SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___ )
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ x ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c)
Tubby's, Inc.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[ ] Previously paid.
1) Title of each class of securities to which transaction applies;
2) Aggregate number of securities to which transaction applies;
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
fee is calculated and state how it was determined);
4) Proposed maximum aggregate value of transactions;
5) Total fee paid;
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.
3) Filing Party:
4) Date Filed:
<PAGE>
TUBBY'S, INC.
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
_____________, 1996
To the shareholders of Tubby's, Inc.:
You are cordially invited to attend the 1996 Annual Meeting of
Shareholders of Tubby's, Inc. to be held at 10:00 a.m. EST, on Thursday, June
13, 1996, at the Moravian Hills Country Club, 56 South Groesbeck, Clinton
Township, Michigan 48036, for the following purposes:
1. To elect Directors to serve for the ensuing year and until
their successors are elected;
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized common
stock from 30,000,000 to 60,000,000 shares; and,
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 26,
1996 as the record date for the determination of shareholders entitled to vote
at the Meeting or any adjournment thereof.
You are cordially invited to attend the Meeting. Your vote is
important. Whether you plan to attend the Meeting or not, you are requested to
complete, date and sign the enclosed proxy form and return it promptly in the
envelope provided for that purpose. The enclosed proxy is being solicited on
behalf of the Board of Directors of the Company.
By Order of the Board of Directors
Vincent J. Tatone
Secretary
Dated: ________________, 1996
<PAGE>
PROXY STATEMENT
TUBBY'S, INC.
6029 E. Fourteen Mile Road
Sterling Heights, Michigan 48312-5801
1996 Annual Meeting of Shareholders
______________, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Tubby's, Inc., a New Jersey
corporation (the "Company"), to be voted at the 1996 Annual Meeting of
Shareholders of the Company (the "Meeting"), to be held on Thursday, June 13,
1996 at the Moravian Hills Country Club, 56 South Groesbeck, Clinton Township,
Michigan 48036, at 10:00 a.m. The approximate mailing date of this Proxy
Statement is May 3, 1996.
All properly executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or otherwise as
provided therein.
Unless instructions to the contrary are marked, proxies will be voted for the
election of seven directors and to increase the number of authorized shares
from 30 million to 60 million. Any proxy may be revoked at any time prior to
the exercise thereof by giving written notice to the Secretary of the Company.
The Directors have fixed the close of business on April 26, 1996, as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting and at any adjournment thereof. Shareholders on the record
date will be entitled to one vote for each share held, with no shares having
cumulative voting rights. As of April 18, 1996, the Company had outstanding
25,381,131 shares of common stock, par value $0.001 per share.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information concerning management and other persons
who are known by the Company to own beneficially more than 5% of the Company's
common stock, $0.001 par value, on November 30, 1995.
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<PAGE>
<TABLE>
<CAPTION>
Amount and Nature Percent of
Name of Beneficial Owner of Ownership (1) Class (2)
- ----------------------------------------- ------------------- -----------
<S> <C> <C>
Robert M. Paganes . . . . . . . . . . . . 2,800,241 11.0%
6029 E. Fourteen Mile Road President
Sterling Heights, Michigan 48312 Director
Peter T. Paganes. . . . . . . . . . . . . 1,914,000 7.5%
6029 E. Fourteen Mile Road Vice President
Sterling Heights, Michigan 48312 Director
Vincent J. Tatone . . . . . . . . . . . . 1,000,000 5.1%(3)
6029 E. Fourteen Mile Road Secretary
Sterling Heights, Michigan 48312 Director
John M. Fayad . . . . . . . . . . . . . . 1,175,000 4.6%
P.O. Box 388 Director
Roseville, Michigan 48066
Ralph R. Roberts . . . . . . . . . . . . . 1,025,000 4.0%
30521 Schoenherr Director
Warren, Michigan 48093
Ronald Boraks . . . . . . . . . . . . . . 0 0.0%(4)
38345 West Ten Mile Road, Suite 300 Director
Farmington Hills, Michigan 48335
J. Thomas Paganes. . . . . . . . . . . . . 2,325,752 9.2%
38633 Moravian Director
Mount Clemens, Michigan 48043
Melvyn B. Erdos. . . . . . . . . . . . . . 6,500 0.4%(3)
6029 E. Fourteen Mile Road Chief Financial Officer
Sterling Heights, Michigan 48312 Shareholder
Patrick J. McCourt. . . . . . . . . . . . 1,510,000 5.9%
830 Helston Court Shareholder
Bloomfield Hills, Michigan
All Executive Officers &
Directors as a Group (8 persons) . . . . . 10,246,493 40.4%
<FN>
(1) The nature of ownership is sole voting and investment power unless
otherwise indicated.
