<PAGE>
SCHEDULE I
AMERIQUEST TECHNOLOGIES, INC.
3 IMPERIAL PROMENADE, STE. 300
SANTA ANA, CALIFORNIA 92707
INFORMATION STATEMENT PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about August 10, 1995, in
connection with the execution by AmeriQuest Technologies, Inc. ("AmeriQuest") of
a Purchase Agreement with Computer 2000 AG and its wholly-owned subsidiary
Computer 2000, Inc. (herein referred to collectively as "Computer 2000") dated
August 7, 1995 (the "Purchase Agreement") pursuant to which, among other things:
1. Computer 2000 will exchange an $18 million Promissory Note from
AmeriQuest 2000, Inc., a wholly-owned subsidiary of AmeriQuest, in
exchange for (i) 810,811 shares of AmeriQuest's Series A Preferred
Stock (convertible into 8,108,110 shares of AmeriQuest Common Stock
upon the authorization of the underlying Common Stock) and (ii)
warrants to purchase 657,289 shares of Series D Preferred Stock
(convertible into 6,572,890 shares of AmeriQuest Common Stock upon the
authorization of the underlying Common Stock) exercisable at $0.50 per
share of the Series D Preferred; and
2. In consideration of $31.25 million, Computer 2000 will purchase (i)
1,785,714 shares of AmeriQuest's Series B Preferred Stock (convertible
into 17,857,140 shares of AmeriQuest Common Stock upon the
authorization of the underlying Common Stock) and (ii) warrants to
purchase 746,186 shares of Series D Preferred Stock (convertible into
7,461,860 shares of AmeriQuest Common Stock upon the authorization of
the underlying Common Stock) exercisable at $.50 per share of Series D
Preferred Stock; and
3. In consideration for the debt conversion and additional investment,
Computer 2000 will also be granted additional pari passu rights with
----------
respect to other warrants and options issued by AmeriQuest, as well as
a warrant to purchase that number of shares equal to the total number
of shares of Common Stock issued and to be issued by AmeriQuest in
excess of 2,800,000 shares in the acquisition of Robec, Inc. at an
effective price of $0.05 per share; and
4. Computer 2000 will assume control of the Board of Directors (five of
nine directors, the Board being expanded to nine directors at that
time), control of the management of AmeriQuest (Chief Executive
Officer and Chief Operating Officer) and ownership of approximately
62% of AmeriQuest.
The transaction would normally require approval of shareholders according
to the Shareholder Approval Policy of the New York Stock Exchange (the
"Exchange"). The Audit Committee of the Board of Directors of AmeriQuest
determined that delays necessary in securing shareholder approval prior to the
proposed transaction would seriously jeopardize the financial viability of
AmeriQuest. AmeriQuest is financially distressed and in the opinion of the
Audit Committee, financial survival is heavily dependent upon effecting the
proposed transaction, with Computer 2000, at the earliest practicable date.
Because of that determination, the Audit Committee, pursuant to an exception
provided in the Exchange's shareholder approval policy for such a situation,
expressly approved AmeriQuest's omission to seek shareholder approval that would
otherwise have been required under that policy. The Exchange has accepted
AmeriQuest's application of the exception.
1
<PAGE>
This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended ("Exchange Act") and Rule 14f-1 thereunder.
You are urged to read this Schedule I carefully. YOU ARE NOT, HOWEVER, BEING
REQUESTED, NOR ARE YOU REQUIRED, TO TAKE ANY ACTION. The information contained
in this Information Statement concerning Computer 2000 and its five designees to
the Board of Directors (the "Computer 2000 Designees") has been furnished to
AmeriQuest by representatives of Computer 2000, and AmeriQuest assumes no
responsibility for the accuracy, completeness or fairness of any such
information.
INFORMATION REGARDING COMPUTER 2000 DESIGNEES
You are receiving this Information Statement in connection with the
anticipated appointment to AmeriQuest's Board of Directors of the Computer 2000
Designees upon the closing of the Purchase Agreement, scheduled to occur on or
about August 20, 1995. Three of the existing directors would resign at that
time and the Board of Directors would be expanded to nine members, with the
Computer 2000 Designees being appointed to AmeriQuest's Board of Directors, in
--
seriatum. It is contemplated that the three directors who will resign at that
- --------
time are Messrs. Terren Peizer, Eric J. Werner and William Silvis. Mr. Gregory
A. White resigned as a Director on August 5, 1995 (effective July 11, 1995).
AmeriQuest has been informed that the Computer 2000 Designees are as
follows:
1. Steve DeWindt (age 40) has served as one of four Co-Presidents of
Computer 2000 and head of Group Sales & Marketing for Computer 2000
since May, 1992. He is responsible for the geographic regions of
Northern Europe, North America and the Middle East. Prior to his
affiliation with Computer 2000 Mr. DeWindt served as Director of
worldwide sales for the reseller channel at Intel from May, 1984 to
April, 1992. Mr. DeWindt also served as Director of Business Affairs
and International Marketing for the Records and Music Publishing Group
of the Walt Disney Company from June, 1979 to March, 1983. Mr.
