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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ______)*
Questron Technology, Inc.
(Name of Issuer)
Common Stock, Par Value $0.01 per Share
(Title of Class of Securities)
748372 20 8
(Cusip Number)
Dominic A. Polimeni
6400 Congress Ave., Suite 200A
Boca Raton, Florida 33487
(561) 241-5251
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 24, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 5 Pages
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GREGORY S. AND VALERIE L. FITZGERALD
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
SEE ITEM 3 HEREOF.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
5 [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
U.S.
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF
- 0 -
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 476,475 (1)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
- 0 -
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
476,475 (1)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
476,475 (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
9.8% (2)
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
(1) Gregory S. and Valerie L. Fitzgerald are husband and wife. This figure
includes presently exercisable options to purchase a total of 40,000 shares of
the Common Stock of the Issuer pursuant to separate Option Agreements between
each of the Fitzgeralds and the Issuer, each covering 20,000 shares.
Page 2 of 5 Pages
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(2) Calculated in accordance with Rule 13d-3(c) of the Act based on 4,846,756
total outstanding shares of Common Stock of the Issuer and all other shares of
Common Stock of the Issuer beneficially owned by the reporting persons as
reflected herein.
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of Common Stock, par value $0.001 per
share (the "Common Stock"), of Questron Technology, Inc., a Delaware corporation
(the "Issuer"). The principal executive offices of the Issuer are located at
6400 Congress Avenue, Suite 200A, Boca Raton, Florida 33487.
ITEM 2. IDENTITY AND BACKGROUND.
1. (a) Gregory S. Fitzgerald
(b) 4324 Garland Drive
Fort Worth, Texas 76117
(c) President
Fas-Tronics, Inc.
4324 Garland Drive
Fort Worth, Texas 76117
2. (a) Valerie L. Fitzgerald
(b) 4324 Garland Drive
Fort Worth, Texas 76117
(c) Operations Manager
Fas-Tronics, Inc.
4324 Garland Drive
Fort Worth, Texas 76117
(d) Neither of the persons identified in this Item 2 has, during the
last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) Neither of the persons identified in this Item 2 has, during the
last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or State Securities laws or finding any violation with respect to
such laws.
(f) Both of the persons identified in this Item 2 are citizens of the
United States of America.
Page 3 of 5 Pages
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The persons identified in Item 2 above, Gregory Fitzgerald and Valerie
Fitzgerald (the "Fitzgeralds"), acquired the shares of the Common Stock reported
herein (the "Shares") from the Issuer pursuant to a Stock Purchase Agreement
(herein so called) dated as of June 12, 1998, and amended as of July 29, 1998
and September 21, 1998, by and between the Issuer, the Fitzgeralds and
Fas-Tronics, Inc., a Texas corporation ("Fas-Tronics"). Pursuant to the Stock
Purchase Agreement, the Fitzgeralds sold 100% of the issued and outstanding
capital stock of Fas-Tronics to the Issuer in exchange for cash and the Shares.
See Item 6 hereof.
ITEM 4. PURPOSE OF TRANSACTION.
The Fitzgeralds acquired the Shares as partial consideration for the sale
of 100% of the issued and outstanding capital stock of Fas-Tronics, a
distributor of metal fasteners. The Fitzgeralds have no present plans or
proposals that relate to or that would result in any of the actions specified in
clauses (a) through (j) of Item 4 of Schedule 13D of the Act. The Shares
include 40,000 shares subject to options presently exercisable by the
Fitzgeralds and 14,534 shares of Common Stock of Issuer previously purchased by
the Fitzgeralds on open market transactions. The Fitzgeralds may in the future
acquire on the open market or in private transactions additional shares of the
Issuer's Common Stock, depending on market conditions and other investment
considerations material to such persons.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The aggregate number of shares of the Common Stock of the Issuer owned
by the Fitzgeralds pursuant to Rule 13d-3 of the Act is 476,475, constituting
approximately 9.8% of the outstanding shares of Common Stock of the Issuer.