(2) As of March 10, 1996.
(3) Pursuant to the rules of the Securities and Exchange Commission,
the Company's common stock which is not outstanding but which is subject
to options is deemed to be outstanding for the purpose of computing the
percentage of outstanding common stock owned by the optionee, but not
deemed to be outstanding for the purpose of computing the percentage owned
by any other person.
(4) Less than 1%.
</TABLE>
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<PAGE>
The Company has no standing audit or nominating committees of the Board of
Directors, or committees performing similar functions. The Board of Directors
will elect a Compensation Committee comprised of two employee directors and
one independent director which selects employees to be granted options under
the Company's stock option plans, determines the size and terms of options to
be granted to each employee selected, determines the time when options will be
granted and establishes objectives and conditions, if any, for earning
options. The Company has a Management Proxy Committee comprised of Messrs.
Peter T. Paganes and Robert M. Paganes to cast votes represented by properly
executed proxies.
A copy of the Company's Annual Report for the year ended November 30, 1995,
including audited financial statements, accompanies this proxy statement.
Additional copies of the Annual Report and copies of the Company's Form 10-KSB
are available upon written request to Tubby's, Inc., 6029 E. Fourteen Mile
Road, Sterling Heights, Michigan 48312-5801.
The Directors of the Company know of no business other than to elect a Board
of seven (7) directors and to increase the number of authorized shares from 30
million to 60 million which will be presented for consideration at the
Meeting. If any other matter is properly presented, it is the intention of the
persons named in the enclosed proxy to vote in accordance with their best
judgment.
PROPOSAL NO. 1
(Election of Directors)
Seven directors constituting the entire Board of Directors, are proposed to be
elected and hold office until the 1997 Annual Meeting and until their
successors are elected and qualified.
All nominees for election have indicated their willingness to serve, but if
any of them should decline or be unable to serve as a director, it is intended
that the enclosed proxy will be voted for the election of such person or
persons as are nominated as replacements by the Board of Directors in
accordance with the By-Laws of the Company.
<TABLE>
<CAPTION>
Nominees
Name Age Position Held with the Company
---- --- ------------------------------
<S> <C>
Robert M. Paganes 39 President, Chief Executive Officer, Director
Peter T. Paganes 51 Chairman of the Board, Vice-President, Director
Vincent J. Tatone 39 Secretary and Director
John M. Fayad 48 Director
Ralph R. Roberts 39 Director
Ronald Boraks 36 Director
J. Thomas Paganes 53 Director
</TABLE>
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<PAGE>
Robert M. Paganes was a founder of Tubby's Sub Shops, Inc., which was formed
in December, 1977. Mr. Paganes has been an officer and Director of Tubby's,
Inc., since May of 1986. Since 1979, Mr. Paganes has also been an owner and
operator of Tubby's Submarine Shop franchises in the Detroit, Michigan area.
From 1990 through June 9, 1994, Mr. Paganes was Vice-President and Secretary
of the Company. On June 10, 1994, Mr. Paganes was elected President and on
August 12, 1994, he was elected as Chief Executive Officer of the Company.
Peter T. Paganes has been a Vice-President and Director of Tubby's, Inc. since
May, 1986. In May, 1990, Mr. Paganes was appointed as Vice-Chairman of the
Board of the Company. Mr. Paganes was a founder of Tubby's Sub Shops, Inc.,
which was incorporated in December, 1977. Mr. Paganes has also been an owner
and operator of Tubby's Submarine Shops franchises in the Detroit, Michigan
area since 1973. On August 12, 1994, Mr. Paganes was elected as Chairman of
the Board of the Company.
