<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Sec. 240.14a-11(c) or Sec. 240.14a-12
</TABLE>
QUESTRON TECHNOLOGY, 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 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> 2
QUESTRON TECHNOLOGY, INC.
6400 CONGRESS AVENUE, SUITE 2000
BOCA RATON, FLORIDA 33487
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the
Stockholders of Questron Technology, Inc., which will be held on Wednesday,
August 16, 2000 at 11:00 a.m., local time, at the Omni Park Central Hotel,
Manhattan Skyline Room, 870 Seventh Avenue, New York, New York.
This booklet includes the notice of the meeting and the proxy statement
which contains information about proposals to be considered and acted upon at
the meeting, your Board of Directors and information about each of the nominees
to the Board.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING
REGARDLESS OF THE SIZE OF YOUR HOLDINGS. I URGE YOU TO COMPLETE, SIGN, DATE AND
RETURN YOUR PROXY CARD PROMPTLY.
If you are a Stockholder of record and plan to attend the meeting,
please mark your proxy card in the space provided for that purpose. However, if
your shares are not registered in your own name, please advise the Stockholder
of record (your bank, broker, etc.) that you wish to attend. Such Stockholder of
record must provide you with evidence of your ownership which will enable you to
gain admittance to and to vote at the meeting.
Sincerely,
Dominic A. Polimeni
Chairman and Chief Executive Officer
July 14, 2000
--------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN YOUR
PROXY CARD IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
<PAGE> 3
QUESTRON TECHNOLOGY, INC.
6400 CONGRESS AVENUE, SUITE 2000
BOCA RATON, FLORIDA 33487
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 16, 2000
Dear Stockholder:
The Annual Meeting of Stockholders of Questron Technology, Inc., a
Delaware corporation (the "Company"), will be held at the Omni Park Central
Hotel, Manhattan Skyline Room, 870 Seventh Avenue, New York, New York on
Wednesday, August 16, 2000 beginning at 11:00 a.m. (local time), for the
following purposes:
(1) To elect six Directors to serve until the next Annual Meeting of
Stockholders.
(2) To ratify the appointment by the Board of Directors of Ernst &
Young LLP as the Company's Independent Public Accountants for the fiscal year
2000.
(3) To transact any other business which properly may be brought before
the meeting and any adjournments or postponements thereof.
Only holders of record of the Company's Common Stock on July 12, 2000
are entitled to notice of and to vote at the meeting and any adjournments or
postponements thereof.
By Order of the Board of Directors
Ann Bastis
SECRETARY
July 14, 2000
<PAGE> 4
QUESTRON TECHNOLOGY, INC.
6400 CONGRESS AVENUE, SUITE 2000
BOCA RATON, FLORIDA 33487
PROXY STATEMENT FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Questron Technology, Inc., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders of
the Company (the "Meeting"), which will be held at 11:00 a.m., local time, on
Wednesday, August 16, 2000 at the Omni Park Central Hotel, Manhattan Skyline
Room, 870 Seventh Avenue, New York, New York, and at any and all adjournments of
the Meeting for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. This proxy statement and the enclosed proxy card will
be mailed to Stockholders on or about July 14, 2000. The Company's principal
executive offices are located at 6400 Congress Avenue, Suite 2000, Boca Raton,
Florida 33487.
The accompanying proxy card is designed to permit each Stockholder of
record as of the close of business on July 12, 2000 (the "Record Date") to vote
at the Meeting. As of the Record Date, 8,406,126 shares of Common Stock, par
value $.001 per share (the "Common Stock"), were issued and outstanding. Each
holder of record will be entitled to one vote for each share of Common Stock.
Holders of shares of Common Stock are entitled to vote on all matters, and no
shares have cumulative voting rights. The presence of a majority of the shares
entitled to vote, present in person or by proxy at the Meeting, will constitute
a quorum.
The proxy card provides space for a Stockholder to withhold voting for
an individual nominee or all nominees for the Board of Directors or to abstain
from voting for any proposal if the Stockholder chooses to do so. Shares
represented by properly executed proxy cards received by the Company at or prior
to the Meeting will be voted at the Meeting according to the instructions
indicated thereon or otherwise as provided therein. The election of Directors
shall be decided by plurality of the votes cast. The ratification of the
appointment of auditors requires the affirmative vote of a majority of the votes
cast at the Meeting, in person or by proxy. For purposes of determining the
number of votes cast with respect to any matter, only those cast "FOR" or
"AGAINST" are included. Abstentions and broker non-votes are counted only for
purposes of determining whether a quorum is present at the Meeting.
Unless instructions to the contrary are indicated, the persons named on
the proxy card will vote the shares so represented "FOR" the election of each of
the nominated Directors and "FOR" the ratification of the appointment of
auditors. As to any other business which may properly come before the Meeting,
the persons named on the proxy card will vote according to their best judgment.
