization of Enterprises and initial
issuance of stock by the Company as if such reorganization had occurred at
inception of the Mobile Fueling Division.
(n) Unaudited Condensed Interim Financial Statements
In the opinion of management, the unaudited condensed interim financial
statements contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial position of the Company
as of July 31, 1996, and the results of its operations and cash flows for the
six month periods ended July 31, 1995 and 1996.
(3) PROPERTY AND EQUIPMENT, NET:
Property and equipment, net consists of the following:
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
1996 1996
----------- -----------
<S> <C> <C>
(UNAUDITED)
Autos, custom trucks and mobile fuel tanks....................... $2,515,027 $3,000,087
Machinery and equipment.......................................... 546,164 559,289
Leasehold improvements........................................... 61,798 61,798
Furniture and fixtures........................................... 34,662 35,697
Capital leases................................................... 577,074 597,557
--------- ---------
3,734,725 4,254,428
Less -- accumulated depreciation and amortization................ 598,060 794,040
--------- ---------
$3,136,665 $3,460,388
========= =========
</TABLE>
The Company is dependent on two manufacturers for its future custom truck
and mobile fuel tank purchases. The Company does not have any contracts or
written agreements with such manufacturers for the purchase of such equipment in
the future.
F-9
<PAGE> 50
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
(4) LINE OF CREDIT:
As of January 31, 1996, Enterprises owes $1,802,795 under a $2,000,000 line
of credit agreement with a bank. As the line of credit is collateralized by
assets of the Company and repayment will result from the assets and operations
of the Company, such line of credit has been fully allocated to the Company and
reflected in the accompanying balance sheets. At various times during and after
fiscal 1996, the Company fully borrowed up to the line of credit limit. As of
July 15, 1996, the line of credit was increased to $2,700,000. Amounts
outstanding under the line of credit at July 31, 1996 total $2,471,398. Interest
is payable monthly at 1.5% over the prime rate (10% as of January 31, 1996).
Subsequent to January 31, 1996, the maturity of the line of credit was extended
from May 1, 1997 to August 1, 1997 and, accordingly, the line of credit
borrowings as of January 31 and July 31, 1996 have been reflected as a long-term
obligation in the accompanying balance sheets.
Borrowings under the line of credit are secured by substantially all of the
assets of Enterprises and are personally guaranteed by the sole shareholder of
Enterprises. Under the terms of the credit agreement, Enterprises is required to
comply with certain financial covenants and restrictions, including maintaining
a minimum tangible net worth of $375,000 on a consolidated basis. As of January
31, 1996, Enterprises' consolidated tangible net worth exceeded the minimum
required, and Enterprises was in compliance with these financial covenants and
restrictions. Subsequent to January 31, 1996, Enterprises was not in compliance
with the tangible net worth covenant of its line of credit agreement and
obtained a waiver from the bank of such covenant through August 1, 1997.
(5) LONG-TERM DEBT:
Long-term debt of Enterprises has also been fully allocated to the Company
at January 31 and July 31, 1996 and consists of the following:
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
1996 1996
----------- ----------
(UNAUDITED)
<S> <C> <C>
Commercial loan and promissory notes payable (10.12% weighted
average fixed interest rate at January 31, 1996) due in monthly
installments with varying maturities from June 1996 through
September 2000................................................... $ 907,137 $1,149,055
Promissory notes payable (Prime + 2%, 10.5% at January 31, 1996)
due in monthly installments with varying maturities from February
1997 through January 2000........................................ 591,835 609,728
Promissory notes payable (Prime + 1.5%, 10% at January 31, 1996)
due in monthly installments through May 1998..................... 89,133 69,827
---------- ----------
Total long-term debt............................................... 1,588,105 1,828,610
Less -- Current portion............................................ 471,404 434,206
---------- ----------
Long-term debt, excluding current portion.......................... $1,116,701 $1,394,404
========== ==========
</TABLE>
The notes payable are collateralized by the vehicles financed by the notes.
F-10
<PAGE> 51
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Future principal payments on long-term debt are due as follows as of
January 31, 1996:
<TABLE>
<CAPTION>
YEAR ENDING JANUARY 31,
-------------------------------------------------
<S> <C>
1997............................................. $ 471,404
1998............................................. 582,489
1999............................................. 362,963
2000............................................. 152,269
2001............................................. 18,980
----------
$1,588,105
==========
</TABLE>
(6) CAPITAL LEASE OBLIGATIONS:
Enterprises leases certain equipment and trucks utilized by the Company
which are also fully allocated to the Company and are accounted for as capital
leases. The following is a schedule by year of future minimum lease payments
under such capital leases together with the present value of minimum lease
payments as of January 31, 1996:
<TABLE>
<CAPTION>
YEAR ENDING JANUARY 31,
------------------------------------------------------------------
<S> <C>
1997.............................................................. $167,359
1998.............................................................. 146,516
1999.............................................................. 126,398
2000.............................................................. 39,935
2001.............................................................. 2,041
--------
Total minimum lease payments...................................... 482,249
Less: Amounts representing interest............................. 97,242
--------
Present value of minimum lease payments........................... 385,007
Less: Current portion........................................... 131,766
--------
Long-term portion................................................. $253,241
========
</TABLE>
(7) RELATED PARTY TRANSACTIONS:
The Company engages in certain transactions with Enterprises, certain of
Enterprises' other subsidiaries and Enterprises' shareholder. Amounts due to the
Company from Enterprises and certain of Enterprises' subsidiaries totalled
$32,298 as of January 31, 1996. Amounts due to another subsidiary of Enterprises
totalled $18,303 as of January 31, 1996. Interest income in fiscal 1996 includes
$15,769 relating to a receivable from Enterprises. Rent expense is paid to the
shareholder of Enterprises totalling $63,600 for the year ended January 31,
1996.
The Company has operating leases with Enterprises that expire in July 2014
and August 2015. Total rent expense for these properties will be approximately
$64,000 for each of the next five years and approximately $821,000 thereafter.
The Company paid $22,585 to its minority shareholder for consulting
services rendered for the year ended January 31, 1996. In June 1996, the Company
entered into a consulting agreement with its minority shareholder for $10,000
per month which expires in May 1998. The consulting agreement can be terminated
by either the Company or consultant at any time upon written notice.
(8) INCOME TAXES:
Income taxes are determined for the Company as if it were a separate tax
paying entity. As of January 31, 1996, NOL carryforwards for income tax purposes
of approximately $300,000, which expire between fiscal
F-11
<PAGE> 52
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
years ending 2009 through 2011, and alternative minimum tax credit ("AMT")
carryforwards of approximately $87,000, which do not expire, are available for
utilization by the Company through a tax sharing agreement with Enterprises.
Deferred income tax liabilities consisting primarily of the tax effect of
accelerated depreciation for income tax purposes, are offset against deferred
income tax assets which consist primarily of the tax effect of the NOL and AMT
carryforwards.
The (provision) benefit for income taxes consists of the following for the
years ended January 31, 1995 and 1996:
<TABLE>
<CAPTION>
1995 1996
-------- ---------
<S> <C> <C>
Federal............................................... $ 332 $ (64,906)
State................................................. 57 (11,110)
-------- ---------
$ 389 $ (76,016)
======== =========
Current............................................... $ 65,324 $ 35,472
Deferred.............................................. (64,935) (111,488)
-------- ---------
$ 389 $ (76,016)
======== =========
</TABLE>
The Company's (provision) benefit for income taxes differs from the
expected income tax (provision) benefit derived by applying the federal
statutory rate of 34% to income (loss) before (provision) benefit for income
taxes for the years ended January 31, 1995 and 1996 as follows:
<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Expected (provision) benefit for income taxes at
statutory federal income tax rates................... $ 12,950 $(59,849)
State income taxes..................................... 38 (7,333)
Nondeductible expenses................................. (12,599) (8,834)
-------- --------
Actual (provision) benefit for income taxes............ $ 389 $(76,016)
======== ========
</TABLE>
(9) MAJOR CUSTOMERS:
Revenue from one major customer (representing over 10% of revenue) was
approximately $2,464,000 in fiscal 1995 and $3,071,000 in fiscal 1996. For the
six month period ended July 31, 1996 the Company had revenue from the
aforementioned major customer and one other major customer of approximately
$1,493,000 and $1,904,000, respectively.
(10) COMMITMENTS AND CONTINGENCIES:
In addition to the operating leases for property owned by the shareholder
of Enterprises discussed in Note 7, the Company has other operating leases that
expire in January and June 1997. Rent expense under these operating leases for
the fiscal years ended 1995 and 1996 was approximately $20,000 and $40,000,
respectively. Remaining payments relating to these properties are approximately
$6,800.
The Company's operations are affected by numerous federal, state and local
laws, including those relating to protection of the environment and worker
safety. The transportation of gasoline and diesel fuel is subject to regulation
by various federal, state and local agencies, including the U.S. Department of
Transportation. These regulatory authorities have broad powers, and the Company
is subject to regulatory and legislative changes that can affect the economics
of the industry by requiring changes in operating practices or influencing the
demand for, and the cost of providing, its services. The Company is also subject
to the rules and regulations of the Hazardous Materials Transportation Act. In
addition, the Company depends on the supply of gasoline and
F-12
<PAGE> 53
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
diesel fuel from the oil and gas industry and, therefore, is affected by
changing taxes, price controls and other laws and regulations relating to the
oil and gas industry generally. The Company cannot determine the extent to which
its future operations and earnings may be affected by new legislation, new
regulations or changes in existing regulations.
The technical requirements of these laws and regulations are becoming
increasingly expensive, complex and stringent. These laws may impose penalties
or sanctions for damages to natural resources or threats to public health and
safety. Such laws and regulations may also expose the Company to liability for
the conduct of or conditions caused by others, or for acts of the Company that
were in compliance with all applicable laws at the time such acts were
performed. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. Certain environmental laws provide for joint and several liability
for remediation of spills and releases of hazardous substances. In addition,
companies may be subject to claims alleging personal injury or property damage
as a result of alleged exposure to hazardous substances, as well as damage to
natural resources.
Although the Company believes that it is in substantial compliance with
existing laws and regulations, there can be no assurance that substantial costs
for compliance will not be incurred in the future. Moreover, it is possible that
other developments, such as stricter environmental laws, regulations and
enforcement policies thereunder, could result in additional, presently
unquantifiable, costs or liabilities to the Company.
(11) SUBSEQUENT EVENTS:
In October 1996, the articles of incorporation authorized the issuance of
1,000,000 shares of "blank check" preferred stock with such designations, rights
and preferences as may be determined by the Board of Directors of the Company.
In October 1996, the Company adopted a stock option plan (the "Plan") under
which 100,000 shares of common stock are reserved for issuance. The Plan
provides for granting both incentive stock options and nonqualified stock
options. To date, no options have been granted under the Plan.
In October 1996, the Company approved the initial public offering of
securities of the Company, including 1,000,000 shares of common stock and
1,000,000 redeemable common stock purchase warrants, as described in this
prospectus.
The Company intends to enter into an employment agreement with Stanley H.
Streicher, the majority shareholder, effective upon completion of this initial
public offering, pursuant to which Mr. Streicher will serve as President and
Chief Executive Officer of the Company. The term of the agreement is five years.
The term of this agreement will automatically renew for two successive two-year
terms, unless notice of termination is given prior to a renewal period. The
agreement provides that Mr. Streicher shall receive an initial annual base
salary of $275,000, subject to cost-of-living increases; and he will be eligible
to participate in a bonus pool which will provide him additional compensation of
up to ten percent of the Company's pre-tax earnings.
The agreement provides that if Mr. Streicher's employment is terminated as
a result of his death or disability, he or his estate will receive for a period
of six months his base salary in effect as of the date of termination and a
prorated amount of any bonuses. The agreement also provides that in the event
Mr. Streicher's employment is terminated "without cause" or for "good reason,"
Mr. Streicher will receive, in addition to any salary, bonus and other
compensation accrued through the date of termination, a lump sum equal to the
greater of the full amount of salary, bonuses and other compensation due under
the agreement for the remainder of the term and three times the then-existing
salary and most recent annual bonus. The agreement further provides that Mr.
Streicher will not compete with the Company while employed by the Company and
for a period of two years following termination of employment. In the event that
his employment is terminated without cause, as a result of his death or
disability, or upon a change of control (as
F-13
<PAGE> 54
STREICHER MOBILE FUELING, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
defined in the employment agreement), all options to purchase common stock held
by Mr. Streicher shall become immediately exercisable.
The agreement further provides Mr. Streicher with stock options that will
enable him to acquire up to an aggregate of 1,000,000 shares of Common Stock at
the initial offering price of the Company following the closing of this
offering. The exercise of the stock options is contingent upon the Company
achieving either a specified earnings per share level or a specified stock price
level (the "performance threshold"), for the corresponding fiscal year-end.
Commencing with fiscal year-ended January 31, 1997 and at each of the five
fiscal year ends thereafter, provided the performance threshold is met, 200,000
of such options will become exercisable at an exercise price equal to the
initial public offering price. Regardless of the Company's performance, all of
the stock options granted to Mr. Streicher shall vest and become exercisable ten
years from the date of the grant.
The Company has entered into a consulting agreement with the
Representative, effective as of August 1, 1996, pursuant to which various
executive and staff personnel of the Representative will provide financial and
investor relation services, public relations services and corporate
communications services for a period of two years at the rate of $4,166 per
month. From August 1, 1996 to December 1, 1996, the monthly payments are accrued
and not payable until December 31, 1996, provided that the agreement has not
been cancelled or rendered void. If the Company does not have shareholder equity
of at least $4 million by December 15, 1996, the agreement is null and void.
However, if termination is after December 31, 1996, the Representative shall not
be required to perform additional services under the agreement and the remainder
of the unpaid balance of funds due to the Representative shall be earned and
shall be immediately due and payable. At the Representative's election, all of
the fees pursuant to the agreement shall be prepaid when the Company attains $4
million in shareholder's equity.
F-14
<PAGE> 55
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH AND INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER, OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 6
Use of Proceeds....................... 15
Dilution.............................. 16
Capitalization........................ 17
Dividend Policy....................... 17
Selected Financial Data............... 18
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 22
Management............................ 28
Principal and Selling Shareholder..... 31
Certain Transactions.................. 31
Description of Securities............. 31
Shares Available for Future Sale...... 34
Underwriting.......................... 35
Legal Matters......................... 38
Experts............................... 38
Available Information................. 38
Financial Statements.................. F-1
</TABLE>
------------------
Until , 1996 (25 days after the date of this Prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a Prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
STREICHER MOBILE
FUELING, INC.
1,000,000 SHARES OF
COMMON STOCK
AND
1,000,000 REDEEMABLE
COMMON STOCK PURCHASE
WARRANTS
------------------------
PROSPECTUS
------------------------
ARGENT SECURITIES, INC. (LOGO)
ATLANTA, GEORGIA
(404) 237-1234
------------------------
October __ , 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 56
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Section 607.0850 of the Florida Business
Corporation Act to indemnify its directors and officers to the extent provided
for in such statute. The Company's Amended and Restated Articles of
Incorporation provide that the Company shall indemnify and may insure its
officers and directors to the fullest extent permitted by law.
