<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Ameriquest Technologies, 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
AMERIQUEST TECHNOLOGIES, INC.
6100 HOLLYWOOD BLVD., STE. 700
HOLLYWOOD, FLORIDA 33024
(954) 967-2397
---------------------
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 1, 1997
---------------------
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
(the "Meeting") of AmeriQuest Technologies, Inc. ("AmeriQuest"), to be held in
the Dolphin Room at the Holiday Inn located at 2905 Sheridan Street, Hollywood,
Florida 33020, on July 1, 1997, at 1:00 p.m., local time.
The matters expected to be acted upon at the Meeting are described in
detail in the following Notice of 1997 Annual Meeting of Stockholders and Proxy
Statement.
The Board of Directors has fixed the close of business on May 23, 1997 as
the record date for determination of stockholders entitled to notice of and to
vote at the Meeting or any postponements or adjournments thereof.
It is important that you use this opportunity to take part in the affairs
of AmeriQuest by voting on the business to come before this Meeting. WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR
SHARES MAY BE REPRESENTED AT THE MEETING. Returning the Proxy does not deprive
you of your right to attend the Meeting and to vote your shares in person.
We look forward to seeing you at the Meeting.
Sincerely yours,
/s/ Michael Dressen
MICHAEL DRESSEN,
President
Hollywood, Florida
June 12, 1997
<PAGE> 3
AMERIQUEST TECHNOLOGIES, INC.
---------------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 1, 1997
---------------------
To the Stockholders of AmeriQuest Technologies, Inc.:
Notice is hereby given that the 1997 Annual Meeting of Stockholders (the
"Meeting") of AmeriQuest Technologies, Inc. ("AmeriQuest") will be held in the
Dolphin Room at the Holiday Inn located at 2905 Sheridan Street, Hollywood,
Florida 33020, on July 1, 1997, at 1:00 p.m., local time, for the following
purposes:
1. To elect seven directors of AmeriQuest, each to serve until the
next Annual Meeting of Stockholders and until his successor has been
elected and qualified or until his earlier resignation or removal.
AmeriQuest's Board of Directors intends to present the following nominees
for election as directors:
<TABLE>
<S> <C>
Dr. Harry Krischik Michael Dressen
Manfred Guenzel Holger Heims
Marc L. Werner J. R. Dick Iverson
Robert H. Beckett
</TABLE>
2. To approve the right to convert, at the election of the holder
thereof, AmeriQuest's Series H Cumulative Convertible Preferred Stock into
shares of AmeriQuest Common Stock.
3. To ratify the selection of Arthur Andersen LLP as independent
accountants for AmeriQuest for fiscal year 1997.
4. To transact such other business as may properly come before the
Meeting or any postponements or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on May 23, 1997 are
entitled to notice of and to vote at the Meeting or any adjournments or
postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Holger Heims
HOLGER HEIMS,
Secretary
Hollywood, Florida
June 12, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO
THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
<PAGE> 4
PROXY STATEMENT
JUNE 12, 1997
AMERIQUEST TECHNOLOGIES, INC.
---------------------
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 1, 1997
---------------------
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of AmeriQuest Technologies, Inc., a Delaware corporation
("AmeriQuest"), for use at the 1997 Annual Meeting of Stockholders of AmeriQuest
(the "Meeting") to be held in the Dolphin Room at the Holiday Inn located at
2905 Sheridan Street, Hollywood, Florida 33020, on July 1, 1997, at 1:00 p.m.,
local time, and at any postponements or adjournments thereof. All proxies will
be voted in accordance with the instructions contained therein and, if no choice
is specified, the proxies will be voted in favor of the nominees and the
proposals set forth in the accompanying Notice of Meeting and this Proxy
Statement. This Proxy Statement and the accompanying form of proxy were first
mailed to stockholders on or about June 12, 1997. An Annual Report to
Stockholders for the fiscal year ended September 30, 1996 accompanies this Proxy
Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Only holders of record of AmeriQuest's Common Stock at the close of
business on May 23, 1997 (the "Record Date") will be entitled to vote at the
Meeting. On the Record Date, AmeriQuest had 66,881,906 shares of Common Stock
outstanding and entitled to vote. Holders of AmeriQuest's Common Stock are
entitled to one vote for each share held as of the Record Date. AmeriQuest also
has 300,000 shares of Series H Cumulative Convertible Preferred Stock (the
"Series H Preferred Stock") outstanding, which shares are entitled to vote with
the Common Stock on all matters (except with respect to Proposal No. 2) with
each share of Series H Preferred Stock being entitled to that number of votes
derived by dividing the original issuance price of the Series H Preferred Stock
($100.00 per share) by the Series H Conversion Price (currently $.715), a total
of approximately 41,958,042 votes.
Directors will be elected, as described in Proposal No. 1, by a plurality
of the votes of the shares of Common Stock and Series H Preferred Stock present
in person or represented by proxy at the Meeting. In each case where the
stockholder has appropriately specified how the Proxy is to be voted, it will be
voted in accordance with the specifications so made. Proposal No. 2 requires for
approval the affirmative vote of a majority of the Common Stock issued and
outstanding on the Record Date. Proposal No. 3 requires the affirmative vote of
a majority of the shares of Common Stock and Series H Preferred Stock present in
person or represented by proxy at the Meeting. All votes will be tabulated by
the inspector of elections appointed for the Meeting who will separately
tabulate, for each proposal, affirmative and negative votes, abstentions and
broker non-votes. Abstentions will be counted toward the tabulation of votes
cast on proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes will be counted toward a quorum but are not
counted for any purpose in determining whether a matter has been approved.
The expenses of soliciting proxies to be voted at the Meeting will be paid
by AmeriQuest. Following the original mailing of the proxies and other
soliciting materials, AmeriQuest and/or its agents may also solicit proxies by
mail, telephone, telegraph or in person. Following the original mailing of the
proxies and other soliciting materials, AmeriQuest will request that brokers,
custodians, nominees and other record holders of AmeriQuest's Common Stock
forward copies of the proxy and other soliciting materials to persons for whom
they hold shares of Common Stock and request authority for the exercise of
proxies. In such cases, AmeriQuest, upon the request of the record holders, will
reimburse such holders for their reasonable expenses.
<PAGE> 5
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to the Meeting or at the Meeting prior to the
vote pursuant to the proxy. A proxy may be revoked by (i) delivering to the
Secretary of AmeriQuest prior to the vote at the Meeting an instrument in
writing, bearing a date later than the proxy, stating that the proxy is revoked,
(ii) delivering to the Secretary of AmeriQuest prior to the vote at the Meeting
another duly executed proxy relating to the same shares, bearing a date later
than the proxy or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not, by itself, revoke a proxy). Please note,
however, that if a stockholder's shares are held of record by a broker, bank or
other nominee and that stockholder wishes to vote at the Meeting, the
stockholder must bring to the Meeting a letter from the broker, bank or other
nominee confirming that stockholder's beneficial ownership of the shares.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Voting Rights and Solicitation of Proxies................... 1
Revocability of Proxies..................................... 2
Proposal 1: Election of Directors........................... 3
Proposal 2: Approval of the right granted to convert
AmeriQuests's Series H Cumulative Convertible
Preferred Stock into shares of AmeriQuest Common
Stock........................................... 5
Proposal 3: Ratification of Selection of Independent
Accountants............................................... 9
Security Ownership of Certain Beneficial Owners and
Management................................................ 10
Executive Officers.......................................... 12
Executive Compensation...................................... 12
Employment Agreements....................................... 15
Compensation Committee Interlocks and Insider
Participation............................................. 16
Report of the Compensation Committee........................ 16
Performance Graph........................................... 18
Certain Relationships and Related Transactions.............. 19
Stockholder Proposals....................................... 22
Compliance under Section 16(a) of the Securities Exchange
Act of 1934............................................... 22
Other Business.............................................. 22
Available Information....................................... 22
Appendix I -- Certificate of Designations of the Series H
Cumulative Convertible Preferred Stock........ A-1
</TABLE>
2
<PAGE> 6
PROPOSAL 1
ELECTION OF DIRECTORS
At the Meeting, stockholders will elect directors to hold office until the
next Annual Meeting of Stockholders and until their respective successors have
been elected and qualified or until such directors' earlier resignation or
removal. The size of the Board is currently set at seven members. Accordingly,
seven persons will be nominated for election at the Meeting to be the directors
of AmeriQuest. In the election of directors, each holder of Common Stock is
entitled to one vote for each share of Common Stock held as of the Record Date
and each holder of Series H Preferred Stock is entitled to vote that number of
votes derived by dividing the original issuance price of the Series H Preferred
Stock ($100.00 per share) by the Series H Conversion Price (currently $.715).
Each share represented by the accompanying proxy will be voted for the election
of the seven nominees recommended by the Board unless the proxy is marked in
such a manner as to withhold authority so to vote. Shares may not be voted
cumulatively. If any nominee for any reason is unable to serve, or for good
cause will not serve, as a director, the proxies may be voted for such
substitute nominee as the proxy holder may determine. AmeriQuest is not aware of
any nominee who will be unable to or, for good cause, will not serve as a
director.
DIRECTORS/NOMINEES
The following table sets forth certain information regarding the persons
nominated to become directors of AmeriQuest.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Michael Dressen............................ 40 President and a Director
Holger Heims............................... 34 Executive Vice President, Chief Financial
Officer, Secretary and a Director
Harry Krischik............................. 46 Chairman of the Board of Directors
Manfred H. Guenzel......................... 46 Director
Robert H. Beckett.......................... 62 Director
Marc L. Werner............................. 39 Director
J.R. Dick Iverson.......................... 68 Director
</TABLE>
Michael Dressen (age 40) was appointed to serve as President of AmeriQuest
in August 1996. From May 1995 to June 1996 he served as a Member of the
Executive Board for Transtec, a value-added reseller with its principal offices
in Tuebingen, Germany. From October 1991 to April 1995 he served as Managing
Director of Computer 2000 SpA Italy (a subsidiary of Computer 2000 AG). He was
appointed to serve as a Director of AmeriQuest on September 12, 1996.
Holger Heims (age 34) has served as an officer of AmeriQuest since October
1995, most recently as Executive Vice President, Chief Financial Officer and
Secretary. From October 1991 until September 1995 he was employed by Computer
2000 AG, most recently as Director of Investments, Tax & Legal. Mr. Heims has a
Masters of Business Administration degree from Munich University.
Dr. Harry Krischik (age 46) has served as one of the Co-Presidents of
Computer 2000 AG for more than the last five years, with responsibility for the
areas of logistics, electronic data processing and human resources. He is now
responsible for worldwide sales and also has regional responsibility for
Southern Europe, North America and Latin America.
Manfred H. Guenzel (age 46) was appointed to serve as a Co-President and
Member of the Executive Board of Computer 2000 AG in January 1996. From August
1990 until January 1996, he served as Head of Corporate
Development/Acquisitions/Controlling (Energy, Chemistry, Aluminum Refractories,
Telecommunications) for VIAG AG, the ultimate parent of Computer 2000 AG.
Robert H. Beckett (age 62) served as the President and Chief Executive
Officer of Robec, Inc. from its inception in 1978 until its acquisition by
AmeriQuest in November 1995. He then served AmeriQuest as Vice
3
<PAGE> 7
President in charge of the Advanced Systems Group until his retirement in June
1996. Mr. Beckett holds a Bachelor of Science degree in Mechanical Engineering
from Worcester Polytechnic Institute.