Vincent J. Tatone was appointed to the Board of Directors of the Company in
January, 1993. Mr. Tatone graduated, cum laude, from the University of Detroit
Law School in 1985, where he was Executive Editor of the University of Detroit
Law Review, received the Clarence M. Burton and Presidential Scholarships and
was enrolled as a lifetime member of the Alpha Signma Nu National Jesuit Honor
Society. Mr. Tatone became General Counsel to the Company in April, 1994, and
was elected as Secretary of the Company on August 12, 1994.
John M. Fayad was born August 10, 1947. Mr. Fayad graduated from Western
Michigan University in 1969 where he majored in finance and accounting. After
graduation, Mr. Fayad was drafted to serve in Vietnam. When Mr. Fayad
returned, he began work at the senior level for Arthur Andersen for five
years. Mr. Fayad then worked at Bach (n/k/a Prudential Securities) as a
broker/tax advisor for professionals. In 1975/1976, Mr. Fayad was employed by
Alkar Steel, a Michigan corporation located in Roseville, Michigan. In 1977,
he became Chief Financial Officer and, in 1982, acquired a 50% ownership
interest in Alkar. In 1990, he acquired 100% ownership of Alkar Steel.
Ralph R. Roberts is President of Ralph R. Roberts Real Estate, Inc., in
Warren, Michigan. He is a Certified Residential Specialist and a graduate of
Realtors Institute. Mr. Roberts has been a Real Estate broker for the past 18
years specializing in real estate investment programs. Mr. Roberts'
professional affiliations are the National, Michigan, Macomb, and South
Oakland County Board of REALTORS, Michigan Education Council member and
founder of Metro Networking Professionals. Mr. Roberts also is active in local
civic and charitable organizations.
Ronald Boraks has been in the real estate and property management business for
the past 15 years. He has a bachelor of science degree in operations
management from Wayne State University and a juris doctor degree from the
University of Detroit School of Law. Mr. Boraks is licensed by the State of
Michigan as an attorney, real estate broker and residential builder and
specializes in financial and administrative management. Mr. Boraks is an
officer and director of Certified Realty, Inc., located in Farmington Hills,
Michigan.
J. Thomas Paganes was the Treasurer and a Director of Tubby's Sub Shops, Inc.
In March, 1989, Mr. Paganes was elected President of Tubby's, Inc. From May,
1990 through June 9,
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<PAGE>
1994, Mr. Paganes was Chairman of the Board of the Company. Mr. Paganes was a
founder of Tubby's Sub Shops, Inc., a Michigan corporation, which was
incorporated in December, 1977. Since 1977, Mr. Paganes has also been
self-employed as an owner and operator of Tubby's Submarine Shop franchises.
Reports and Board of Directors Meetings
To the best of the Company's knowledge, based solely upon a review of Forms 3
and 4 furnished to the Company during its most recent fiscal year, three
directors, Messrs. Fayad, Roberts and Boraks, failed to file on a timely basis
reports required by Section 16(a) of the Securities Exchange Act of 1934. They
each filed one late report.
There were six (6) meetings of the Board of Directors held during the past
fiscal year. Each director attended at least seventy-five percent of the
meetings of the Board of Directors during the fiscal year ended November 30,
1995, except J. Thomas Paganes, who missed three (3) meetings.
Compensation of Directors and Officers
The following table sets forth compensation awarded to, earned by or paid to
the Company's President and Chief Executive Officer. No other officer of the
Company earned a salary and bonus of more than $100,000 during the Company's
fiscal year ending November 30, 1995. The Company did not grant any options,
restricted stock awards or stock appreciation rights, nor pay compensation
that would qualify as "All Other Compensation", nor did the Company make
payments to any Executive Officer earning an annual salary or bonus in excess
of $100,000, which may be categorized as "Other Annual Compensation" or "LTIP
Payouts", during the Company's fiscal year ended November 30, 1995.
<TABLE>
<CAPTION>
Name & Principal Position Fiscal Year Salary ($)
- ------------------------- ----------- ----------
<S> <C> <C>
Robert M. Paganes. . . . . . . . . . . 1995 72,099
President & Chief Executive Officer
</TABLE>
No stock options were granted to the above-named Executive Officer during the
fiscal year ended November 30, 1995.