The provisions of the Florida Business Corporation Act that authorize
indemnification do not eliminate the duty of care of a director, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of nonmonetary relief will remain available under Florida law. In addition, each
director will continue to be subject to liability for (a) violations of criminal
laws, unless the director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful, (b) deriving an
improper personal benefit from a transaction, (c) voting for or assenting to an
unlawful distribution and (d) willful misconduct or conscious disregard for the
best interests of the Company in a proceeding by or in the right of the Company
to procure a judgment in its favor or in a proceeding by or in the right of a
shareholder. The statute does not affect a director's responsibilities under any
other law, such as the federal securities laws.
The effect of the foregoing is to require the Company to indemnify the
officers and directors of the Company for any claim arising against such persons
in their official capacities if such person acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table itemizes expenses to be incurred by the Company in
connection with the issuance and distribution of the securities being registered
hereby, other than underwriting discounts and commissions.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $ 6,806
NASD filing fee........................................................... 2,746
Nasdaq listing fee........................................................ 7,725
Printing expenses......................................................... 65,000
Accounting fees and expenses.............................................. 125,000
Legal fees and expenses................................................... 85,000
Fees and expenses (including legal fees) for qualifications under state
securities laws......................................................... 25,000
Miscellaneous............................................................. 38,000
------
Total*.......................................................... $355,277
======
</TABLE>
* All amounts except the Securities and Exchange Commission registration
fee, the NASD filing fee and the Nasdaq listing fee are estimated. The
Company intends to pay all expenses of registration with respect to
shares being sold by the Selling Shareholder pursuant to the
Underwriters' over-allotment, with exception of underwriting discounts
and commissions.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Upon completion of the Offering described in the Prospectus included in
this Registration Statement, the Company will issue 1,500,000 shares of Common
Stock to Streicher Enterprises, Inc. in consideration of the
II-1
<PAGE> 57
transfer to the Company of Streicher Enterprises, Inc.'s mobile fueling
operations. Such shares will be issued pursuant to the exemption set forth in
Section 4(2) of the Securities Act.
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------------
<C> <S> <C>
1 -- Form of Underwriting Agreement**
3.1 -- Articles of Incorporation**
3.2 -- ByLaws**
4.1 -- Specimen Common Stock Certificate*
4.2 -- Specimen Redeemable Warrant Certificate*
4.3 -- Form of Underwriters' Purchase Option Agreement*
4.4 -- Form of Warrant Agreement*
5.1 -- Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as to the
validity of the securities to be registered***
10.1 -- Form of Employment Agreement between the Company and Stanley H. Streicher*
10.2 -- Stock Option Plan*
23.1 -- Consent of Arthur Andersen LLP, Independent Certified Public Accountants*
23.2 -- Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (contained
in Exhibit 5.1).*
27.1 -- Financial Data Schedule for period ended July 31, 1996 (for SEC use only).*
27.2 -- Financial Data Schedule for period ended January 31, 1996 (for SEC use only).*
</TABLE>
- ---------------
* Filed herewith.
** Previously filed.
*** To be filed by amendment.
ITEM 28. UNDERTAKINGS.
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That for purposes of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event
II-2
<PAGE> 58
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
The undersigned Company hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of the registration
statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 59
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form SB-2 and has duly caused this Amendment No.
1 to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Ft. Lauderdale, State of Florida, on
the 25th day of October, 1996.
STREICHER MOBILE FUELING, INC.
By: /s/ Stanley H. Streicher
-----------------------------------
Stanley H. Streicher, President and
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ------------------------------------------------
<S> <C> <C>
/s/ Stanley H. Streicher President, Chief Executive October 25, 1996
- ------------------------------- Officer and Director
Stanley H. Streicher
/s/ Kenneth C. Day Controller, Chief Financial October 25, 1996
- ------------------------------- Officer (principal
Kenneth C. Day financial officer and
principal accounting
officer)
</TABLE>
II-4
<PAGE> 1
Exhibit 4.1
STREICHER MOBILE FUELING, INC.
COMMON STOCK
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
NUMBER SHARES
CUSIP_____________
THIS CERTIFIES THAT__________________________________________________________
IS THE OWNER OF______________________________________________________________
FULLY-PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE, OF
STREICHER MOBILE FUELING, INC.
Transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be held subject to all the provisions of the Articles of Incorporation,
as amended, and the By-laws of the Corporation, as amended (copies of which are
on file at the office of the Transfer Agent), to all of which the holder of
this Certificate by acceptance hereof assents. This Certificate is not valid
unless countersigned and registered by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
Secretary
Stanley H. Streicher
President
Countersigned and registered
American Stock Transfer and Trust Company, New York
TRANSFER AGENT AND REGISTRAR
<PAGE> 2
STREICHER MOBILE FUELING, INC.
THE CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE
A FULL STATEMENT OF (A) THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS APPLICABLE TO EACH CLASS OF CAPITAL STOCK AUTHORIZED TO BE ISSUED;
(B) THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH
SERIES AUTHORIZED TO BE ISSUED WITHIN EACH SUCH CLASS AND (C) THE AUTHORITY OF
THE BOARD OF DIRECTORS TO DETERMINE SUCH VARIATIONS FOR SUBSEQUENT SERIES.
The following abbreviations, when used in the inscription on the face of this
Certificate,shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT MIN ACT ____ Custodian_____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act________________________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, ______________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares of the common stock evidenced by this Certificate, and do hereby
irrevocably constitute and appoint
Attorney,
- -----------------------------------------------------------------------
to transfer the said shares on the books of the Corporation with full power
of substitution.
Dated
-----------------------------
NOTICE
-------------------------------------------------------------------------
THE SIGNATURE TO THIS AGREEMENT MUST CORRESPOND WITH THE NAME AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Signature Guaranteed:
- -------------------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15
<PAGE> 1
Exhibit 4.2
REDEEMABLE COMMON SHARE PURCHASE WARRANT
STREICHER MOBILE FUELING, INC.
VOID (UNLESS EXTENDED) AFTER 5:00 P.M., NEW YORK CITY TIME, ON NOVEMBER __, 2001
WARRANT WARRANT
NUMBER SHARES
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP _____________________
THIS CERTIFIES THAT, for value received ________________________________________
or registered assigns (the "Warrant Holder"), is entitled to purchase from
STREICHER MOBILE FUELING, INC., a Florida corporation, (the "Company"), subject
to the terms and conditions hereof and of the Warrant Agreement mentioned
below, at any time from November ___, 1997 until on or before 5:00 p.m. New
York City time, on November ___, 2001 on such later date as the Company may
determine (the "Expiration Date"), the number of fully paid and nonassessable
shares of the Company's Common Stock, no par value (the "Shares") stated above
by surrendering this Warrant Certificate with the Subscription Form on the back
thereof duly executed at the office or at such other office or agency as the
Company may from time to time designate, (the "Warrant Agent"), and by paying
in full, to the Company in lawful money of the United States, $9.00 for each
Share as to which this Warrant Certificate is exercisable (the "Warrant
Exercise Price").
This Warrant may be redeemed at the option of the Company at any time
after 5:00 p.m. New York City time, on November ___, 1997, at such time as the
market price of the Company's Common Stock, no par value, if the average
closing bid price for the Common Stock equals or exceeds $10.50 per share for a
period of twenty (20) consecutive business days ending on the third day prior
to the date of redemption at a redemption price of $.01 per Warrant. The
Company shall send to the Warrantholders being redeemed written notice of
redemption by first class mail not less than thirty (30) days prior to the
date fixed for redemption.
In case the Warrant Holders shall exercise this Warrant with respect to
less than all of the Shares that may be purchased hereunder, a new Warrant
Certificate for the balance shall be countersigned and delivered to or upon the
order of the Warrant Holder.
This Warrant Certificate will not be valid and may not be transferred or
exercised unless countersigned by the Warrant Agent.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of November ___, 1996 between the Company and the
Warrant Agent (the "Warrant Agreement") and is subject to the terms and
provisions contained therein, to all of which terms and provisions the holder
of this Warrant Certificate consents by acceptance hereof. In certain
contingencies provided for in the Warrant Agreement, the number of Shares
subject to purchase hereunder and the purchase price per Share thereof are
subject to adjustment. Copies of the Warrant Agreement are on file at the
principal corporate office of the Warrant Agent.
THIS WARRANT SHALL BE VOID AND OF NO EFFECT (UNLESS EXTENDED) AFTER
5:00 P.M. NEW YORK CITY TIME, NOVEMBER ___, 2001.
WITNESS, the facsimile seal of the Company and the facsimile signatures
of its duly authorized officers.
Dated:
Treasurer
Stanley H. Streicher
President
Streicher Mobile Fueling, Inc.
Corporate Seal
1996
Florida
[SEAL]
Countersigned and Registered:
American Stock Transfer & Trust Co.
(New York, NY)
By Transfer Agent and Registrar
Authorized Signature
<PAGE> 2
STATEMENT OF OTHER TERMS OF WARRANT
1. The Warrant represented by this Warrant Certificate (the "Warrant")
shall expire at and shall not be exercisable after, 5:00 P.M. New York City
time, on November __, 2001 or on such later date determined by the Company.
2. Notwithstanding that the number of Shares purchasable upon the
exercise of a Warrant may have been adjusted pursuant to the terms of the
Warrant Agreement, the Company shall nonetheless not be required to issue
fractions of Shares upon exercise of a Warrant or to distribute Share
Certificates that evidence fractional shares. In lieu of fractional shares,
there shall be returned to the exercising registered holder of a Warrant upon
such exercise an amount in cash, in United States dollars, equal to the
amount in excess of that required to purchase the largest number of full Shares.
3. If any Shares issuable upon the exercise of this Warrant require
registration or approval of any governmental authority, including, without
limitation, the filing of necessary registration statements or amendments or
supplements thereto under the Securities Act of 1933, as amended, or the taking
of any action under the laws of the United States of America or any political
subdivision thereof before such Shares may be validly issued, then the Company
covenants that it will in good faith and as expeditiously as possible endeavor
to secure such registration or approval or to take such other action, as the
case may be: PROVIDED, HOWEVER, there is no assurance such registration or
approval can be obtained, and in no event shall such Shares be issued and the
Company is hereby authorized to suspend the exercise of all Warrants, for the
period during which it is endeavoring to obtain such registration or approval
or to take such other action.
4. This Warrant Certificate may be exchanged and is transferable at the
principal office of the Warrant Agent by the registered holder hereof or by his
duly authorized representative or attorney, upon surrender of this Warrant
Certificate duly endorsed or accompanied (if so required by the Company or the
Warrant Agent) by a written instrument, or instruments, of transfer
satisfactory to the Company or the Warrant Agent. If the right to purchase less
than all of the Shares covered hereby shall be so transferred, the registered
holder hereof shall be entitled to receive a new Warrant Certificate or Warrant
Certificates covering in the aggregate the remaining whole number of Shares.
5. No Warrant Holder, as such, shall be entitled to vote or receive
dividends or be deemed the holder of Shares for any purpose, nor shall anything
contained in this Warrant Certificate be construed to confer upon any Warrant
Holder, as such, any of the rights of a shareholder of the Company or any right
to vote, give or withhold consent to any action by the Company (whether upon
any recapitalization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings or other action
affecting shareholders (except as provided in the Warrant Agreement), receive
dividends or subscription rights, or otherwise, until this Warrant shall have
been exercised and the Shares purchasable upon the exercise hereof shall have
been delivered as provided in the Warrant Agreement.
6. The Company and the Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notations of ownership or writing hereon made by anyone other than the
Company or the Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary.
7. This Warrant shall be binding upon any successors or assigns of the
Company.
This Warrant Certificate has been issued as part of a Unit consisting
of the number of Redeemable Common Share Purchase Warrants stated hereon and
shares of Common Stock represented by a stock certificate for a number of
shares of Common Stock of the Company stated thereon.
SUBSCRIPTION FORM
(To Be Executed By The Warrant Holder If He Desires To
Exercise The Warrant In Whole Or In Part)
To: Streicher Mobile Fueling, Inc.
The undersigned ______________________________________________________
hereby irrevocably elects to exercise the right of purchase represented by the
within Warrant Certificate for, and to purchase thereunder, _______ Shares
provided for therein and tenders payment herewith to the order of HEART LABS OF
AMERICA, INC., in the amount of
$________________
The undersigned requests that certificates for such Shares be issued as follows:
Name:___________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
Soc. Sec. No. or Other I.D. No., if any:________________________________________
Deliver:________________________________________________________________________
Address:________________________________________________________________________
and, if said number of Shares shall not be all the Shares purchasable
hereunder, that a new Warrant Certificates for the balance remaining of the
Shares purchasable under the Warrant Certificate be registered in the name of,
and delivered to, the undersigned at the address stated above.
Date: 19 Signature_______________________________
Note: The signature of this Subscription
must correspond with the name as
written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
ASSIGNMENT
(To Be Signed Only Upon Assignment)
For Value Received, the undersigned hereby sells, assigns and transfers onto
________________________________________________________________________________
________________________________________________________________________Warrants
evidenced by the within Warrant Certificate and appoints.
________________________________________________________________________________
to transfer said Warrant Certificate and Warrants on the books of HEART LABS OF
AMERICA, INC., with the full power of substitution in the premises.
Date: 19 ________________________________________
(Signature must conform in all respects
In the presence of: to the name of Warrant Holder specified
on the face of the Warrant Certificate,
without alteration, enlargement or any
change whatsoever, and the signature
must be guaranteed in the usual manner).
<PAGE> 1
EXHIBIT 4.3
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (REGISTRATION NO. 333-14501).
HOWEVER, NEITHER THE OPTIONS NOR SUCH SECURITIES CAN BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION
STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR
(iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
THE TRANSFER OF THIS OPTION IS
RESTRICTED AS DESCRIBED HEREIN.
STREICHER MOBILE FUEL, INC.
PURCHASE OPTION AGREEMENT
100,000 Shares of Common Stock
and 100,000 Common Stock Purchase Warrants
THIS CERTIFIES that, for receipt in hand of $1,000.00 and other value
received, Argent Securities, Inc., 3340 Peachtree Road, N.E., Suite 450,
Atlanta, Georgia 30326 (hereinafter referred to as the "Holder" or
"Underwriter") is entitled to subscribe for and purchase from STREICHER MOBILE
FUEL, INC., a Florida corporation (the "Company"), upon the terms and
conditions set forth herein, at any time or from time to time after November__,
1997 and before 5:00 P.M. on November __, 2000, New York time (the "Exercise
Period"), 100,000 shares of the Company's Common Stock, par value $.01 per
share (the "Shares") at a price of $7.20 per share, and 100,000 Common Stock
Purchase Warrants ("Underwriter's Warrants") at a price of $.01 per share.
This Warrant may not be sold, transferred, assigned or hypothecated, until
November __, 1997 except that it may be transferred in whole or in part, to (i)
one or more officers or partners of the Holder (or the officers or partners of
any such person); (ii) a successor to the Holder, or the officers or partners
of such successor; (iii) a purchaser of substantially all of the assets of the
Holder; or (iv) by operation of law. The term "Holder" as used herein shall
include any transferee to whom this Warrant has been transferred in accordance
with the above. As used herein the term "this Option" shall mean and include
this Option and any option or options hereafter issued as a consequence of the
exercise or transfer of this Option in whole or part.