Marc L. Werner (age 39) serves as President and Chief Executive Officer of
Cornucopias Capital Advisors. He was employed by Werner Co. and various
companies affiliated with Werner Co. from 1986 until April 30, 1997, most
recently as Chief Executive Officer and President and Director for Werner
Financial, Inc. Mr. Werner is a Certified Public Accountant, and holds a
Bachelor of Science degree in Accounting from Northern Illinois University.
J. R. Dick Iverson (age 68) is currently retired, except for his service on
the board of directors of AmeriQuest, Telegen Corporation and ComStream
Corporation, an indirect wholly-owned subsidiary of Spar Aerospace Limited. From
1986 to 1994 he served as Chief Executive Officer and President of the American
Electronics Association.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board met 12 times, including telephone conference meetings, and did
not act by written consent, during fiscal year 1996. No director attended fewer
than 75% of the aggregate of the total number of meetings of the Board (held
during the period for which he was a director) and the total number of meetings
held by all committees of the Board on which such director served (during the
period that such director served).
Standing committees of the Board include an Audit Committee and a
Compensation Committee. The Board does not have a nominating committee or a
committee performing similar functions.
Marc L. Werner and J.R. Dick Iverson are the current members of the Audit
Committee, which met four times during fiscal year 1996. The Audit Committee
meets with AmeriQuest's independent accountants to review the adequacy of
AmeriQuest's internal control systems and financial reporting procedures;
reviews the general scope of AmeriQuest's annual audit and the fees charged by
the independent accountants; reviews and monitors the performance of non-audit
services by AmeriQuest's auditors, reviews the fairness of any proposed
transaction between any officer, director or other affiliate of AmeriQuest and
AmeriQuest, and after such review, makes recommendations to the full Board; and
performs such further functions as may be required by any stock exchange or
over-the-counter market upon which AmeriQuest's Common Stock may be listed.
Dr. Harry Krischik and Marc L. Werner are the current members of the
Compensation Committee, which met four times during fiscal year 1996. Mr. D.
Stephen DeWindt also served as a member of the Compensation Committee until the
termination of his employment on September 30, 1996. 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.
COMPENSATION OF OUTSIDE DIRECTORS
AmeriQuest pays its outside Directors, Robert H. Beckett, Marc L. Werner
and J.R. Dick Iverson, $2,500 per calendar quarter plus expenses incurred to
attend Board meetings. All directors are also eligible to receive stock and/or
stock options as a form of compensation.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
THE ELECTION OF EACH OF THE NOMINATED DIRECTORS
4
<PAGE> 8
PROPOSAL 2
APPROVAL OF THE RIGHT
TO CONVERT AMERIQUEST'S SERIES H CUMULATIVE CONVERTIBLE PREFERRED
STOCK INTO SHARES OF AMERIQUEST COMMON STOCK.
On May 6, 1997 AmeriQuest issued and sold 300,000 shares of its Series H
Cumulative Convertible Preferred Stock (the "Series H Preferred Stock") to
Computer 2000 Inc. for $30,000,000 in cash. The proceeds from the sale were used
to partially pay down AmeriQuest's existing bank credit lines. Stockholders are
being asked to approve the right to convert, at the election of the holder
thereof, the Series H Preferred Stock into shares of AmeriQuest Common Stock.
REASONS FOR PROPOSAL
Rule 312.03 (C) of the New York Stock Exchange requires that whenever
securities convertible into common stock are to be issued in any transaction
other than a public offering for cash, the stockholders of the company must
approve such issuance if (i) the common stock into which the securities are
convertible has or will have upon issuance voting power equal to or in excess of
20% of the voting power outstanding immediately before the issuance of such
convertible securities, or (ii) the number of shares of common stock to be
issued is or will be equal to or in excess of 20% of the number of shares of
common stock outstanding before the issuance of the convertible securities. The
New York Stock Exchange consented to the immediate issuance of the Series H
Preferred Stock provided that such Series H Preferred Stock could not be
converted prior to stockholder approval of the right to convert the Series H
Preferred Stock to AmeriQuest Common Stock.
If the Series H Preferred Stock were to be converted immediately,
41,958,042 shares of Common Stock would be issuable upon such conversion and
would represent approximately 63% of the voting power and the number of shares
of Common Stock outstanding immediately before the conversion; and approximately
39% of the voting power and the number of shares outstanding immediately after
the conversion. Following such a conversion Computer 2000 Inc. would own an
aggregate of 72% of the then issued and outstanding shares (without giving
effect to the right of Computer 2000 Inc. to acquire other additional shares
pursuant to outstanding warrants and options which predate the issuance of the
Series H Preferred Stock.) For information regarding the number of warrants and
options held by Computer 2000 Inc. see Footnote 2 to the ownership table under
"Security Ownership of Certain Beneficial Owners and Management." Thus, pursuant
to any applicable test under the Rule, approval of the holders of the issued and
outstanding Common Stock of AmeriQuest is required to permit the conversion of
the Series H Preferred Stock into Common Stock of AmeriQuest.
$30 MILLION CAPITAL CONTRIBUTION BY COMPUTER 2000 INC.
In November 1996, Computer 2000 AG delivered a capital obligation letter to
AmeriQuest's Board of Directors confirming Computer 2000 AG's obligation to
provide AmeriQuest with additional financing in the amount of at least $30
million early in calendar year 1997. At the April 9, 1997 Board Meeting,
Computer 2000 AG's designees on the Board proposed that this obligation be
fulfilled in full by means of a $30 million investment in a new series of
convertible preferred stock. On April 23, 1997 the AmeriQuest Board approved the
issuance and sale of such convertible preferred stock, subject to the receipt of
a final fairness opinion in substantially the form of the draft presented to the
AmeriQuest Board prior to the April 23, 1997 meeting. The fairness opinion is
described in greater detail below.
THE SERIES H PREFERRED STOCK
L.H. Friend, Weinress, Frankson & Presson, Inc. ("L.H. Friend") delivered a
final written opinion to the Board of Directors on April 28, 1997 pursuant to
which it opined that the investment of the Series H Preferred Stock and the
price paid therefor by Computer 2000 Inc. are fair to AmeriQuest and its
stockholders, without opining as to the fairness to Computer 2000 Inc. and its
affiliates, from a financial point of view. (L.H. Friends' opinion relates only
to the financial aspects of the transaction, and does not address other
shareholder
5
<PAGE> 9
interests, such as voting rights.) Included within the terms considered by L.H.
Friend was the right to convert the Series H Preferred Stock into Common Stock.
On April 28, 1997, AmeriQuest and Computer 2000 Inc. entered into a
Preferred Stock Purchase Agreement pursuant to which AmeriQuest agreed to issue
and sell to Computer 2000 Inc. 300,000 shares of Series H Cumulative Convertible
Preferred Stock at a purchase price of $100.00 per share. The closing of the
transaction occurred on May 6, 1997.
General
The Board of Directors is empowered by AmeriQuest's Articles of
Incorporation ("Articles"), without further action by the holders of the Common
Stock, to designate the relative rights and preferences of AmeriQuest's
Preferred Stock, when and if issued. Such rights and preferences can, and
generally do, address such matters as liquidation, redemption and conversion
rights, voting rights, dividends and other preferences, any of which may be
dilutive to the interests of the holders of AmeriQuest's Common Stock.
AmeriQuest's authorized Preferred Stock consists of 5,000,000 shares, $0.01
par value; from which the Board has designated 300,000 shares as Series H
Cumulative Convertible Preferred Stock.
Series H Preferred Stock. The following description of the Series H
Preferred Stock is qualified in its entirety by reference to the "Certificate of
Designations of the Series H Cumulative Convertible Preferred Stock" attached to
this Proxy Statement as Appendix I (the "Certificate of Designations"). The
Series H Preferred Stock was authorized by the Board of Directors as a new
series of Preferred Stock. So long as any Series H Preferred Stock is
outstanding, AmeriQuest is prohibited from issuing any series of stock having
rights senior to or on parity with the Series H Preferred Stock without the
approval of the holders of 80% of the outstanding shares of Series H Preferred
Stock.
Dividends. The holders of the then outstanding Series H Preferred Stock
shall be entitled to receive cumulative dividends, out of any funds legally
available for the payment of such dividends, at the rate of $7.00 per share per
annum payable in quarterly installments of $1.75 each commencing on June 30,
1997; any such dividends payable through June 30, 1998 may be paid, in whole or
in part, by the issuance of additional shares of AmeriQuest Common Stock. As of
the date hereof AmeriQuest does not have any funds legally available for the
payment of dividends on the Series H Preferred Stock. The value of any shares so
issued as dividends would be determined with reference to the closing price of
AmeriQuest's Common Stock on the day the dividend accrues (whether or not
declared) as quoted by the New York Stock Exchange ("NYSE"); or if such shares
are not then trading on the NYSE with reference to the price of the last
reported bona fide trade in the market where it is then trading; or if not then
trading at all in any market, the value shall be determined by an investment
banking firm of national reputation that has not in the preceding twelve months
performed any investment banking services for AmeriQuest or any holder of the
Series H Preferred Stock. After June 30, 1998, all such dividends shall be
payable solely in cash. Such dividends shall accrue from the date of issuance of
the shares of Series H Preferred Stock and shall accrue from day-to-day, whether
or not earned or declared. Such dividends shall be cumulative so that if such
dividends in respect of any previous or current dividend period, at the annual
rate specified above, shall not have been paid or declared and a sum sufficient
for the payment thereof set apart, the deficiency shall first be fully paid
before any dividend or other distribution (other than those payable solely in
Common Stock) shall be paid on or declared and set apart for the Common Stock or
any other class or series of stock ranking junior to the Series H Preferred
Stock in right of payment of dividends. Any accumulation of dividends on the
Series H Preferred Stock shall not bear interest.
The Series H Preferred Stock will be senior as to dividends to any other
series or class of AmeriQuest's stock previously or hereafter issued, and if at
any time AmeriQuest has failed to pay or declare and set apart for payment
accrued and unpaid dividends on the Series H Preferred Stock, AmeriQuest may not
pay any other dividends. The Series H Preferred Stock is senior to the Common
Stock in the payment of dividends, and no dividend may be declared, paid or set
apart for payment on, and no purchase, redemption or other acquisition may be
made by AmeriQuest of, any Common Stock or other stock unless all accrued and
unpaid dividends of the Series H Preferred Stock have been paid or declared and
set apart for payment.
6
<PAGE> 10
Conversion Rights. Each share of Series H Preferred Stock shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, into that number of shares of
Common Stock derived by dividing the original issuance price of the Series H
Preferred Stock ($100.00) by the Conversion Price (currently $.715), which as of
the Record Date would result in the issuance of a total of 41,958,042 shares of
AmeriQuest Common Stock. In lieu of any fractional shares to which the holder
would otherwise be entitled, AmeriQuest shall pay cash equal to the fair market
value of such fractional shares as determined in good faith by the AmeriQuest
Board.
The Conversion Price of the Series H Preferred Stock, which is currently
$.715, is subject to adjustment upon the occurrence of certain stock splits,
stock combinations, stock dividends and other corporate actions that affect the
number of shares of AmeriQuest Common Stock outstanding. For example, if
AmeriQuest's Common Stock splits 2 for 1, the Conversion Price will be adjusted
proportionately to $.3575. If AmeriQuest's Common Stock reverse splits 1 for 2,
the Conversion Price will be adjusted proportionately to $1.43. The Conversion
Price is also subject to adjustment in the event of certain new issuances of
Common Stock at a price per share below the then-effective Conversion Price.
