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
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
[X] Definitive proxy statement Commission only (as permitted
[ ] Definitive additional materials by Rule 14a-6(c)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
INTERNATIONAL FAST FOOD CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions apply:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[X] 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>
INTERNATIONAL FAST FOOD CORPORATION
1000 LINCOLN ROAD, SUITE 200, MIAMI BEACH, FLORIDA 33139
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 19, 1996
-------------------
To the Shareholders
of International Fast Food Corporation:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders
(the "Annual Meeting") of International Fast Food Corporation, a Florida
corporation (the "Company"), will be held at 8:30 a.m., local time, on Monday,
August 19, 1996, at Cheeca Lodge in Islamorada, Florida for the following
purposes:
(1) To elect three members to the Company's Board of Directors to
hold office until the Company's 1997 Annual Meeting of
Shareholders or until their successors are duly elected and
qualified;
(2) To consider and vote upon a proposal to increase the number of
authorized shares of the Company's common stock, par value $.01
per share (the "Common Stock"), from 10,000,000 to 100,000,000
shares by amending the Company's Articles of Incorporation; and
(3) To transact such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on July 19, 1996
as the record date for determining those shareholders entitled to notice of,
and to vote at, the Annual Meeting and any adjournments or postponements
thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
MITCHELL RUBINSON
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
Miami Beach, Florida
July 24, 1996
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
<PAGE>
1996 ANNUAL MEETING OF SHAREHOLDERS
OF
INTERNATIONAL FAST FOOD CORPORATION
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of International Fast Food Corporation, a Florida
corporation (the "Company"), of proxies from the holders of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), for use at the 1996 Annual
Meeting of Shareholders of the Company to be held at 8:30 a.m., local time, on
Monday, August 19, 1996, or at any adjournment(s) or postponement(s) thereof
(the "Annual Meeting"), pursuant to the foregoing Notice of Annual Meeting of
Shareholders.
The approximate date that this Proxy Statement and the enclosed form
of proxy are first being sent to shareholders is July 24, 1996. Shareholders
should review the information provided herein in conjunction with the Company's
1995 Annual Report on Forms 10-KSB and 10-KSB/A, which accompanies this Proxy
Statement. The Company's principal executive offices are located at 1000 Lincoln
Road, Suite 200, Miami Beach, Florida 33139, and its telephone number is (305)
531-5800.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement,
the Notice of Annual Meeting of Shareholders and the enclosed proxy is to be
borne by the Company. In addition to the use of mail, employees of the Company
may solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company may reimburse
such persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) The election of three members to the Company's Board of Directors
to serve until the Company's 1997 Annual Meeting of Shareholders
or until their successors are duly elected and qualified;
(2) A proposal to increase the number of authorized shares of the
Company's Common Stock from 10,000,000 to 100,000,000 shares by
amending the Company's Articles of Incorporation; and
<PAGE>
(3) Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation
(and which have not been revoked in accordance with the procedures set forth
above) will be voted for the election of the three nominees for director named
below. In the event a shareholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification so
made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on July 19, 1996
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were 6,253,534 shares of Common Stock issued and outstanding,
all of which are entitled to be voted at the Annual Meeting. Each share of
Common Stock is entitled to one vote on each matter submitted to shareholders
for approval at the Annual Meeting. Shareholders do not have the right to
cumulate their votes for directors.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of Common Stock entitled to vote at the Annual Meeting
is necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting. The proposal to approve the increase in the number of
authorized shares of Common Stock to 100,000,000 and any other matter that may
be submitted to a vote of the shareholders will be approved if the number of
shares of Common Stock voted in favor of the matter exceeds the number of shares
voted in opposition to the matter, unless such matter is one for which a greater
vote is required by law or by the Company's Articles of Incorporation or Bylaws.
If less than a majority of outstanding shares entitled to vote are represented
at the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof. Abstentions will
be considered as shares present and entitled to vote at the Annual Meeting and
will be counted as votes cast at the Annual Meeting, but will not be counted as
votes cast for or against any given matter.
A broker or nominee holding shares registered in its name, or in the
name of its nominee, which are beneficially owned by another person and for
which it has not received instructions as to voting from the beneficial owner,
may have discretion to vote the beneficial owner's shares with respect to the
election of directors and other matters addressed at the Annual Meeting. Any
such shares which are not represented at the Annual Meeting either in person
or by proxy will not be considered as shares present at the Annual Meeting, and
will not be considered to have cast votes on any matters addressed at the Annual
Meeting.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of July 19, 1996, the number of
shares of Common Stock of the Company which were owned beneficially by (i)
each person who is known by the Company to own beneficially more than 5% of its
Common Stock, (ii) each director and nominee for director, (iii) the Chief
Executive Officer and the Chief Financial Officer of the Company (collectively,
the "Named Executive Officers") and (iv) all directors and executive officers of
the Company as a group:
AMOUNT AND
NATURE OF PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OUTSTANDING
BENEFICIAL OWNER(1) OWNERSHIP SHARES OWNED(2)
- ------------------------------------------- ------------ --------------
Mitchell Rubinson .........................