Each Underwriter's Warrant shall entitle the holder thereof to purchase
one share of Common Stock (the shares of Common Stock issuable upon exercise
of the Underwriter's Warrants being referred to as the "Warrant Shares") at
$9.00 per share. Each Underwriter's Warrant shall be identical in all respects
to the Warrants (the "Public Warrants"), issued pursuant to the Warrant
Agreement, dated November __, 1996 (the "Warrant Agreement"), between the
Company and
<PAGE> 2
American Stock Transfer and Trust Co., as Warrant Agent; provided, however, the
Underwriter's Warrants shall not be subject to redemption by the Company under
any circumstances.
1. Term of Exercise. (a) This Option may be exercised during the Exercise
Period as to the whole or any lesser number of Shares and Underwriter's
Warrants, by the surrender of this Warrant (with the election at the end hereof
duly executed) to the Company at its offices at 2720 N.W. 55th Court, Fort
Lauderdale, FL 33309 or such other place as is designated in writing by the
Company, together with a certified or bank cashier's check payable to the order
of the Company in an amount equal to the aggregate Exercise Price (per share
and per warrant) multiplied by the number of Shares and Underwriter's Warrants
for which this Option is being exercised.
(b) For purposes of this Option, the term "Current Market Price" at any
date shall be deemed to be: (i) the average of the daily closing prices of the
Common Stock or the Public Warrants, as the case may be, for the 20 consecutive
trading days immediately preceding such date in reported sales price, or (ii)
in case no such reported sale takes place on such date, the last sales price
regular way in either case as reported on the principal national securities
exchange on which the Common Stock or the Public Warrants, as the case may be,
is listed or admitted to trading, or (iii) if the Common Stock or the Public
Warrants, as the case may be, is not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked prices
regular way for the Common Stock or the Public Warrants, as the case may be, on
the Nasdaq National Market System or Nasdaq SmallCap Market of the Nasdaq Stock
Market, Inc. (together referred to as "Nasdaq") or (iv) if the Common Stock or
the Public Warrants, as the case may be, is not listed or admitted for trading
on any national securities exchange and is not reported on NASDAQ or any
similar organization, the average of the closing bid and asked prices in the
over-the-counter market as furnished by the National Quotation Bureau, Inc. or
if no such quotation is available, the fair market value as determined by the
Board of Directors in good faith.
2. Delivery of Certificates to Registered Holder. Upon each exercise of
this option, the Holder shall be deemed to be the holder of record of the
Shares and Underwriter's Warrants issuable upon such exercise notwithstanding
that the transfer books of the Company shall then be closed or certificates
representing such Shares or Underwriter's Warrants shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise of this Warrant, the Company shall issue and deliver to the Holder a
certificate or certificates for the Shares and a certificate or certificates
for the Underwriter's Warrants registered in the name of the Holder or its
designee. If this option should be exercised in part only, the Company shall,
upon surrender of this Option for cancellation, execute and deliver a new
Warrant evidencing the right of the Holder to purchase the balance of the Units
(or portions thereof) subject to purchase hereunder.
3. Warrant Register. Any Warrants issued upon the transfer or exercise in
part of this Option shall be numbered and shall be registered in an Option
Register as they are issued. The Company shall be entitled to treat the
registered holder of any Option on the Option Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Option on the part of any other person, and
shall not be liable for any
-2-
<PAGE> 3
registration or transfer of Options which are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration or participation therein amounts to bad faith.
The Options shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by its duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment
or authority to transfer in all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new option or options to the option of
the holder thereof, for another Option, or other options of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Units (or portions thereof) upon surrender to the
Company or its duly authorized agent. Notwithstanding the foregoing, the
Company shall have no obligation to cause Warrants to be transferred on its
books to any person if, in the opinion of counsel to the Company, such transfer
does not comply with the provisions of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations thereunder.
4. Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized and unissued Common Stock, solely for
the purpose of providing for the exercise of this Option and the Underwriter's
Warrants, such number of shares of Common Stock as shall, from time to time, be
sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Option and the Underwriter's Warrants when paid
for in accordance with the respective terms thereof, shall be validly issued,
fully paid and nonassessable by the Company.
5. Anti-Dilution; Adjustments to Exercise Price.
(a) Upon the occurrence of any event (an "Event") as a result of which
an adjustment is made to the exercise price (the "Public Exercise Price") of any
of the Public Warrants, the number of Shares issuable thereafter upon exercise
of this Option shall be adjusted to equal the number of Shares issuable prior
to such Event multiplied by a fraction, the numerator of which shall be the
Public Exercise Price in effect prior to such Event and the denominator of
which shall be the Public Exercise Price subsequent to such Event.
(b) Notwithstanding any other provision of this Option, any adjustment
of the exercise price, and/or the number of Warrant Shares purchasable upon the
exercise of the Underwriter's Warrants shall be determined solely by the
antidilution and other adjustment provisions contained in the Warrant Agreement
(which provisions are incorporated herein by reference) as if such
Underwriter's Warrants were and had been outstanding on and from November ,
1995.
(c) Whenever there shall be an adjustment as provided in this paragraph
5, the Company shall promptly cause written notice thereof to be sent by
registered mail, postage prepaid, to the Holder, at its principal office, which
notice shall be accompanied by an officer's certificate setting forth the
number of Shares issuable as part of each Unit and the exercise price and the
number
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<PAGE> 4
of Warrant Shares purchasable upon the exercise of the Underwriter's Warrants
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment and the computation thereof, which officer's
certificate shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
(d) All calculations under this paragraph 5 shall be made to the nearest
cent or to the nearest one-thousandth of a share, as the case may be.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or other capital stock of the Company upon the exercise of
Options. If any fraction of a share would be issuable on the exercise of any
Option (or specified portions thereof), the Company, in its sole discretion,
shall purchase such fraction for an amount in cash equal to the same fraction
of the Current Market Price of such share of Common Stock on the date of
exercise of the Option.
6. Reorganization/Reclassification. (a) In case of any consolidation with
or merger of the Company with or into another corporation (other than a merger
or consolidation in which the Company is the surviving or continuing
corporation), or in case of any sale, lease or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety, such successor, leasing or purchasing corporation, as the case may
be, shall (i) execute with the holder an agreement providing that the holder
shall have the right thereafter to receive upon exercise of this Option solely
the kind and amount of shares of stock and other securities, property, cash or
any combination thereof receivable upon such consolidation, merger, sale, lease
or conveyance by a holder of the number of shares of Common Stock and the
Underwriter's Warrants for which this Option might have been exercised
immediately prior to such consolidation, merger, sale, lease or conveyance, and
(ii) make effective provision in order to effect such agreement. Such
agreement shall provide for adjustment which shall be as nearly equivalent as
practicable to the adjustments in paragraph 5.
(b) In case of any reclassification or change of the shares of Common
Stock issuable upon exercise of this Option (other than a change in par value
or from par value to no par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from par value to no par value, or as a result
of a subdivision or combination, but including any change in the shares into
two or more classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise of this Option solely the kind and amount
of shares of stock and other securities, property, cash or any combination
thereof receivable upon such reclassification, change, consolidation or merger
by a holder of the number of shares of Common Stock and the Underwriter's
Warrants for which this Option might have been exercised immediately prior to
such reclassification, change, consolidation or merger. Thereafter,
appropriate provision shall be made for adjustments which shall be as nearly
equivalent as practicable to the adjustments in paragraph 5 above.
-4-
<PAGE> 5
(c) The above provisions of this paragraph 6 shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases or conveyances similar to
those described in paragraphs 6(a) and (b).
7. Notice of Dividends/Distributions. In case at any time the Company
shall propose:
(a) to pay any dividend or make any distribution on shares of Common
Stock in shares of Common Stock or make any other distribution (other than
regularly scheduled cash dividends which are not in a greater amount per share
than the most recent such cash dividend) to all holders of Common Stock; or
(b) to issue any rights, warrants or other securities to all holders of
Common Stock or Public Warrants entitling them to purchase any additional
shares of Common Stock or any other rights, warrants or other securities; or
(c) to effect any reclassification or change or outstanding shares of
Common Stock, or any consolidation, merger, sale, lease or conveyance of
property, described in paragraph 6; or
(d) to effect any liquidation, dissolution, or winding-up of the
Company; or
(e) to take any other action which would cause an adjustment to the
exercise price of the Public Warrants;
then, and in any one or more of such cases, the Company shall give written
notice thereof, by registered mail, postage prepaid, to the Holder at the
Holder's address as it shall appear in the Option Register, mailed at least 15
days prior to: (i) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such dividend, distribution, rights,
warrants or other securities are to be determined; (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution, or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock or Public
Warrants, as the case may be, shall be entitled to exchange their shares or
warrants for securities or other property, if any, deliverable upon such
reclassification, change of outstanding shares, consolidation, merger, sale,
lease, conveyance of property, liquidation, dissolution, or winding-up; or
(iii) the date of such action which would require an adjustment to the Public
Exercise Price.
8. Payment of Taxes. The issuance of any Shares or Underwriter's Warrants
or other securities upon the exercise of this Option, and the delivery of
certificates or other instruments representing such shares of Common Stock,
Warrants or other securities, shall be made without charge to the Holder for
any tax or other charge in respect of such issuance. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name other
than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until person or persons requesting
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<PAGE> 6
the issue thereof shall have paid the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or is not due and payable.
9. Registration Rights. (a) If, at any time after November __, 1996, and
before November __, 2000, the Company shall file a registration statement
(other than on Form S-8, or any successor form) with the Securities and
Exchange Commission (the "Commission") while Shares or Underwriter's Warrants
are available for purchase upon exercise of this Option or while any Shares,
Underwriter's Warrants or Warrant Shares (which have not been so registered)
are outstanding, the Company shall give the Holder and all the then registered
holders of such Shares, Underwriter's Warrants or Warrant Shares at least 30
days prior written notice of the filing of such registration statement. If
requested by the Holder or by any such holder in writing within 20 days after
receipt of any such notice, the Company shall, at the Company's sole expense
(other than the fees and disbursements of counsel for the Holder or such holder
and the underwriting discounts and commissions, if any, payable in respect of
the Warrants, Units, Shares, Underwriter's Warrants and Warrant Shares sold by
the Holder or any such holder), register or qualify the Units, the Shares,
Underwriter's Warrants and Warrant Shares (collectively, the "Underwriter's
Securities") of the Holder or any such holders who shall have made such request
concurrently with the registration covering such other securities, all to the
extent requisite to permit the public offering and sale of the Underwriter's
Securities through the facilities of all appropriate securities exchanges and
the over-the-counter market, and will use its best efforts through its
officers, directors, auditors and counsel to cause such registration statement
to become effective as promptly as practicable. Notwithstanding the foregoing,
if the managing underwriter of any such offering shall advise the Company in
writing that, in its opinion, the distribution of all or a portion of the
Underwriter's Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company
for its own account, the Underwriter's Securities shall not be included in such
registration statement or such registation statement shall include only so many
of the Underwriter's Securities as will not have such an effect, provided that
if any securities of the Company are included in such registration statement
for the account of any person other than the Company and the Holder or any such
holder, the securities included in such registration statement for such other
person shall have been reduced pro rata to the reduction of the Underwriter's
Securities which were requested to be included in such registration.
(b) If at any time after November __, 1996 and before November __, 2000,
the Company shall receive a written request from holders of Underwriter's
Securities who, in the aggregate, own (or upon exercise of all Warrants and
Underwriter's Warrants, will own) a majority of the total number of shares of
Common Stock issued or issuable upon exercise of the Warrants and the
Underwriter's Warrants, the Company shall, as promptly as practicable, prepare
and file with the Commission a registration statement sufficient to permit the
public offering and sale of the Underwriter's Securities through the facilities
of all appropriate securities exchanges and the over-the-counter market, and
will use its best efforts through its officers, directors, auditors and counsel
to cause such registration statement to become effective as promptly as
practicable; provided however, that the Company shall only be obligated to file
one such registration statement for which all expenses incurred in connection
with such registration (other than the fees and disbursements of counsel for
the Holder or such holders and underwriting discounts and commissions, if any,
payable in respect
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<PAGE> 7
of the Underwriter's Securities sold by the Holder or any such holder) shall
be borne by the Company and one additional such registration statement for
which all such expenses shall be paid by the Holder and such holders.
(c) In the event of a registration pursuant to the provisions of this
paragraph 5, the Company shall use its best efforts to cause the Underwriter's
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder or such holders
may reasonably request; provided, however, that the Company shall not be
required to (i) qualify to do business in any state by reason of this paragraph
9(c) in which it is not otherwise required to qualify to do business, (ii) or
register or qualify in any state which will impose material burdens on the
Company or its principals
(d) The Company shall keep effective any registration or qualification
contemplated by this paragraph 9 and shall from time to time amend or
supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period of
time as shall be required to permit the Holder or such holders to complete the
offer and sale of the Underwriter's Securities covered thereby. The Company
shall in no event be required to keep any such registration or qualification
effect for a period in excess of nine months from the date on which the Holder
and such holders are first free to sell such Underwriter's Securities;
provided, however, that if the Company is required to keep any such
registration or qualification in effect with respect to securities other than
the Underwriter's Securities beyond such period, the Company shall keep such
registration or qualification in effect as it relates to the Underwriter's
Securities for so long as such registration or qualification remains or is
required to remain in effect in respect of such other securities.
(e) In the event of a registration pursuant to the provisions of this
paragraph 9, the Company shall furnish to each of the five largest holders of
any Underwriter's Securities included therein such amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of
copies of each prospectus contained in such registration statement and each
supplement or amendment thereto (including each preliminary prospectus), all of
which shall conform to the requirements of the Act and the rules and
regulations thereunder, and such other documents, as the Holder or such holders
may reasonably request in order to facilitate the disposition of the
Underwriter's Securities included in such registration.
(f) In the event of a registration pursuant to the provisions this
paragraph 9, the Company shall furnish to each holder of any Underwriter's
Securities so registered with an opinion of its counsel (reasonably acceptable
to the Holder) to the effect that (i) the registration statement has become
effective under the Act and no order suspending the effectiveness of the
registration statement, preventing or suspending the use of the registration
statement, any preliminary prospectus, any final prospectus, or any amendment
or supplement thereto has been issued, nor has the Securities and Exchange
Commission (the "Commission") or any state securities authority instituted or
threatened to institute any proceedings with respect to such an order, (ii) the
registration statement and each prospectus forming a part thereof (including
each preliminary prospectus), and any amendment or supplement thereto, complies
as to form with the Act and the rules and regulations
-7-
<PAGE> 8
thereunder (except as to financial statements, including schedules, and other
accounting and financial data, as to which counsel need express no opinion, and
(iii) such counsel has no knowledge or reason to know of any material
misstatement or omission in such registration statement or any prospectus, as
amended or supplemented. Such opinion shall also state the jurisdictions in
which the Underwriter's Securities have been registered or qualified for sale
pursuant to the provisions of paragraph 9(c).