Redemption. The Series H Preferred Stock is not subject to redemption,
either at the option of AmeriQuest or the holders of the Series H Preferred
Stock.
Voting Rights. With the exception only of the approval by the holders of
Common Stock of the right of the holders of the Series H Preferred Stock to
convert the Series H Preferred Stock into shares of AmeriQuest's Common Stock,
as to which the holders of Series H Preferred Stock shall not vote, the holders
of Series H Preferred Stock and Common Stock shall vote together as a single
class; provided, however, that the holders of the Series H Preferred Stock will
vote as a class on any matter for which a class vote is required under Delaware
law.
Liquidation Rights. In the event of any Liquidation Event, either
voluntary or involuntary, the holders of shares of Series H Preferred Stock
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or surplus funds of AmeriQuest to the holders of Common Stock or
any other stock of AmeriQuest ranking on liquidation junior to the Series H
Preferred Stock, an amount equal to $100.00 per share, plus any accrued but
unpaid dividends payable on the Series H Preferred Stock, whether or not earned
or declared, to and including the date full payment shall be tendered to the
holders of the Series H Preferred Stock with respect to such liquidation,
dissolution or winding-up, and no more. All of the preferential amounts to be
paid to the holders of the Series H Preferred Stock shall be paid or set apart
for payment before the payment or setting apart for payment of any amount for,
or the distribution of any assets or surplus funds of AmeriQuest to, the holders
of the Common Stock or any other stock of AmeriQuest ranking on liquidation
junior to the Series H Preferred Stock in connection with such liquidation,
dissolution or winding-up. If the assets or surplus funds to be distributed to
the holders of the Series H Preferred Stock are insufficient to permit the
payment to such holders of their full preferential amount, the assets and
surplus funds legally available for distribution to such holders shall be
distributed ratably among the holders of the Series H Preferred Stock in
proportion to the full preferential amount each such holder would otherwise be
entitled to receive.
Only after the payment or setting apart of the full preferential amounts
required to be paid to the holders of Series H Preferred Stock would the holders
of Common Stock or any other stock of AmeriQuest ranking on liquidation junior
to the Series H Preferred Stock be entitled to receive remaining assets or
surplus funds, if any, of AmeriQuest.
A Liquidation Event includes any Reorganization Transaction (as defined
below), liquidation, dissolution or winding up of AmeriQuest. A Reorganization
Transaction includes any consolidation or merger of AmeriQuest with or into
another corporation, or other entity or person or any other corporate
reorganization, or the sale of all or substantially all of AmeriQuest's assets
to another person, or any transaction by AmeriQuest in which an excess of 50% of
AmeriQuest's voting power is transferred.
7
<PAGE> 11
Actions Adverse to Interests of Holders of Series H Preferred
Stock. AmeriQuest shall not, without first obtaining the affirmative vote or
written consent of not less than eighty percent (80%) of the issued and
outstanding shares of Series H Preferred Stock:
(a) Amend AmeriQuest's Certificate of Incorporation if such action
would adversely affect the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series H Preferred Stock;
or
(b) Engage in a Reorganization Transaction that would adversely affect
any of the rights, preferences or privileges of the Series H Preferred
Stock.
EFFECT OF PROPOSAL
Pursuant to the Company's Certificate of Incorporation, as amended, the
Board of Directors had the right to issue convertible shares without further
approval of AmeriQuest's stockholders, and this vote is thus necessitated by the
rules of the New York Stock Exchange (as reflected in the Certificate of
Designations).
If stockholders do not approve this Proposal, then the shares of Series H
Preferred Stock held by Computer 2000 Inc. would remain Series H Preferred Stock
with an attendant annual dividend equal to 7% per annum, provided that funds
were legally available for the payment of dividends, and in a position
preferential to the rights of the holders of the Common Stock. Additionally as
to all matters other than the approval of this proposal, the Series H Preferred
Stock votes on an "as-converted basis" with the holders of the Common Stock, and
failure to approve the right to convert would thus not deprive holders of Series
H Preferred Stock of any voting rights. Computer 2000 Inc. has informed
AmeriQuest that it does not presently intend to exercise its right to convert
any Series H Preferred Stock into Common Stock.
VOTE REQUIRED
Approval of the right to convert the Series H Preferred Stock into
AmeriQuest Common Stock requires the affirmative vote of a majority of the
voting power of the shares of AmeriQuest Common Stock present in person or by
proxy at the Meeting.
Computer 2000 Inc. has indicated that it will vote its current holdings of
AmeriQuest Common Stock in favor of approving the right to convert the Series H
Preferred Stock into shares of AmeriQuest Common Stock. On the Record Date,
Computer 2000 Inc. held 36,349,878 shares of AmeriQuest Common Stock,
representing approximately 54% of the total number of shares of AmeriQuest
Common Stock outstanding on the Record Date and entitled to vote on this
Proposal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THE APPROVAL OF THE RIGHT OF THE HOLDER(S) OF
THE SERIES H PREFERRED STOCK TO CONVERT
AMERIQUEST SERIES H PREFERRED STOCK INTO AMERIQUEST COMMON STOCK
8
<PAGE> 12
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
AmeriQuest has selected Arthur Andersen LLP as its independent accountants
to perform the audit of AmeriQuest's financial statements for fiscal year 1997,
and the stockholders are being asked to ratify such selection. Representatives
of Arthur Andersen LLP are expected to be present at the Meeting, will have the
opportunity to make a statement at the Meeting if they desire to do so and are
expected to be available to respond to appropriate questions.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT ACCOUNTANTS FOR AMERIQUEST FOR THE CURRENT FISCAL YEAR
9
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date (May 23, 1997),
information relating to the beneficial ownership of AmeriQuest's Common Stock
and Series H Preferred Stock by (i) each person known to AmeriQuest to be the
beneficial owner of more than five percent of any such class of AmeriQuest's
outstanding voting securities, (ii) each director and nominee, (iii) each of the
Named Executive Officers (as defined below in "Executive Compensation"), and
(iv) all directors and executive officers as a group. AmeriQuest knows of no
other agreement among its stockholders which relates to voting or investment
power over its securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------------ PERCENT OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON PREFERRED CLASS OF SECURITY(20)
------------------------------------ ---------- ---------------- ----------------------
<S> <C> <C> <C>
Computer 2000 Inc.(2)................... 36,350,408 54%
6100 Hollywood Blvd., Ste. 700 300,000 Series H 100%
Hollywood, Florida 33024
Computer 2000 AG(2)..................... 36,350,408 54%
Wolfratshauser Strasse 84 300,000 Series H 100%
81379 Munich, Germany
DIRECTORS AND OFFICERS(17)
Michael Dressen(3)...................... -0- *
Holger Heims(4)......................... -0- *
Harry Krischik(5)....................... 36,350,408 54%
300,000 Series H 100%
Manfred H. Guenzel(6)................... 36,350,408 54%
300,000 Series H 100%
Robert H. Beckett(7).................... 3,497,657 5%
Marc L. Werner(8)....................... 3,693,473 5%
J.R. Dick Iverson(9).................... 10,000 *
Alexander C. Kramer, Jr.(10)............ 26,881 *
John Tonnison(11)....................... -0- *
Kenneth V. Burke(12).................... 83,100 *
Dennis C. Fairchild(13)................. 32,131 *
D. Stephen DeWindt(14).................. 50,000 *
Robert S. Beckett(15)................... -0- *
John Faiman(16)......................... -0- *
All officers and directors as a group
(15 persons)(17)...................... 43,634,650(18)(19) 64%
300,000 Series H(5)(6) 100%
</TABLE>
- ---------------
* Denotes less than 1%
(1) Unless otherwise indicated below, the persons and entities named in the
table have sole voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.
(2) Includes shares owned directly by Computer 2000 Inc., a wholly-owned
subsidiary of Computer 2000 AG. The amount reflected in the table includes
530 shares subject to outstanding Achievement Warrants in favor of Computer
2000 Inc., which are currently exercisable. The warrants and option held by
C-2000 are as follows:
<TABLE>
<S> <C>
Acquisition Maintenance Warrants............................ 258,967
Achievement Warrants........................................ 7,035,280
Maintenance Option.......................................... 3,727,255
</TABLE>
10
<PAGE> 14
(3) Mr. Dressen became President of AmeriQuest on August 1, 1996, and was
appointed to serve as a Director on September 12, 1996.
(4) Mr. Heims is Executive Vice President, Chief Financial Officer, Secretary
and a Director of AmeriQuest.
(5) Represents the shares held of record by Computer 2000 Inc. (see footnote
(2) above). Mr. Krischik is a member of the Management Board of Computer
2000 AG, and therefore may be deemed to have shared voting power over the
shares of AmeriQuest held by Computer 2000 Inc. There are a total of five
Co-Presidents of Computer 2000, of which Mr. Krischik is one. In this
regard, it should also be noted that the parent companies of Computer 2000
AG, Kloeckner & Co. AG and VIAG Aktiengesellschaft, have been asserting a
significant degree of control over the affairs of Computer 2000 AG.
Additionally, it should be noted that Messrs. Michael Dressen and Holger
Heims are nominees of Computer 2000 AG. Mr. Krischik disclaims beneficial
ownership of all shares of AmeriQuest held by Computer 2000 Inc. Mr.
Krischik is the Chairman of the Board of Directors of AmeriQuest.
(6) Represents the shares held of record by Computer 2000, Inc. (see footnote
(2) above). Mr. Guenzel is a member of the Management Board of Computer
2000 AG, and therefore may be deemed to have shared voting power over the
shares of AmeriQuest held by Computer 2000 Inc. There are a total of five
Co-Presidents of Computer 2000, of which Mr. Guenzel is one. In this
regard, it should also be noted that the companies of Computer 2000 AG,
Kloeckner & Co. AG and VIAG Aktiengesellschaft, have been asserting a
significant degree of control over the affairs of Computer 2000 AG.
Additionally, it should be noted that Messrs. Michael Dressen and Holger
Heims are nominees of Computer 2000 AG. Mr. Guenzel disclaims beneficial
ownership of all shares of AmeriQuest held by Computer 2000 Inc. Mr.
Guenzel is a Director of AmeriQuest.
(7) Mr. Robert H. Beckett served as Senior Vice President -- Advanced Systems
Group from November 13, 1995 to the time of his severance from employment
in May 1996. Mr. Beckett still serves as a Director of AmeriQuest.
(8) Includes 80,000 shares of Common Stock held of record by Mr. Werner, of
which 20,000 shares are held by Mr. Werner as custodian for certain of his
children. The amount reflected in the table also includes 1,605,273 shares
of Common Stock and 1,700,000 shares of Common Stock subject to warrants,
each held of record by Manufacturers Indemnity and Insurance Company of
America. The warrants are currently exercisable. Mr. Werner is deemed to be
an "affiliate" of Manufacturers Indemnity and Insurance Company of America
until July 29, 1997 (90 days after he terminated his employment as the
President and a Director of Manufacturers Indemnity and Insurance Company
of America) although he may not now be deemed to have shared voting and
investment powers over the shares of AmeriQuest held by Manufacturers
Indemnity and Insurance Company of America. Mr. Werner disclaims beneficial
ownership of all shares of AmeriQuest held by Manufacturers Indemnity and
Insurance Company of America. Mr. Werner is a Director of AmeriQuest.