Directors' Compensation
A fee of $500 per meeting attended was paid to each independent, non-employee
Director for their services as such for the fiscal year ended November 30,
1995. The total amount paid to independent Directors as a group was $7,000.
Certain Relationships and Related Transactions
Peter T. Paganes and Robert M. Paganes, each of whom is a director, officer
and shareholder of the Company and owns and operates franchised stores, and J.
Thomas Paganes, who is a
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<PAGE>
director and shareholder of the Company and owns and operates franchised
stores, received loans and advances in years prior to 1991 related to their
stores.
As of November 30, 1995:
Included in Accounts Receivable..................... $ 25,968
Included in Other Assets; Notes Receivable.......... $ 45,864
For the year ended November 30, 1995:
Included in Revenue................................. $ 170,756
Included in Interest Income......................... $ 7,450
Prior to January 1, 1993, the above persons had an exemption from paying
royalties on their stores. Effective January 1, 1993, this exemption was
limited to previously existing stores and was discontinued until such time as
these persons were not employed by the Company. Each of the above persons is
in full compliance with all personal obligations to the Company as of November
30, 1995.
As of November 30, 1995, certain of the officers and directors of the Company
had remaining balances regarding loans from the Company and/or credits for
loans made to the Company. The loans made to Robert M. Paganes called for
quarterly payments of principal and interest at 9% per annum and Robert M.
Paganes was in full compliance with these loans as of November 30, 1995. The
activity of such accounts for the year ended November 30, 1995, is shown
below.
<TABLE>
<CAPTION>
Balance
Beginning Balance
1995 12/1/94 Additions Deductions 11/30/95
---- --------- --------- ---------- --------
<S> <C> <C> <C> <C>
Robert M. Paganes . . . . . $ 65,894 $ (20,030) $ 45,864
Peter T. Paganes . . . . . 51,847 (51,847) -0-
J. Thomas Paganes . . . . . (2,195) $2,195 -0-
Total $115,546 $2,195 $ (71,877) $ 45,864
======== ====== ========= ========
<FN>
The following table summarizes the amounts due as of November 30, 1995 from
all stores owned by officers or directors of the Company:
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<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Amount Due from
Number of Stores at
Name Franchises Owned November 30, 1995
---- ---------------- -----------------
<S> <C> <C>
Robert M. Paganes. . . . . . . 2 $11,453
Peter T. Paganes . . . . . . . 1 3,623
----- ---------
Amount due from Officers. . 3 15,076
J. Thomas Paganes . . . . . . 3 10,892
----- ---------
Amount Due from Officers
and Directors. . . . . . 6 $25,968
===== =======
</TABLE>
On January 27, 1995, the Board of Directors authorized the sale of 5,000,000
shares of restricted common stock through private placements at $0.08 per
share and, on February 28, 1995, amended the authorization to increase the
number of shares to 5,750,000. In February and March of 1995, the Company sold
2,750,000 shares to four unrelated investors and sold 2,000,000 shares to
officers/directors, 1,000,000 to Robert M. Paganes and 1,000,000 to Vincent J.
Tatone, resulting in total cash proceeds to the Company of $380,000. In
addition, the Company sold 1,000,000 shares of restricted common stock to
Peter T. Paganes in exchange for all of the stock of P.T.P., Inc., a Michigan
corporation, which owned and operated a Tubby's Sub Shop, valued at $80,000,
which was determined on the basis of historical valuation methods used with
unrelated franchisees. The Company sold all of the assets of P.T.P., Inc., on
January 15, 1996, for $83,750, which resulted in a gain of $14,346 on the
sale.
PROPOSAL NO. 2
(Increase in Authorized Shares)
The Company's Certificate of Incorporation presently provides that the number
of shares which the Company shall have the authority to issue is 30,000,000
shares of common stock, par value $.001 per share. As of April 18, 1996, there
were 25,381,131 shares issued and outstanding.
The Board of Directors recommends that the Company's Certificate of
Incorporation be amended to increase the number of authorized shares from
30,000,000 to 60,000,000 shares. This increase is necessary to enable the
Company to issue shares for future stock splits, stock dividends, potential
acquisitions, employee stock options, and for other corporate purposes. The
Company has no present plans to issue any additional shares of common stock.