(g) The Company agrees that until all the Underwriter's Securities have
been sold under a registration statement or pursuant to Rule 144 under the Act,
it shall keep current in filing all reports, statements and other materials
required to be filed with the Commission to permit holders of the Underwriter's
Securities to sell such securities under Rule 144.
10. Indemnification. (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Holder, any holder of any of
the Underwriter's Securities, their officers, directors, partners, employees,
agents and counsel, and each person, if any, who controls any such person
within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and
all loss, liability, charge, claim, damage and expense whatsoever (which shall
include, for all purposes of this paragraph 10, but not be limited to,
reasonable attorneys' fees and any and all expense whatsoever reasonably
incurred, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in connection
with (i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any registration statement, preliminary prospectus or final
prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto, or (B) in any application or other document or
communication (in this paragraph 10 collectively called an "application")
executed by or on behalf of the Company filed in any jurisdiction in order to
register or qualify any of the "Underwriter's Securities" under the securities
or blue sky laws thereof or filed with the Commission or any securities
exchange; or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company with respect to
the Holder or any holder of any of the Underwriter's Securities by or on behalf
of such Holder or Holders, or such other Holder, exclusively for inclusion in
any such preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant or agreement of the Company to
indemnify, which shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this Warrant.
If any action is brought against the Holder or any holder of any of the
Underwriter's Securities or any of its officers, directors, partners,
employees, agents or counsel, or any controlling persons of such person (an
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
it may have other than pursuant to this paragraph 10(a) except to the extent
that it has been registered in any material request by such failure) and the
Company shall
-8-
<PAGE> 9
promptly assume the defense of such action, including the employment of
counsel (reasonably satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or parties
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such action or the Company shall
not have promptly employed counsel reasonably satisfactory to such indemnified
party or parties to have charge of the defense of such action or such
indemnified party or parties shall have reasonably concluded that there may be
one or more legal defenses available to it or them or to other indemnified
parties which are different from or addition to those available to the Company,
if any of which events the reasonable fees and expenses of such counsel shall
be borne by the Company and the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties. Anything
in this paragraph 10 (a) to the contrary notwithstanding, the Company shall not
be liable for any settlement of any such claim or action effected without its
written consent.
(b) The Holder and any other holder of Underwriter's Securities agree to
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall have signed any registration statement
covering Underwriter's Securities held by the Holder and such other holder and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Holder and such other holder
in paragraph 10(a), but only with respect to statements or omissions, if any,
made in any registration statement, preliminary prospectus, or final prospectus
(as from time to time amended and supplemented), or any amendment or supplement
thereto, or in any application, in reliance upon and in conformity with written
information furnished to the Company with respect to the Holder or such other
holder by or on behalf of the Holder or such other holder expressly for
inclusion in any such registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as
the case may be. If any action shall be brought against the Company or any
other person so indemnified based on any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, and in respect of which indemnity may be sought
against the Holder pursuant to this paragraph 10(b), the Holder and such other
holder shall have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and duties given to
the indemnified parties, by the provisions of paragraph 10(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to paragraph 10(a)
or 10(b) (subject to the limitations thereof) but is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, or (ii) any indemnified or indemnifying party seeks
contribution under the Act, the Exchange Act or otherwise, then the Company
(including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed any such
registration statement and any controlling person of the Company), as one
entity, and the Holder and any holder of any of the Underwriter's Securities
included in such registration in the aggregate (including for this purpose any
contribution by or on behalf of an indemnified party), as a
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<PAGE> 10
second entity, shall contribute to the losses, liabilities, claims, damages and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
the Holder or any such holder in connection with the facts which resulted in
such losses, liabilities, claims, damages and expenses. The relative fault, in
the case of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company, by the Holder or by any holder of Underwriter's Securities
included in such registration, and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent such statement,
alleged statement, omission or alleged omission. The Company and the Holder
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Holder or any such other holder of the Underwriter's
Securities for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages and expenses
(even if the Holder and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this paragraph 10(c). No
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this paragraph
10(c), each person, if any, who controls the Holder or any holder of any of the
Underwriter's Securities within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act and each officer, director, partner, employee, agent
and counsel of each such person, shall have the same rights to contribution as
such person and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent and counsel of each such person,
shall have the same rights to contribution as such person and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to
the provisions of this paragraph 10(c). Anything in this paragraph 10(c) to
the contrary notwithstanding, no party shall be liable for contribution with
respect to the settlement of any claim or action effected without its written
consent. This paragraph 10(c) is intended to supersede any right to
contribution under the Act, the Exchange Act or otherwise.
11. Legend. The securities issued upon exercise of the Options shall be
subject to a stop transfer order and the certificate or certificates evidencing
any such securities shall bear the following legend:
"THE SHARES [OR OTHER SECURITIES] REPRESENTED BY
THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO
A REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. HOWEVER, SUCH SHARES
[OR OTHER SECURITIES] CANNOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT
TO SUCH REGISTRATION STATEMENT, (ii) A
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<PAGE> 11
SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT,
OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT."
12. Lost Certificates. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of any Option (and upon
surrender of any Option if mutilated), and upon reimbursement of the Company's
reasonable incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Option of like date, tenor and denomination.
13. No Rights as Shareholder. The Holder of any Option shall not have,
solely on account of such status, any rights of a shareholder of the Company,
either at law or in equity, or to any notice of meetings of stockholders or of
any other proceedings of the Company, except as provided in this Option.
14. Notices.
All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been duly made when delivered, or
mailed by registered or certified mail, return receipt requested:
(a) If to the registered holder of this Option, to the address of such
holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Paragraph l(a) of
this Option; or
(c) if to the Holder, to the address set forth on the first page of
this Option.
15. Governing Law. This Option shall be construed in accordance with the
laws of the State of Georgia, without giving effect to conflict of laws.
Dated: October __, 1996
STREICHER MOBILE FUEL, INC.
By:
-------------------------------------
Name:
--------------------------
Title:
--------------------------
[Seal]
- -------------------------------------
Secretary
<PAGE> 12
THE UNDERWRITER'S OPTION REPRESENTED BY THIS CERTIFICATE AND THE OTHER
SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR
RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE UNDERWRITER'S OPTIONS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE UNDERWRITER'S UNIT PURCHASE
OPTION AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, OCTOBER , 2000
No. U.0.1 Underwriter's Options
UNDERWRITER'S OPTION CERTIFICATE
This Underwriter's Option Certificate certifies that Argent Securities,
Inc. or registered assigns, is the registered holder of Underwriter's Options
to purchase initially, at any time from ___________, 1997 until 5:30 p.m. New
York time on ___________, 2000 ("Expiration Date"), up to 100,000 Shares of
Common Stock and 100,000 Redeemable Stock Purchase Warrants of Streicher Mobile
Fuel, Inc., a Florida corporation (the "Company"), at an aggregate initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $________ upon surrender of this Underwriter's Option Certificate and
payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Purchase Option Agreement
dated as of November __, 1996 between the Company and Argent Securities, Inc.
(the "Underwriter's Purchase Option Agreement"). Payment of the Exercise Price
shall be made by certified or official bank check in New York Clearing House
funds payable to the order of the Company.
No Underwriter's Option may be exercised after 5:30 p.m., New York time,
on the Expiration Date, at which time all Underwriter's Options evidenced
hereby, unless exercised prior thereto, shall thereafter be void.
The Underwriter's Options evidenced by this Underwriter's Option
Certificate are part of a duly authorized issue of warrants pursuant to the
Underwriter's Purchase Option Agreement, which Underwriter's Purchase Option
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights,
limitation of rights,
<PAGE> 13
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Underwriter's Options.
The Underwriter's Purchase Option Agreement provides that upon the
occurrence of certain events the exercise prices and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Underwriter's Option Certificate evidencing the adjustment in the exercise
price and the number and/or type of securities issuable upon the exercise of
the Underwriter's Options; provided, however, that the failure of the Company
to issue such new Underwriter's Option Certificates shall not in any way
change, alter or otherwise impair, the rights of the holder as set forth in the
Underwriters Purchase Option Agreement.
Upon due presentment for registration of transfer of this Underwriter's
Option Certificate at an office or agency of the Company, a new Underwriter's
Option Certificate or Underwriter's Option Certificates of like tenor and
evidencing in the aggregate a like number of Underwriter's Options shall be
issued to the transferees in exchange for this Underwriter's Option
Certificate, subject to the limitations provided herein and in the
Underwriter's Unit Purchase Option Agreement, without any charge except for any
tax or other governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Underwriter's Options evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Underwriter's Option Certificate representing such numbered unexercised
Underwriter's Options.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Underwriter's Option Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
All terms used in this Underwriter's Option Certificate which are defined
in the Underwriter's Warrant Agreement shall have the meanings assigned to them
in the Underwriter's Purchase Option Agreement.
IN WITNESS WHEREOF, the Company has caused this Underwriter's Option
Certificate to be duly executed under its corporate seal.
Dated as of _________________, 1996
STREICHER MOBILE FUEL, INC.
[SEAL] By:
----------------------------------
Name:
-----------------------
Title:
-----------------------
Attest:
- ----------------------------------
Secretary
<PAGE> 14
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Underwriter's Option Certificate, to purchase _________
Shares and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
Streicher Mobile Fuel, Inc. in the amount of $___________, all in accordance
with the terms hereof. The undersigned requests that a certificate for such
securities be registered in the name of _______________________ whose address
is __________________________________________ and that such Certificate be
delivered to _______________________________________________ whose address is
________________________________________________________________.
Dated:__________________
------------------------------------------
Signature
(Signature must conform in all
respects to name of holder as specified on
the face of the Underwriter's Option
Certificate.)
------------------------------------------
Insert Social Security or
Other Identifying Number of Holder)
<PAGE> 1
EXHIBIT 4.4
WARRANT AGREEMENT
Agreement made as of October __, 1996, between Streicher Mobile
Fueling, Inc., a Florida corporation, with offices at 2720 Northwest 55th
Court, Ft. Lauderdale, Florida 33309 ("Company"), and American Stock Transfer &
Trust Company, a New York corporation, with offices at 40 Wall Street, New
York, New York 10005 (herein called "Warrant Agent").
WHEREAS, the Company has determined to issue and deliver up to
1,150,000 Redeemable Common Stock Purchase Warrants ("Redeemable Warrants") and
up to 115,000 Common Stock Purchase Warrants ("Underwriter's Warrants,"
together with the Redeemable Warrants, "Warrants") evidencing the right of the
holders thereof to purchase an aggregate of 1,365,000 shares of common stock,
$.01 par value per share, of the Company ("Common Stock"), which Warrants are
to be issued and delivered in connection with the Company's initial public
offering ("IPO") of securities and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of
the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in accordance
with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1. Form of Warrant. Each Warrant shall be issued in registered
form only, shall be in substantially the form of Exhibit A hereto, the
provisions of which are incorporated herein and shall be signed by, or bear the
facsimile signature of, the Chairman or President and Secretary or Assistant
Secretary of the Company and shall bear a facsimile of the Company's seal. In
the event the person whose facsimile signature has been placed upon any Warrant
shall have ceased to be Chairman or President and Secretary or Assistant
Secretary of the Company before such Warrant is issued, it may be
<PAGE> 2
issued with the same effect as if he had not ceased to be such at the date of
issuance. No Warrant may be exercised until it has been countersigned by the
Warrant Agent as provided in Section 2.3 hereof.
2.2. Effect of Countersignature. Unless and until countersigned by
the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of
no effect.
2.3. Events for Countersignature. The Warrant Agent shall
countersign a Warrant only upon the occurrence of either of the following
events:
(i) if the Warrant is to be issued in exchange or
substitution for one or more previously countersigned
Warrants, as hereinafter provided, or
(ii) if the Company instructs the Warrant Agent to do so.
2.4. Registration.
2.4.1. Warrant Register. The Warrant Agent shall maintain
books ("Warrant Register"), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2. Registered Holder. Prior to due presentment or
registration of transfer of any Warrant the Company and the Warrant Agent may
deem and treat the person in whose name such Warrant shall be registered upon
the Warrant Register ("registered holder"), as the absolute owner of such
Warrant and of each Warrant represented thereby (notwithstanding any notation
of ownership or other writing an the Warrant Certificate made by anyone other
than the Company or the Warrant Agent), for the purpose of any exercise thereof
and for all other purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
2.5. Detachability of Warrants. The Warrant Agent understands that
the Warrants and the shares of Common Stock are being offered separately and
may be traded separately.
3. Terms and Exercise of Warrants
3.1. Warrant Price. Each Redeemable Warrant shall, when
countersigned by the Warrant Agent, entitle the registered holder thereof,
subject to the provisions of such Warrant and of this Warrant Agreement, to
purchase from the Company one share of Common Stock for $9.00 per whole share,
subject to the adjustments provided in Section 4 hereof. The term "Warrant
Price" as used in this Warrant Agreement refers to the price per share at which
Common Stock may be purchased at the time a Warrant is exercised. The Company
has the right, in its sole discretion, to decrease the exercise price of the
Warrants for a period of not less than 30 days on not less than 30 days' prior
written notice to the holders of the Warrants.
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<PAGE> 3
3.2. Duration of Warrants. A Warrant may be exercised only during
the period ("Exercise Period") commencing on the first anniversary of the
effective date of the IPO and terminating on the fourth anniversary date of the
IPO; provided, however, that the Exercise Period of the Redeemable Warrants
shall terminate earlier on the date fixed for redemption of such Redeemable
Warrants as provided in Section 6 of this Agreement ("Expiration Date"). Each
Warrant not exercised on or before the Expiration Date shall become void, and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease at the close of business on the Expiration Date. The Company has
the right, in its sole discretion, to extend the expiration date of the
Warrants on five business days' prior written notice to the holders of the
Warrants.
3.3. Exercise of Warrants.
3.3.1. Payment. A Warrant, when countersigned by the
Warrant Agent, may be exercised by the registered holder thereof by
surrendering it, at the office of the Warrant Agent, or at the office of its
successor as Warrant Agent, in the Borough of Manhattan, City and State of New
York, with the purchase form, as set forth in the Warrant and in substantially
the form of Exhibit A hereto, duly executed, and by paying in full, in lawful
money of the United States, the Warrant Price for each full share of Common
Stock as to which the Warrant is exercised and any and all applicable taxes due
in connection with the exercise of the Warrant, the exchange of the Warrant for
the Common Stock, and the issuance of the Common Stock. Subject to Section
3.3.5, upon exercise of any Warrant, the Warrant Agent shall promptly remit
the payment received for the Warrant to the Company or its agent, as the
Company may direct in writing.
3.3.2. Issuance of Certificates. As soon as practicable
after the exercise of any Warrant, the Company shall issue to the registered
holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which he is entitled, registered in such name or
names as may be directed by him, and if such Warrant shall not have been
exercised in full, a new countersigned Warrant for the number of shares as to
which such Warrant shall not have been exercised, Notwithstanding the
foregoing, the Company shall not be obligated to deliver any securities
pursuant to the exercise of a Warrant unless a registration statement under the
Securities Act of 1933 with respect to the securities is effective. Warrants
may not be exercised by, or securities issued to, any registered holder in any
state in which such exercise would be unlawful.
