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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
______________________________________________________________________
(2) Aggregate number of securities to which transaction applies: ________
______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
______________________________________________________________________
(5) Total fee paid:
______________________________________________________________________
[ ] Fee paid previsouly 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 1997 ANNUAL MEETING OF SHAREHOLDERS
May 5, 1997
To the shareholders of Tubby's, Inc.:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of Tubby's, Inc. to be held at 10:00 a.m. EST, on Thursday, June
12, 1997, at the Best Western Sterling Inn, 34911 Van Dyke Ave., Sterling
Heights, Michigan 48312, for the following purposes:
1. To elect Directors to serve for the ensuing year and
until their successors are elected;
2. 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 25,
1997 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 5, 1997
<PAGE>
PROXY STATEMENT
TUBBY'S, INC.
6029 E. Fourteen Mile Road
Sterling Heights, Michigan 48312-5801
1997 Annual Meeting of Shareholders
May 5, 1997
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 1997 Annual Meeting of
Shareholders of the Company (the "Meeting"), to be held on Thursday, June 12,
1997 at the Best Western Sterling Inn, 34911 Van Dyke Ave., Sterling Heights,
Michigan 48312, at 10:00 a.m. The approximate mailing date of this Proxy
Statement is May 5, 1997.
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 five directors. 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 25, 1997, 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, 1997, the Company had
outstanding 25,831,131 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, 1996.
1
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS (2)
------------------------ -------------------- ---------
<S> <C> <C>
Robert M. Paganes 2,700,241 10.5%
6029 E. Fourteen Mile Road President
Sterling Heights, MI 48312 Director
Peter T. Paganes 1,914,000 7.4%
6029 E. Fourteen Mile Road Vice-President
Sterling Heights, MI 48312 Director
Vincent J. Tatone 1,000,000 5.0%(3)
6029 E. Fourteen Mile Road Secretary
Sterling Heights, MI 48312 Director
John M. Fayad 1,175,000 4.6%
P.O. Box 388 Director
Roseville, MI 48066
Ronald Boraks 0 0.0%(4)
38345 W. Ten Mile Road Director
Farmington Hills, MI 48335
J. Thomas Paganes 2,025,752 7.8%
38633 Moravian Director
Mt. Clemens, MI 48043
Melvyn B. Erdos 6,500 0.4%(3)
6029 E. Fourteen Mile Road Treasurer & CFO
Sterling Heights, MI 48312 Shareholder
All Executive Officers and 8,821,493 34.2%
Directors as a Group (7 persons)
<FN>
(1) The nature of ownership is sole voting and investment power unless
otherwise indicated.
(2) As of February 28, 1997.
(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
does have a Compensation Committee comprised of two employee directors
2
<PAGE>
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, 1996,
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 five (5) directors 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)
Five directors constituting the entire Board of Directors, are proposed to be
elected and hold office until the 1998 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> <C>
Robert M. Paganes 40 President, Chief Executive Officer, Director
Peter T. Paganes 52 Chairman of the Board, Vice-President, Director
Vincent J. Tatone 40 Secretary and Director
John M. Fayad 49 Director
Ronald Boraks 36 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,
3
<PAGE>
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. After serving a two year appointment as a law
clerk at the Michigan Supreme Court, Mr. Tatone engaged in the private
practice of law. 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.
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.
Reports and Board of Directors Meetings
4
<PAGE>
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, one
director, Mr. Roberts failed to file on a timely basis reports required by
Section 16(a) of the Securities Exchange Act of 1934. Mr. Roberts filed one
late report.
There were seven (7) 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,
1996.
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 $100,000, which may be categorized as "Other Annual Compensation" or "LTIP
Payouts", during the Company's fiscal year ended November 30, 1996.
<TABLE>
<CAPTION>
Name & Principal Position Fiscal Year Salary ($)
------------------------- ----------- ----------
<S> <C> <C>
Robert M. Paganes. . . . . . . . . . . 1996 66,346
President & Chief Executive Officer
</TABLE>
No stock options were granted to the above-named Executive Officer during the
fiscal year ended November 30, 1996.
Directors' Compensation
A fee of $250 per meeting attended was paid to each independent, non-employee
Director for their services as such for the fiscal year ended November 30,
1996. The total amount paid to independent Directors as a group was $6,500.
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,
5
<PAGE>
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, 1996:
<S> <C>
Included in Accounts Receivable....................... $ 26,262
Included in Other Assets; Notes Receivable............ $ 24,436
<CAPTION>
For the year ended November 30, 1996:
<S> <C>
Included in Revenue................................... $150,215
Included in Interest Income........................... $ 3,401
</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, 1996.
As of November 30, 1996, 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, 1996. The
activity of such accounts for the year ended November 30, 1996, is shown
below.
<TABLE>
<CAPTION>
1996 BALANCE
---- BEGINNING BALANCE
12/01/95 ADDITIONS DEDUCTIONS 11/30/96
-------- --------- ---------- --------
<S> <C> <C> <C> <C>
Robert M. Paganes $45,864 - $(21,428) $24,436
------- ----- -------- -------
Total $45,864 $0 $(21,428) $24,436
======= == ======== =======
</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>
NUMBER OF AMOUNT DUE FROM STORES AT
NAME FRANCHISES OWNED NOVEMBER 30, 1996
---- ---------------- -------------------------
<S> <C> <C>
Robert M. Paganes 2 $ 7,667
6
<PAGE>
Peter T. Paganes 1 7,025
-- -------
Amount Due from Officers 3 14,692
J. Thomas Paganes 3 11,570
-- -------
Amount Due from Officers
and Directors 3 $26,262
== =======
</TABLE>
Resignations of Directors
One director, Ralph R. Roberts, resigned. Mr. Roberts submitted a written
resignation letter dated January 23, 1997, stating that he was unable to
serve because of the demands of his other business activities and
responsibilities.
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, 1997. 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 1998 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 5, 1998 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.
7
<PAGE>
By Order of the Board of Directors
/s/ Vincent J. Tatone
Vincent J. Tatone
Secretary
Dated: May 5, 1997
<PAGE>
TUBBY'S, INC.
Proxy Solicited on Behalf of the Board of Directors for
Annual Shareholders Meeting June 12, 1997
The undersigned hereby appoints PETER T. PAGANES and ROBERT M. PAGANES,
jointly and severally, proxies, with the full power of substitution, to
represent the undersigned at the Annual Meeting of Shareholders of Tubby's,
Inc., to be held at the Best Western Sterling Inn, 34911 Van Dyke Avenue,
Sterling Heights, Michigan 48312 on Thursday, June 12, 1997 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 and Robert Boraks
A VOTE FOR ANY OF THE ABOVE MAY BE WITHHELD BY LINING OUT THEIR NAMES(S).
2. 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.
Unless otherwise directors herein, the proxy or proxies appointed hereby
are authorized to vote "FOR" item 1 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.)
- -------------------------------------------------------------------------------
(Continued from the reverse side)
Any proxy or proxies heretofore given to vote such shares are hereby revoked.
Dated:________________________,1997
_____________________________
_____________________________
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.
8