A proxy may be revoked at any time before it is voted at the Meeting by
filing with the Secretary of the Company an instrument revoking it, by a duly
executed proxy bearing a later date, or by voting in person at the Meeting.
<PAGE> 5
This proxy is solicited by the Board of Directors of the Company. The
cost of preparing, assembling and mailing the Notice of Annual Meeting of
Stockholders, proxy statement and proxy will be borne by the Company. The
Company does not anticipate that such cost will exceed the amount normally
expended in an uncontested election of directors. In addition to the
solicitation of the proxies by use of the mails, some of the officers, Directors
and regular employees of the Company, without additional remuneration, may
solicit proxies personally or by telephone. The Company may also request
brokerage firms, nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock held of record. The Company will
reimburse such persons for the reasonable expenses in forwarding soliciting
material.
VOTING SECURITIES AND SECURITIES OWNERSHIP
VOTING SECURITIES
The Board of Directors has fixed the close of business on July 12, 2000
as the Record Date for the determination of Stockholders entitled to notice of,
and to vote at, the Meeting and any adjournments thereof. Only Stockholders of
record on the Record Date will be able to vote at the Meeting. The list of
Stockholders entitled to vote at the Meeting will be available for the
examination of any Stockholder for any purpose pertinent to the Meeting at the
offices of Arent Fox Kintner Plotkin & Kahn, PLLC, 1675 Broadway, New York, New
York, for ten days prior to the date of the Meeting.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information, as of March 21,
2000, known to the Company regarding beneficial ownership of the Company's
Common Stock by (i) any holder of more than five percent of the outstanding
shares; (ii) the Company's Directors; and (iii) all executive officers and
Directors as a group:
<TABLE>
<CAPTION>
% OF
NAME AND ADDRESS OF NUMBER OF SHARES OF COMMON
BENEFICIAL OWNER POSITION WITH THE COMPANY COMMON STOCK STOCK
-------------------------------------------- ----------------------------------- -------------------- -----------
<S> <C> <C> <C>
Dominic A. Polimeni (1) Chairman and Chief Executive 2,374,957 (2) 25.78
Officer
Robert V. Gubitosi (1) Director, President and Chief -- (3) --
Financial Officer
Douglas D. Zadow Vice President and President of 872,176 (4) 11.77
1 Fox Hollow Lane Questron Distribution Logistics,
Melissa, TX 75454 Inc., a subsidiary of the Company
Milton M. Adler (1) Director 8,247 (5) *
Frederick W. London (1) Director 14,000 (6) *
William J. McSherry, Jr. (1) Director 95,384 (7) 1.32
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Phillip D. Schwiebert (8) Vice President and Regional Vice 923,339 (9) 11.65
c/o Questron Distribution President of Questron
Logistics, Inc. Distribution Logistics, Inc., a
386 Railroad Court subsidiary of the Company
Milpitas, CA 95035
Gulfstream Financial Group, Inc. -- 1,260,273(10) 15.54
6400 Congress Ave.
Suite 2000
Boca Raton, FL 33487
Joan R. Gubitosi (4) -- 2,360,273(11) 25.62
c/o Gulfstream Financial Group, Inc.
6400 Congress Ave.
Suite 2000
Boca Raton, FL 33487
Malcolm A. Tallmon Vice President, Aerospace 662,040 9.26
P.O. Box 11889 Business Development
Fort Worth, TX 76110-8889
Gregory S. Fitzgerald President, Questron Aerospace 887,626(12) 11.97
5112 Squaw Creek Court Logistics, a division of Questron
Fort Worth, TX 76137 Distribution Logistics, Inc., a
subsidiary of the Company
Valerie L. Fitzgerald -- 887,626(12) 11.97
5112 Squaw Creek Court
Fort Worth, TX 76137
All officers and Directors as a group 5,168,243 49.41
(nine persons)
</TABLE>
----------------------------
* Less than 1%
(1) c/o Questron Technology, Inc., 6400 Congress Avenue, Suite 2000, Boca
Raton, FL 33487.
(2) Consists of 260,273 shares of Common Stock and Series IV Warrants to
purchase 1,000,000 shares of Common Stock owned by Gulfstream, 14,684
shares of Common Stock owned by Mr. Polimeni and options to purchase
1,100,000 shares of Common Stock at an exercise price of $4.50 per share
that were awarded to Mr. Polimeni pursuant to the terms of his employment
agreement. Pursuant to the terms of a Gulfstream shareholder agreement,
beneficial interest in such options is shared equally by Mr. Polimeni and
Mrs. Gubitosi. These amounts do not include options to purchase 26,265
shares of Common Stock at $3.5625 per share granted effective November 19,
1999, which vest and become exercisable as to 8,755 shares on each of the
first, second and third anniversary dates of the date of the grant.