3,650,000(3) 58.37%
Stephen R. Groth...........................
30,000(4) *
Dr. Mark Rabinowitz........................ 0 *
All directors and executive officers as a
group (four persons)....................... 3,680,000(5) 58.85%
- ------------------------------
* Less than 1%.
(1) The address of each of the listed beneficial owners identified is 1000
Lincoln Road, Suite 200, Miami Beach, Florida 33139. Unless otherwise
noted, the Company believes that all persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise of options. Each beneficial owner's
percentage ownership is determined by assuming that options that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date of this Proxy Statement
have been exercised. As of July 19, 1996 there were 6,253,534 shares of
Common Stock outstanding.
(3) Such figure includes options to purchase 150,000 shares of Common Stock
granted to Mr. Rubinson pursuant to the Company's Stock Option Plan that
are immediately exercisable at an exercise price of $1.375. Such figure
includes 80,000 outstanding shares of Common Stock presently owned by
Mitchell and Edda Rubinson which are subject to an option granted to
Whale Securities Co., L.P. ("Whale") to purchase at any time until
August 30, 1998 at a purchase price of $5.50 per share (the
"Rubinson/Whale Option").
(4) Represents options to purchase 30,000 shares of Common Stock granted to
Mr. Groth pursuant to the Company's Stock Option Plan that are
immediately exercisable at an exercise price of $1.375 per share.
(5) See Notes (3)-(4) above.
POSSIBLE CHANGES IN CONTROL OF THE COMPANY
Until April 26, 1996, Mr. Mitchell Rubinson, together with members of
his immediate family, controlled Capital Brands and through Capital Brands and
certain direct shareholdings the Company. As a result of a Share Exchange
Agreement with CompScript Inc. and certain shareholders of CompScript (the
"Shareholders") the shareholders sold their CompScript shares to Capital Brands
in exchange (the "Share Exchange") for approximately 75% of Capital Brands
Common Stock. In connection with the Share Exchange, CompScript required Capital
Brands to exchange its 1,300,000 shares of Common Stock of the Company for
1,300,000 shares of Capital Brands Common Stock owned by Mr. Rubinson.
3
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's outstanding Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock. Such persons are required by SEC
regulation to furnish the Company with copies of all such reports they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners have been
complied with.
ELECTION OF DIRECTORS; NOMINEES
The Company's Bylaws provide that the number of directors shall be fixed
from time to time by resolution of the Board of Directors within limits
specified by the Company's Articles of Incorporation. The Board of Directors has
fixed at three the number of directors that will constitute the Board for the
ensuing year. Each director elected at the Annual Meeting will serve for a term
expiring at the Company's 1997 Annual Meeting of the Shareholders or when his
successor has been duly elected and qualified.
The Company has nominated each of Mitchell Rubinson, Stephen R. Groth
and Dr. Mark Rabinowitz to be elected as a director at the Annual Meeting. The
Board of Directors has no reason to believe that any nominee will refuse or be
unable to accept election; however, in the event that one or more nominees are
unable to accept election or if any other unforeseen contingencies should arise,
each proxy that does not direct otherwise will be voted for the remaining
nominees, if any, and for such other persons as may be designated by the Board
of Directors.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
NAME AGE POSITION
- -------------------------- ------- --------------------------------------
Mitchell Rubinson......... 49 Chairman of the Board, Chief Executive
Officer and President
Leon Blumenthal........... 56 Senior Vice President, Chief Operating
Officer and General Manager
Stephen R. Groth.......... 35 Chief Financial Officer, Treasurer and
Director
Dr. Mark Rabinowitz....... 49 Director
MITCHELL RUBINSON has served as the Chairman of the Board, Chief
Executive Officer and President of the Company since its incorporation in
December 1991 and was the Treasurer of the Company from December 1991 to
February 1993. Mr. Rubinson has served as the Chairman of the Board, Chief
Executive Officer and President of Capital Brands since March 1988 and was the
Treasurer of Capital Brands from March 1992 to April 1993. Capital Brands, a
publicly traded company, searches for, investigates, and attempts to secure and
develop business concepts. Capital Brands has been involved in the development
of the business concepts of the Company, QPQ, QPQ Medical Weight Loss Centers,
Inc. ("QPQ Medical"), Family Chicken Incorporated ("FCI") and International
Hotel Corporation ("IHC"). Mr. Rubinson has served as the Chairman of the Board,
Chief Executive Officer and President of QPQ, a minority owned, publicly traded
subsidiary of Capital Brands, since July 1993 and has served as the Chief
4
<PAGE>
Operating Officer of QPQ since October 1995. QPQ is the exclusive developer
and operator of Domino's Pizza stores in Poland. Mr. Rubinson has served as the
Chairman of the Board, Chief Executive Officer and President of QPQ Medical
since September 1995. QPQ Medical, a wholly owned subsidiary of QPQ, develops
and operates centers which provide medically supervised weight loss programs in
South Florida. Mr. Rubinson has served as the Chairman of the Board, Chief
Executive Officer and President of FCI since June 1994. FCI, a wholly-owned
subsidiary of Capital Brands, develops and operates chicken shops in South
Florida. Mr. Rubinson has been the Chairman of the Board, Chief Executive
Officer and President of IHC, a majority-owned subsidiary of Capital Brands,
since January 1994. IHC previously held the exclusive right to develop and
operate Holiday Inn Express Hotels in Poland. Mr. Rubinson has served as
Chairman of the Board, Chief Executive Officer and President of Integrated
Equities, Inc., a privately held corporation that provides financial services,
since July 1990. Since October 1995 Mr. Rubinson has been a director and
principal shareholder of and has served as the secretary of Weight Loss
Associates, Inc. ("WLA"). WLA has developed and licenses to QPQ Medical a weight
loss system.