DeWindt holds an Masters in Business Administration from the
University of California at Los Angeles ("UCLA"). Mr. DeWindt will
become the Chairman of the Board and Chief Executive Officer of
AmeriQuest.
2. Mark Mulford (age 41) has served for the last nine years with
Frontline Distribution Ltd., Computer 2000's largest foreign
subsidiary, which conducts business in the United Kingdom, most
recently as Managing Director. Mr. Mulford holds a degree in Chemical
Pharmacology from Oxford University. Mr. Mulford will become the
President and Chief Operating Officer of AmeriQuest.
3. Klaus J. M. Laufen (age 52) has served as one of the Co-Presidents of
Computer 2000 for more than the last five years, with responsibility
for the areas of finance, group investments and investor relations.
4. Dr. Harry Krischik (age 44) has served as one of the Co-Presidents of
Computer 2000 for more than the last five years, with responsibility
for the areas of logistics, electronic data processing and human
resources. He also has regional responsibility for Southern Europe
and Latin America.
5. Holger Heims (age 32) has served with Computer 2000 since October,
1991, most recently as Director of Investments, Tax & Legal. From
May, 1989 to October, 1991 he was a partner in the firm of Heims Tax
Consultants. Mr. Heims has a Masters of Business Administration
degree from Munich University.
Computer 2000 currently owns 532,000 shares of AmeriQuest Common Stock
which it acquired in August, 1994 at $2.50 per share. AmeriQuest has been
advised that none of the Computer 2000 Nominees, nor any of Computer 2000's
directors, executive officers, affiliates or associates beneficially owns any
equity
2
<PAGE>
securities, or rights to acquire any equity securities, of AmeriQuest; and none
has been involved in any transactions with AmeriQuest or any of its directors,
executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the Securities & Exchange Commission
("SEC") except for Mr. Jochen Tschunke, Chairman of the Board of Computer 2000.
Mr. Tschunke paid $600,000 for (i) 250,000 shares of AmeriQuest Common Stock and
(ii) a warrant to acquire an additional 250,000 shares of AmeriQuest Common
Stock, initially exercisable at $3.50 per share and subsequently adjusted to
$2.22 per share. Mr. Tschunke's purchase was part of a private placement in
October, 1994 to a larger group of investors that provided funds necessary for
AmeriQuest to acquire Ross White Enterprises, Inc. d/b/a "National Computer
Distributors ("NCD"). Mr. Tschunke made his investment separately, and NOT as a
representative of Computer 2000. In the opinion of management, his investment
was no more favorable to Mr. Tschuke than that afforded other unaffiliated
investors as part of that same placement.
AmeriQuest has been advised that each of the Computer 2000 Designees has
consented to act as a director, and that none of such persons has, during the
last five years, been convicted in a criminal proceeding (excluding traffic
violations and similar misdeameanors) or was 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 activities subject to federal or
state securities laws or finding any violation of such laws.
The principal business address for the Computer 2000 Nominees is c/o
Computer 2000 AG, Wolfratshauser Strasse 84, 81379 Munich, Germany, telephone
no. 011/49/89/724 900.
INFORMATION REGARDING AMERIQUEST'S BOARD OF DIRECTORS
AND EXECUTIVE OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information regarding the current
directors and officers of AmeriQuest.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- --- ----------------------------------------------
<S> <C> <C>
Marc L. Werner* 38 Chairman of the Board of Directors
Eric J. Werner* 33 Director
Terren S. Peizer 36 Director
William N. Silvis 68 Director
William T. Walker, Jr. 63 Director
Harold L. Clark 59 Director, Co-Chairman and Chief Executive Officer
Stephen G. Holmes 49 Director, Secretary/Treasurer and Chief Financial Officer
Dennis Fairchild 45 Chief Accounting Officer
William F. Gibson III 40 Vice President and Comptroller
Robert H. Beckett** 61 President of Robec, Inc.
</TABLE>
- --------------
* Messrs. Marc L. Werner and Eric J. Werner are first cousins.
** Mr. Robert H. Beckett will be appointed to the Board at its meeting
following the completion of the acquisition of Robec, Inc. pursuant to the
Amended and Restated Agreement and Plan of Reorganization dated as of
August 11, 1994 (the "Robec Acquisition Agreement"), as amended.
AmeriQuest is also obligated under the Robec Acquisition Agreement to
nominate Mr. Beckett for reelection to the Board of Directors each of the
next two years.
3
<PAGE>
Marc L. Werner has been employed by Werner Co. since 1986, and currently
serves as Treasurer, Chief Financial Officer and Director for Werner Co. and
various companies affiliated with Werner Co. Mr. Werner is a Certified Public
Accountant, and holds a Bachelor of Science degree in Accounting from Northern
Illinois University.
Eric J. Werner has been employed by Werner Co. since 1988, and currently
serves as Secretary, General Counsel and Director for Werner Co. and various
companies affiliated with Werner Co. Mr. Werner holds a Bachelor of Science
degree in Industrial Engineering from Pennsylvania State University and a
Jurisprudence Doctorate degree from Boston University--School of Law.