At the annual meeting, the shareholders are being requested to consider and
approve the amendment to the Certificate of Incorporation. The affirmative
vote of the holders of a majority
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<PAGE>
of the outstanding shares of the common stock ill be required to approve the
amendment to the Certificate of Incorporation. It is the intention of the
persons named in the accompanying proxy to vote the shares represented thereby
in favor of the amendment unless the proxy contains instructions to the
contrary, in which case the proxy will be voted pursuant to such instructions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
Independent Accountants
The Board of Directors has selected BDO Seidman, independent public
accountants, to examine the financial statements of the Company for the year
ending November 30, 1996. A representative of BDO is expected to be present at
that Meeting. Ernst & Young, who was replaced by BDO, has signed off with a
fair opinion of the Company's consolidated financial statements.
Proposals of Shareholders
Shareholder proposals for the 1997 Annual Meeting of Shareholders must be
received by the Company at 6029 E. Fourteen Mile Road, Sterling Heights,
Michigan 48312-5801 before the close of business on January 3, 1997 for
consideration for inclusion in the Company's proxy statement. Shareholder
proposals should be addressed to the attention of the Company's Secretary.
Miscellaneous
The Board of Directors is not aware of any other business that will be
presented for action at the Meeting. If any other business comes before the
Meeting, the Management Proxy Committee has been directed by the Board of
Directors to cast such votes at their discretion. The cost of preparing and
mailing the notice of meeting, proxy statement and proxy to the shareholders
will be borne by the Company.
By Order of the Board of Directors
Vincent J. Tatone
Secretary
Dated: _______________, 1996
8
<PAGE>
[ FORM OF PROXY -- FRONT ]
TUBBY'S, INC.
Proxy Solicited on Behalf of the Board of Directors
for Annual Shareholders Meeting June 13, 1996
The undersigned hereby appointed P. TERRANCE PAGANES and ROBERT M.
PAGANES, jointly and severally, proxies, with the full pwoer of substitution,
to represent the undersigned at the Annual Meeting of Shareholders of Tubby's,
Inc., to be held at the Moravian Hills Country Club, 56 South Groesbeck,
Clinton Township, Michigan on Thursday, June 13, 1996 at 10:00 a.m., or at
any adjournments thereof, and to vote all shares of common stock of Tubby's,
Inc. which the undersigned is entitled to vote, and act with all the powers
the undersigned would possess if personally present at the meeting:
1. "FOR" / / "AGAINST" / / "WITHHOLD VOTE FOR" / /
the election of the following persons as Directors of the Company to hold
office until the next Annual Meeting and until their successors shall have
been elected and qualified:
Robert M. Paganes, P. Terrance Paganes, Vincent J. Tatone, John M. Fayad,
Ralph R. Roberts, Ronald Boraks and J. Thomas Paganes
A VOTE FOR ANY OF THE ABOVE MAY BE WITHHELD BY LINING OUT THEIR NAME(S).
2. "FOR" / / "AGAINST" / / "WITHHOLD VOTE FOR" / /
amending the Company's Certificate of Incorporation to increase the number of
authorized common stock from 30,000,000 to 60,000,000 shares.
3. In their discretion, for or against such other matters as may properly
come before the meeting or any adjournment or adjournments thereof.
The Board of Directors recommends a vote "FOR" Item 1. The Board of
Directors recommends a vote "FOR" Item 2.
Unless otherwise directed herein, the proxy or proxies appointed
hereby are authorized to vote "FOR" Items 1 and 2 and to vote in their
discretion with respect to all other matters which may come before the meeting
or any adjournments thereof.
If only one of the above-named proxies shall be present in person or by
substitute at the Meeting, or any adjournment thereof, then that one, either in
person or by substitute, may exercise all of the powers hereby given.
This proxy may be revoked prior to its exercise.
(Continued on the reverse side.)
<PAGE>
[ FORM OF PROXY -- BACK ]
(Continued from reverse side)
Any proxy or proxies heretofore given to vote such shares are hereby revoked.
Dated: ___________________________ , 1996
_________________________________________
_________________________________________
Please sign exactly as name appears
hereon. Executors, administrators, trustees,
etc. should give full title as such.
(This proxy is solicited by the Board of Directors)
- -------------------------------------------------------------------------------
IMPORTANT: PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