The Fitzgeralds are not the beneficial owners of any other shares of the
Common Stock of the Issuer.
(b) The Fitzgeralds share the power to vote or to direct the vote and to
dispose or to direct the disposition of the shares of Common Stock of the Issuer
for which this report is filed.
(c) The Fitzgeralds have not effected any transactions in shares of the
Common Stock of the Issuer, other than as described in Items 3, 4 and 6 hereof.
(d) No person or entity other than the Fitzgeralds has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of the Common Stock owned by them.
(e) Not applicable.
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ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to the Stock Purchase Agreement, on September 24, 1998 (the
"Closing Date"), the Fitzgeralds conveyed to the Issuer 100% of the issued and
outstanding capital stock of Fas-Tronics. The total purchase price paid by the
Issuer for the Fas-Tronics shares was $6,229,674 in cash, 421,941 shares of the
Issuer's Common Stock, and options to purchase a total of 40,000 shares of the
Issuer's Common Stock at an exercise price of $4.575 per share, which options
may be exercised for a five-year period following the Closing Date.
True and correct copies of the Option Agreements between Gregory Fitzgerald
and the Issuer, and Valerie Fitzgerald and the Issuer, are filed as exhibits
hereto. Except as set forth herein, there are no other contracts, arrangements,
understandings, or relationships with respect to the shares of the Common Stock
for which this report is filed.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Non-Statutory Stock Option Agreement between Gregory Fitzgerald and
Questron Technology, Inc.
(b) Non-Statutory Stock Option Agreement between Valerie Fitzgerald and
Questron Technology, Inc.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 9, 1998
/s/ Gregory Fitzgerald
---------------------------------
GREGORY FITZGERALD
/s/ Valerie Fitzgerald
---------------------------------
VALERIE FITZGERALD
Page 5 of 5 Pages
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EXHIBIT 1.1
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THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
QUESTRON TECHNOLOGY, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
I. GRANT OF OPTION
Questron Technology, Inc., a Delaware corporation (the "Company"), hereby
grants to Gregory Fitzgerald (the "Optionee"), an option (the "Option") to
purchase an aggregate of 20,000 shares of common stock, par value $0.001 per
share ("Common Stock"), of the Company at a price of $4.575 per share (the
"Exercise Price per Share"), purchasable as set forth in and subject to the
terms and conditions of this Option Agreement.
I. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION
A. VESTING OF OPTION. The Option shall vest in its entirety on the date
hereof.
A. EXERCISABILITY OF OPTION. All Options are vested and are immediately
exercisable. Notwithstanding the foregoing, the Option shall not be exercisable
unless such exercise is in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), all other applicable laws and regulations
(including state securities laws) and the requirements of any securities
exchange or interdealer quotation system on which the shares of Common Stock may
be listed or included for quotation.
A. EXPIRATION DATE. Except as otherwise provided in this Option
Agreement, the Option may not be exercised after September 24, 2004.
A. EXERCISE PROCEDURE. Subject to the conditions set forth in this
Agreement, the Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Secretary of the Company, specifying the number of
Shares to be purchased and the Exercise Price per
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Share to be paid therefor and accompanied by payment in accordance with
Section 3 hereof. The Optionee may purchase less than the total number of Shares
covered hereby, provided that no exercise of less than all the Option may be for
less than 100 whole Shares.
I. PAYMENT OF EXERCISE PRICE; RESTRICTIONS ON EXERCISE
Payment of the Exercise Price per Share for Shares purchased upon exercise
of an Option shall be made by delivery to the Company of the Exercise Price,
payable in cash (by certified check) or any other method that is specifically
authorized by the Company on or before the time of exercise.