Terren S. Peizer is an independent, full-time investor. For the last five
years he has been engaged in his investment activities first as President of
Financial Group Holdings, Inc. and subsequently as President of Beachwood
Financial Company, Inc. Mr. Peizer also serves as a Director of Urethane
Technologies, Inc.
William N. Silvis joined AmeriQuest's Board of Directors in December 1988.
He has served as General Manager, Commercial Products Division, of Research and
Development Laboratory, Inc. from 1987 to the present. From 1986 to 1987, Mr.
Silvis was self-employed as a management consultant for various companies,
including AmeriQuest. From 1984 to 1986, Mr. Silvis was Senior Vice President
of Sales and Marketing for Gateway Computer, a retail computer products chain.
Previously, he had been employed by IBM for 31 years in various sales and
management positions.
William T. Walker, Jr. has been the principal of Walker Associates, a
corporate financial consultant for investment banking, since 1985. From 1969
through 1985, he was employed by Bateman Eichler, Hill Richards, a Los Angeles
based investment banker, in various capacities, including serving on its Board
of Directors and Executive Committee, and as Executive Vice President, Manager
of Investment Banking and Chairman of the Underwriting Committee. Mr. Walker has
been a Member of the Board of Directors of the Securities Industry Association,
a Governor of the Pacific Coast Stock Exchange and has served on the American
Stock Exchange Advisory Committee. Mr. Walker also serves as a Director of Go-
Video, Inc. and Fortune Petroleum.
Harold L. Clark was named President and Chief Executive Officer of
AmeriQuest on December 3, 1993. He was appointed to serve as a Director on March
4, 1994. Prior to December 1993 he served as President and Chief Executive
Officer of CDS Distribution, Inc., a subsidiary of AmeriQuest, from April 1993
to December 1993. From February 1991 to December 1992, he served as President,
Chief Operating Officer and Director of Everex Systems, Inc. ("Everex"). From
1989 through 1991, he served as a computer industry consultant. From 1984 to
1989, he served as the President of Ingram Micro, Inc. Dr. Clark received a B.S.
Degree from Bryant College, an MBA from Pepperdine University, and has earned a
Doctor of Education Degree from Nova University.
Stephen G. Holmes joined AmeriQuest as its Chief Financial Officer,
Secretary and Treasurer in January 1992, after serving as a general partner and
a managing partner of Arthur Andersen & Co. from 1978 until 1992. Mr. Holmes was
appointed to serve as a Director on March 4, 1994. Mr. Holmes was educated at
the University of Colorado and the University of Rochester, from which he
received a B.S. degree, and is licensed to practice as a CPA in the State of
California and other states.
Dennis Fairchild joined AmeriQuest upon its acquisition of NCD in November,
1994. Mr. Fairchild has served as Chief Financial Officer of NCD since January,
1994. From March, 1990 to December, 1993, Mr. Fairchild was a partner in Coral
Springs Connections, the owner of Southwest Frozen Foods, and served as Chief
Financial Officer of Southwest Frozen Foods. Mr. Fairchild is a CPA and a CMA.
4
<PAGE>
William F. Gibson III joined AmeriQuest in June 1988, and since January,
1994 has been the Vice President and Comptroller of AmeriQuest. He is a
Certified Public Accountant and holds a Bachelor of Science degree from
University of California--Berkeley in Business Administration.
Robert H. Beckett has served as the President and Chief Executive Officer
of Robec, Inc. for more than the last five years. Mr. Beckett holds a Bachelor
of Science degree in Mechanical Engineering from Worcester Polytechnic
Institute.
BENEFICIAL OWNERSHIP OF AMERIQUEST AND
CHANGE OF CONTROL ARRANGEMENTS
OUTSTANDING SHARES
As of July 28, 1995 AmeriQuest had outstanding 24,303,572 shares of Common
Stock of $.01 par value, each share being entitled to one vote. Shareholders of
AmeriQuest do not have cumulative voting rights.
BENEFICIAL OWNERSHIP OF AMERIQUEST COMMON STOCK
The following table sets forth, as of July 28, 1995, information relating
to the beneficial ownership of AmeriQuest's Common Stock by (i) each person
known to AmeriQuest to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock of AmeriQuest, (ii) each director, (iii) each
of the executive officers for which executive compensation information is set
forth above, and (iv) all directors and executive officers as a group.