(9) Mr. Iverson commenced service as a Director of AmeriQuest on July 10, 1996.
(10) Includes 26,881 shares subject to stock options exercisable within 60 days
after the Record Date. Mr. Kramer serves as Vice President -- Advanced
Systems Group.
(11) Mr. Tonnison serves as Chief Operating Officer of AmeriQuest.
(12) Includes 37,500 shares subject to a 150,000 share stock option in favor of
Mr. Burke, which are exercisable within sixty days after the Record Date.
Mr. Burke serves as Vice President of AmeriQuest and General Manager of CMS
Enhancements, Inc., a wholly-owned subsidiary of AmeriQuest.
(13) Includes 10,000 shares subject to a 50,000 share stock option in favor of
Mr. Fairchild, which are exercisable within sixty days after the Record
Date. Mr. Fairchild last served as the Chief Financial Officer of
AmeriQuest from October 1996 until his severance from employment on January
7, 1997.
(14) Includes 50,000 shares of Common Stock subject to a Warrant currently
exercisable in full. Mr. DeWindt served as Chairman of the Board of
Directors and Chief Executive Officer of AmeriQuest from August 21, 1995
until the termination of his employment on September 30, 1996.
(15) Mr. Robert S. Beckett served as Vice President -- Components of AmeriQuest
from November 13, 1995 until his severance from service on September 30,
1996.
(16) Mr. Faiman served as Vice President -- U.S. Sales until the termination of
his employment on August 5, 1996.
11
<PAGE> 15
(17) The address for the executive officers and directors and proposed directors
is: 6100 Hollywood Blvd., Ste. 700, Hollywood, Florida 33024.
(18) Includes 1,824,911 shares subject to stock options and warrants currently
vested and issuable upon exercise of such options and warrants.
(19) The executive officers of AmeriQuest as of the Record Date were Michael
Dressen, Holger Heims, John Tonnison, Alexander C. Kramer, Jr. and Kenneth
V. Burke. The shares owned by all directors and executive officers as a
group include the shares referred to in footnotes (3) through (12) above.
(20) 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 number of shares of AmeriQuest's
Common Stock outstanding on the Record Date (66,881,906) plus the number of
shares of Common Stock subject to outstanding stock options and warrants
exercisable currently or within 60 days of the Record Date 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 OFFICERS
The following table sets forth certain information regarding the current
officers of AmeriQuest.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Michael Dressen................... 40 President and a Director
Holger Heims...................... 34 Executive Vice President, Chief Financial Officer,
Secretary
and a Director
John Tonnison..................... 28 Chief Operating Officer
Alexander C. Kramer, Jr........... 53 Vice President; General Manager of Advanced Systems Group
Kenneth V. Burke.................. 45 Vice President; General Manager of CMS Enhancements
</TABLE>
For information regarding the positions and offices with AmeriQuest held by
Messrs. Dressen and Heims, please refer to the discussion regarding nominees for
election as directors in "Directors/Nominees" under Proposal 1 above.
John Tonnison (age 28) served as Vice President -- Information Systems of
AmeriQuest from January 1996 until January 1997, at which time he was appointed
Chief Operating Officer of AmeriQuest. From October 1993 to December 1995 he
served as Computer 2000 AG's director for implementation of SAP software
systems. From October 1991 to September 1993 he served as a Director and as
Director of Information Systems for Frontline Distribution Ltd., Computer 2000
AG's wholly-owned subsidiary in the United Kingdom.
Alexander C. Kramer, Jr. (age 53) served as Vice President -- Operations of
Robec, Inc. for thirteen years prior to its acquisition in November 1995 by
AmeriQuest. Since November 1995 he has served in various capacities, most
recently as Vice President; General Manager of the Advanced Systems Group.
Kenneth V. Burke (age 45) served in various capacities while employed by
Mountain Computer, Inc. between 1981 to 1995, the last of which was as Executive
Vice President/General Manager of Summit, Inc., a subsidiary of Mountain
Computer, Inc. from 1991 to March 1995. Mr. Burke joined AmeriQuest in March,
1995, as Vice President; General Manager of CMS Enhancements.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
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 1996, and for two of the other highest paid executive officers who
terminated their employment with AmeriQuest prior to the end of fiscal year 1996
(collectively, the "Named Executive Officers") for services rendered to
AmeriQuest and its subsidiaries in all capacities during the fiscal years 1996,
1995 and 1994. This information includes the dollar values of base salaries and
bonus awards, and
12
<PAGE> 16
certain other compensation, if any, whether paid or deferred. AmeriQuest does
not provide long-term compensation benefits other than stock options.
The only Named Executive Officers named in the table below who are still
employees of AmeriQuest are Kenneth V. Burke and Alexander C. Kramer, Jr. For
more information regarding the termination of employment of those Named
Executive Officers no longer employed by AmeriQuest, please see "Certain
Relationships and Related Transactions -- Severance Arrangements with Prior
Members of Management" below. This table does not present the compensation of
the current executive officers of AmeriQuest, who are identified under the
caption "Executive Officers" above, because this table solely discloses
information regarding compensation during fiscal years 1996, 1995 and 1994, the
last three completed fiscal years. The compensation of the current executive
officers of AmeriQuest will be disclosed, as may be required, in AmeriQuest's
proxy statement for the next annual meeting of stockholders.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION(1) STOCK OPTION
-------------------------- AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (SHARES) COMPENSATION
- --------------------------- ---- -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
D. Stephen DeWindt........................ 1996 $210,000 -0- -0- $110,000(3)
Chief Executive Officer 1995 -0- -0- -0- -0-
1994 -0- -0- -0- -0-
Robert S. Beckett......................... 1996 $159,808(2) $19,974 -0- $110,000(3)
Vice President -- Components 1995 150,000 -0- -0- -0-
1994 119,769 -0- -0-
Kenneth V. Burke.......................... 1996 $170,000 $60,000 -0- -0-
Vice President of AmeriQuest 1995 92,772 18,750 -0- -0-
and General Manager of CMS 1994 -0- -0- -0- -0-
Enhancements, Inc., a wholly-owned
subsidiary of AmeriQuest
Alexander C. Kramer Jr.................... 1996 $150,000 $19,974 -0- -0-
Vice President -- Advanced 1995 150,000 -0- -0- -0-
Systems Group 1994 115,000 -0- -0- -0-
Dennis C. Fairchild....................... 1996 $145,000 $28,000 50,000 $ 50,000(4)
Chief Financial Officer 1995 122,227 40,000 -0- -0-
1994 71,154 -0- -0- -0-
Robert H. Beckett......................... 1996 $129,831(2) $26,326 -0- $196,000(5)
Vice President -- Advanced 1995 196,000 -0- -0- -0-
Systems Group 1994 127,500 -0- -0- -0-
John Faiman............................... 1996 $151,330(2) $19,974 50,000 $ 75,000(6)
Vice President -- U.S. Sales 1995 154,124 -0- -0- -0-
1994 153,124 -0- -0- -0-
</TABLE>
- ---------------
(1) In fiscal years 1996, 1995 and 1994, 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) Salary compensation includes amounts paid for vacation time not taken by the
employees.
(3) Messrs. D. Stephen DeWindt and Robert S. Beckett terminated their employment
on September 30, 1996, and the amounts set forth under the column entitled
"All Other Compensation" represents severance payments to which they were
entitled under their respective employment agreements.
(4) Represents amounts advanced during the fiscal year in contemplation that the
same would be forgiven in fiscal 1997 as a bonus for the employee's
cooperation to move to Florida following the end of the 1996 fiscal year.
13
<PAGE> 17
(5) Mr. Robert H. Beckett terminated his employment on May 17, 1996, and the
amount set forth under the column entitled "All Other Compensation"
represents a severance payment to which he was entitled under his employment
agreement.
(6) Mr. John Faiman terminated his employment on August 5, 1996, and the amount
set forth under the column entitled "All Other Compensation" represents a
severance payment to which he was entitled under his employment agreement.
OPTION GRANTS
The following table provides, information concerning individual grants of
stock options made during fiscal year 1996 to each of the Named Executive
Officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL RATES
OF STOCK PRICE
NO. OF % OF APPRECIATION
SECURITIES TOTAL OPTIONS FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(2)(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------
NAME GRANTED FISCAL YEAR 1996 (PER SHARE) DATE 0% 5% 10%
- ---- ---------- ---------------- -------------- ---------- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
D. Stephen DeWindt................ -0- -0- -0- -- $0 $0 $0
Robert S. Beckett................. -0- -0- -0- -- 0 0 0
Kenneth V. Burke.................. -0- -0- -0- -- 0 0 0
Alexander C. Kramer............... -0- -0- -0- -- 0 0 0
Dennis C. Fairchild............... 50,000 11% $2.00 7/20/01 0 0 0
Robert H. Beckett................. -0- -0- -0- -- 0 0 0
John Faiman....................... 50,000 11 2.00 7/20/01 0 0 0
</TABLE>
- ---------------
(1) Options granted to employees during fiscal 1996 totalled 450,000 shares
exercisable at $2.00 per share, the closing price of AmeriQuest Common Stock
on July 20, 1995. The grants made were primarily to honor promises of prior
managers to the employees involved.
(2) 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.
(3) 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.
14
<PAGE> 18
OPTION EXERCISES AND FISCAL YEAR END VALUES
The following table provides, as to the Named Executive Officers,
information concerning unexercised stock options at September 30, 1996. None of
the executive officers exercised any stock options during fiscal year 1996.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISABLE
NUMBER OF UNEXERCISABLE IN-THE-MONEY OPTIONS AT
OPTIONS AT SEPTEMBER 30, 1996 SEPTEMBER 30, 1996(1)
------------------------------ ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C>
D. Stephen DeWindt......................... -0- -0- -0- -0-
Robert S. Beckett(2)....................... 10,753 -0- $2,518 -0-
Kenneth V. Burke........................... 37,500 112,500 -0- -0-
Alexander C. Kramer, Jr.(3) 26,882 26,882 1,799 $1,799
Dennis C. Fairchild(4)..................... 10,000 40,000 -0- -0-
Robert H. Beckett.......................... -0- -0- -0- -0-
John Faiman(5)............................. 50,000 -0- -0- -0-
</TABLE>
- ---------------
(1) Based on the closing price of AmeriQuest's Common Stock on the New York
Stock Exchange on September 30, 1996.
(2) The Severance Agreement with Robert S. Beckett as of September 30, 1996
acknowledged 10,753 shares as having vested at that time with respect to an
option granted on June 7, 1994.
(3) Represents 10,753 shares as having vested with respect to an option granted
on June 7, 1994 and 26,882 shares as having vested under an option granted
March 22, 1993.
(4) Represents shares vested under a 50,000 share option granted on July 22,
1995.
(5) Represents shares vested under a Severance Agreement dated August 5, 1996.
EMPLOYMENT AGREEMENTS
AmeriQuest and Alexander C. Kramer, Jr. entered into an Employment
Agreement dated September 21, 1994, upon the acquisition of a majority of the
issued and outstanding shares of Robec, Inc., and it was amended on November 13,
1995 upon the final acquisition of Robec, Inc. The Employment Agreement, as
amended, provides for a term of two years, expiring November 13, 1997, and a
salary of $150,000 per year. Should AmeriQuest terminate Mr. Kramer prior to the
expiration of the term "without cause," Mr. Kramer would be entitled to
severance pay equal to one year's salary.