I. DELIVERY OF SHARES
The Company shall, upon payment of the Exercise Price per Share for the
number of Shares purchased and paid for, make prompt delivery of such Shares to
the Optionee. No Shares shall be issued and delivered upon exercise of an
Option unless and until, in the opinion of counsel for the Company, any
applicable registration requirements of the Securities Act, any applicable
listing requirements of any national securities exchange or interdealer
quotation system on which stock of the same class is then traded or included for
quotation, and any other requirements of law, including state securities laws,
or of any regulatory bodies having jurisdiction over such issuance and delivery,
shall have been fully complied with. As a condition to the exercise of this
Option, the Company may require the Optionee to make such representations and
warranties to the Company as may be required to determine whether such exercise
would constitute a violation of any applicable law or regulation. If it is
determined pursuant to this Section IV that an Option may not be exercised, then
the Company must return to the Optionee, within one business day, any payment
made by the Optionee to the Company with respect to such Option.
I. NON-TRANSFERABILITY OF OPTION
The Options are personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise), except by will or the laws of descent and distribution,
nor shall any such rights be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of an Option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon any Option or such
rights, this Option Agreement and such rights shall, at the election of the
Company, become null and void.
I. RIGHTS AS A STOCKHOLDER
The Optionee shall have no rights as a stockholder with respect to any
shares which may be purchased by exercise of the Option unless and until a
certificate representing such shares is duly issued to the Optionee. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date on such stock certificate.
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I. RECAPITALIZATION
In the event that the outstanding shares of Common Stock of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination or subdivision, an appropriate and
proportionate adjustment may be made in the number and kind of shares and in the
number, kind, and per share exercise price, of shares subject to unexercised
Option or portions thereof granted prior to such adjustment.
I. REORGANIZATION
In the event that (i) there is a reorganization or liquidation of the
Company, prior to the expiration date of the Option or termination of this
Option Agreement, the Company shall, with respect to the Option or any
unexercised portion hereof, as to outstanding Options, either (x) in the case of
a merger, consolidation or reorganization of the Company, make appropriate
provision for the protection of any such outstanding Options by the substitution
on an equivalent basis of appropriate stock of the Company, or of the merged,
consolidated or otherwise reorganized corporation that will be issuable in
respect of the shares of Common Stock of the Company (provided that no
additional benefits shall be conferred upon Optionee as a result of such
substitution), or (y) upon written notice to the Optionee, provide that all
unexercised Options must be exercised within a specified number of days of the
date of such notice or they will be terminated, or (z) upon written notice to
the Optionee, provide that all unexercised Options shall be purchased by the
Company or its successor within a specified number of days of the date of such
notice at a purchase price equal to the difference between the aggregate
Exercise Price per Share of the Option over the Book Value per Share (as of any
date means the book value per share of Common Stock as of such date, as
reflected in the regularly prepared consolidated financial statements of the
Company prepared in accordance with generally accepted accounting principles
consistently applied) of the Shares underlying the Option as of the close of
business on the last day of the fiscal year of the Company immediately preceding
the purchase or fair market value, calculated on the basis of the average last
reported sale price for the Company's Common Stock for the five (5) trading days
ending on the third trading day immediately prior to such date, whichever is
greater. Any Option or portion thereof purchased by the Company in this manner
shall be canceled and shall have no further force or effect.
I. WITHHOLDING TAXES
The Company's obligation to deliver shares upon the exercise of an Option
shall be subject to the Optionee's satisfaction of all applicable federal, state
and local income and employment tax withholding requirements with respect to the
Option.