AmeriQuest knows of no agreements among its shareholders which relate to voting
or investment power over its Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership as of July 28, 1995
----------------------------------------
Number of Shares Percent of Class(10)
---------------- --------------------
Name and Address of Beneficial Owner
- ------------------------------------
<S> <C> <C>
DIRECTORS AND OFFICERS(9)(10)
- -----------------------------
Marc L. Werner 3,693,473(1) 14.29%
Eric J. Werner 3,619,473(1) 14.00%
Terren S. Peizer 1,296,000(2) 5.23%
William N. Silvis 15,000(3) *
William T. Walker, Jr. 35,000(4) *
Harold L. Clark 262,500(5) 1.08%
Stephen G. Holmes 81,667(6) *
All officers and directors as
a group (22 persons)(9) 5,865,556(7) 22.01%
</TABLE>
- -------------------------
* Denotes less than 1%
(1) The Board of Directors of Manufacturers Indemnity and Insurance Company of
America is vested with the voting and investment powers relating to the
shares of AmeriQuest's Common Stock held by Manufacturers Indemnity and
Insurance Company of America. Messrs. Marc L. Werner and Eric J. Werner are
also directors of Manufacturers Indemnity and Insurance Company of America,
and may accordingly be deemed to have shared voting and investment powers
over the 1,683,473 shares of AmeriQuest Common Stock held by Manufacturers
Indemnity and Insurance Company of America. In addition, Manufacturers
Indemnity
5
<PAGE>
and Insurance Company of America holds a four-year warrant to purchase
190,000 shares of Common Stock at $3.50 per share from May 14, 1995 to
November 14, 1998. The exercise price of the warrant was adjusted downward
to $2.22 per share because of the right of such purchasers to adjust the
warrant exercise price to the same price as other investors acquire shares
between November 14, 1994 and May 14, 1995. The conversion price to
Computer 2000 of its $18 million loan is deemed by AmeriQuest to constitute
such a "sale." In addition, Manufacturers Indemnity and Insurance Company
of America holds a three-year warrant to purchase 1,360,000 shares of
Common Stock at $1.05 per share thru June 30, 1998. Such shares are
reflected in the table under both Marc L. Werner's and Eric J. Werner's
names individually, but are not duplicated in the caption relating to "All
Officers and Directors as a Group."
(2) Mr. Terren S. Peizer is the sole shareholder of the corporate general
partner of Wendover Financial Company L.P., and may be deemed to have sole
voting and investment powers over the 596,000 shares of AmeriQuest Common
Stock held by Wendover Financial Company L.P. In addition, Wendover
Financial Company L.P. holds a four-year warrant to purchase 100,000 shares
of Common Stock at $3.50 per share from May 14, 1995 to November 14, 1998.
The exercise price of the warrant was adjusted downward to $2.22 per share
because of the right of such purchasers to adjust the warrant exercise
price to the same price as other investors acquire shares between November
14, 1994 and May 14, 1995. The conversion price to Computer 2000 of its
$18 million loan is deemed by AmeriQuest to constitute such a "sale." Mr.
Peizer personally holds a stock option that is currently exercisable to
acquire 400,000 shares of Common Stock at $4.50 per share through March 3,
1999. All such shares are included in the foregoing table.
(3) All of the shares reflected in the name of Mr. Silvis are issuable upon
exercise of currently exercisable options to purchase Common Stock at
$3.375 per share granted to Mr. Silvis on October 14, 1994.
(4) Of the shares reflected in the name of Mr. Walker, 20,000 shares are
issuable upon exercise of currently exercisable options to purchase Common
Stock at $1.50 per share granted to Walker Associates, of which Mr. Walker
is the President and Chairman. The shares subject to that option were
increased on December 3, 1993 from 10,000 shares to 20,000 shares, and were
afforded immediate vesting. The remaining 15,000 shares are issuable upon
exercise of currently exercisable options to purchase Common Stock at
$3.375 per share granted to Mr. Walker on October 14, 1994.
(5) Includes 200,000 shares issued to Mr. Clark on October 14, 1994 for which
Mr. Clark paid $2,000 in cash and tendered to AmeriQuest a one-year
Promissory Note in the amount of $498,000. The balance of the shares are
subject to currently exercisable stock options, exercisable at $1.75 per
share.
(6) Includes 50,000 shares issued to Mr. Holmes on October 14, 1994 for which
Mr. Holmes paid $500 in cash and tendered to AmeriQuest a one-year
Promissory Note in the amount of $124,500. The balance of the shares are
subject to currently exercisable stock options, exercisable at $1.75 per
share.
(7) Includes 958,767 shares subject to stock options and warrants currently
vested and issuable upon exercise of such options and warrants.
(8) The address for the executive officers and directors and proposed directors
is: 3 Imperial Promenade, Ste. 300, Santa Ana, California 92707.
(9) Each executive officer and director has sole voting and investment power
with respect to the shares listed, unless otherwise indicated.
(10) For purposes of determining the percentage of outstanding Common Stock held
by each person or group set forth in the table, the number of shares held
by a person or group is divided by the sum of the number of shares of
AmeriQuest's Common Stock outstanding on July 28, 1995 (24,303,572 shares)
plus the
6
<PAGE>
number of shares of Common Stock subject to outstanding stock options and
warrants exercisable currently or within 60 days of July 28, 1995 by such
person or group, in accordance with Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, as amended. Percentages of less than 1% are
represented by an asterisk.
EXECUTIVE COMPENSATION.
The following table provides information concerning the annual and long-
term compensation of the Chief Executive Officer of AmeriQuest and each of the
four other highest paid executive officers who served as such during fiscal year
1995 for services rendered to AmeriQuest and its subsidiaries in all capacities
during the fiscal years 1995, 1994 and 1993.