3.3.3. Valid Issuance. All shares of Common Stock issued
upon the proper exercise of a Warrant in conformity with this Agreement shall
be validly issued.
3.3.4. Date of Issuance. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the registered holder of record
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<PAGE> 4
of such shares on the date on which the Warrant was surrendered, and payment of
the Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open.
4. Adjustments.
4.1. Stock Dividends - Split-Ups. If after the date hereof, and
subject to the provisions of Section 4.5 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar event,
then, on the effective date of such stock dividend or split-up, the number of
shares issuable on exercise of each Warrant shall be increased in proportion to
such increase in outstanding shares and the then applicable Warrant Price shall
be correspondingly decreased.
4.2. Aggregation of Shares. If after the date hereof, and subject
to the provisions of Section 4.5, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date of
such consolidation, combination or reclassification, the number of shares
issuable on exercise of each Warrant shall be decreased in proportion to such
decrease in outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
4.3. Reorganization, etc. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the Warrant holders shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in the Warrants and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented thereby, such shares of stock, securities, or assets as
may be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchasable upon the exercise of the Warrants)
shall thereafter be applicable, as nearly as may
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<PAGE> 5
be in relation to any share of stock, securities, or assets thereafter
deliverable upon the exercise hereof. The Company shall not effect any such
consolidation, merger, or sale unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing such assets, shall
assume by written instrument executed and delivered to the Warrant Agent the
obligation to deliver to the Warrant holders such shares of stock, securities,
or assets as, in accordance with the foregoing provisions, such holders may be
entitled to purchase.
4.4. Notices of Changes in Warrant. Upon every adjustment of the
Warrant Price or the number of shares issuable on exercise of a Warrant, the
Company shall give written notice thereof to the Warrant Agent, which notice
shall state the Warrant Price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the
exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the
occurrence of any event specified in Sections 4.1., 4.2., or 4.3., then, in any
such event, the Company shall give written notice in the manner set forth above
on the record date for such event, or the effective date of such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance of shares. Such notice shall also specify
the date as of which the holders of Common Stock of record shall participate in
such dividend, distribution, or subscription rights, or shall be entitled to
exchange their Common Stock for stock, securities, or other assets deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, winding up or issuance. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such event.
4.5. No Fractional Shares. Notwithstanding any provision contained
in this Warrant Agreement to the contrary, the Company shall not issue
fractional shares upon exercise of Warrants. If, by reason of any adjustment
made pursuant to this Section 4, the holder of any Warrant would be entitled,
upon the exercise of such Warrant, to receive a fractional interest in a share,
the Company shall, upon such exercise, purchase such fractional interest,
determined as follows: (i)If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the Nasdaq National Market or Nasdaq SmallCap Market,
the current value shall be the last reported sale price of the Common Stock on
such exchange on the last business day prior to the date of exercise of the
Warrant or if no such sale is made on such day, the average of the closing bid
and asked prices for such day on such exchange; or (ii)If the Common Stock is
not listed or admitted to unlisted trading privileges, the current value shall
be the mean of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of the
exercise of the Warrant, or (iii)If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and
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<PAGE> 6
asked prices are not so reported, the current value shall be an amount
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company.
4.6. Form of Warrant. The form of Warrant need not be changed
because of any adjustment pursuant to this Section 4, and Warrants issued after
such adjustment may state the same Warrant Price and the same number of shares
as is stated in the Warrants initially issued pursuant to this Agreement,
However, the Company may at any time in its sole discretion make any change in
the form of Warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any Warrant thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
or otherwise, may be in the form as so changed.
5. Transfer and Exchange of Warrants.
5.1. Registration of Transfer. The Warrant Agent shall register
the transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with
signatures properly guaranteed and accompanied by appropriate instructions for
transfer. Upon any such transfer, a new Warrant representing an equal
aggregate number of Warrants shall be issued and the old Warrant shall be
canceled by the Warrant Agent. The Warrants so canceled shall be delivered by
the Warrant Agent to the Company from time to time upon request.
5.2. Procedure for Surrender of Warrants. Warrants may be
surrendered to the Warrant Agent, together with a written request for exchange
or transfer, and thereupon the Warrant Agent shall issue in exchange therefor
one or more new Warrants as requested by the registered holder of the Warrants
so surrendered, representing an equal aggregate number of Warrants; provided,
however, that in the event that a Warrant surrendered for transfer bears a
restrictive legend, the Warrant Agent shall not cancel such Warrant and issue
new Warrants in exchange therefor until the Warrant Agent has received an
opinion of counsel for the Company stating that such transfer may be made and
indicating whether the new Warrants must also bear a restrictive legend.
5.3. Fractional Warrants. The Warrant Agent shall not be required
to effect any registration of transfer or exchange which will result in the
issuance of a Warrant for a fraction of a Warrant.
5.4. Service Charges. No service charge shall be made for any
exchange or registration of transfer of Warrants.
5.5. Warrant Execution and Countersignature. The Warrant Agent is
hereby authorized to countersign and to deliver, in accordance with the terms
of this Agreement, the Warrants required to be issued pursuant to the
provisions of this Section 5, and the Company, whenever required by the Warrant
Agent, will supply the Warrant Agent with Warrants duly executed on behalf of
the Company for such purpose.
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<PAGE> 7
6. Redemption.
6.1. Redemption. Subject to Section 6.4 hereof, the Redeemable
Warrants may be redeemed, at the option of the Company, as a whole at any time
or in part from time to time, after the First Exercise Date and prior to their
expiration, in any proportion as the Company in its sole discretion may
determine, at the office of the Warrant Agent, upon the notice referred to in
Section 6.2., at the price of $.01 per Warrant ("Redemption Price"), provided
that the average closing price of the Common Stock has been at least equal to
$10.50 per share for the twenty consecutive trading days ending three days
prior to the date of the notice of redemption.
6.2. Date Fixed for and Notice of Redemption. In the event the
Company shall elect to redeem all or any part of the Redeemable Warrants, the
Company shall fix a date for the redemption. Notice of redemption shall be
mailed by first class mail, postage prepaid, by the Company or the Company's
agent at its direction not less than 30 days from the date fixed for redemption
to the registered holders of the Warrants to be redeemed at their last
addresses as they shall appear on the registration books. Any notice mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such notice.
6.3. Exercise After Notice of Redemption. The Redeemable Warrants
may be exercised in accordance with Section 3 of this Agreement at any time
after notice of redemption shall have been given by the Company pursuant to
Section 6.2. hereof and prior to the date fixed for redemption. On and after
the redemption date, the record holder of the Redeemable Warrants shall have no
further rights except to receive, upon surrender of the Redeemable Warrants,
the redemption price.
6.4. Redemption Exceptions. Notwithstanding anything to the
contrary herein, the Company shall not have the right to redeem any of the
115,000 Underwriter's Warrants. The provisions of this Section 6.4 shall not
be modified, amended or deleted without the prior written consent of Argent
Securities, Inc.
7. Other Provisions Relating to Rights of Holders of Warrants.
7.1. No Rights as Stockholder. A Warrant does not entitle the
registered holder thereof to any of the rights of a stockholder of the Company,
including, without limitation, the right to receive dividends, or other
distributions, exercise any preemptive rights or rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders
or the election of directors of the Company or any other matter.
7.2. Lost, Stolen, Mutilated, or Destroyed Warrants. If any
Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include the
surrender
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<PAGE> 8
thereof, issue a new Warrant of like denomination, tenor, and date as the
Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time enforceable by anyone.
7.3. Reservation of Stock. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.
7.4. Registration Statement. The Company has filed with the
Securities and Exchange Commission a Registration Statement [No. 33-14501]
("Registration Statement") on Form SB-2 for the registration, under the
Securities Act of 1933, of, among others, the Warrants and the Common Stock
issuable upon exercise of the Warrants.
7.5. Registration of Common Stock. The Company agrees that prior
to the commencement of the Exercise Period, it shall file with the Securities
and Exchange Commission a post-effective amendment to the Registration
Statement, or a new registration statement, for the registration, under the
Securities Act of 1933, of the Common Stock issuable upon exercise of the
Warrants. In either case, the Company will use its best efforts to cause the
same to become effective and to maintain the effectiveness of such registration
statement or another registration statement with respect to such Common Stock
until the expiration or redemption of the Warrants in accordance with the
provisions of this Agreement.
8. Concerning the Warrant Agent and Other Matters.
8.1. Payment of Taxes. The Company will from time to time promptly
pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon the
exercise of Warrants, but the Company shall not be obligated to pay any
transfer taxes in respect of the Warrants or such shares.
8.2. Resignation, Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment of Successor Warrant Agent. The Warrant
Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities (other than those incurred
prior to such resignation or discharge) hereunder after giving sixty (60) days'
notice in writing to the Company and may be removed by the Company upon sixty
(60) days' notice and the written consent of Meyerson. If the office of the
Warrant Agent becomes vacant by resignation or incapacity to act or otherwise,
the Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation or
incapacity by the Warrant Agent, then the holder of any Warrant may apply to
the Supreme Court of the State of New York for the County of New York
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<PAGE> 9
for the appointment of a successor Warrant Agent. Any successor Warrant Agent,
whether appointed by the Company or by such court, shall be a corporation in
good standing and having its principal office in the Borough of Manhattan, City
and State of New York, and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested with
all the authority, powers, rights, immunities, duties, and obligations of its
predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed, but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder, and upon request of any successor Warrant
Agent the Company shall make, execute, acknowledge, and deliver any and all
instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities.
duties, and obligations.
8.2.2. Notice of Successor Warrant Agent. In the event a
successor Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Warrant Agent and the transfer agent for the Common
Stock not later than the effective date of any such appointment.
8.2.3. Merger or Consolidation of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
8.2.4. Records. The Warrant Agent shall, upon request by
the Company, deliver to the Company a copy of the transfer records relating to
the Warrants subject to the payment of any amounts required to be paid pursuant
to Section 8.3 1,
8.3. Fees and Expenses of Warrant Agent.
8.3.1. Remuneration. The Company agrees to pay the Warrant
Agent the aggregate sum of per month for (i) its services as Warrant Agent
hereunder and (ii) its services as transfer agent to the Company, and to
reimburse the Warrant Agent, upon demand and presentation of appropriate
vouchers or receipts, for the reasonable costs incurred by the Warrant Agent in
connection with its services as Warrant Agent hereunder.
8.3.2. Further Assurances. The Company and the Warrant
Agent agree to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reasonably be required by the Warrant
Agent or the Company for the carrying out or performing of the provisions of
this Agreement.
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<PAGE> 10
8.4. Liability of Warrant Agent
8.4.1. Reliance on Company Statement. Whenever in the
performance of its duties under this Warrant Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
statement signed by the Chairman or President of the Company and delivered to
the Warrant Agent. The Warrant Agent may rely upon such statement for any
action taken or suffered in good faith by it pursuant to the provisions of this
Agreement.
8.4.2. Indemnity. The Warrant Agent shall be liable
hereunder only for its own negligence or willful misconduct or any actions
taken in bad faith. The Company agrees to indemnify the Warrant Agent and save
it harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement except as a result of the Warrant Agent's
negligence, willful misconduct, or bad faith.
8.4.3. Exclusions. The Warrant Agent shall have no
responsibility with respect to the validity or execution of any Warrant (except
its countersignature thereof; nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant, nor shall it be responsible to make any adjustments required under the
provisions of Section 4. hereof or responsible for the manner, method, or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Warrant or as to whether any shares of Common Stock will when
issued be valid and fully paid and nonassessable.
8.5. Acceptance of Agency. The Warrant Agent hereby accepts the
agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth and among other things, shall account
promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all moneys received by the Warrant Agent
for the purchase of shares of the Company's Common Stock through the exercise
of Warrants.
8.6. Right to Consult Counsel. The Warrant Agent may at any time
consult with legal counsel of its selection satisfactory to it (who may be
legal counsel for the Company), and the Warrant Agent shall incur no liability
or responsibility to the Company or to any registered holder for any action
taken, suffered or omitted by it in good faith in accordance with the opinion
or advice of such counsel.
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9. Miscellaneous Provisions
9.1. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns.
9.2. Notices. Any notice, statement or demand authorized by this
Warrant Agreement to be given or made by the Warrant Agent or by the holder of
any Warrant to or on the Company shall be sufficiently given or made if sent by
certified mail, or private courier service, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows: with a copy to Streicher Mobile Fueling, Inc.
2720 Northwest 55th Court
Ft. Lauderdale, Florida 33309
Attn: Stanley H. Streicher
and Kenneth C. Hoffman, Esq.
Greenberg, Traurig
1221 Brickell Avenue
Miami, Florida 33131
Any notice, statement or demand authorized by this Agreement to be given or
made by the holder of any Warrant or by the Company to or on the Warrant Agent
shall be sufficiently given or made if sent by certified mail or private
courier service, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attn: Compliance Department
with a copy to:
(Name & Address of Law Firm)
Attention:
9.3. Applicable Law. The validity, interpretation, and performance
of this Agreement and of the Warrants shall be governed in all respects by the
laws of the State of New York.
9.4. Persons Having Rights under this Agreement. Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the registered holders
of the Warrants and, for the purposes of Sections 6-1 and 6.4 hereof, Meyerson,
any right, remedy, or claim
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under or by reason of this Warrant Agreement or of any covenant, condition,
stipulation, promise, or agreement hereof. Meyerson shall be deemed to be a
third party beneficiary of this Agreement with respect to Sections 6.1 and 6.4
hereof. All covenants, conditions, stipulations, promises, and agreements
contained in this Warrant Agreement shall be for the sole and exclusive benefit
of the parties hereto (and to the extent set forth above) and their successors
and assigns and of the registered holders of the Warrants.
9.5. Examination of the Warrant Agreement. A copy of this
Agreement shall be available at all reasonable times at the office of the
Warrant Agent in the Borough of Manhattan, City and State of New York, for
inspection by the registered holder of any Warrant. The Warrant Agent may
require any such holder to submit his or her Warrant for inspection by it.
9.6. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
9.7. Effect of Headings. The Section headings herein are for
convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under their respective corporate seals as of the day and year
first above written.
STREICHER MOBILE FUELING, INC.
By
--------------------------------------
Stanley H. Streicher, President
AMERICAN STOCK TRANSFER & TRUST COMPANY
By
--------------------------------------
12
<PAGE> 1
EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of October __, 1996, by and between STREICHER MOBILE
FUELING, INC., a Florida corporation ("Streicher" or "Company"), and STANLEY H.
STREICHER ("Executive").