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I. OPTIONEE REPRESENTATIONS; LEGEND
A. REPRESENTATIONS. The Optionee
(i) represents and warrants that the Option and any shares of Common
Stock issuable upon exercise thereof (together, the "Securities") are being
acquired as an investment and not with a view to the distribution thereof;
(ii) understands that none of the Securities have been registered under
the Securities Act, in reliance on an exemption therefrom, and that none of
the Securities have been approved or disapproved by the United States
Securities and Exchange Commission or by any other Federal or state agency;
(iii) understands that none of the Securities can be sold, transferred or
assigned unless registered by the Company (which the Optionee has the right
to compel) pursuant to the Securities Act and any applicable state securities
laws, or unless an exemption therefrom is available, and, accordingly, it may
not be possible for the Optionee to liquidate its investment in the
Securities, and agrees not to sell, assign or otherwise transfer or dispose
of the Securities unless such Securities have been so registered or an
exemption from registration is available;
(iv) acknowledges that all documents, records and books pertaining to the
Company and its business (including, but not limited to, the following
documents which have been provided to, and reviewed by, each of Sellers: (a)
the Company's Annual Reports on Form 10-KSB for the fiscal years ended
December 31, 1995, 1996 and 1997, (b) the Company's Quarterly Reports on Form
10-QSB for the quarterly periods ended March 31, 1997, June 30, 1997,
September 30, 1997, March 31, 1998 and June 30, 1998, (c) the Company's Proxy
Statement, dated May 5, 1998, relating to its 1998 Annual Meeting of
Shareholders), and (d) the Company's Form 8-K and Form 8-K/A dated October 7,
1997 and December 5, 1997, respectively, have been made available to the
Optionee and the Optionee's attorney and/or accountant and/or representative.
The Optionee has had an opportunity to ask questions and receive answers from
the Company concerning the business and assets of and all such questions have
been answered to the full satisfaction of the Optionee; and
(v) represents and warrants that it is an accredited investor, as that
term is defined in Regulation D under the Act.
A. LEGEND ON STOCK CERTIFICATE. The Optionee understands that, any shares of
Common Stock acquired upon exercise of an Option may not have been registered
under the Securities Act nor the securities laws of any state. Accordingly,
unless all such registrations are then in effect, all stock certificates
representing shares of Common Stock issued to the Optionee upon exercise of an
Option shall have affixed thereto a legend substantially in the following form,
in addition to any other legends required by applicable state law:
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"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE."
1. MISCELLANEOUS
Except as provided herein, this Option Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
All notices under this Option Agreement shall, unless otherwise provided
herein, be mailed or delivered by hand to the parties at their respective
addresses set forth beneath their names below or at such other address as may be
designated in writing by either of the parties to the other.
This Option Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflicts of laws
provisions.
This Option Agreement shall be binding upon and inure to the heirs,
successors and assigns of the Optionee (subject, however, to the limitations set
forth herein with respect to assignment of the Option or rights therein) and the
Company.
Grant Date: September 24, 1998
QUESTRON TECHNOLOGY, INC.
/s/ Dominic A. Polimeni
-------------------------------------------
By: Dominic A. Polimeni
Title: Chairman, Chief Executive Officer and President
Address: 6400 Congress Avenue
Suite 200A
Boca Raton, Florida 33487
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OPTIONEE
/s/ Gregory Fitzgerald
-------------------------------------------
Gregory Fitzgerald
Address: Fas-Tronics, Inc.
4324 Garland Drive
Fort Worth, Texas 76117
Page 6
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EXHIBIT 1.2
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THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE
ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
QUESTRON TECHNOLOGY, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
I. GRANT OF OPTION
Questron Technology, Inc., a Delaware corporation (the "Company"), hereby
grants to Valerie Fitzgerald (the "Optionee"), an option (the "Option") to
purchase an aggregate of 20,000 shares of common stock, par value $0.001 per
share ("Common Stock"), of the Company at a price of $4.575 per share (the
"Exercise Price per Share"), purchasable as set forth in and subject to the
terms and conditions of this Option Agreement.
I. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION
A. VESTING OF OPTION. The Option shall vest in its entirety on the date
hereof.
A. EXERCISABILITY OF OPTION. All Options are vested and are immediately
exercisable. Notwithstanding the foregoing, the Option shall not be exercisable
unless such exercise is in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), all other applicable laws and regulations
(including state securities laws) and the requirements of any securities
exchange or interdealer quotation system on which the shares of Common Stock may
be listed or included for quotation.
A. EXPIRATION DATE. Except as otherwise provided in this Option
Agreement, the Option may not be exercised after September 24, 2004.