<TABLE>
<CAPTION>
Long-Term All Other
Annual Compensation/(1)/ Compensation Compensation
------------------------- -------------------- ------------
Name and Stock Option
Principal Position Year Salary Bonus Awards (shares)/(2)/
- ------------------ ------ ----------- -------- --------------------
<S> <C> <C> <C> <C> <C>
Harold L. Clark, 1995 $214,117 -0- 200,000 shs./(2)/ -0-
Chief Executive 1994 $134,861/(3)/ -0- 250,000 shs./(2)/ -0-
Officer 1993 $ 18,000/(3)/ -0- -0- -0-
Stephen G. Holmes, 1995 $155,769 -0- 50,000 shs./(2)/ -0-
Secretary/Treasurer 1994 $130,819 -0- 100,000 shs./(2)/ -0-
Chief Financial 1993 $100,000 -0- -0- -0-
Officer
Peter S.H. Grubstein, 1995 $162,500 -0- -0- -0-
Senior Vice President 1994 -0- -0- -0- -0-
1993 -0- -0- -0- -0-
Howard B. Crystal, 1995 $148,942 -0- 100,000 shs./(2)/ -0-
Senior Vice 1994 -0- -0- -0- -0-
President - 1993 -0- -0- -0- -0-
Operations
Irwin Bransky/(4)/ 1995 $271,631 -0- -0- -0-
Former President 1994 -0- -0- -0- -0-
and Chief 1993 -0- -0- -0- -0-
Executive
Officer of Kenfil Inc.
Carol L. Miltner/(5)/, 1995 $184,560/(5)/ -0- -0- -0-
Executive Vice 1994 $ 75,000 $28,125 100,000 shs./(3)(5)/ -0-
President - 1993 -0- -0- -0- -0-
Sales and Marketing
</TABLE>
_________________________________
(1) In fiscal years 1995, 1994 and 1993, no executive officer received
perquisites or other personal benefits, securities or property which
exceeded the lesser of $50,000 or 10% of such executive officer's salary
and bonus.
(2) Stock awards were made during fiscal 1995 to Messrs. Clark and Holmes at
$2.50 per share, with the par value being paid in cash and the balance
represented by non-interest bearing Promissory Notes in the amounts of
$498,000 and $124,500, respectively. Stock options awarded in fiscal 1995
and 1994 were non-qualified stock options exercisable at $3.15 and $2.00
per share, respectively, and are subject to the approval of shareholders.
7
<PAGE>
(3) Includes compensation received as a consultant in the applicable period in
the amounts of $59,861 and $18,000, respectively.
(4) Irwin Bransky left AmeriQuest in February, 1995.
(5) Carol Miltner left AmeriQuest in March, 1995. A consulting fee of $75,000
was paid at that time to The Consulting Group, which is wholly-owned by Ms.
Miltner, and the options subject to her Employment Agreement were deemed to
be fully vested, exercisable at $2.00 per share.
OPTION GRANTS
The following table provides, as to the Chief Executive Officer and each of
the five other highest paid executive officers who served as such during fiscal
year 1995, information concerning individual grants of stock options made during
fiscal year 1995.
<TABLE>
<CAPTION>
% of Total Potential Realizable Value
No. of Options at Assumed Annual Rates
Securities Granted to of Stock Price Appreciation
Underlying Employees Exercise for Option Term(4)(5)
Options in Fiscal Price Expiration -----------------------------
Name Granted Year 1995 (per share) Date 0% 5% 10%
---- ---------- ---------- ----------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Harold L. Clark/(1)/ -0- -0- -0- - $0 $0 $0
Stephen G. Holmes/(1)/ -0- -0- -0- - $0 $0 $0
Peter S.H. Grubstein -0- -0- -0- - $0 $0 $0
Howard B. Crystal 100,000/(2)/ 100% $3.15 7/14/2000 $0 $110,000 $240,000
Irwin Bransky -0- -0- -0- - $0 $0 $0
Carol L. Miltner/(3)/ -0- -0- -0- - $0 $0 $0
</TABLE>
- ---------------
(1) Stock awards were made during fiscal 1995 to Messrs. Clark and Holmes at
$2.50 per share, with the par value being paid in cash and the balance
represented by non-interest bearing Promissory Notes in the amounts of
$498,000 and $124,500, respectively. The Notes are due September 30, 1996.
(2) The options granted are non-qualified stock options which vest in 25%
increments every 14 months, with the first 25% scheduled to vest on
September 14, 1995. Mr. Crystal left AmeriQuest at the end of July, 1995,
and the severance arrangements are currently under negotiation.
(3) Carol Miltner left AmeriQuest in March, 1995. A consulting fee of $75,000
was paid at that time to The Consulting Group, which is wholly-owned by Ms.
Miltner, and the options subject to her Employment Agreement were deemed to
be fully vested, exercisable at $2.00 per share.