WITNESSETH:
WHEREAS, the Company believes that the attraction and retention of key
employees such as the Executive is essential to the Company's growth and
success; and
WHEREAS, the Company desires to employ Executive as its Chief Executive Officer
and President, and Executive desires to accept such employment, all on the
terms and conditions as hereinafter provided; and
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree
as follows:
1. Term. The Company hereby employs Executive and Executive
hereby accepts employment by the Company for a period of five (5) years
beginning on the effective date of the Company's initial public offering of its
common stock, (the "Effective Date") subject to the terms and conditions
hereafter contained. This Agreement will be renewed automatically thereafter
for successive periods of two (2) years, unless not less than one hundred
twenty (120) days prior to the end of the initial five (5) year period, or one
hundred twenty (120) days prior to the end of any two (2) year renewal period,
as the case may be, one of the parties sends written notice to the other party
of its intent to terminate this Agreement at the end of such period.
2. Duties. Executive shall hold the offices of and shall
function as Chief Executive Officer and President of the Company. In such
capacities, Executive will supervise the business and all operations of the
Company and its subsidiaries and shall perform such other duties ordinarily
within the scope of the office or offices occupied by Executive. Executive
shall report to the Board of Directors ("Board of Directors"), and shall
perform such other reasonable duties as the Board of Directors may assign to
him from time to time, provided, however, the Executive shall, during the term
hereof, continuously have and retain such duties, responsibilities and
authorities at least as significant in scope and substance as the duties,
responsibilities and authorities required of the Executive's position with the
Company as of the Effective Date. The Executive agrees to devote substantially
all of his time during normal business hours, best efforts, abilities,
knowledge and experience to the faithful performance of the duties,
responsibilities and authorities which may be reasonably assigned to him and
which are consistent with this Section 2 of this Agreement. Notwithstanding
the preceding, the Executive may, without being in violation of his obligations
hereunder, serve on corporate, civic or charitable boards or committees and
manage personal investments, and continue to provide services to Streicher
Enterprises, Inc. in the same manner as he has prior to the date hereof,
provided the Executive shall use his best efforts to pursue such activities
<PAGE> 2
in such a manner so that such activities shall not prevent the Executive from
fulfilling his obligations to the Company hereunder.
3. Base Salary. As compensation for the services rendered by
Executive hereunder and all services as an officer of the Company, the Company
agrees to pay or cause to be paid to Executive an annual "Base Salary" during
the term of this agreement in the amount of $275,000, subject to increase as
hereinafter set forth, payable in accordance with the normal payroll practices
of the Company.
On each January 1 during the term of this Agreement,
commencing January 1, 1998, the base salary shall be increased to reflect the
change in the cost of living, based upon the change, from the proceeding
January 1, in the Consumer Price Index for All Urban Consumers, as published by
the U.S. Bureau of Labor Statistics (reference base 1982-1984 = 100). On each
January 1, and at any time that there is a change in the financial condition or
character of the business of the Company during the term of this Agreement, the
Board of Directors shall review the base salary amount to determine whether or
not to grant additional increases in the base salary amount.
Any increase in the Base Salary or other compensation granted
by the Board of Directors shall in no way limit or reduce any other obligations
of the Company under this Agreement and, once established at an increased
specified rate, the Base Salary shall not thereafter be reduced without the
Executive's written consent.
4. Termination of Guarantees. It is understood that Executive has
individually guaranteed Company debt and lease obligations, and has incurred
other costs for which he has not been compensated. In consideration of the
above services, the Company agrees to make every effort to remove and cause to
be terminated all guarantees provided by Executive in respect of certain bank
loans before the scheduled loan pay-off dates of the guaranteed loans or other
obligations. If the Company is unable to remove and cause to be terminated any
such loan guarantees on or prior to the earlier of the effective date of the
Company's initial public offering or July 31, 1997, the Company agrees to
compensate Executive in addition to all other compensation provided hereunder
in an amount equal to two percent (2%) of the outstanding balance of the
guaranteed loans and other obligations, which amount shall be paid to Executive
in quarterly installments.
Upon termination of this Agreement, all guarantees made by
Executive must be immediately removed and terminated and certified as such by
the lending institution or other person in whose favor the guarantee was made.
In the event this Agreement terminates and the Company has been unable to
remove and terminate said loan guarantees prior to said termination of
employment, then the Company shall continue to pay Executive compensation at
the rate and upon the same terms as he was paid under this Agreement until said
loan guarantees have been removed and terminated. The Company further agrees to
indemnify Executive and hold Executive harmless from and against any and all
claims, losses, damages, liens, costs and expenses, including reasonable
attorneys' fees and costs, arising out of any default by the Company on loans
or other obligations guaranteed by Executive plan;
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<PAGE> 3
This Section 4 shall survive termination of this Agreement.
5. Incentive Stock Options. On the effective date of the
Company's initial public offering, the Company shall grant to Executive
incentive stock options to acquire 1,000,000 shares of Common Stock of the
Company (the "Options"). The Options shall vest annually during the first five
(5) years following the closing of the aforementioned public offering (the
"Closing"), provided, however, that the Company achieves either the earnings
per share ("EPS") level or the stock price level for the corresponding fiscal
year-end, as described in Exhibit A attached hereto.
The vesting criteria set forth in Exhibit A are cumulative.
Thus, for any year in which the Company attains (i) the cumulative EPS
requirement, (ii) the threshold stock price or (iii) the net income
(cumulative) for prior years, all Options not previously vested shall become
exercised in addition to the Options vested for the applicable year. All
Options previously vested shall become exercised on the ninth (9th) anniversary
date of the initial grant. All Options shall become immediately exercisable if
the Executive is terminated without justifiable cause (as herein defined), as a
result of his death or disability, or upon a Change of Control (as defined
herein) or termination by the Executive for Good Reason (as defined herein).
6. Performance Bonus. As additional compensation, Executive
shall participate in a management incentive bonus pool ("Bonus Pool") to be
established by the Company. The Company shall cause ten percent (10%) of its
annual pre-tax profit to be paid into the Bonus Pool. Persons occupying the
offices of President and such other officers as are recommended by the
Executive and approved by the Board of Directors of the Company shall be
eligible to participate in the Bonus Pool. The Board of Directors, in its sole
discretion, shall determine the allocation of Bonus Pool funds among the
eligible participants; provided, however, that the entire balance of the Bonus
Pool shall be allocated each year.
7. Performance Requirements. Executive agrees to devote his best
efforts and the majority of his business time and attention to the performance
of his duties hereunder for the benefit of the Company and its subsidiaries.
8. Fringe Benefits. Executive shall be entitled to vacations,
health care benefits, fringe benefits and reimbursement for reasonable
out-of-pocket expense, including but not limited to those hereinafter detailed,
in accordance with the Company's practices covering executive personnel. The
Company shall use reasonable efforts to seek waivers of waiting periods, if
any, applicable to particular benefits. Such benefits shall include:
A. Coverage under any major medical and dental insurance
programs and plans, and under any short-term, long-term or permanent disability
programs and plans, which are or may become generally available to management
employees of the Company;
B. Retirement benefits at such time and on such amounts
as are paid to executives by the Company at such time as the Company institutes
a retirement plan;
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<PAGE> 4
C. Reimbursement of all properly documented travel and
business related expenses normally paid by the Company for the benefit of its
executives including all allowable business expenses of an automobile approved
by the Board. All expense reports must be approved by the Chief Financial
Officer of the Company prior to reimbursement;
D. Four (4) weeks of paid vacation per calendar year at
any time or times selected by Executive taking into account the convenience of
the Company. Unused vacation time will be cumulative from year to year;
E. Twelve (12) days of sick leave annually; and
F. A holiday on the following days with full pay: New
Year's Day, President's Day, Easter, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, and such other holidays as the Company may
declare.
9. Termination.
A. Executive's employment by the Company shall terminate
on the death of Executive or may be terminated by the Company at any time upon:
(i) the disability of Executive (as defined below);
(ii) the termination of the Agreement by the Company for
"justifiable cause" (as defined below) or with Notice (as described
below);
(iii) a decision by the Board of Directors of the Company,
in the exercise of their reasonable business judgment, to cease
conducting operations;
B. The term "justifiable cause" shall mean only the
following:
(i) Executive's conviction of a felony involving moral
turpitude, fraud, or dishonesty, or any crime in connection with his
employment by the Company which causes the Company a substantial
detriment, but specifically shall not include traffic offenses;
(ii) continual gross neglect of duties ordinarily within
the scope of the office or offices occupied by Executive or refusal to
carry out the lawful policies of the Company as adopted by the Board
of Directors that are ordinarily carried out by employees in the
offices occupied by Executive, provided that in either event Executive
has received written notice of the Board of Directors of such neglect
or refusal and Executive fails to cure such breach within thirty (30)
days of receipt of notice;
(iii) breach of Section 11 hereof;
(iv) breach of Section 12 hereof;
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<PAGE> 5
(v) Executive takes unlawful advantage of a corporate
opportunity, unless: (a) he first offers the corporate opportunity to
the Company and makes disclosure concerning the conflict of interest
and the corporate opportunity, and the corporate opportunity is
rejected in advance; or (b) Executive's taking of the corporate
opportunity is ratified by a majority of disinterested members of the
Board of Directors; provided also that such taking of corporate
advantage shall not constitute "just cause" if (i) Executive's failure
to offer the corporate opportunity to the Company resulted from a good
faith belief that the business activity did not constitute a corporate
opportunity, and (ii) not later than fifteen (15) days after receiving
written notice from the Board of Directors challenging the taking of
the corporate opportunity, the corporate opportunity is to the extent
possible offered to the Company.
If there is a dispute as to whether or not "justifiable
cause" shall exist, the parties agree to settle the dispute by arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association and the judgment of the arbitrator(s) may be entered in any court
having jurisdiction thereof. The Company agrees to pay all legal fees and
costs, including Executive's reasonable attorneys' fees and costs (including
paralegal fees) associated with any legal proceedings concerning the
interpretation of this Agreement. Executive shall continue to be paid by the
Company as provided herein during the pendency of any arbitration
proceeding(s).
C. Executive may terminate his employment hereunder upon
giving at least ninety (90) days' prior written notice. If Executive terminates
this Agreement, he shall be entitled to receive his Base Salary, a prorated
amount of the bonus and fringe benefits, including vacation through to the date
of such termination. No additional remuneration shall be payable by the Company
to Executive and the Company shall have no other obligations or liabilities to
Executive, except to the extent required by law. If Executive gives notice of
termination as permitted pursuant to this Section 9C, the Company shall have
the right to relieve Executive, in whole or in part, of his duties under this
Agreement (without further reduction of his Base Salary, prorated bonus or
fringe benefits through the termination date).
D. The Company may terminate this Agreement at any time
upon ninety (90) days written notice to the Executive, which termination shall
also mean "without cause".
E. The Executive may terminate this Agreement at any
time for Good Reason (as hereinafter defined) in which event the Company shall
have no further liability hereunder to the Executive except to the extent set
forth in Section 10(E) hereof.
F. For purposes of this Agreement, the term "Good
Reason" shall mean, without the Executive's express written consent the
occurrence of any of the following circumstances (which changes shall
constitute a "Change"):
(1) The assignment to the Executive of
any duties inconsistent in any material respect (unless in the nature of a
promotion) with the Executive's position in the Company immediately prior to
such Change and titles, or a significant adverse alteration or diminution in
the nature or status of the Executive's authority, duties or responsibilities
from those in effect immediately
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<PAGE> 6
prior to such Change, other than an isolated, insubstantial and inadvertent
action that is fully corrected within five (5) days after receipt of written
notice from the Executive;
(2) Any failure by the Company to comply with any
of the provisions of Sections 3, 4 or 8 of this Agreement, other than an
isolated, insubstantial and inadvertent action that is fully corrected within
five (5) days after notice from the Executive; or
(3) Any failure by the Company to comply with any
material provision of this Agreement that has not been cured within ten (10)
days after notice of such noncompliance has been given by the Executive to the
Company.
(4) Any Change of Control of the Company:
(a) For purposes of this Agreement, a
"Change of Control" shall be deemed to have taken place if (i) any "person" (as
such term is defined in Section 13(d) (3) of the Securities Exchange Act of
1934) becomes a beneficial owner, directly or indirectly, of the Company's
securities representing 25% or more of the combined voting power of the then
outstanding securities of the Company; (ii) individuals who, as of the date
hereof constitute the Board (as of the date hereof, the "Incumbent Board")
cease for any reason to constitute a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than the election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or (iii) any merger in which the company is not the
surviving corporation or which results in more than 50% of the shares of the
Company being owned by persons other than the shareholders of the Company prior
to such merger; or (iv) any sale or other transfer of all or substantially all
of the assets of the Company. Notwithstanding the foregoing, the Board, in good
faith, may make a finding that a Change of Control of the Company has taken
place without the occurrence of any or all of the events enumerated above.
(b) If any of the events described in
Section 5(a) hereof constituting a Change of Control of the Company shall have
occurred or the Board has determined that a Change of Control of the Company
has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e) and (f) of this Section upon the subsequent
termination of his employment at any time during the term of this Agreement
(regardless of whether such termination results from his resignation or his
dismissal), unless such termination is (a) because of his death, or, (b) by the
Company for justifiable cause or Disability. Upon a Change of Control,
Executive shall have the right to resign from the Company at any time during
the term of this Agreement.
(c) Upon the occurrence of a Change of
Control of the Company followed by termination of the Executive's employment,
the Company shall pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a sum equal to the greater of (i) three (3)
times the highest annual rate of salary and bonus paid to Executive at any time
under this Agreement, or (ii) three (3) times the Executive's average annual
compensation from the Company reportable for the federal income tax purposes
during the five (5) previous years or such lesser period that Executive has
been employed by the Company. At the discretion of the Company, such amount
shall be paid in a lump sum or monthly during the three (3) years following
termination. Any amounts not paid
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<PAGE> 7
in a lump sum shall be evidenced by a promissory note to reasonable
satisfaction to the Executive and shall bear interest at the rate paid by the
Company to its primary lender.
(d) Upon the occurrence of a Change of
Control of the Company, the Company shall pay Executive, or, in the event of
his subsequent death, his beneficiary or beneficiaries, or his estate, as the
case may be, (i) payment of all deferred compensation, if any, and (ii) payment
of an amount equal to what Executive would have earned under the current year
bonus plan as of the Change of Control.
(e) Upon the occurrence of a Change of
Control of the Company, the Company will cause to be continued at the Company's
expense, life, health, retirement and disability coverage of Executive
substantially identical to the coverage maintained by the Company for the
Executive prior to his termination. Such coverage shall cease upon the earlier
of Executive's employment by another employer or the expiration of the
remaining term of this Agreement.
(f) Notwithstanding any provision of the
Options or any stock option plan of the Company under which the Executive is
granted stock options, inconsistent herewith, upon the occurrence of a Change
of Control of the Company followed by the termination of Executive's
employment, Executive will immediately become vested as to all Options and any
other options previously granted to him under any such stock option plan,
provided, however, that Executive shall exercise such options not later than
the date which is ten (10) years from the date of grant of such stock option.
(g) Upon the occurrence of a Change of
Control of the Company, the Company will transfer to the Executive all ordinary
life insurance contracts on the Executive's life under the Key Man insurance
program.
G. Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the performance of his duties under this Agreement for six
consecutive months during any calendar year, and within 30 days after written
notice of termination is given (which notice may only be given after the end of
such six-month period), the Executive shall not have returned to the
performance of his duties under this Agreement, the Company may terminate the
Executive's employment under this Agreement for "Disability".