A. EXERCISE PROCEDURE. Subject to the conditions set forth in this
Agreement, the Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Secretary of the Company, specifying the number of
Shares to be purchased and the Exercise Price per
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Share to be paid therefor and accompanied by payment in accordance with Section
3 hereof. The Optionee may purchase less than the total number of Shares covered
hereby, provided that no exercise of less than all the Option may be for less
than 100 whole Shares.
I. PAYMENT OF EXERCISE PRICE; RESTRICTIONS ON EXERCISE
Payment of the Exercise Price per Share for Shares purchased upon exercise
of an Option shall be made by delivery to the Company of the Exercise Price,
payable in cash (by certified check) or any other method that is specifically
authorized by the Company on or before the time of exercise.
I. DELIVERY OF SHARES
The Company shall, upon payment of the Exercise Price per Share for the
number of Shares purchased and paid for, make prompt delivery of such Shares to
the Optionee. No Shares shall be issued and delivered upon exercise of an
Option unless and until, in the opinion of counsel for the Company, any
applicable registration requirements of the Securities Act, any applicable
listing requirements of any national securities exchange or interdealer
quotation system on which stock of the same class is then traded or included for
quotation, and any other requirements of law, including state securities laws,
or of any regulatory bodies having jurisdiction over such issuance and delivery,
shall have been fully complied with. As a condition to the exercise of this
Option, the Company may require the Optionee to make such representations and
warranties to the Company as may be required to determine whether such exercise
would constitute a violation of any applicable law or regulation. If it is
determined pursuant to this Section IV that an Option may not be exercised, then
the Company must return to the Optionee, within one business day, any payment
made by the Optionee to the Company with respect to such Option.
I. NON-TRANSFERABILITY OF OPTION
The Options are personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise), except by will or the laws of descent and distribution,
nor shall any such rights be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of an Option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon any Option or such
rights, this Option Agreement and such rights shall, at the election of the
Company, become null and void.
I. RIGHTS AS A STOCKHOLDER
The Optionee shall have no rights as a stockholder with respect to any
shares which may be purchased by exercise of the Option unless and until a
certificate representing such shares is duly issued to the Optionee. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date on such stock certificate.
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I. RECAPITALIZATION
In the event that the outstanding shares of Common Stock of the Company are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination or subdivision, an appropriate and
proportionate adjustment may be made in the number and kind of shares and in the
number, kind, and per share exercise price, of shares subject to unexercised
Option or portions thereof granted prior to such adjustment.
I. REORGANIZATION
In the event that (i) there is a reorganization or liquidation of the
Company, prior to the expiration date of the Option or termination of this
Option Agreement, the Company shall, with respect to the Option or any
unexercised portion hereof, as to outstanding Options, either (x) in the case of
a merger, consolidation or reorganization of the Company, make appropriate
provision for the protection of any such outstanding Options by the substitution
on an equivalent basis of appropriate stock of the Company, or of the merged,
consolidated or otherwise reorganized corporation that will be issuable in
respect of the shares of Common Stock of the Company (provided that no
additional benefits shall be conferred upon Optionee as a result of such
substitution), or (y) upon written notice to the Optionee, provide that all
unexercised Options must be exercised within a specified number of days of the
date of such notice or they will be terminated, or (z) upon written notice to
the Optionee, provide that all unexercised Options shall be purchased by the
Company or its successor within a specified number of days of the date of such
notice at a purchase price equal to the difference between the aggregate
Exercise Price per Share of the Option over the Book Value per Share (as of any
date means the book value per share of Common Stock as of such date, as
reflected in the regularly prepared consolidated financial statements of the
Company prepared in accordance with generally accepted accounting principles
consistently applied) of the Shares underlying the Option as of the close of
business on the last day of the fiscal year of the Company immediately preceding
the purchase or fair market value, calculated on the basis of the average last
reported sale price for the Company's Common Stock for the five (5) trading days
ending on the third trading day immediately prior to such date, whichever is
greater. Any Option or portion thereof purchased by the Company in this manner
shall be canceled and shall have no further force or effect.
