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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ x ] 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):
[ ] $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;
[ x ] 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
May 6, 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
/s/ Vincent J. Tatone
---------------------
Vincent J. Tatone
Secretary
Dated: May 6, 1996
<PAGE>
PROXY STATEMENT
TUBBY'S, INC.
6029 E. Fourteen Mile Road
Sterling Heights, Michigan 48312-5801
1996 Annual Meeting of Shareholders
May 6, 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 10,246,493 40.4%
persons) ..........................................
<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>
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.
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<PAGE>
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
Position Held with
Name Age Company
---- --- ------------------
<S> <C> <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>
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
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<PAGE>
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, 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 $100,000, which may be categorized as "Other Annual
Compensation" or "LTIP Payouts", during the Company's fiscal year ended
November 30, 1995.
<TABLE>
<CAPTION>
Name and Principal Position Fiscal Year Salary ($)
--------------------------- ----------- ----------
<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.
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<PAGE>
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 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.
<TABLE>
<CAPTION>
As of November 30, 1995:
<S> <C>
Included in Accounts Receivable ..................... $ 25,968
Included in Other Assets; Notes Receivable .......... $ 45,864
</TABLE>
<TABLE>
<CAPTION>
For the year ended November 30, 1995:
<S> <C>
Included in Revenue ................................. $ 170,756
Included in Interest Income ......................... $ 7,450
</TABLE>
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
</TABLE>
The following table summarizes the amounts due as of November 30, 1995
from all stores owned by officers or directors of the Company:
<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
5
<PAGE>
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 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
/s/ Vincent J. Tatone
---------------------
Vincent J. Tatone
Secretary
Dated: May 6, 1996
6
<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 PETER T. 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, Peter T. 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.