3
<PAGE> 7
(3) Does not include options to purchase 26,265 shares of Common Stock at
$3.5625 per share granted effective November 19, 1999, which vest and
become exercisable as to 8,755 shares on each of the first, second and
third anniversary dates of the date of the grant. Mr. Gubitosi's wife, Joan
R. Gubitosi, has shared beneficial ownership with Mr. Polimeni of 2,360,273
shares of Common Stock (see Footnote 11). Mr. Gubitosi disclaims beneficial
ownership of such shares.
(4) The 872,176 shares of Common Stock reported above include 30,162 shares
subject to a serial put agreement dated September 22, 1997, which gives Mr.
Zadow the option to sell the shares to the Company on a monthly basis
during the five-year period ending September 22, 2002 for a price of $6.275
per share, and options to purchase 300,000 shares of Common Stock at an
exercise price of $4.50 per share that were awarded to Mr. Zadow effective
March 31, 1999 pursuant to the terms of his employment agreement. These
amounts do not include options to purchase 24,621 shares of Common Stock at
$3.5625 per share granted effective November 19, 1999, which vest and
become exercisable as to 8,207 shares on each of the first, second and
third anniversary dates of the date of the grant.
(5) Includes options to purchase 8,000 shares of Common Stock. These amounts do
not include options to purchase 3,000 shares of Common Stock at $3.5625 per
share granted effective November 19, 1999, which vest and become
exercisable as to 1,000 shares on each of the first, second and third
anniversary dates of the date of the grant.
(6) Consists of 500 shares of Common Stock, Series IV Warrants to purchase 500
shares of Common Stock and options to purchase 13,000 shares of Common
Stock. These amounts do not include options to purchase 3,000 shares of
Common Stock at $3.5625 per share granted effective November 19, 1999,
which vest and become exercisable as to 1,000 shares on each of the first,
second and third anniversary dates of the date of the grant.
(7) Includes 5,984 shares of Common Stock owned by Mr. McSherry, options to
purchase 48,000 shares of Common Stock and Series IV Warrants to purchase
41,400 shares of Common Stock. These amounts do not include (i) 886 shares
of Common Stock owned by one of his adult sons, as to which Mr. McSherry
disclaims beneficial ownership or (ii) options to purchase 3,000 shares of
Common Stock at $3.5625 per share granted effective November 19, 1999,
which vest and become exercisable as to 1,000 shares on each of the first,
second and third anniversary dates of the date of the grant.
(8) Pursuant to the terms of an exchange agreement, Mr. Schwiebert received
options to purchase 166,667 shares of Common Stock of the Company at an
exercise price of $7.75 per share on February 24, 1998 and options to
purchase 333,333 shares of Common Stock at an exercise price of $4.50 per
share effective March 31, 1999.
(9) The shares reported above consist of 113,339 shares owned by Mr.
Schwiebert, options to purchase 560,000 shares of Common Stock and Series
IV Warrants to purchase 250,000 shares of Common Stock. Also see footnote
8.
(10) Consists of 260,273 shares of Common Stock and Series IV Warrants to
purchase 1,000,000 shares of Common Stock. Joan R. Gubitosi and Dominic A.
Polimeni are executive officers and the stockholders of Gulfstream and
share voting and investment power with respect to the shares owned by
Gulfstream.
4
<PAGE> 8
(11) Consists of 260,273 shares of Common Stock and Series IV Warrants to
purchase 1,000,000 shares of Common Stock owned by Gulfstream, and options
to purchase 1,100,000 shares of Common Stock, at an exercise price of $4.50
per share, in which beneficial interest is shared equally by Mrs. Gubitosi
and Mr. Polimeni pursuant to a Gulfstream shareholder agreement.
(12) The 887,626 shares of Common Stock reported above are owned jointly by Mr.
and Mrs. Fitzgerald and include options to purchase 40,000 shares of Common
Stock at an exercise price of $4.575 that were awarded September 24, 1998
and 14,534 shares of Common Stock purchased in open market transactions.
5
<PAGE> 9
ELECTION OF DIRECTORS
At the Meeting, Stockholders will elect six Directors to hold office
until the next Annual Meeting of Stockholders or until their respective
successors have been duly elected and qualified. Unless contrary instructions
are given, the shares represented by a properly executed proxy will be voted
"FOR" the election of the following nominees: Milton M. Adler, Robert V.
Gubitosi, Frederick W. London, William J. McSherry, Jr., Dominic A. Polimeni and
Douglas D. Zadow. All of the nominees presently comprise the entire Board of
Directors of the Company. If at any time prior to or during the Meeting any of
the nominees becomes unavailable to serve as a Director, the persons named in
the enclosed proxy will vote the shares represented by the proxy for the
election of such person as the Board of Directors may recommend.