AmeriQuest and Kenneth V. Burke entered into an Employment Agreement dated
April 1, 1995, upon his being hired to serve as General Manager of CMS
Enhancements, Inc., a wholly-owned subsidiary of AmeriQuest. The Employment
Agreement provides for a term of two years, which expired on April 1, 1997. The
salary provided for in the Employment Agreement was for $170,000 per year, with
the possibility of a performance bonus up to $100,000 per year. It also provided
for a stock option of 150,000 shares to vest in 25% increments every 14 months
exercisable at $2.00 per share. Should AmeriQuest have terminated Mr. Burke
prior to the expiration of the term "without cause," Mr. Burke would have been
entitled to severance pay equal to six month's salary to be paid monthly
following such termination.
AmeriQuest and Dennis C. Fairchild entered into an Employment Agreement
dated April 1, 1995. The Employment Agreement provided for a term of two years,
expiring April 1, 1997, and a salary of $140,000 per year, with the possibility
of a performance bonus up to $60,000 per year. It also provided for a stock
option of 50,000 shares to vest in 25% increments every 14 months exercisable at
$2.00 per share. It also provided that should AmeriQuest terminate Mr. Fairchild
prior to the expiration of the term "without cause," Mr. Fairchild would be
entitled to severance pay equal to six month's salary, to be paid monthly
following such termination. Mr. Fairchild's employment with AmeriQuest was
terminated "without cause" on January 7, 1997, at which time he received, as a
lump sum, the six months' salary as severance pay together with his accrued
bonus, accrued and unused vacation, and amounts necessary to relocate Mr.
Fairchild back to California, as he had relocated to Florida from California in
October 1996 solely at the request of AmeriQuest.
15
<PAGE> 19
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
During fiscal 1996 the Compensation Committee consisted of D. Stephen
DeWindt, Dr. Harry Krischik and Marc L. Werner.
During the same period that Marc L. Werner was a member of the Compensation
Committee, Mr. Werner was also President and a Director of Manufacturers
Indemnity and Insurance Company of America ("MIICA"), a stockholder of
AmeriQuest. Mr. Werner terminated his relationship with MIICA on April 30, 1997,
but is still deemed to be an "affiliate" of MIICA until July 29, 1997 (90 days
from the date of severance of his employment relationship with MIICA).
In October 1994, AmeriQuest sold to MIICA 200,000 shares of Common Stock at
$2.50 per share. The purchase price at which AmeriQuest sold these shares was
$0.10 per share greater than the purchase price at which AmeriQuest offered and
sold shares in a separate private placement completed in October 1994. MIICA
paid-in $2,000 cash (equal to the par value for the shares) and remained
obligated to pay the balance of $498,000. This payment obligation was unsecured,
and did not bear interest. This payment obligation was originally due in October
1995, but in July 1995, AmeriQuest extended the due date until September 1996.
On March 29, 1996, the Board of Directors resolved to forgive this indebtedness
in consideration of the efforts expended by Marc L. Werner on behalf of
AmeriQuest above and beyond his role as a Director. At the time of the purchase
in October 1994, Marc L. Werner and his cousin Eric J. Werner were Directors of
both MIICA and AmeriQuest, and Marc L. Werner was a member of the Compensation
Committee.
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
individual executive's contribution to that performance and changes in the role
and responsibility of the executive during that year.
Calendar year 1996 was a very difficult year for AmeriQuest, with a
substantial loss being reported for the fiscal year 1996. Likewise, AmeriQuest
struggled to maintain market share, but continued to report losses which have
given rise to dramatic restructuring measures. The losses were a combination of
operating and restructuring losses.
AmeriQuest also has Stock Option Plans which are administered by the Board
of Directors. 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. Options granted to employees during fiscal
1996 totalled 450,000 shares exercisable at $2.00 per share, the closing price
of AmeriQuest Common Stock on July 20, 1995. The grants made were primarily to
honor promises of prior managers to the employees involved. Mr. Dressen was
granted a stock option covering 100,000 shares exercisable at $.625 in
connection with the
16
<PAGE> 20
commencement of his employment by AmeriQuest which was equal to the closing
price of AmeriQuest Common Stock on that date.
COMPENSATION COMMITTEE
Dr. Harry Krischik
Marc L. Werner
17
<PAGE> 21
PERFORMANCE GRAPH
The stock price performance graph below is required by the SEC and shall
not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act or under the Exchange Act, except to the extent that AmeriQuest
specifically incorporates this information by reference, and shall not otherwise
be deemed soliciting material or filed under such Acts.
The graph below compares the percentage change in the cumulative
stockholder return on AmeriQuest Common Stock from September 30, 1992 through
September 30, 1996 with the percentage change in the cumulative total return
over the same period on (i) an Index of Computer Distribution and Manufacturing
Companies, which includes Merisel, TechData, Software Spectrum, MicroAge,
Intelligent Electronics, Inacom, Western Digital, Seagate, Dell and Compaq (the
"CDMC Index"), and (ii) the Index for the NASDAQ Stock Market -- U.S. Companies.
This graph assumes an initial investment of $100 on October l, 1992 in each of
AmeriQuest Common Stock, the CDMC Index and the NASDAQ Stock Market -- U.S.
Companies.
<TABLE>
<CAPTION>
Measurement Period NASDAQ
(Fiscal Year Covered) AQS Index CDMC Index
<S> <C> <C> <C>
9/30/92 100 100 100
9/30/93 128 131 140
9/30/94 144 131 149
9/30/95 61 179 202
9/30/96 31 210 315
</TABLE>
Note: The CDMC Index replaces previously used and discontinued CRSP Index.
18
<PAGE> 22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In December 1995, Computer 2000 AG issued guarantees to certain lenders to
secure up to $66 million of lines of credit such lenders might extend to
AmeriQuest. In November 1996 Computer 2000 AG increased the $66 million of
credit lines to $76 million. The total amount guaranteed as of December 12, 1996
was approximately $76 million. As of September 30, 1996, AmeriQuest had borrowed
approximately $65.1 million from such lenders under such lines of credit. These
borrowings were used in part to reduce AmeriQuest's interest-bearing
indebtedness under its previously outstanding lines of credit from approximately
$52 million to zero, resulting in a reduction, as of September 30, 1996, in the
average interest rate on AmeriQuest's total outstanding indebtedness from
approximately 11.0% per annum to approximately 6.4% per annum. In return for the
guarantees, AmeriQuest agreed to pay Computer 2000 AG one-half of one percent
(0.5%) per annum of the amounts guaranteed, on a weighted average basis, and
provided Computer 2000 AG with a security interest in all of AmeriQuest's
assets, and agreed to seek refinancing of its outstanding debt as soon as
reasonably practicable. Computer 2000 AG's guarantees expire on September 30,
1997, and the lines of credit guaranteed by Computer 2000 AG mature on June 30,
1997. In the opinion of management this financing was at least as favorable to
AmeriQuest as could have been obtained from unaffiliated third party lenders.
On April 9, 1997, the Board unanimously approved a wide-ranging
restructuring plan encompassing head-count reductions and facility closures over
the next several months with the goal of focusing on and strengthening the
activities of AmeriQuest's Advanced Systems Group ("ASG"), which has the highest
gross margins of AmeriQuest's distribution businesses. AmeriQuest has announced
that projected losses for the year ending September 30, 1997 could be in the
range of approximately $45,000,000, partly as the result of estimated charges in
the amount of $25,000,000 related to the planned restructuring and $2,000,000 of
restructuring costs and provisions earlier included in operating results
predating the Board's authorization of the restructuring in April 1997.
The restructuring measures are necessitated by the fact that revenues for
the quarter ended March 31, 1997 were substantially below expectations,
primarily due to the inability of AmeriQuest to compete effectively in the
standard distribution of computer products. Management also continues the
investigation of other possible dispositions of assets of AmeriQuest. The
restructuring plan will be implemented through fiscal year 1997 and will result
in a substantial reduction in sales revenue with the goal of returning
AmeriQuest to profitability in future years.
It is important to note that to date ASG has been profitable only on an
operating basis prior to corporate overhead allocations. Management estimates
that a 25%-40% increase in sales would be required in order for ASG to achieve a
break-even level of operations on a stand-alone basis. No assurance can be given
that such a sales increase will occur or that ASG will be profitable on a
stand-alone basis.
On May 6, 1997, as more fully described in Proposal 2 above, AmeriQuest
issued and sold to Computer 2000 Inc. 300,000 shares of its Series H Cumulative
Convertible Preferred Stock (convertible into 41,958,042 shares of AmeriQuest
Common Stock) for a purchase price of $30 million. The proceeds of the sale were
used to partially pay down AmeriQuest's existing bank credit lines. All of the
Company's bank lines of credit are guaranteed by Computer 2000 AG. For
information regarding the fairness of the arrangements, see Proposal 2 above.
Computer 2000 AG has committed to provide and/or secure, directly or
indirectly, interim financing for AmeriQuest until September 30, 1997, up to a
maximum amount of $66 million. Management believes that the capital infusion
from Computer 2000 AG and the continued line of credit guarantees will be
adequate for the Company to meet its credit obligations on a timely basis during
fiscal 1997. No assurance can be given that the lines of credit guaranteed by
Computer 2000 AG or other interim financing provided by Computer 2000 AG will be
extended after September 30, 1997, or that the Company will be able to obtain
replacement financing from other independent financing sources.
The following four persons were designated by Computer 2000 Inc. to serve
as Directors of AmeriQuest: Dr. Harry Krischik, Manfred Guenzel, Michael Dressen
and Holger Heims.
Computer 2000 AG is a publicly-held company in Germany, and Klockner & Co.
AG ("Klockner") is the majority shareholder. In a press release dated April 28,
1997, Klockner announced that as part of a substantial restructuring and
reorganization to be completed over the next twelve months, control of Computer
2000 AG will be removed from the Klockner group and transferred to VIAG AG, a
publicly-held company whose shares are listed on the stock exchanges in Germany
and Switzerland. At present, Computer 2000 AG is an indirect subsidiary of VIAG
AG.
19
<PAGE> 23
------------------------------------
On April 19, 1997, AmeriQuest and Computer 2000 AG entered into identical
indemnification agreements with Board members Dr. Harry Krischik, Manfred
Guenzel, Michael Dressen, Holger Heims, Robert H. Beckett, Marc L. Werner and
J.R. Dick Iverson, and with John Tonnison, respectively (together referred to as
the "Indemnification Agreements").
AmeriQuest's certificate of incorporation provides that the corporation
shall indemnify its directors and officers to the fullest extent permitted by
law and shall advance expenses in connection therewith.