(4) The potential realizable values shown in these columns illustrate the
results of hypothetical annual rates of appreciation compounded annually
from the date of grant until the end of the option term, assuming an
initial investment equal to the aggregate exercise price shown for the
option grant. These amounts are reported net of the option exercise price
(which may be paid by delivery of already-owned shares of Common Stock),
but before any taxes associated with the exercise or subsequent sale of the
underlying shares.
(5) The dollar amounts in these columns are based on the hypothetical annual
rates of appreciation noted and are therefore not intended to forecast
possible future appreciation, if any, of the price of AmeriQuest's Common
Stock. Alternative formulas for determining potential realizable value
have not been utilized because AmeriQuest is not aware of any formula which
will determine with reasonable accuracy a present value based on future
unknown or volatile factors. There can be no assurance that the dollar
amounts reflected in these columns will be achieved. Actual gains, if any,
on stock option exercises are dependent on the future performance of the
Common Stock and overall market conditions, as well as the executive
officer's continued employment through the vesting period.
8
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides, as to the Chief Executive Officer of
AmeriQuest and each of the five other highest paid executive officers who served
as such during fiscal year 1995, information concerning unexercised stock
options at June 30, 1995. None of the executive officers exercised any stock
options during fiscal year 1995.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-the-Money Options at
at June 30, 1995 June 30, 1995/(1)/
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Harold L. Clark, 62,500 187,500 shs. $ 7,813 $23,438
Stephen G. Holmes 35,000 75,000 shs. $ 9,375 $ 9,375
Peter S.H. Grubstein -0- -0- -0- -0-
Howard B. Crystal -0- 100,000 shs. -0- -0-
Irwin Bransky -0- -0- -0- -0-
Carol L. Miltner 100,000 -0- $12,500 -0-
</TABLE>
- -----------------------------
(1) Based on the closing price of AmeriQuest's Common Stock on the New York
Stock Exchange on June 30, 1995.
(2) Carol Miltner left AmeriQuest in March, 1995. A consulting fee of $75,000
was paid at that time to The Consulting Group, which is wholly-owned by Ms.
Miltner, and the options subject to her Employment Agreement were deemed to
be fully vested, exercisable at $2.00 per share.
COMPENSATION OF OUTSIDE DIRECTORS
AmeriQuest pays Messrs. Walker and Silvis $2,500 per quarter. AmeriQuest
has and will continue to pay the expenses of its non-employee Directors in
attending Board meetings. All directors are also eligible to receive stock
and/or stock options as a form of compensation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 1993 AmeriQuest granted options to
each of Messrs. Walker and Silvis to purchase 5,000 shares of AmeriQuest's
Common Stock at $1.50 per share. Such options were originally due to vest over
a three-year period; however, on December 3, 1993 the Board resolved that such
options should immediately vest, and be increased to 20,000 shares each
exercisable at $1.875 per share. Mr. Silvis has exercised his option in full,
but Mr. Walker still holds his option. On October 14, 1994, the Board resolved
to grant Messrs. Walker and Silvis additional three-year options relating to
15,000 shares each, exercisable at $3.375 per share. The proposal to adjust the
stock options arrangements in favor of Messrs. Walker and Silvis and the grant
of new options was proposed by new directors without regard to any compensation
that might be paid to others pursuant to recommendation of the Compensation
Committee. Additionally, on July 28, 1995, the Board resolved to cancel the
options outstanding in favor of Messrs. Walker and Silvis in the respective
amounts of 35,000 and 15,000 shares, respectively, and granted to such
individuals fully-paid shares in such amounts in recognition of their long-
standing service to AmeriQuest.
On March 4, 1994, the independent members of the Board of Directors
authorized AmeriQuest to grant five-year, non-qualified stock options to Mr.
Terren S. Peizer and Manufacturers Indemnity and Insurance Company of America in
the amounts of 400,000 shares and 150,000 shares, respectively, as additional
incentive for Messrs. Terren S. Peizer and Marc L. Werner to assist AmeriQuest
with its avowed
9
<PAGE>
policy of growth by acquisition. The options vested when AmeriQuest's
operations attained a sales "run rate" of $300 Million per year. The exercise
price is $4.50 per share.
On October 14, 1994, Manufacturers Indemnity and Insurance Company of
America paid $456,000 for (i) 190,000 shares of AmeriQuest Common Stock and (ii)
a warrant to acquire an additional 190,000 shares of AmeriQuest Common Stock,
initially exercisable at $3.50 per share and subsequently adjusted to $2.22 per
share. Manufacturers Indemnity and Insurance Company of America's purchase was
part of a private placement in October, 1994 to a larger group of investors that
provided funds necessary for AmeriQuest to acquire NCD. Also, on October 14,
1994, Manufacturers Indemnity and Insurance Company of America acquired 200,000
shares of AmeriQuest Common Stock in consideration of a promise to pay $2.50 per
share.
On June 28, 1995, Manufacturers Indemnity and Insurance Company of America
paid $1,190,000 for (i) 680,000 shares of AmeriQuest Common Stock and (ii) a
warrant to acquire an additional 1,360,000 shares of AmeriQuest Common Stock,
exercisable at $1.05 per share. Manufacturers Indemnity and Insurance Company
of America's purchase was part of a private placement in June, 1995 to a larger
group of investors that provided funds necessary for AmeriQuest to meet working
capital requirements occasioned by AmeriQuest being under collateralized on its
obligation to IBM Credit Corporation.