Set forth below is certain information concerning the nominees for
election as Directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Dominic A. Polimeni................. 54 Chairman and Chief Executive Officer
Robert V. Gubitosi.................. 52 Director, President and Chief Financial
Officer
Douglas D. Zadow.................... 42 Director, Vice President
and President of Questron Distribution
Logistics, Inc., a subsidiary of the
Company
Milton M. Adler..................... 72 Director
Frederick W. London................. 48 Director
William J. McSherry, Jr............. 52 Director
</TABLE>
DOMINIC A. POLIMENI has been a Director of the Company since March 1995
and Chairman and Chief Executive Officer of the Company since February 1996. Mr.
Polimeni served as President of the Company from March 1995 until May 1999.
Since September 1997, he has been a director of Nu Horizons, Inc., a publicly
held company based in Melville, New York, which is a distributor of electronic
components. Mr. Polimeni has been a Managing Director of Gulfstream Financial
Group, Inc., a privately held financial consulting and investment banking firm
since August 1990. Prior to that, he held the position of Chief Financial
Officer of Arrow Electronics, Inc. ("Arrow") for four (4) years. He also held
several other positions, including general management positions, with Arrow over
an eight-year period. Mr. Polimeni also practiced as a Certified Public
Accountant for more than 12 years and was a Partner in the New York office of
Arthur Young & Company. Mr. Polimeni is the brother-in-law of Mr. Gubitosi.
ROBERT V. GUBITOSI has been a Director of the Company since February
1996, and President and Chief Financial Officer since May 1999. Mr. Gubitosi has
been a Managing Director of Gulfstream Financial Group, Inc., a privately held
financial consulting and investment banking firm since August 1990. Prior to
that, he held the position of General Partner and Chief Financial Officer of The
Securities Groups, a New York investment banking firm and primary dealer of U.S.
government securities, with responsibility for the investment banking activities
of the firm. In addition, Mr. Gubitosi has held managerial positions at Goldman
Sachs & Company and Oppenheimer & Company, and has specialized in brokerage
accounting and auditing at Haskins & Sells and Touche Ross & Company. Mr.
Gubitosi is the brother-in-law of Mr. Polimeni.
DOUGLAS D. ZADOW has been a Director of the Company since September
1999, a Vice President of the Company and President of Questron Distribution
6
<PAGE> 10
Logistics, Inc., a subsidiary of the Company, since May 1998 and President of
California Fasteners, Inc. ("Calfast"), now a wholly owned subsidiary of the
Company, since May 1995. Calfast was acquired by the Company in September 1997.
From 1987 to 1996, he served as President of All-Spec, Inc., a manufacturers
representative of fastener products. In 1986, Mr. Zadow served as President of
Southwest Fastener Association.
MILTON M. ADLER has been a Director of the Company since February 1996.
Mr. Adler was Secretary of the Company from October 1993 through September 1999,
and Treasurer of the Company from February 1992 through September 1999. Since
July 1997, he has been President, Secretary and Treasurer of Judicate of
Philadelphia, Inc., a former subsidiary of the Company. Prior to October 1993,
Mr. Adler was employed by Travelco, a travel-consulting firm, for more than 18
years in various capacities, the most recent of which was Vice President of
Administration. Mr. Adler is a Certified Public Accountant.
FREDERICK W. LONDON has been a Director of the Company since April
1998. Mr. London has been a partner of the law firm of Dunnington, Bartholow &
Miller LLP, Westlake Village, California since September 1999. From February
1998 to June 1999, Mr. London was Vice President and Deputy General Counsel of
Pinkerton's, Inc., a provider of global security solutions based in Westlake
Village, California. From January 1995 through February 1998, Mr. London was a
partner of Gould & Wilkie, a law firm based in New York City. Prior to that, he
was a partner in the New York City office of the law firm of Dunnington,
Bartholow & Miller LLP.
WILLIAM J. MCSHERRY, JR. has been a Director of the Company since
February 1996. Mr. McSherry has been a member of Arent Fox Kintner Plotkin &
Kahn, PLLC, a law firm with offices in New York City and Washington, DC, since
February 2000. Arent Fox is legal counsel to the Company. Prior to February
2000, Mr. McSherry was a partner in the law firms of Battle Fowler LLP and Bryan
Cave LLP. He is also President and a director of Playtex Marketing Corporation,
a privately-owned corporation, and, prior to April 1998, served as a trustee and
Deputy Mayor of the Village of Larchmont, State of New York. He is also a
trustee of The Michael Gordon Foundation, a private foundation.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held seven meetings during the fiscal year ended
December 31, 1999. All Directors participated in all of the meetings of the
Board of Directors. The Board of Directors also acted by unanimous written
consent three times during such year.