Among other things, each of the Indemnification Agreements provides that in
the event an indemnitee becomes a party to certain specified legal proceedings
by reason of an Indemnifiable Event (as defined below), AmeriQuest and Computer
2000 AG, jointly and severally, shall indemnify such indemnitee to the fullest
extent permitted by law against Indemnifiable Expenses (as defined below) if the
indemnitee acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of AmeriQuest and, with respect to any
criminal proceeding or investigation, had no reasonable cause to believe his
conduct was unlawful. In the event an indemnitee becomes a party to a legal
proceeding by or in the right of AmeriQuest to procure a judgment in its favor
by reason of an Indemnifiable Event, AmeriQuest and Computer 2000 AG, jointly
and severally, shall indemnify such indemnitee to the fullest extent permitted
by law against Indemnifiable Expenses actually and reasonably incurred by the
Indemnitee in connection with such legal proceeding or any appeal therefrom, if
the indemnitee acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of AmeriQuest, except that no
indemnification shall be made in respect of any such legal proceeding as to
which the indemnitee shall have been adjudged to be liable to AmeriQuest unless
and only to the extent that the court in which such proceeding was brought shall
determine that the indemnitee is fairly and reasonably entitled to indemnity for
such Indemnifiable Expenses. All such Indemnification will be subject to the
terms and conditions set forth in the Indemnification Agreements.
As used in each of the Indemnification Agreements, "Indemnifiable Expenses"
means any and all costs, charges and expenses, including, without limitation,
attorneys' fees and other fees, expenses in connection with the investigation,
defense or appeal of any legal proceeding, judgments, fines and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of any such attorneys' fees and other
fees and expenses, judgments, fines or amounts paid in settlement) actually and
reasonably incurred by the Indemnitee in connection with a legal proceeding or
any appeal therefrom. The term "Indemnifiable Event" means any actual or
asserted event or occurrence related to the fact that the indemnitee is or was a
director, officer, employee, agent, or fiduciary of AmeriQuest, or is or was
serving at the request of AmeriQuest as a director, officer, employee, trustee,
agent, or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust, or other entity, or anything done or not done by the
indemnitee in any such capacity.
------------------------------------
AmeriQuest leases its facility in Horsham, Pennsylvania from Bowe 3
Partners at a lease rate of approximately $522,000 per year for 105,000 square
feet of office and warehouse space. The Lease for this facility was scheduled to
terminate on December 31, 1996, but by mutual agreement of the parties was
extended on September 10, 1996 through January 31, 1998 at the same rate as that
currently in effect for September 1996. Robert H. Beckett, Robert S. Beckett and
Alexander C. Kramer, Jr. are partners in Bowe 3 Partners. In the opinion of
management the terms of the Lease are as favorable as could be obtained from
unaffiliated third parties.
------------------------------------
Reference is hereby made to the forgiveness of indebtedness from
Manufacturers Indemnity and Insurance Company of America which resulted from the
issuance of securities to Manufacturers Indemnity and Insurance Company of
America which is described above in the section entitled "Compensation Committee
Interlocks and Insider Participation."
20
<PAGE> 24
SEVERANCE ARRANGEMENTS WITH PRIOR MEMBERS OF MANAGEMENT
During fiscal 1996 several officers terminated their employment with
AmeriQuest as part of its efforts to reduce overhead expenses and retain
personnel skilled enough to effect a restructuring of the company. The following
table sets forth the amounts of severance payments made and the names of the
officers to whom such payments were made.
<TABLE>
<CAPTION>
DATE OF CONTRACT SEVERANCE
EMPLOYEE NAME AND POSITION SEVERANCE RIGHT PAID
- -------------------------- --------- -------- ---------
<S> <C> <C> <C>
Thomas F. Ross............................. Nov 3, 95 $340,000 $340,000
Chief Operating Officer (two year's salary)
Donald Resnick............................. Jan 31, 96 None $100,000(1)
Chief Financial Officer
John Higgins............................... Jan 31, 96 None $100,000(2)
Vice President Marketing and Purchasing
Robert H. Beckett.......................... May 17, 96 $196,000 $196,000
Sr. Vice President, Advanced Systems
Group (one year's salary)
David R. Malmberg.......................... May 28, 96 $80,000 $ 80,000
Vice President, Purchasing (six month's salary)
John Faiman................................ August 5, 1996 None $ 75,000(3)
Vice President, U.S. Sales
D. Stephen DeWindt......................... September 30, 1996 $105,000 $110,000(4)
Chief Executive Officer (six month's salary)
Robert S. Beckett.......................... September 30, 1996 $150,000 $100,000
Vice President, Components (one year's salary)
</TABLE>
- ---------------
(1) Don Resnick had no written contract, only a resolution of the Board of
Directors, with no provision for severance. $80,000 of his severance pay was
structured as project completion pay.
(2) John Higgins had no written contract. He was given a repricing of his
175,000 shares under option from $2.00 to $.70 per share.
(3) John Faiman had no written contract.
(4) Includes $5,000 paid to settle various miscellaneous claims against
AmeriQuest for damaged property and automobile rental.
The following table sets forth information regarding instances where
AmeriQuest's Board of Directors repriced outstanding options. Every instance of
repricing occurred in connection with the termination of employment, and was
undertaken as a means of conserving cash resources, to the extent possible,
given the severance rights and obligations of AmeriQuest to such employees.
Currently, there is no realizable value attributable to such options, and
accordingly there has been no exercise of the options.
TEN YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER MARKET ORIGINAL
OF SHARES PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK AT PRICE AT NEW REMAINING AT
OPTIONS TIME OF TIME OF EXERCISE DATE OF
NAME DATE REPRICED REPRICING REPRICING PRICE REPRICING
- ---- ---- ---------- ----------- --------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Harold L. Clark 8-21-95 250,000 $1.875 $2.00 $1.00 12-3-1999(1)
Stephen G. Holmes 8-21-95 100,000 1.875 2.00 1.00 12-3-1999(1)
John Higgins 1-31-96 175,000 .875 2.00 .70 12-31-2000(2)
</TABLE>
- ---------------
(1) The Stock Option Agreements pursuant to which the options were granted
provided that such options had to be exercised within 30 days following the
cessation of employment. In connection with the
21
<PAGE> 25
repricing, the exercise period was extended to March 29, 1998, two years
from the date of the 1996 Annual Meeting of Shareholders at which such
options were ratified by the stockholders of AmeriQuest.
(2) The Stock Option Agreement pursuant to which the options were granted
provided that such options had to be exercised within 30 days following the
cessation of employment. In connection with the repricing, the exercise
period was extended to January 31, 1997.
STOCKHOLDER PROPOSALS
Any AmeriQuest stockholder who wishes to submit a proposal for presentation
to AmeriQuest's 1998 Annual Meeting of Stockholders must submit the proposal to
AmeriQuest, 6100 Hollywood Blvd., Ste. 700, Hollywood, Florida 33024, Attention:
Mr. Holger Heims, Secretary, not later than September 15, 1997 for inclusion, if
appropriate, in AmeriQuest's proxy statement and form of proxy relating to its
1998 Annual Meeting of Stockholders.
COMPLIANCE UNDER SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16 of the Exchange Act requires AmeriQuest's directors and
officers, and persons who beneficially own more than 10% of AmeriQuest's Common
Stock to file initial reports of ownership and reports of changes in beneficial
ownership with the SEC and the NYSE. Such persons are required by SEC regulation
to furnish AmeriQuest with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms furnished to
AmeriQuest and written representations from the executive officers and
directors, AmeriQuest believes that all Section 16(a) filing requirements were
met for AmeriQuest's fiscal year 1996, except as follows: (i) Dr. Harry Krischik
failed to file a Forms 4 to report the acquisition of additional shares by
Computer 2000 Inc. on February 15, 1996 and September 18, 1996, at which times
Mr. Krischik was a Director of both Computer 2000 AG and AmeriQuest; (ii)
Manfred Guenzel failed to file a Form 3 reporting his appointment to the Board
of Directors on July 10, 1996 and a Form 4 to report the acquisition of
additional shares by Computer 2000 Inc. on September 18, 1996, at which time Mr.
Guenzel was a Director of both Computer 2000 AG and AmeriQuest; and (iii)
Michael Dressen failed to file a Form 3 reporting his appointment as President
of AmeriQuest in August 1996.
OTHER BUSINESS
The Board does not presently intend to bring any other business before the
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the Notice of the Meeting. As to any
business that may properly come before the Meeting, however, it is intended that
proxies, in the form enclosed, will be voted in respect thereof in accordance
with the judgment of the persons voting such proxies.
AVAILABLE INFORMATION
AmeriQuest is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports, proxy statements and other
information with the SEC. Reports, proxy statements and other information filed
by AmeriQuest can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street N.W., Washington, D.C. 20549, and at
the following Regional Offices of the SEC: New York Regional Office, 7 World
Trade Center, New York, New York 10048 and Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Section of the SEC, 450 Fifth Street
N.W., Washington, D.C. 20549, at the SEC's prescribed rates. Such material can
also be inspected and copied at the offices of the NYSE, on which AmeriQuest's
Common Stock is listed.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT IN CONNECTION WITH
22
<PAGE> 26
THE MATTERS SUBJECT HEREOF, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AMERIQUEST.
THIS PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES. THE
DELIVERY OF THIS PROXY STATEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PAID
ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Holger Heims
HOLGER HEIMS,
Secretary
Hollywood, Florida
June 12, 1997
23
<PAGE> 27
APPENDIX I
CERTIFICATE OF DESIGNATIONS
OF THE
SERIES H CUMULATIVE CONVERTIBLE PREFERRED STOCK
(PAR VALUE $.01 PER SHARE)
OF
AMERIQUEST TECHNOLOGIES, INC.
---------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
---------------------
The undersigned, does hereby certify that the following resolution was duly
adopted by the Board of Directors of AmeriQuest Technologies, Inc., a Delaware
corporation (the "Corporation"), at a meeting duly convened and held on April
23, 1997, at which a quorum was present and acting throughout:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation (the "Board of Directors") by Article
FOURTH of the Certificate of Incorporation of the Corporation, as amended by
that certain Certificate of Amendment effective as of April 1, 1996, (the
"Certificate of Incorporation") the Board of Directors hereby authorizes and
approves the creation and issuance of a new series of Preferred Stock of this
Corporation upon the terms and conditions set forth in these resolutions which
fix the powers, designation, preferences and relative, participating, optional
or other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such new series, in addition to those set forth in the
Certificate of Incorporation, as follows:
(A) Series H Cumulative Convertible Preferred Stock. The new series
of Preferred Stock of the Corporation authorized hereby shall be designated
the "Series H Cumulative Convertible Preferred Stock" (hereinafter referred
to as the "Series H Preferred Stock"), and shall consist of 300,000 shares,
$.01 par value per share; provided, however, that the Board of Directors
may decrease (but not increase) the number of authorized shares in such
series subsequent to the date of original issuance of shares in such series
(the "Original Issuance Date"), but not below the number of shares of such
series then outstanding. The Series H Preferred Stock is issuable solely in
whole shares that shall entitle the holder thereof to exercise the voting
rights, to participate in the distributions and to have the benefit of all
other rights of holders of Series H Preferred Stock as set forth herein and
in the Certificate of Incorporation.
(B) Rights, Preferences and Restrictions of Series H Preferred
Stock. The Series H Preferred Stock shall have the voting power,
preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof, as set forth
below. For purposes of this Certificate of Designations, the terms "Common
Stock" and "Preferred Stock" shall have the meanings set forth in the
Certificate of Incorporation in effect as of the Original Issuance Date.