Messrs. Marc L. Werner, Terren S. Peizer and William N. Silvis serve on the
Compensation Committee. While there are no "interlocks" between such
individuals and other companies with which they are affiliated or associated,
AmeriQuest granted options during fiscal 1994 to Mr. Terren S. Peizer and
Manufacturers Indemnity and Insurance Company of America, a company affiliated
with Mr. Werner, to secure the services of Messrs. Peizer and Werner in
connection with the projected efforts they were to expend in assisting
AmeriQuest in its acquisition of other companies.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the fiscal year ended June 30, 1993 AmeriQuest granted options to
each of Messrs. Walker and Silvis to purchase 5,000 shares of AmeriQuest's
Common Stock at $1.50 per share. Such options were originally due to vest over
a three-year period; however, on December 3, 1993 the Board resolved that such
options should immediately vest, and be increased to 20,000 shares each
exercisable at $1.875 per share. Mr. Silvis has exercised his option in full,
but Mr. Walker still holds his option. On October 14, 1994, the Board resolved
to grant Messrs. Walker and Silvis additional three-year options relating to
15,000 shares each, exercisable at $3.375 per share. The proposal to adjust the
stock options arrangements in favor of Messrs. Walker and Silvis and the grant
of new options was proposed by new directors without regard to any compensation
that might be paid to others pursuant to recommendation of the Compensation
Committee. Additionally, on July 28, 1995, the Board resolved to cancel the
options outstanding in favor of Messrs. Walker and Silvis in the respective
amounts of 35,000 and 15,000 shares, respectively, and granted to such
individuals fully-paid shares in such amounts in recognition of their long-
standing service to AmeriQuest.
On March 4, 1994, the independent members of the Board of Directors
authorized AmeriQuest to grant five-year, non-qualified stock options to Mr.
Terren S. Peizer and Manufacturers Indemnity and Insurance Company of America in
the amounts of 400,000 shares and 150,000 shares, respectively, as additional
incentive for Messrs. Terren S. Peizer and Marc L. Werner to assist AmeriQuest
with its avowed policy of growth by acquisition. The options vested when
AmeriQuest's operations attained a sales "run rate" of $300 Million per year.
The exercise price is $4.50 per share.
On October 14, 1994, Manufacturers Indemnity and Insurance Company of
America paid $456,000 for (i) 190,000 shares of AmeriQuest Common Stock and (ii)
a warrant to acquire an additional 190,000 shares of AmeriQuest Common Stock,
initially exercisable at $3.50 per share and subsequently adjusted to $2.22 per
share. Manufacturers Indemnity and Insurance Company of America's purchase was
part of a private
10
<PAGE>
placement in October, 1994 to a larger group of investors that provided funds
necessary for AmeriQuest to acquire NCD. Also, on October 14, 1994,
Manufacturers Indemnity and Insurance Company of America acquired 200,000 shares
of AmeriQuest Common Stock in consideration of a promise to pay $2.50 per share.
On June 28, 1995, Manufacturers Indemnity and Insurance Company of America
paid $1,190,000 for (i) 680,000 shares of AmeriQuest Common Stock and (ii) a
warrant to acquire an additional 1,360,000 shares of AmeriQuest Common Stock,
exercisable at $1.05 per share. Manufacturers Indemnity and Insurance Company
of America's purchase was part of a private placement in June, 1995 to a larger
group of investors that provided funds necessary for AmeriQuest to meet working
capital requirements occasioned by AmeriQuest being under collateralized on its
obligation to IBM Credit Corporation.
SEVERANCE ARRANGEMENTS WITH PRECEDING MANAGEMENT
On July 28, 1995, the Board of Directors resolved to accede to the demands
of Mr. Gregory A. White in connection with his severance of service from
AmeriQuest. The Separation Agreement between AmeriQuest and Mr. White provides
for (i) a lump-sum payment of $500,000 within three (3) business days following
the closing of the Purchase Agreement (together with normal salary until so
paid), (ii) to continue health insurance coverage for Mr. White and his
dependents for a period of two years through July 11, 1997, (iii) all options
are deemed vested and exercisable for a period of twenty-four months from the
effective date of the Separation Agreement, and (iv) AmeriQuest will allow Mr.
White to retain $155,000 he took as an interest-free loan, which shall be due
and payable as soon as the market price for AmeriQuest's Common Stock reaches
$3.50 for a 20-day (consecutive) period, provided there is then an effective
registration statement available which would allow Mr. White to sell the shares
underlying his options upon exercise thereof. AmeriQuest also forgave the
outstanding loan it made to Mr. White to assist him in relocating his family
from Florida to California, in the amount of $75,000.