Until October 1999, the members of the Audit Committee of the Board of
Directors were Messrs. London and McSherry. In October 1999, Mr. McSherry
resigned from the Audit Committee and was replaced by Mr. Adler. The Audit
Committee currently consists of Messrs. London and Adler. The Audit Committee is
responsible for considering management's recommendation of independent certified
public accountants for each fiscal year, recommending to the Board of Directors
the appointment or discharge of independent accountants and confirming the
independence of the accountants. It is also responsible for reviewing and
approving the scope of the planned audit, the results of the audit and the
accountants' compensation for performing such audit; reviewing the Company's
audited financial statements; and reviewing and approving the Company's internal
accounting controls and discussing such controls with the independent
accountants. The Audit Committee met three times during 1999. The Company has
neither a compensation committee nor a nominating committee. The Company's Board
of Directors carried out all deliberations concerning executive officer
compensation. No non-director officers or employees of the Company were involved
in these deliberations.
7
<PAGE> 11
Election of Directors of the Company requires a plurality of the votes
represented at the Meeting in person or by proxy. In the event that any of the
nominees should become unavailable for election for any reason not presently
known or contemplated, the persons named on the proxy will have discretionary
authority to vote pursuant to the proxy for a substitute.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE-NAMED NOMINEES.
8
<PAGE> 12
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation of
the named executive officers for the periods indicated. No other executive
officer of the Company received total annual salary and bonus greater than
$100,000 during the periods indicated. The base salaries of the named executive
officers have been set by reviewing compensation for competitive positions in
the market and the historical compensation levels of such executives.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS/PAYOUTS
-----------------------------------------------------------------------------------------------------------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND BONUS ($) COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPEN-
PRINCIPAL POSITION YEAR SALARY ($) ($) ($) SARS(#) ($) SATION
-----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dominic A. Polimeni 1999 $265,600 -- -- -- 26,265 -- --
Chairman and 1998 $182,800 -- -- -- 1,100,000 -- --
Chief Executive Officer 1997 $100,000 -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Robert V. Gubitosi 1999 $176,241 -- -- -- 26,265 -- --
President and 1998 $47,600 -- -- -- -- -- --
Chief Financial Officer 1997 $45,000 -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Douglas D. Zadow 1999 $218,000 $37,500 -- -- 24,621 -- --
Vice President and 1998 $198,000 -- -- -- 300,000 -- --
President of Questron 1997 $60,000 -- -- -- -- -- --
Distribution Logistics, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Phillip D. Schwiebert 1999 $106,000 $57,763 -- -- 9,000 -- --
Vice President and 1998 $106,000 $62,050 -- -- 333,333 -- --
Regional Vice 1997 $106,000 $63,578 -- -- 196,667 -- --
President of Questron
Distribution Logistics, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
Malcolm A. Tallmon 1999 $144,400 $20,000 -- -- 37,500 -- --
Vice President, Aerospace 1998 $72,200 $10,000 -- -- -- -- --
Business Development 1997 -- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
James W. Taylor 1999 $156,000 -- -- -- 10,500 -- --
Vice President and 1998 $156,000 -- -- -- 90,000 -- --
President of Integrated 1997 $91,000 -- -- -- 90,000 -- --
Material Systems, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 13
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth summary information concerning stock
options granted in respect of employment for the year ended December 31, 1999 to
the named executive officers.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS GRANTED TO
OPTIONS/ EMPLOYEES IN EXERCISE OR BASE EXPIRATION
NAME SARS GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10%($)
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
(a) (b) (c) (d) (e) (f) (g)
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dominic A. Polimeni 26,265 6.7% $3.56 11/19/09 $58,845 $149,125
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
Robert V. Gubitosi 26,265 6.7% $3.56 11/19/09 $58,845 $149,125
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
Douglas D. Zadow 24,621 6.3% $3.56 11/19/09 $55,162 $139,791
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
Phillip D. Schwiebert 9,000 2.3% $3.56 11/19/09 $20,164 $51,099
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
Malcolm A. Tallmon 37,500 9.5% $3.63 11/17/09 $85,490 $216,649
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
James W. Taylor 10,500 2.7% $3.56 11/19/09 $23,525 $59,616
---------------------------- ----------------- ------------------- ------------------ --------------- --------------- ------------
</TABLE>
10
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth summary information concerning the
exercise options during the year ended December 31, 1999 by each of the named
executive officers and the year-end value of their respective unexercised
options. None of the named executive officers exercised any stock options during
1999.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT FISCAL
FISCAL YEAR END YEAR END ($)
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
(a) (b) (c) (d) (e)
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
Dominic A. Polimeni -- -- 1,100,000/ $2,131,250/
26,265 $75,512
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
Robert V. Gubitosi -- -- -- / -- /
26,265 $75,512
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
Douglas D. Zadow -- -- 300,000/ $581,250/
24,621 $70,785
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
Phillip D. Schwiebert -- -- 550,000/ $735,208/
19,000 $30,250
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
Malcolm A. Tallmon -- -- 37,500/ $105,469/
-- --
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
James W. Taylor -- -- 126,000/ $190,125/
64,500 $53,813
----------------------------- --------------------- ----------------------- ---------------------- -------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
Dominic A. Polimeni, Chairman and Chief Executive Officer of the
Company, is a party to a five-year employment agreement with the Company
effective July 1, 1998. Under the terms of such employment agreement, the
Company has agreed to compensate Mr. Polimeni with a regular salary at the rate
of $250,000 per annum and incentive compensation of up to $100,000 per year
based upon the attainment of certain operating and earnings targets. Effective
March 29, 1999, options to purchase 1,100,000 shares of Common Stock of the
Company at an exercise price of $4.50 per share were awarded to Mr. Polimeni
pursuant to the terms of such employment agreement.