10. Compensation upon Termination.
(a) Death. If the Executive's employment shall be
terminated pursuant to Section 9(A) hereof by reason of his death, the Company
shall pay to such person as the Executive shall have designated in a notice
filed with the Company, or, if no such person shall have been designated, to
his estate as a lump sum death benefit within thirty (30) days after the date
of death, (i) his full Base Salary through the date of his death in addition to
any payments the Executive's spouse, beneficiaries or estate may be entitled to
receive pursuant to any pension or employee benefit plan, life insurance policy
or other plan, program or policy (including accrued vacation and sick leave
benefits) then maintained or provided by the Company, or any other agreement
between the Executive and the Company, (ii) an amount equal to six months of
his current Base Salary at the date of death, and (iii)
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<PAGE> 8
any amounts which the Executive is entitled to pursuant to Section 6 hereof
which shall be prorated for such time period until Executive's date of death,
and such payments shall, assuming the Company is in compliance with the
provisions of this Agreement, fully discharge the Company's obligations
hereunder.
(b) Disability. During any period that the Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Executive shall continue to receive his full Base Salary
until the Executive's employment is terminated pursuant to Section 9A(i)
hereof. After termination because of his Disability (as defined in Section
9(g)), the company shall pay to Executive as a lump sum death benefit within
thirty (30) days after the date of termination, (i) his full Base Salary to the
date of disability in addition to any payments he may be entitled to receive
pursuant to any pension or employee benefit plan, disability insurance policy
or other plan, program or policy then maintained or provided by the Company, or
any other agreement between the Executive and the Company, (ii) an amount equal
to six months of his current Base Salary at the date of death, and (iii) any
amounts which the Executive is entitled to pursuant to Section 6 hereof which
shall be prorated through the Executive's date of Disability, and such payments
shall, assuming the Company is in compliance with the provisions of this
Agreement, fully discharge the Company's obligations hereunder.
(c) Cause. If the Executive's employment shall be
terminated by the Company for Cause, or by the Executive for other than Good
Reason, the Company shall pay the Executive (i) his full Base Salary to the
date of termination in addition to any payments he may be entitled to receive
pursuant to any pension or employee benefit plan, disability insurance policy
or other plan, program or policy then maintained or provided by the Company, or
any other agreement between the Executive and the Company, (ii) any accrued
vacation pay or sick leave benefits through the date of termination, and (iii)
any amounts which the Executive is entitled to pursuant to Section 6 hereof
which shall be prorated for such time period until Executive's date of
termination, and such payments shall, assuming the Company is in compliance
with the provisions of this Agreement, fully discharge the Company's
obligations hereunder.
(d) Termination by the Company without Cause. Upon the
termination of Executive's employment, as described in Section 9(D) hereof, the
Company shall pay to Executive, or, in the event of his subsequent death, to
his beneficiary or beneficiaries, or his estate, as the case may be, as
severance pay or liquidated damages or both, a lump sum within thirty (30)
days after the date of termination equal to the greater of (i) three (3) times
the highest annual rate of Base Salary paid to Executive at any time under this
Agreement, or (ii) an amount equal to (y) the present value of the payments
owed to Executive for the remaining term of this Agreement and (z) any
compensation due to Executive pursuant to Section 6 hereof which shall be
prorated through the date of termination.
(e) Termination by the Executive for Good Reason. In the
event this Agreement is terminated by the Executive pursuant to the provisions
of Section 9E hereof, the Company shall pay Executive, or, in the event of his
subsequent death, to his beneficiary or beneficiaries, or his estate, as the
case may be, as severance pay or liquidated damages, or both, a lump sum within
thirty (30) days after the date of termination equal to the greater of (i)
three (3) times the highest annual rate of Base Salary paid to Executive at
any time under this Agreement, or (ii) an amount equal to (y) the present
value of the payments owed to Executive for the remaining term of this
Agreement and (z) any compensation due to Executive pursuant to Section 6
hereof which shall be prorated through the date of termination.
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<PAGE> 9
(f) Termination by the Executive with Notice. In the
event this Agreement is terminated by the Executive other than pursuant to the
provisions of Section 9(E) hereof, the Executive shall be entitled to receive
(i) any accrued, but unpaid, salary, pursuant to Section 3 hereof, (ii) any
accrued but unpaid Additional Compensation, and (iii) any declared, but unpaid,
Bonus Compensation.
Upon the occurrence of an event of termination as
set forth in Section 9 hereof, the Company will transfer to the Executive all
ordinary life insurance contracts on the Executive's life under the Key Man
insurance program and the Company will cause to be continued at the Company's
expense, health and disability coverage of Executive substantially identical
to the coverage maintained by the Company for Executive prior to his
termination. Such coverage shall cease upon the earlier of Executive's
employment by another employer or the expiration of the remaining term of this
Agreement.
(g) Termination of Obligations of the Company Upon
Payment of Compensation. Upon payment of all amounts and the provision of all
other benefits, if any, due the Executive pursuant to the preceding provisions
of this Section, the Company shall have no further obligation to the Executive
under this Agreement.
11. Confidential Information. Executive recognizes and
acknowledges that the Company has, through the expenditure of substantial time,
effort and money, developed and acquired certain confidential information and
trade secrets which have become of great value to the Company in its
operations. Executive further acknowledges and understands that in the course
of performing his duties for the Company, Executive has received and will
receive special training and experience, and has had and will have access to
the trade secrets and confidential information of the Company. Executive agrees
that during the course of his employment and for a period of two (2) years
after Executive ceases to be employed by the Company, he will not make any
independent use of, publish or disclose, or authorize anyone to publish or
disclose, to any other person or organization, any of the Company's trade
secrets and confidential information, except as required in the course of his
employment with the Company or by law. Upon request of the Company and, in any
event upon the cessation of Executive's employment with the Company, whether
with or without cause, Executive will promptly return all tangible expressions
of trade secrets and confidential information in his possession and control and
all copies thereof. As used herein, the term "trade secrets and confidential
information" shall mean client lists, applicant lists, and other related client
and applicant data, computerized compilation of such data, training materials
and information, policy and procedure manuals, video and audio recordings of
training and operation methods, sales, services, support and marketing
practices and operations, advertising themes, formats of advertising and other
business methods, and techniques, processes and financial information of the
Company, all of which are not generally known to the trade or industry and
which will be of competitive use by them. "Trade secrets and confidential
information" shall not include intangible information which is generally known
and used by persons with training and experience comparable to Executive as of
the date of this
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<PAGE> 10
Agreement and all intangible information which is common knowledge in the
industry or otherwise legally in the public domain.
Executive further agrees that the restrictions set forth in
this Section 11 are in addition to, and not in lieu of, any other restrictions
or obligations placed upon him, and/or any rights or remedies available to the
Company, by any statute or at common law.
12. Covenant not to Compete. Executive covenants and agrees that,
in order to protect the Company's interest in its business, operations and
assets during the term of his employment, for a period of two (2) years
following the termination of this Agreement (other than a termination by the
Company without Justifiable Cause, a termination by the Executive for Reason or
a termination by the Company or the Executive following a Change in Control),
however the same shall occur, whether voluntary or involuntary, Executive will
not, without the prior written consent of the Company, directly or indirectly,
A. engage, whether by virtue of stock ownership,
management responsibilities or otherwise, in companies, businesses,
organizations and for ventures which market or distribute services which are
competitive with any of the "Company's Services" (as hereinafter defined)
anywhere in the locations within the United States that the Company has a place
of business with more than ten (10) employees at the time of termination of
this Agreement; or
B. become interested, directly or indirectly, whether
as principal, owner, stockholder, partner, agent, officer, director, employee,
salesman, joint venturer, consultant, advisor, independent contractor or
otherwise, in any person, firm, partnership, association, venture, corporation
or entity engaging directly or indirectly in any of the activities described in
Subsection 12A above; or
C. knowingly solicit the employment of any of the
Company's personnel (as hereinafter defined).
For purposes of this Agreement:
(i) the term "Company Personnel" shall mean any person
employed by the Company at any time through the end of the term of
this Agreement, but excluding any person who has left such employment
for a continuous period exceeding one (1) year;
(ii) the term "Company" shall include any successor in
interest whether by sale, merger, liquidation or the like, and any of
the Company's subsidiaries and affiliates;
(iii) the term "Company's Services" shall mean any present
or future (future being limited to the term of this Agreement and any
and all extensions thereof) services being marketed or provided by the
Company.
D. None of the foregoing shall prevent Executive from
holding up to two percent (2%) in the aggregate of any class of securities of
any entity engaged in the prohibited activities
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<PAGE> 11
described above, provided that, such securities are listed on a national
securities exchange or registered under Section 12(g) of the Securities and
Exchange Act of 1934.
E. If any of the provisions contained in this Section 11
are held to be unenforceable because of the duration of such provision, the
geographical area covered thereby, and/or the range of the Company's services
protected, the parties agree that the court of competent jurisdiction making
such determination shall have the power to reduce or otherwise modify the
duration, the geographical area of such provision, and/or the range of the
Company's services protected, and, in its reduced or modified form, such
provisions shall then be enforceable.
13. Remedies in Event of Breach.
13.1 Injunctive Relief. Recognizing that irreparable
damage will result to the Company in the event of the breach by Executive of
any of the covenants and assurances contained in Sections 11 and 12 above, upon
the determination of a court of competent jurisdiction that Executive has
breached or has attempted or threatened so to breach this Agreement, the
Company, in addition to and not by way of limitation of any other rights,
remedies or damages available to the Company, at law or in equity, shall be
entitled to a temporary and/or permanent injunction in order to prevent or to
restrain any such breach or threatened breach, or the continuance of a
violation of any of the terms of this Agreement by Executive, or any and all
persons directly or indirectly acting for or with him or compelling compliance
by specific performance with this Agreement.
13.2 Damages. In addition to any injunctive relief that
may be granted to the Company or Executive for breach of the Agreement, the
Company and Executive shall be entitled to recover all damages, including
reasonable attorneys' fees and costs (including paralegal' fees), sustained or
incurred by the Company or Executive by reason of a violation or threatened
violation of the terms of this Agreement. Executive covenants and agrees that,
if he violates any of his covenants or agreements under Section 11 or 12
hereof, the Company shall be entitled to such other rights, remedies and
damages to which the Company is or may be entitled at law or in equity or under
this Agreement.
14. Reasonableness. Executive has carefully read and considered
the provisions of Sections 11 and 12 hereof and, having done so, agrees that
the restrictions set forth in such sections, including, but not limited to, the
time period of restriction, the geographical areas of restriction, and the
definition of Company Services set forth therein, are fair and reasonable and
are reasonably required for the protection of the interests of the Company, and
further that the geographical areas of restriction set forth therein accurately
reflect the area in which he will be actively engaged in the performance of
services.
15. No Inconsistent Obligations. Executive represents and warrants
that no action required of him under this Agreement or any other agreements or
understandings, written or oral, entered into with the Company will conflict
with, breach or otherwise impair any previously existing agreements or
understandings, whether written or oral, into which Executive has entered with
other persons or entities, including agreements with respect to proprietary
information or non-competition.
- 11 -
<PAGE> 12
16. Indemnification. The Company agrees to indemnify Executive to
the maximum extent permitted by the laws of the State of Florida including all
amendments thereto, if such are applicable, subject, however, to the
limitations of other applicable laws, if any.
17. Notices. Any notice to be given hereunder shall be deemed to
be given when delivered by hand or by overnight courier to the party for whom
the notice is intended, or three (3) days after notice is placed in the U.S.
mail properly addressed to the party for whom notice is intended, at the
following address:
If to the Company: Streicher Mobile Fueling, Inc.
2720 N.W. 55th Court
Fort Lauderdale, FL 33309
Attention: Chief Financial Officer
If to Executive: Mr. Stanley H. Stretcher
943 Pepperidge Terrace
Boca Raton, FL 33486
18. Binding Effect and Governing Law. This Agreement supersedes
all prior understandings and agreements between the parties with respect to the
subject matter hereof. This Agreement shall be binding upon the legal
representatives, heirs, distributes, successors and assigns of the parties. The
Agreement contains the entire agreement of the parties, and may not be changed
orally but only in writing signed by the party against whom enforcement of any
such change is sought. It is agreed that a waiver by either party of a breach
of any provision of this Agreement shall not be operated or be construed as a
waiver of any subsequent breach by that same party. This Agreement shall be
governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above written.
STREICHER MOBILE FUELING, INC.
By:
-----------------------------
Stanley H. Streicher
Executive:
By:
------------------------------
Stanley H. Stretcher
- 12 -
<PAGE> 13
EXHIBIT A
TO EMPLOYMENT AGREEMENT
STREICHER MOBILE FUELING, INC.
STANLEY H. STREICHER'S
COMPENSATION PLAN (2) (3)
<TABLE>
<CAPTION>
EPS (4)(5) EPS
FYE BASE OPTIONS CURRENT CUM STOCK PRICE NET INCOME
1/31 VESTED(1) YEAR CUMULATIVE
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998 275,000 200,000 .36 .66 7.25 $2,000,000
1999 200,000 .43 1.09 8.75 $3,000,000
2000 200,000 .52 1.61 10.50 $4,000,000
2001 200,000 .62 2.23 12.50 $5,000,000
2002 200,000 .74 2.97 15.00 $6,000,000
</TABLE>
(1) The exercise price of the stock option grant shall be 100% of the
initial public offering price
(2) The Executive shall be entitled to participate in any bonus pool
adopted by the Company, which shall be based on the Company's pre-tax
profit.
(3) For the year in which the Company attains either (i) the EPS target,
(ii) the target stock price or (iii) Net Income, any shares not
previously released shall be released in addition to the shares
released for the applicable year.
(4) Earnings per share (EPS) is defined as net income of the Company as
reflected on the company's audited financial statements, without
giving any effect to noncash changes associated with the granting or
vesting of the Options.
(5) The EPS target will be deemed met if the Company achieves either the
per share or the net income levels as set forth above.
- 13 -
<PAGE> 1
EXHIBIT 10.2
---------------------------------
STREICHER MOBILE FUELING, INC.
STOCK OPTION PLAN
---------------------------------
1. Purpose. The purpose of this Plan is to advance the interests of
STREICHER MOBILE FUELING, INC., a Florida corporation (the "Company"), by
providing an additional incentive to attract and retain qualified and competent
persons who are key employees of the Company, directors and officers (whether
or not employees) and consultants to the Company and upon whose efforts and
judgment the success of the Company is largely dependent, through the
encouragement of stock ownership in the Company by such persons.
2. Definitions. As used herein, the following terms shall have the
meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed
by the Board pursuant to Section 13 hereof or, if not appointed, the Board.