__________________________________
On July 28, 1995, the Board of Directors, in recognition of indications
that Computer 2000 intended to replace Messrs. Clark and Holmes, resolved that
AmeriQuest should honor the terms of their severance pay concurrent with the
closing of the Purchase Agreement. The severance arrangements provide for the
following:
<TABLE>
<CAPTION>
Severance Pay Harold L. Clark Stephen G. Holmes
------------- --------------- -----------------
<S> <C> <C>
Cash:
Severance $170,000 $160,000 ($100,000 at closing/$60,000 on 1/1/96)
Vacation pay 20,000 11,539
Consulting
retainer 100,000 -0-
-------- --------
$290,000 $171,539
======== ========
Repriced
options: 250,000 shs. @ $1.00 100,000 shs. @ $1.00
</TABLE>
11
<PAGE>
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOLLOWING REPORT OF THE
COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH ON PAGE 13 SHALL NOT BE
DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY
REFERENCE THIS ANNUAL REPORT INTO ANY FILING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
EXCEPT TO THE EXTENT THAT THE REGISTRANT SPECIFICALLY INCORPORATES THIS
INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER
SUCH ACTS.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board performs four principal tasks: it
recommends to the full Board the compensation of AmeriQuest's Chief Executive
Officer, reviews and takes action on the recommendations of the Chief Executive
Officer as to the appropriate compensation of AmeriQuest's other officers,
approves the granting of any bonuses to officers and reviews other compensation
and personnel development matters generally.
In fulfilling these duties, it is the objective of the Compensation
Committee to have a policy that will enable AmeriQuest to attract, retain and
reward executive officers of outstanding ability.
AmeriQuest's compensation policy for executives is to pay competitively and
to be fair in the administration of pay. This is the same policy applicable to
all employees of AmeriQuest. Base salary levels for AmeriQuest's executive
officers are intended to be generally competitive with other comparable
companies, taking into account such factors as the level of responsibility
involved, the need for special expertise and the specific individual's
experience and prior performance at AmeriQuest.
Executive base salaries are reviewed by the Committee annually, with any
adjustments normally becoming effective on January 1. During this review the
Committee considers the performance of AmeriQuest during the prior year, the
individuals executive's contribution to that performance and changes in the role
and responsibility of the executive during that year.
Calendar year 1994 was a very difficult year for AmeriQuest, with a
substantial loss being reported for the fiscal year 1994. Likewise, AmeriQuest
has struggled to maintain market share to date in 1995, and continues to report
losses. These losses have been a combination of operating and restructuring
losses.
AmeriQuest also has Stock Option Plans which are administered by a separate
Stock Option Committee. AmeriQuest has never issued restricted stock or stock
appreciation rights to executive officers, and it does not have any long-term
incentive plans other than the Stock Option Plans.
Non-qualified stock options were granted during 1994 to the five highest
paid executive officers of AmeriQuest, as follows: Harold L. Clark, 250,000
shares; Carol L. Miltner, 100,000 shares; Stephen G. Holmes, 100,000 shares;
Mike Rusert, 100,000 shares and Peter Lytle, 40,000 shares. During 1995, non-
qualified options were granted to Howard B. Crystal, 100,000 shares; and options
were granted in connection with business operations acquired, including 610,000
shares to former NCD employees and 121,798 to employees of Robec, Inc.
AmeriQuest also allowed Messr. Clark and Holmes to purchase 200,000 and 50,000
shares, respectively for $2.50 per share for consideration consisting of the par
value paid in cash and Promissory Notes in the amounts of $298,000 and $124,500,
respectively, which are due September 30, 1996.
12
<PAGE>
On December 6, 1993, the Compensation Committee was appointed, consisting
of Messrs. Marc Werner, Terren Peizer and William Silvis. Accordingly, this
report has been signed by these directors.
COMPENSATION COMMITTEE
Marc L. Werner
Terren S. Peizer
William N. Silvis
August 7, 1995
PERFORMANCE GRAPH
Set forth below are line graphs which illustrate for the purpose of
comparison the percentage change in the cumulative stockholder return on
AmeriQuest's Common Stock from June 30, 1991 through June 30, 1995 with the
percentage change in the cumulative total return over the same period on (i) the
CRSP Index for the NASDAQ Stock Market - US Companies, and (ii) the CRSP Index
for the NASDAQ Stock Market - Computer Manufacturing Companies. This graph
assumes an initial investment of $100 on July 1, 1991 in each of AmeriQuest's
Common Stock, the CRSP Index for the NASDAQ Stock Market - US Companies and the
CRSP Index for the NASDAQ Stock Market - Computer Manufacturing Companies.
[PERFORMANCE GRAPH APPEARS HERE]
13
<PAGE>
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires AmeriQuest's
executive officers, directors and persons who own more than 10% of a registered
class of AmeriQuest's equity securities to file reports of ownership and changes
in ownership of AmeriQuest securities with the Securities and Exchange
Commission and the New York Stock Exchange. Based solely on its review of the
copies of such forms furnished to AmeriQuest and representations regarding
compliance with such filing requirements as were received from AmeriQuest's
executive officers, directors and greater than 10% shareholders, AmeriQuest
believes that all such Section 16(a) filing requirements were complied with
during fiscal 1994 and 1995.
14