Mr. Polimeni is a 50% stockholder of Gulfstream Financial Group, Inc.
("Gulfstream") and shares voting and investment power with respect to the shares
of the Company's Common Stock owned by Gulfstream. Pursuant to a Management
Advisory and Consulting Agreement, dated as of November 29, 1994, between the
Company and Gulfstream, Gulfstream acted as an advisor and consultant to the
Company. Such advisory and consulting services were directed principally at the
expansion of the Company's business through the identification of potential
acquisition candidates. The agreement was terminated effective March 1, 1999,
11
<PAGE> 15
more than one year prior to its stated expiration, and options to purchase
1,160,500 shares of Common Stock at an average exercise price of $5.43 were
cancelled. Fees paid to Gulfstream in connection with the agreement and the
termination thereof amounted to $68,000 in 1999, $305,000 in 1998 and $105,000
in 1997. Pursuant to a shareholders' agreement, Mr. Polimeni has agreed to share
his beneficial ownership of the options received under his employment agreement
with the other 50% shareholder of Gulfstream.
Robert V. Gubitosi, President and Chief Financial Officer of the
Company, is a party to an employment agreement with the Company effective
October 1, 1999 through June 30, 2003. Under the terms of such employment
agreement, the Company has agreed to compensate Mr. Gubitosi with a regular
salary at the rate of $250,000 per annum and incentive compensation of up to
$100,000 per year based upon the attainment of certain operating and earnings
targets.
In connection with the acquisition of Calfast, the Company entered into
a five-year employment agreement with Douglas D. Zadow, a former shareholder and
President of Calfast, effective September 1, 1997. Under the terms of such
employment agreement, as amended, the Company has agreed to compensate Mr. Zadow
with a regular salary at the rate of $200,000 per year and incentive
compensation of up to $100,000 per year based on the attainment of certain
operating goals. Effective March 31, 1999, options to purchase 300,000 shares of
Common Stock of the Company at an exercise price of $4.50 per share were awarded
to Mr. Zadow pursuant to the terms of such employment agreement, as amended.
QDL entered into a four-year employment agreement with Phillip D.
Schwiebert, its Western Regional Vice President, effective April 1, 2000. Under
the terms of such employment agreement, QDL has agreed to compensate Mr.
Schwiebert with a regular salary at the rate of $106,000 per year, plus bonus
compensation based on the attainment of certain operating goals at the rate of
$15,000 per quarter. In addition, pursuant to an Exchange Agreement dated
November 8, 1996, on February 24, 1998, options to purchase 166,667 shares of
Common Stock of the Company at an exercise price of $7.75 per share and,
effective March 31, 1999, options to purchase 333,333 shares of Common Stock at
an exercise price of $4.50 per share, were awarded to Mr. Schwiebert.
In connection with the acquisition of Fortune Industries, the Company
entered into a five-year employment agreement with Malcolm A. Tallmon, the
former shareholder and President of Fortune Industries, effective June 30, 1998.
Under the terms of such employment agreement, the Company has agreed to
compensate Mr. Tallmon with a regular salary at the rate of $144,400 per year,
plus bonus compensation based on the attainment of certain operating goals at
the rate of $20,000 per year. Pursuant to the terms of such employment
agreement, as amended, to reflect a change in his role and responsibilities, the
Company has agreed to compensate Mr. Tallmon for the remaining term of the
agreement with a regular salary at the rate of $64,400 per year effective
January 1, 2000.
In connection with the acquisition of IMS, the Company entered into a
five-year employment agreement with James W. Taylor, the former shareholder and
President of IMS, effective June 1, 1997. Under the terms of such employment
agreement, the Company has agreed to compensate Mr. Taylor with a regular salary
at the rate of $144,000 per year, plus bonus compensation based on the
attainment of certain operating goals at the rate of $14,400 per year. Effective
March 31, 1999, options to purchase 90,000 shares of Common Stock of the Company
at an exercise price of $4.50 per share were awarded to Mr. Taylor pursuant to
the terms of such employment agreement.