(c) "Common Stock" shall mean the Company's no par value Common
Stock.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean a Director who is not,
during the one year prior to his or her service as an administrator of this
Plan, or during such service, granted or awarded equity securities pursuant to
this Plan or any other plan of the Company or any of its affiliates, except
that:
(i) participation in a formula plan meeting the conditions
in paragraph (c)(2)(ii) of Rule 16b-3 promulgated under the Securities Exchange
Act shall not disqualify a Director from being a Disinterested Person;
(ii) participation in an ongoing securities acquisition
plan meeting the conditions in paragraph (d)(2)(i) of Rule 16b-3 promulgated
under the Securities Exchange Act shall not disqualify a Director from being a
Disinterested Person; and
(iii) an election to receive an annual retainer fee in
either cash or an equivalent amount of securities, or partly in cash and partly
in securities, shall not disqualify a Director from being a Disinterested
Person.
(f) "Fair Market Value" of a Share on any date of reference
shall be the "Closing Price" (as defined below) of the Common Stock on the
business day immediately preceding such date, unless the Committee in its sole
discretion shall determine otherwise in a fair and uniform manner. For the
purpose of determining Fair Market Value, the "Closing Price" of the Common
Stock on any business day shall be (i) if the Common Stock is listed or
admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the mean
between the closing high bid and low asked quotations for such day of Common
Stock on such system, or (iii) if neither clause (i) or (ii) is applicable, the
mean between the high bid and low asked quotations for the Common Stock as
reported by the National Quotation Bureau, Incorporated if at least two
securities dealers have inserted both bid and asked quotations for Common Stock
on at least five of the ten preceding days.
1
<PAGE> 2
(g) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the
Internal Revenue Code.
(h) "Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(i) "Non-Statutory Stock Option" shall mean an Option which is
not an Incentive Stock Option.
(j) "Officer" shall mean the Company's president, principal
financial officer, principal accounting
officer and any other person who the Company identifies as an "executive
officer" for purposes of reports or proxy materials filed by the Company
pursuant to the Securities Exchange Act.
(k) "Option" (when capitalized) shall mean any option granted
under this Plan.
(l) "Optionee" shall mean a person to whom a stock option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(m) "Plan" shall mean this Stock Option Plan for the Company.
(n) "Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(o) "Share(s)" shall mean a share or shares of the Common Stock.
3. Shares and Options. The Company may grant to Optionees from time
to time Options to purchase an aggregate of up to One Hundred Thousand
(100,000) Shares from Shares held in the Company's treasury or from authorized
and unissued Shares. If any Option granted under the Plan shall terminate,
expire, or be canceled or surrendered as to any Shares, new Options may
thereafter be granted covering such Shares. An Option granted hereunder shall
be either an Incentive Stock Option or a Non-Statutory Stock Option as
determined by the Committee at the time of grant of such Option and shall
clearly state whether it is an Incentive Stock Option or Non-Statutory Stock
Option. All Incentive Stock Options shall be granted within 10 years from the
effective date of this Plan.
4. Dollar Limitation. Options otherwise qualifying as Incentive
Stock Options hereunder will not be treated as Incentive Stock Options to the
extent that the aggregate fair market value (determined at the time the Option
is granted) of the Shares, with respect to which Options meeting the
requirements of Internal Revenue Code Section 422(b) are exercisable for the
first time by any individual during any calendar year (under all plans of the
Company), exceeds $100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee, provided
such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons selected by the Committee which may include
employees, directors and officers (whether or not employees) and consultants to
the Company. Any person who files with the Committee, in a form satisfactory
to the Committee, a written waiver of eligibility to receive any Option under
this Plan shall not be eligible to receive any Option under this Plan for the
duration of such waiver.
(b) In granting Options, the Committee may take into
consideration the contribution the person has made to the success of the
Company and such other factors as the Committee shall determine. The Committee
shall also have the authority to consult with and receive recommendations from
officers and other personnel of the Company with regard to these matters. The
Committee may from time to time in granting Options under the Plan prescribe
such other terms and conditions concerning such Options as it deems
appropriate, including, without
2
<PAGE> 3
limitation, (i) prescribing the date or dates on which the Option becomes
exercisable, (ii) providing that the Option rights accrue or become exercisable
in installments over a period of years, or upon the attainment of stated goals
or both, or (iii) relating an Option to the continued employment of the
Optionee for a specified period of time, provided that such terms and
conditions are not more favorable to an Optionee than those expressly permitted
herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company. Neither the Plan nor any Option granted
under the Plan shall confer upon any person any right to employment or
continuance of employment by the Company.
(d) Notwithstanding any other provision of this Plan, and in
addition to any other requirements of this Plan, Options may not be granted to
a Director or Officer unless the grant of such Options is authorized by, and
all of the terms of such Options are determined by, a Committee that is
appointed in accordance with Section 13 of this Plan and all of whose members
are Disinterested Persons.
6. Option Price. The option price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the option price per Share
of any Incentive Stock Option be less than the Fair Market Value of the Shares
underlying such Option on the date such Option is granted.
7. Exercise of Options. An Option shall be deemed exercised when
(i) the Company has received written notice of such exercise in accordance with
the terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii)
arrangements that are satisfactory to the Committee in its sole discretion have
been made for the Optionee's payment to the Company of the amount that is
necessary for the Company employing the Optionee to withhold in accordance with
applicable Federal or state tax withholding requirements. Unless further
limited by the Committee in any Option, the option price of any Shares
purchased shall be paid in cash, by certified or official bank check, by money
order, with Shares or by a combination of the above; provided further, however,
that the Committee in its sole discretion may accept a personal check in full
or partial payment of any Shares. If the exercise price is paid in whole or in
part with Shares, the value of the Shares surrendered shall be their Fair
Market Value on the date the Option is exercised. The Company in its sole
discretion may, on an individual basis or pursuant to a general program
established by the Committee in connection with this Plan, lend money to an
Optionee to exercise all or a portion of an Option granted hereunder. If the
exercise price is paid in whole or part with Optionee's promissory note, such
note shall (i) provide for full recourse to the maker, (ii) be collateralized
by the pledge of the Shares that the Optionee purchases upon exercise of such
Option, (iii) bear interest at a rate no less than the rate of interest payable
by the Company to its principal lender, and (iv) contain such other terms as
the Committee in its sole discretion shall require. No Optionee shall be
deemed to be a holder of any Shares subject to an Option unless and until a
stock certificate or certificates for such Shares are issued to such person(s)
under the terms of this Plan. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as expressly provided in Section 10
hereof.
8. Exercisability of Options. Any Option shall become exercisable in
such amounts, at such intervals and upon such terms as the Committee shall
provide in such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the
Committee at the time of grant, but in no event shall an Option be exercisable
after the expiration of 10 years from the date of grant of the Option.
(b) Unless otherwise provided in any Option, each outstanding
Option shall become immediately fully exercisable:
3
<PAGE> 4
(i) if there occurs any transaction (which shall include a
series of transactions occurring within 60 days or occurring pursuant to a
plan), that has the result that stockholders of the Company immediately before
such transaction cease to own at least 51 percent of the voting stock of the
Company or of any entity that results from the participation of the Company in
a reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;
(ii) if the stockholders of the Company shall approve a
plan of merger, consolidation, reorganization, liquidation or dissolution in
which the Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or
(iii) if the stockholders of the Company shall approve a
plan for the sale, lease, exchange or other disposition of all or substantially
all the property and assets of the Company (unless such plan is subsequently
abandoned).
(c) The Committee may in its sole discretion accelerate the date
on which any Option may be exercised and may accelerate the vesting of any
Shares subject to any Option or previously acquired by the exercise of any
Option.
(d) Options granted to Officers and Directors shall not be
exercisable until the expiration of a period of at least six months following
the date of grant.
9. Termination of Option Period with respect to Employee Grants.
(a) The unexercised portion of an Option granted to an employee
of the Company shall automatically and without notice terminate and become null
and void at the time of the earliest to occur of the following:
(i) three months after the date on which the Optionee's
employment is terminated or, in the case of a Non-Statutory Stock Option, and
unless the Committee shall otherwise determine in writing in its sole
discretion, the date on which the Optionee's employment is terminated, in
either case for any reason other than by reason of (A) Cause, which, solely for
purposes of this Plan, shall mean the termination of the Optionee's employment
by reason of the Optionee's wilful misconduct or gross negligence, (B) a mental
or physical disability as determined by a medical doctor satisfactory to the
Committee, or (C) death;
(ii) immediately upon the termination of the Optionee's
employment for Cause;
(iii) one year after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Internal Revenue Code Section 22(e)) as determined by a medical
doctor satisfactory to the Committee; or
(iv) (A) twelve months after the date of termination of the
Optionee's employment by reason of death of the employee, or (B) three months
after the date on which the Optionee shall die if such death shall occur during
the one year period specified in Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may by giving written
notice ("cancellation notice") cancel, effective upon the date of the
consummation of any corporate transaction described in Subsections 8(b)(ii) or
(iii) hereof, any Option that remains unexercised on such date. Such
cancellation notice shall be given a reasonable period of time prior to the
proposed date of such cancellation and may be given either before or after
approval of such corporate transaction.
10. Adjustment of Shares.
4
<PAGE> 5
(a) If at any time while the Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum
number of Shares available for grant under the Plan, so that the same
percentage of the Company's issued and outstanding Shares shall continue to be
subject to being so optioned; and
(ii) appropriate adjustment shall be made in the number of
Shares and the exercise price per Share thereof then subject to any outstanding
Option, so that the same percentage of the Company's issued and outstanding
Shares shall remain subject to purchase at the same aggregate exercise price.
(b) Subject to the specific terms of any Option, the Committee
may change the terms of Options outstanding under this Plan, with respect to
the option price or the number of Shares subject to the Options, or both, when,
in the Committee's sole discretion, such adjustments become appropriate by
reason of a corporate transaction described in Subsections 8(b)(ii) or (iii)
hereof.
(c) Except as otherwise expressly provided herein, the issuance
by the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection
with direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to the number of or
exercise price of Shares then subject to outstanding Options granted under the
Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business; (ii) any merger or
consolidation of the Company; (iii) any issue by the Company of debt
securities, or preferred or preference stock that would rank above the Shares
subject to outstanding Options; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the assets
or business of the Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
11. Transferability of Options. Each Option shall provide that such
Option shall not be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, and each Option shall be exercisable during
the Optionee's lifetime only by the Optionee.
12. Issuance of Shares. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements
or undertakings, if any, as the Committee may deem necessary or advisable to
assure compliance with any such law or regulation including, but not limited
to, the following:
(i) a representation and warranty by the Optionee to the
Company, at the time any Option is exercised, that he is acquiring the Shares
to be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to be bound
by any legends that are, in the opinion of the Committee, necessary or
appropriate to comply with the provisions of any securities law deemed by the
Committee to be applicable to the issuance of the Shares and are endorsed upon
the Share certificates.
5
<PAGE> 6
13. Administration of the Plan.
(a) The Plan shall be administered by the Committee, which shall
consist of not less than two Directors, each of whom shall be Disinterested
Persons to the extent required by Section 5(d) hereof. The Committee shall
have all of the powers of the Board with respect to the Plan. Any member of
the Committee may be removed at any time, with or without cause, by resolution
of the Board and any vacancy occurring in the membership of the Committee may
be filled by appointment by the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The Committee's
determinations and its interpretation and construction of any provision of the
Plan shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at
a meeting or (ii) without a meeting by the unanimous written approval of the
members of the Committee.
14. Incentive Options for 10% Stockholders. Notwithstanding any
other provisions of the Plan to the contrary, an Incentive Stock Option shall
not be granted to any person owning directly or indirectly (through attribution
under Section 424(d) of the Internal Revenue Code) at the date of grant, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or of its subsidiary [as defined in Section 424 of the
Internal Revenue Code] at the date of grant) unless the option price of such
Option is at least 110% of the Fair Market Value of the Shares subject to such
Option on the date the Option is granted, and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted.
15. Interpretation.
(a) The Plan shall be administered and interpreted so that all
Incentive Stock Options granted under the Plan will qualify as Incentive Stock
Options under section 422 of the Internal Revenue Code. If any provision of
the Plan should be held invalid for the granting of Incentive Stock Options or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, but instead the Plan shall be construed and enforced as if
such provision had never been included in the Plan.
(b) This Plan shall be governed by the laws of the State of
Florida.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
16. Amendment and Discontinuation of the Plan. Either the Board or
the Committee may from time to time amend the Plan or any Option.
17. Effective Date and Termination Date. The effective date of the
Plan is the date on which the Board adopts this Plan, and the Plan shall
terminate on the 10th anniversary of the effective date.
6
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
As independent certified public accountants, we hereby consent to the use of
our report on the financial statements of Streicher Mobile Fueling, Inc. and to
all references to our firm included in this Registration Statement on Amendment
No.1 to Form SB-2.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
October 25, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS OF STREICHER MOBILE FUELING, INC. AS OF JANUARY 31, 1996 AND JULY 31,
1996 (UNAUDITED), AND THE RELATED STATEMENTS OF OPERATIONS, SHAREHOLDERS'
EQUITY AND CASH FLOWS FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED JANUARY 31,
1996 AND THE SIX MONTHS ENDED JULY 31, 1995 AND 1996 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 7,345
<SECURITIES> 94,395
<RECEIVABLES> 3,363,991
<ALLOWANCES> 30,000
<INVENTORY> 64,272
<CURRENT-ASSETS> 3,543,430
<PP&E> 4,254,428
<DEPRECIATION> 794,040
<TOTAL-ASSETS> 7,248,964
<CURRENT-LIABILITIES> 2,581,544
<BONDS> 0
0
0
<COMMON> 15,000
<OTHER-SE> 212,014
<TOTAL-LIABILITY-AND-EQUITY> 7,248,964
<SALES> 13,887,855
<TOTAL-REVENUES> 13,887,855
<CGS> 12,760,929
<TOTAL-COSTS> 12,760,929
<OTHER-EXPENSES> 1,203,353
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 260,252
<INCOME-PRETAX> (330,292)
<INCOME-TAX> 118,420
<INCOME-CONTINUING> (211,872)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (211,872)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEETS OF STREICHER MOBILE FUELING, INC. AS OF JANUARY 31, 1996 AND JULY 31,
1996 (UNAUDITED) AND THE RELATED STATEMENTS OF OPERATIONS, SHAREHOLDERS'
EQUITY AND CASH FLOWS FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED JANUARY 31,
1996 AND THE SIX MONTHS ENDED JULY 31, 1995 AND 1996 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> JAN-31-1996
<CASH> 189,508
<SECURITIES> 203,743
<RECEIVABLES> 2,620,559
<ALLOWANCES> 28,000
<INVENTORY> 65,193
<CURRENT-ASSETS> 3,151,793
<PP&E> 3,734,725
<DEPRECIATION> 598,060
<TOTAL-ASSETS> 6,444,186
<CURRENT-LIABILITIES> 2,426,374
<BONDS> 0
0
0
<COMMON> 15,000
<OTHER-SE> 423,886
<TOTAL-LIABILITY-AND-EQUITY> 6,444,186
<SALES> 23,989,358
<TOTAL-REVENUES> 23,989,358
<CGS> 21,752,350
<TOTAL-COSTS> 21,752,350
<OTHER-EXPENSES> 1,750,235
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 343,967
<INCOME-PRETAX> 176,025
<INCOME-TAX> 76,016
<INCOME-CONTINUING> 100,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,009
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