1. Dividend Provisions. The holders of shares of Series H Preferred Stock
shall be entitled to receive dividends payable in cash (or, through and
including the dividend payable on June 30, 1998, at the option of the
Corporation, payable in whole or in part in Common Stock valued as set forth
below), out of any funds legally available therefor, prior and in preference to
any declaration or payment of any dividend (other than a dividend payable in
shares of Common Stock of the Corporation) on the Common Stock and to any
declaration or payment of any dividend on any other series of Preferred Stock of
the Corporation (other than dividends payable in Preferred Stock of the same
series and class upon which such dividend is declared and paid), at the rate of
$7.00 per share of Series H Preferred Stock per annum (as adjusted for any stock
dividends, combinations or splits with respect to such shares), payable
quarterly on the last day of March, June, September and December of each year,
commencing June 30, 1997. Such dividends shall accrue on each share and accrue
from day to day, whether or not earned or declared, and shall be cumulative so
that if such dividends with respect to any previous quarter dividend period at
said rate per share per annum shall not
A-1
<PAGE> 28
have been paid on or declared and set apart for all shares of Series H Preferred
Stock at the time outstanding, the deficiency shall be fully paid on or declared
and set apart for such shares before the Corporation makes any distribution (as
such term is hereinafter defined) to the holders of Common Stock or any other
series of Series H Preferred Stock. The term "distribution" as used in this
paragraph shall mean the transfer of cash or property without consideration,
whether by way of dividend or otherwise (except a dividend in shares of the
Corporation which are junior to the Series H Preferred Stock as to dividends and
assets and except as contemplated by this Certificate of Designations) or the
purchase or redemption of shares of the Corporation for cash or property (except
for the repurchase of Common Stock from employees, directors, consultants and
advisers pursuant to the terms of stock purchase agreements existing on the
Original Issuance Date under which such shares are issued), including any such
transfer, purchase or redemption by a subsidiary of the Corporation. The time of
any distribution by way of dividend shall be the date of declaration thereof and
the time of any distribution by purchase or redemption of shares shall be the
day cash or property is transferred by the Corporation, whether or not pursuant
to a contract of an earlier date; provided that, where a negotiable debt
security is issued in exchange for shares the time of the distribution is the
date when the Corporation acquires the shares in such exchange. In the event the
Corporation exercises its option to pay any dividend in whole or in part in
Common Stock, such Common Stock shall be valued as follows: (a) if the
Corporation's Common Stock is trading on the New York Stock Exchange (the
"NYSE"), at the closing price on the day such dividend accrues (whether or not
declared); (b) if the Corporation's stock is not trading on the NYSE but is
trading in any other domestic public market, at the price of the last reported
bona fide trade in such market; or (c) if the Corporation's stock is not trading
in any public market, at a price to be determined by an investment banking firm
of national reputation that has not in the prior twelve (12) months performed
any investment banking services for the Corporation or any holder of Series H
Preferred Stock.
2. Liquidation Preference.
(a) Series H Liquidation Preference. In the event of any Liquidation Event
(as defined below), either voluntary or involuntary, the holders of Series H
Preferred Stock shall be entitled to receive by reason of their ownership
thereof, prior and in preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock, or to any other series of Preferred
Stock that may be issued by the Corporation from time to time, an amount per
share in cash equal to the sum of (i) $100.00 for each outstanding share of
Series H Preferred Stock, as adjusted for any stock dividends, combinations or
splits with respect to such share (the "Original Series H Issue Price"), and
(ii) an amount equal to all accrued but unpaid dividends (whether or not
declared) on each such share (the "Liquidation Preference").
(b) Participation. After the distributions described in subsection (a)
above have been paid, the entire remaining assets of the Corporation legally
available for distribution to the stockholders of the Corporation shall be
distributed to the holders of any other series of Preferred Stock then
outstanding, if any, having a liquidation preference over the Common Stock (to
the extent of and in accordance with the liquidation preference rights of such
other series of Preferred Stock) and then among the holders of the Common Stock
pro rata based on the number of shares of Common Stock held by each holder.
(c) Insufficient Funds. If in connection with any Liquidation Event the
Corporation's cash funds legally available for distribution to the holders of
the Series H Preferred Stock are not sufficient to pay the full Series H
Preferred Stock liquidation preference in cash, then any deficiency in the cash
payment of the Series H Preferred Stock liquidation preference shall be paid in
non-cash assets of the Corporation legally available for distribution to the
holders of Series H Preferred Stock. If the cash and non-cash assets legally
available for distribution to the holders of the Series H Preferred Stock shall
be insufficient to permit the full payment to such holders of the full Series H
Preferred Stock liquidation preference, then the entire cash and non-cash assets
of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Series H Preferred Stock in proportion to the
number of such shares owned by each such holder. In connection with the
distribution of any non-cash assets in payment of the Series H Preferred Stock
liquidation preference, the non-cash assets will be valued at their fair market
value, as determined by independent appraisal by an appraiser selected in good
faith by the Board of Directors.
A-2
<PAGE> 29
(d) Liquidation Event. For purposes of this Section 2, a "Liquidation
Event" shall mean any Reorganization Transaction (as defined below),
liquidation, dissolution, or winding up of the Corporation. A reorganization of
the Corporation, for purposes of this Certificate of Designations, shall mean
any consolidation or merger of the Corporation with or into another corporation,
or other entity or person or any other corporate reorganization, or the sale of
all or substantially all of the Corporation's assets to another person, or any
transaction by the Corporation in which an excess of 50% of the Corporation's
voting power is transferred (each, a "Reorganization Transaction").
3. Redemption. Shares of the Series H Preferred Stock shall not be subject
to redemption, either mandatorily or at the option of the Corporation or the
holder thereof.
4. Conversion. The holders of Series H Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Subject to subsection (c), each share of Series
H Preferred Stock shall be convertible (subject to approval by the holders
of the Corporation's Common Stock of the issuance of the common stock
issuable upon such conversion as required by the NYSE), at the option of
the holder thereof, at any time after the Original Issuance Date at the
office of the Corporation or any transfer agent for the Series H Preferred
Stock, into such number of fully paid and nonassessable shares of the
Corporation's Common Stock as is determined by dividing the Liquidation
Preference by the Series H Conversion Price then in effect. The Series H
Conversion Price per share is set forth in subsection 4(c).
(b) Mechanics of Conversion. Before any holder of Series H Preferred
Stock shall be entitled to convert any Shares into shares of Common Stock,
such holder shall deliver the certificate or certificates therefor, with a
duly executed election to convert, to the principal executive office of the
Corporation or of any transfer agent for the Series H Preferred Stock and
shall give written notice to the Corporation at its principal executive
office (which notice and delivery shall be deemed given when received by
the Corporation) of the election to convert some or all of its Shares and
shall state therein the number of Shares to be converted and the name or
names in which the certificate or certificates for shares of Common Stock
are to be issued. The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Series H Preferred Stock
or to the nominee or nominees of such holder, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be
entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of
the shares of Series H Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. Following the
conversion of shares of Series H Preferred Stock into Common Stock, as
contemplated by this paragraph (b), the Corporation shall promptly prepare
and deliver a new certificate or new certificates to the holder of Series H
Preferred Stock representing the remaining number or shares of Series H
Preferred Stock still held by such holder following such conversion.
(c) Series H Conversion Price and Adjustments.
(i) Series H Conversion Price. The Series H Conversion Price shall
be $0.715 (Seventy One and One-Half Cents) per share, which amount is
equal to 110% of the average of the daily closing price per share of the
Common Stock for the 20 consecutive trading days immediately preceding
April 28, 1997.
(ii) Series H Conversion Price Adjustments.
(1) Subdivision, Combination or Reclassification. In the event
that the Corporation at any time or from time to time after the
Original Issuance Date shall declare or pay, without consideration,
any dividend on the Common Stock payable in shares of Common Stock or
in any right to acquire shares of Common Stock for no consideration,
or shall effect a subdivision of the outstanding shares of Common
Stock into a greater number of shares of Common Stock (by stock
split, reclassification or otherwise than by payment of a dividend in
Common Stock or in any right to acquire Common Stock), or in the
event the outstanding shares of Common
A-3
<PAGE> 30
Stock shall be combined or consolidated, by reclassification, reverse
stock split or otherwise, into a lesser number of shares of Common
Stock, then the Series H Conversion Price in effect immediately prior
to such event shall, concurrently with the effectiveness of such
event, be proportionately decreased or increased, as appropriate. In
the event that the Corporation shall declare or pay, without
consideration, any dividend on the shares of Common Stock payable in
any right to acquire Common Stock for no consideration, then the
Corporation shall be deemed to have made a dividend payable in shares
of Common Stock in an amount of shares equal to the maximum number of
shares issuable upon exercise of such rights to acquire shares of
Common Stock.
(2) Issuance of Additional Shares. If at any time after the
Original Issuance Date and while there are any shares of Series H
Preferred Stock outstanding, the Corporation shall issue or sell
Additional Shares of Common Stock at a Price Per Share less than the
Series H Conversion Price in effect immediately prior to such
issuance or sale, then the Series H Conversion Price then in effect
shall be adjusted to an amount determined by multiplying the Series H
Conversion Price in effect immediately prior to the new issuance by a
fraction,
(A) the numerator of which is equal to the sum of (x) the number
of shares of Outstanding Common Stock immediately prior to the
issuance of such Additional Shares, and (y) the amount determined by
(i) dividing the aggregate consideration received by the Corporation
upon the issuance of such Additional Shares, by (ii) the Series H
Conversion Price in effect immediately prior to the issuance of the
Additional Shares, and
(B) the denominator of which is the number of shares of
Outstanding Common Stock immediately after the issuance of such
Additional Shares.
For the purposes of this Section 4(c)(ii), the issuance of any
Convertible Securities shall be deemed an issuance at such time of
the Common Stock issuable upon exercise, conversion, or exchange of
the such Convertible Securities if the Price Per Share shall be less
than the Series H Conversion Price in effect at the time of such
issuance. No adjustment of the Series H Conversion Price shall be
made under this Section 4(c)(ii) upon the issuance of any shares of
Common Stock which are issued pursuant to the exercise, conversion,
or exchange of any Convertible Securities if any adjustment shall
previously have been made upon the issuance of any such Convertible
Securities as above provided. Any adjustment of the Series H
Conversion Price made with respect to the issuance of Convertible
Securities shall be reversed if and when any such Convertible
Securities expire or are canceled without being exercised, converted,
or exchanged so that the Series H Conversion Price in effect
immediately upon such cancellation or expiration shall be equal to
the Series H Conversion Price which would have been in effect had the
expired or canceled Convertible Securities never been issued (but any
such reversal of an adjustment shall only apply as to the portion of
the Convertible Security which has expired or been canceled), with
such additional adjustments as would have been made to the Series H
Conversion Price which would have been in effect had such expired or
canceled Convertible Securities never been issued.
The provisions of this Section 4(c)(ii) shall not apply to any issuance or
distribution of Additional Shares if by reason of any other provision of this
Section 4 an adjustment of the Series H Conversion Price results with respect to
such issuance of Additional Shares or if the holders of Series H Preferred Stock
are entitled to receive a distribution of such Additional Shares.
For purposes of this Section 4(c)(ii), the following definitions apply:
"Additional Shares" shall mean shares of Common Stock (including
Common Stock deemed issued upon the issuance of Convertible Securities),
other than Excluded Additional Shares (the issuance of which shall not
result in any adjustment of the Series H Conversion Price).
"Convertible Securities" shall mean any securities (whether debt or
equity) issued by the Corporation which are exercisable, convertible, or
exchangeable into or for shares of Common Stock.
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"Excluded Additional Shares" shall mean:
(1) Any Existing Securities, excluding any increase in the Common
Stock or Convertible Securities which may be issued pursuant to Existing
Securities as a result of any modifications or amendments to Existing
Securities occurring after the Original Issuance Date.