I. WITHHOLDING TAXES
The Company's obligation to deliver shares upon the exercise of an Option
shall be subject to the Optionee's satisfaction of all applicable federal, state
and local income and employment tax withholding requirements with respect to the
Option.
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I. OPTIONEE REPRESENTATIONS; LEGEND
A. REPRESENTATIONS. The Optionee
(i) represents and warrants that the Option and any shares of
Common Stock issuable upon exercise thereof (together, the "Securities")
are being acquired as an investment and not with a view to the distribution
thereof;
(ii) understands that none of the Securities have been registered
under the Securities Act, in reliance on an exemption therefrom, and that
none of the Securities have been approved or disapproved by the United
States Securities and Exchange Commission or by any other Federal or state
agency;
(iii) understands that none of the Securities can be sold,
transferred or assigned unless registered by the Company (which the
Optionee has the right to compel) pursuant to the Securities Act and any
applicable state securities laws, or unless an exemption therefrom is
available, and, accordingly, it may not be possible for the Optionee to
liquidate its investment in the Securities, and agrees not to sell, assign
or otherwise transfer or dispose of the Securities unless such Securities
have been so registered or an exemption from registration is available;
(iv) acknowledges that all documents, records and books pertaining
to the Company and its business (including, but not limited to, the
following documents which have been provided to, and reviewed by, each of
Sellers: (a) the Company's Annual Reports on Form 10-KSB for the fiscal
years ended December 31, 1995, 1996 and 1997, (b) the Company's Quarterly
Reports on Form 10-QSB for the quarterly periods ended March 31, 1997, June
30, 1997, September 30, 1997, March 31, 1998 and June 30, 1998, (c) the
Company's Proxy Statement, dated May 5, 1998, relating to its 1998 Annual
Meeting of Shareholders), and (d) the Company's Form 8-K and Form 8-K/A
dated October 7, 1997 and December 5, 1997, respectively, have been made
available to the Optionee and the Optionee's attorney and/or accountant
and/or representative. The Optionee has had an opportunity to ask
questions and receive answers from the Company concerning the business and
assets of and all such questions have been answered to the full
satisfaction of the Optionee; and
(v) represents and warrants that it is an accredited investor, as
that term is defined in Regulation D under the Act.
A. LEGEND ON STOCK CERTIFICATE. The Optionee understands that, any
shares of Common Stock acquired upon exercise of an Option may not have been
registered under the Securities Act nor the securities laws of any state.
Accordingly, unless all such registrations are then in effect, all stock
certificates representing shares of Common Stock issued to the Optionee upon
exercise of an Option shall have affixed thereto a legend substantially in the
following form, in addition to any other legends required by applicable state
law:
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"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE."
1. MISCELLANEOUS
Except as provided herein, this Option Agreement may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
All notices under this Option Agreement shall, unless otherwise provided
herein, be mailed or delivered by hand to the parties at their respective
addresses set forth beneath their names below or at such other address as may be
designated in writing by either of the parties to the other.
This Option Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflicts of laws
provisions.
This Option Agreement shall be binding upon and inure to the heirs,
successors and assigns of the Optionee (subject, however, to the limitations set
forth herein with respect to assignment of the Option or rights therein) and the
Company.
Grant Date: September 24, 1998
QUESTRON TECHNOLOGY, INC.
/s/ Dominic A. Polimeni
-------------------------------------------------------
By: Dominic A. Polimeni
Title: Chairman, Chief Executive Officer and President
Address: 6400 Congress Avenue
Suite 200A
Boca Raton, Florida 33487
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OPTIONEE
/s/ Valerie Fitzgerald
-------------------------------------------
Valerie Fitzgerald
Address: Fas-Tronics, Inc.
4324 Garland Drive
Fort Worth, Texas 76117
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