12
<PAGE> 16
COMPENSATION OF DIRECTORS
Other than the 1994 Director Non-Qualified Stock Option Plan and the
1996 Stock Option Plan described below, the Company does not have a standard
policy regarding compensation of members of the Board of Directors. Other than
as reported below, the members of the Board of Directors did not receive
compensation for their services as such during the year ended December 31, 1999.
1994 DIRECTOR NON-QUALIFIED STOCK OPTION PLAN
The 1994 Director Non-qualified Stock Option Plan, as amended (the
"1994 Plan"), was approved by stockholders at the annual meeting held June 11,
1998. The 1994 Plan permits the Company to grant options to purchase an
aggregate of 150,000 shares of the Company's Common Stock to non-employee
Directors of the Company.
Currently, all non-employee Directors receive options to purchase 5,000
shares of the Company's Common Stock on the first Wednesday of February in each
calendar year at an exercise price equal to the fair market value per share of
the Common Stock on that date. Such options are exercisable immediately upon
being granted for a period of ten years from the date of grant unless terminated
earlier pursuant to the terms of the 1994 Plan. 72,000 options have been granted
to date under the 1994 Plan at exercise prices ranging from $3.88 per share to
$24.08 per share.
1996 STOCK OPTION PLAN
The 1996 Stock Option Plan, as amended (the "1996 Plan"), was approved
by stockholders at the annual meeting held October 28, 1999. Under the 1996
Plan, either Incentive Stock Options or Non-Qualified Stock Options may be
granted; however, the former may be granted only to officers, employees and
directors of the Company and its subsidiaries. The 1996 Plan permits the Company
to grant to officers, employees and directors of the Company and its
subsidiaries options to purchase shares of the Company's Common Stock equal to
the greater of 1,000,000 shares of Common Stock or 14% of the total number of
shares of Common Stock outstanding on December 31 of the immediately preceding
calendar year. As of December 31, 1999, an aggregate of 1,003,033 shares of the
Company's Common Stock were authorized for grant under the 1996 Plan.
473,251 options have been granted to date under the 1996 Plan. Options
granted were issued with an exercise price equal to the fair market value of the
Common Stock on the date of grant. The options have terms of ten years and
become exercisable either (i) in three equal nine-month installments, (ii) in
three equal annual installments or (iii) three years from the date of grant.
13
<PAGE> 17
THE FOLLOWING PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED
FILED UNDER SUCH ACTS.
PERFORMANCE COMPARISONS
The graph and chart set forth below compare the cumulative total
shareholder return of the Company's Common Stock for the five years ended
December 31, 1999 to (a) the Total Return Index for the Nasdaq Stock Market
(U.S. Companies)1/, and (b) the S&P SmallCap Performance 600. In all cases
shown, the graph and chart assume the investment of $100 on December 31, 1994
and the reinvestment of all dividends.
The Company has chosen the S&P SmallCap Performance 600 Index as an
index of issuers with similar market capitalizations because the Company does
not believe it can reasonably identify a peer group or select an appropriate
published industry or line-of-business index. Such industry or line-of-business
indices are comprised primarily of either retailers or manufacturers whose
business is not substantially similar to the Company's business.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN OF
NASDAQ STOCK MARKET (U.S. COMPANIES), S&P SMALLCAP PERFORMANCE 600
AND QUESTRON TECHNOLOGY, INC. [GRAPH OMITTED]
<TABLE>
<CAPTION>
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market (U.S. Companies)(1) 100 141.3 173.9 213.1 300.2 542.4
S&P SmallCap Performance 600 100 128.6 154.5 192.4 188.4 210.0
Questron Technology, Inc. 100 100 10.2 28.2 16.4 23.4
</TABLE>
-----------
(1) The index is issued by the University of Chicago Graduate School of
Business, Center for Research in Security Prices.
14
<PAGE> 18
RELATED PARTY TRANSACTIONS
Battle Fowler LLP, the law firm in which Mr. McSherry, a Director of
the Company, was a partner through February 2000, provided legal services to the
Company during the year ended December 31, 1999. Arent Fox Kintner Plotkin &
Kahn, PLLC, the law firm in which Mr. McSherry is now a member, presently
provides legal services to the Company and is expected to continue to provide
legal services to the Company in the future.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership of equity securities of the Company with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater-than-ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms that they file.
.........Based solely on a review of the copies of Forms 3, 4 and 5 and
amendments thereto furnished to the Company, or written representations from
certain reporting persons that such persons have filed on a timely basis all
reports required by Section 16(a), and without researching or making any inquiry
regarding delinquent Section 16(a) filings, the Company believes that, during
the fiscal year ended December 31, 1999, all such reports were filed on a timely
basis, except that each of Messrs. Polimeni, Gubitosi, Zadow, London, Adler and
McSherry failed to timely file a report of change in beneficial ownership on
Form 5 with respect to stock options granted in November 1999, which reports
have now been filed.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent
public accountants of the Company for the fiscal year ending December 31, 2000.