(2) Any Common Stock or Convertible Securities issued after the
Original Issuance Date to any employee, consultant, advisor, officer, or
director of the Corporation or any subsidiary thereof pursuant to any
incentive or compensation agreement, arrangement, or plan approved by
the Board of Directors.
(3) Any Common Stock issued in connection with any stock dividend
on the Common Stock which is also payable to the Series H Preferred
Stock pursuant to any provision of Section 4 hereof.
(4) Any Common Stock issued upon conversion of the Series H
Preferred Stock.
"Existing Securities" shall mean any Common Stock or Convertible
Securities issued with respect to any options, notes, rights, warrants, or
other securities of the Corporation outstanding as of the Original Issuance
Date, and shall include all shares of Series H Preferred Stock issued as of
the Original Issuance Date.
"Outstanding Common Stock" shall mean all shares of Common Stock of
the Corporation outstanding (on a fully diluted basis) at the time of a
calculation under Section 4(c)(ii), assuming for this purpose that all
then-outstanding Convertible Securities are then deemed exercised,
converted, or exchanged into shares of Common Stock.
"Price Per Share" shall be determined as follows:
(1) In the case of an issuance of shares of Common Stock for cash,
the Price Per Share shall mean the per share cash consideration received
by the Corporation for such shares.
(2) The Price Per Share for purposes of Convertible Securities
shall mean the amount equal to the consideration received by the
Corporation upon the issuance of such Convertible Securities, plus the
amount of consideration payable to the Corporation upon exercise,
conversion, or exchange thereof, divided by the aggregate number of
shares of Common Stock that would be issued if all such Convertible
Securities were exercised, exchanged, or converted.
(3) The Price Per Share for purposes of Convertible Securities
shall be determined in each instance as of the date of issuance of the
Convertible Securities without giving effect to any possible future
price adjustments or rate adjustments pursuant to the provisions of such
Convertible Securities which may result from any adjustments in the
Series H Conversion Price pursuant to the provisions of this Section 4.
(4) If a part or all of the consideration received by the
Corporation in connection with the issuance of securities consists of
property other than cash, the value of such consideration shall be the
fair market value of such property as determined by the Board of
Directors in good faith.
(d) Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other persons, in evidences of
indebtedness issued by the Corporation or other persons or in assets
(excluding cash dividends) or in rights not referred to in Section
4(c)(ii), then, in each such case for the purpose of this Section 4(d), the
holders of Series H Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the
number of shares of Common Stock of the Corporation into which their shares
of Series H Preferred Stock are convertible as of the record date fixed for
the determination of the holders of Common Stock of the Corporation
entitled to receive such a distribution.
(e) Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or reclassification) provision shall be made so that the
holders of Series H Preferred Stock shall thereafter be entitled to
receive, upon conversion of
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their Series H Preferred Stock, the number of shares of stock or other
securities or property of the Corporation, or otherwise, to which a holder
of Common Stock deliverable upon conversion would have been entitled in
such recapitalization as if converted immediately prior to such
recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 4 with respect to the
rights of the holders of Series H Preferred Stock after the
recapitalization to the end that the provisions of this Section 4
(including adjustment of the Series H Conversion Price, if applicable, then
in effect and the number of shares receivable upon conversion of Series H
Preferred Stock) shall be applicable after that event as nearly equivalent
as may be practicable.
(f) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in
the taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Series H Preferred
Stock against impairment.
(g) Fractional Shares and Certificate as to Adjustments.
(i) No fractional shares shall be issued upon conversion of the
Series H Preferred Stock pursuant to the provisions of this Section 4.
In lieu of fractional shares, the Corporation shall pay in cash the fair
market value of any fractional shares as determined by the Board of
Directors in good faith. The determination of the fractional shares for
which a cash payment will be made shall be determined on the basis of
the total number of shares of the Series H Preferred Stock the holder is
at the time converting into Common Stock and the number of shares of
Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment of the
Series H Conversion Price pursuant to this Section 4, the Corporation,
at its expense, shall within a reasonable time compute such adjustment
or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series H Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Corporation
shall, within a reasonable time following a written request of any
holder of Series H Preferred Stock, furnish or cause to be furnished to
such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the Series H Conversion Price at the time in effect,
and (C) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion
of a share of Series H Preferred Stock.
(h) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of Series H Preferred Stock such number of its
shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of Series H Preferred Stock; and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all of the then
outstanding shares of Series H Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series H Preferred
Stock, the Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.
(i) No Minor Adjustments to Series H Conversion Price. No adjustment
of the Series H Conversion Price shall be made pursuant to this Section 4
in an amount less than one cent ($.01) per share. Adjustment amounts under
one cent ($.01) per share shall be carried forward and taken into account
in any subsequent adjustment calculations.
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5. Notices.
(a) Required Notices.
(i) In the event of any taking by the Corporation of a record of the
holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right; the Corporation shall mail to
each holder of Series H Preferred Stock, at least thirty (30) days prior to
the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or
right.
(ii) The Corporation shall give each holder of record of Series H
Preferred Stock written notice of any impending Reorganization Transaction
not later than thirty (30) days prior to the stockholders' meeting called
to approve such transaction, or thirty (30) days prior to the closing of
any such Reorganization Transaction, whichever is earlier. Such notice
shall describe the material terms and conditions of the impending
Reorganization Transaction, describe the consideration per share to be
received by the holders of the Common Stock and by the holders of the
Series H Preferred Stock as a result of such Reorganization Transaction,
and the date upon which the conversion rights of the Series H Preferred
Stock terminate in connection with such Reorganization Transaction, and the
Corporation shall thereafter give such holders prompt notice of any
material changes in the information contained in such notice.
(b) Notice Procedures. Any notice required by the provisions of this
Section 5 to be given to a holder of shares of Series H Preferred Stock shall be
given in writing and shall be deemed given if addressed to the holder of record
of such shares at such holder's address appearing on the books of the
Corporation or such other address given in writing by the holder to the
Corporation for the purpose of notice and deposited in the United States mail,
postage prepaid, or with a courier which guaranteed delivery of the notice
within three business days after deposit with such courier, and in either case,
such notice shall be deemed given on the third business day after such deposit.
6. Voting Rights. The holder of each share of Series H Preferred Stock
shall have the right to one vote for each share of Common Stock into which such
Series H Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion basis being rounded to the nearest whole
share). Shares of Series H Preferred Stock shall have full voting rights and
powers equal to the voting rights and powers of the holders of Common Stock, and
shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the bylaws of the Corporation. Subject
to the provisions of Paragraph 7 below, Shares of Series H Preferred Stock shall
vote with holders of Common Stock as a single class with respect to any question
upon which holders of Common Stock have the right to vote; provided, however,
that (a) the holders of Series H Preferred Stock will vote as a class on matters
as to which a class vote is required under Delaware law and (b) the holders of
the Series H Preferred Stock shall not vote with the holders of Common Stock or
otherwise with respect to the approval required by the NYSE as set forth in
Section 4(a) above, as to which approval the holders of Series H Preferred Stock
shall have no vote.
7. Restrictions and Limitations. Without the vote or written consent of
the holders of at least eighty percent (80%) of the then outstanding shares of
Series H Preferred Stock, the Corporation will not:
(a) Authorize or issue, or obligate itself to issue, any other equity
security (including any security convertible into or exercisable for any
equity security) senior to or at parity with the Series H Preferred Stock
as to dividend rights, redemption rights or liquidation preferences or
which have voting rights as to matters upon which the holders of Common
Stock are entitled to vote that provide for more votes in any such matters
than one vote for each share of Common Stock into which such equity
security could then be converted into Common Stock in accordance with the
conversion rights of such equity security;
(b) Amend its Certificate of Incorporation (including this Certificate
of Designations) if such amendment would adversely affect any of the
rights, preferences or privileges provided for therein or herein for the
benefit of the shares of Series H Preferred Stock; or
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<PAGE> 34
(c) Engage in a Reorganization Transaction that would adversely affect
any of the rights, preferences or privileges of the Series H Preferred
Stock.
8. Status of Converted Stock. In the event any shares of Series H
Preferred Stock shall be converted pursuant to Section 4 hereof, or are
otherwise acquired by the Corporation, the shares so converted or acquired shall
resume the status of authorized but unissued shares of Series H Preferred Stock.
9. No Preemptive Rights. The holders of the Series H Preferred Stock shall
not have any preemptive rights.
10. Severability of Provisions. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective an valid under applicable
law, but if any provision hereof should to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof.
IN WITNESS WHEREOF, this Certificate of Designations is executed on this
25th day of April, 1997.
AMERIQUEST TECHNOLOGIES, INC.
By: /s/ HOLGER HEIMS
------------------------------------
Name: Holger Heims
Title:. Executive Vice President
and Corporate Secretary
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APPENDIX B
PROXY
AMERIQUEST TECHNOLOGIES, INC.
PROXY FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael Dressen and Holger Heims, and each of
them, the attorney and proxy of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote all the
shares of Common Stock of AmeriQuest Technologies, Inc. ("AmeriQuest"), which
the undersigned is entitled to vote at the 1997 Annual Meeting of Stockholders
of AmeriQuest (the "Meeting") to be held in the Dolphin Room at the Holiday Inn
located at 2905 Sheridan Street, Hollywood, Florida 33020, on July 1, 1997 at
1:00 p.m., local time, and at any and all postponements or adjournments
thereof, with all the powers the undersigned would possess if personally
present, as directed on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE. WHEN NO CHOICE IS
INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED IN
PROPOSAL 1, FOR PROPOSAL 2 AND FOR PROPOSAL 3. In their discretion, the proxy
holders are authorized to vote upon such other business as may properly come
before the Meeting or any adjournments or postponements thereof to the extent
authorized by Rule 14a-4(c) promulgated under the Securities Exchange Act of
1934, as amended.
TO VOTE IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS, JUST
SIGN AND DATE THIS PROXY.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR ELECTION OF ALL NOMINEES AND
FOR PROPOSALS 2 AND 3.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: Nominees: Dr. Harry Krischik
Manfred Guenzel
[ ] FOR all nominees (except as provided Michael Dressen
to the contrary below)* Holger Heims
[ ] WITHHOLDING AUTHORITY to vote for all Marc L. Werner
nominees at right) Robert H. Beckett
J.R. Dick Iverson
------------------
INSTRUCTION: To withhold authority to vote for any *If any nominee is unable to
individual nominee, write that nominee's name in the serve, or for good cause will
space provided below: not serve, proxy will be voted
for a substitute nominee
---------------------------------------------------- determined by the proxy holders.
For Against Abstain
--- ------- -------
2. To approve the right to convert AmeriQuest's [ ] [ ] [ ]
Series H Cumulative Convertible Preferred
Stock into shares of AmeriQuest Common Stock.
3. To ratify the selection of Arthur Andersen LLP [ ] [ ] [ ]
as independent accountants for AmeriQuest for
fiscal year 1997.
4. The transaction of such other business as may properly come before the Meeting or any
adjournments or postponements of the Meeting.
</TABLE>
Please sign exactly as name appears on this Proxy. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person. The signer hereby revokes all proxies heretofore given by
the signer(s) to vote at said Meeting or any postponements or adjournments
thereof.
Dated: , 1997
------------ ---------------------------------
Signature
_________________________________
Signature if held jointly