The Board of Directors is submitting the appointment of Ernst & Young LLP for
ratification at the Meeting. Ernst & Young LLP audited the Company's financial
statements for the fiscal years ended December 31, 1999 and 1998, and the Board
believes that this firm has demonstrated that it is well qualified to make an
independent examination of the accounts of the Company. If the appointment is
not approved, the Board will consider the appointment of other independent
auditors. Representatives of Ernst & Young LLP will be present at the Meeting
with the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
Although the Company is not required to submit the ratification of the
selection of its independent auditors to a vote of stockholders, the Board of
Directors believes that it is a sound policy to do so. Ratification of the
appointment of auditors requires the affirmative vote of a majority of the votes
represented at the Meeting in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOREGOING RATIFICATION.
15
<PAGE> 19
OTHER BUSINESS
It is not expected that any business other than that set forth in the
Notice of Annual Meeting of Stockholders will be brought before the Meeting.
However, if any other business should properly come before the Meeting, it is
the intention of the persons named on the enclosed proxy card to vote the signed
proxies received by them in accordance with their best judgment on such business
and any matters dealing with the conduct of the Meeting.
2001 STOCKHOLDER PROPOSALS
Proposals of stockholders which are intended to be presented by such
stockholders at the Company's meeting of stockholders to be held in 2001,
including the nomination of persons to serve on the Board, must be received by
the Company's Secretary not later than March 10, 2001, for inclusion in the
proxy statement for that annual meeting. It is recommended that stockholders
submitting proposals direct them to the Company's Secretary via certified mail,
return receipt requested, to ensure timely delivery. The Company's principal
executive office is 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. No
stockholder proposals were received with respect to the Meeting.
ANNUAL REPORT
The SEC rules require that an annual report precede or accompany proxy
material. Copies of the Company's Annual Report for the fiscal year ended
December 31, 1999 accompany this proxy statement. More than one annual report
need not be sent to the same address, if the recipient agrees. If more than one
annual report is being sent to your address, mailing of the duplicate copy to
the account you select will be discontinued upon your request. The Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as filed
with the SEC, is also available free of charge to all stockholders of record as
of the Record Date by writing to the Company at 6400 Congress Avenue, Suite
2000, Boca Raton, FL 33487, Attention: Corporate Secretary.
By Order of the Board of Directors
Ann Bastis
SECRETARY
Date: July 14, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE FILL IN,
SIGN AND DATE THE PROXY SUBMITTED HEREWITH AND RETURN IT IN THE ENCLOSED STAMPED
ENVELOPE. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH
PROXY IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE ANNUAL MEETING. THE
ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS.
16
<PAGE> 20
QUESTRON TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Robert V. Gubitosi and Dominic A. Polimeni
as Proxies, each with the full power of substitution, and hereby authorizes
each of them, to represent and vote, as designated on the reverse hereof, all
shares of Common Stock of Questron Technology, Inc. (the "Company") held of
record by the undersigned on July 12, 2000, at the Annual Meeting of
Stockholders to be held on August 16, 2000, or any adjournment thereof, upon
all such matters as may properly come before the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED "FOR"
THE ELECTION OF EACH OF THE NOMINATED DIRECTORS AND "FOR" THE RATIFICATION OF
THE APPOINTMENT OF AUDITORS. STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND
RETURN THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE
IF MAILED WITHIN THE UNITED STATES.
(THE PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE.)
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
QUESTRON TECHNOLOGY, INC.
AUGUST 16, 2000
Please Detach and Mail in the Envelope Provided
[X] Please mark your
vote as in this
example.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR all nominees WITHHOLD NOMINEES:
listed at right (except AUTHORITY Dominic A. Polimeni
as marked to the to vote for all nominees Robert V. Gubitosi
contrary below) listed at right Douglas D. Zadow
1. ELECTION Milton M. Adler
OF Frederick W. London
DIRECTORS [ ] [ ] William J. McSherry, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, write that name in the space provided below:
-------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
AND FOR APPROVAL OF PROPOSAL 2.
FOR AGAINST ABSTAIN
2. Ratification of appointment of Ernst & Young
LLP as the Company's independent public
accountants for the fiscal year ending [ ] [ ] [ ]
December 31, 2000.
3. In their discretion, the Proxies are authorized to vote upon such other matters as may properly
come before the meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED.
PLEASE MARK, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
SIGNATURE: ________________________________ DATE: _________ 2000 SIGNATURE: ________________________________ DATE: _________ 2000
(SIGNATURE IF HELD JOINTLY)
NOTE: Please sign exactly as name or names appear on stock certificate. Each joint owner must sign. When signing as an attorney,
executor, administrator or guardian, please give full title as such.
</TABLE>