STEPHEN R. GROTH, C.P.A., has served as the Chief Financial Officer and
Treasurer of the Company since February 1993 and a Director of the Company since
June 1994. Mr. Groth has served as the Chief Financial Officer and Treasurer of
Capital Brands since April 1993 and the Secretary and a Director of Capital
Brands since November 1993. Since July 1993 Mr. Groth has served as the Chief
Financial Officer, Treasurer and a Director of QPQ, from December 1994 until
October 1995 Mr. Groth served as the Chief Operating Officer of QPQ and since
December 1994 has served as the General Manager of QPQ. Since January 1994 Mr.
Groth has served as the Chief Financial Officer and Treasurer of IHC. From
January 1988 to February 1993, Mr. Groth served as the Chief Financial Officer
of Cellar Door Management, Inc., a privately held corporation engaged in the
management and operation of food, beverage and entertainment facilities and the
presentation of live entertainment events. From January 1981 to January 1988,
Mr. Groth served as an accounting manager at Deloitte, Haskins & Sells,
C.P.A.'s, an international accounting firm.
DR. MARK RABINOWITZ has served as a director of the Company since
January 1996. Dr. Rabinowitz has also served as a director of QPQ since January,
1996. Since 1983, Dr. Rabinowitz' principal occupations have been serving as a
medical doctor for and the Vice President of Jose E. Gilbert and Mark Rabinowitz
MDS, P.A. and serving as a medical doctor for and the President of Women's
Centre for Health, Inc. Since October 1995, Dr. Rabinowitz has been a principal
shareholder of and has served as a director and the President of WLA.
LEON BLUMENTHAL has served as the Senior Vice President, Chief Operating
Officer and General Manager of the Company since March 1995. Mr. Blumenthal's
appointment as General Manager is subject to the final approval of the Burger
King Corporation. Mr. Blumenthal has served as the Senior Vice President and
Chief Operating Officer of Pizza King Polska, a wholly owned subsidiary of QPQ,
since March 1995. Mr. Blumenthal served as General Manager of Hanna Holding Fast
Foods from January 1991 to March 1994. As General Manager, Mr. Blumenthal was
responsible for the operation of 20 Burger King restaurants within Denmark,
Sweden and Norway. From 1986 to 1990, Mr. Blumenthal owned and operated two
franchised restaurants of C. & M. Foods, Inc., d/b/a Bojangles Chicken &
Biscuits in Lilburn, Georgia. From 1968 to 1982, Mr. Blumenthal served as the
Director of European Operations for the Burger King Corporation.
The Company's officers are elected annually by the Board of Directors
and serve at the discretion of the Board. The Company's directors hold office
until the next annual meeting of shareholders or until their successors have
been duly elected and qualified. The Company reimburses all directors for their
expenses in connection with their activities as directors of the Company. It is
anticipated that the directors will make themselves available to consult with
the Company's management. Directors of the Company who are also employees of the
Company will not receive additional compensation for their services as
directors. Under the terms of the BKC Development Agreement (as defined below),
the Company is required to use its reasonable best efforts to elect Mr. Rubinson
as a director and officer of the Company. Mr. Rubinson has agreed to serve in
those capacities if elected.
The Company has agreed for a period expiring May 20, 1997, if so
requested by Whale, to nominate and use its best efforts to elect a designee of
Whale as a director of the Company or, at Whale's option, as a non-voting
adviser to the Company's Board of Directors. Whale has not yet exercised its
right to designate such a person.
5
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the Company's fiscal year ended December 31, 1995, the Company's
Board of Directors held one meeting, and took action an additional ten times by
unanimous written consent. Each member of the Board participated in each action
of the Board.
The Board does not currently have a stock, audit, nomination,
compensation or similar committee.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation paid to the
Named Executive Officers. None of the Company's other executive officers total
annual salary and bonus for the year ended December 31, 1995 was $100,000 or
more.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION(1) COMPENSATION
--------------------------- ------------
OTHER NUMBER OF
NAME AND PRINCIPAL FISCAL ANNUAL OPTIONS ALL OTHER
POSITION YEAR SALARY COMPENSATION GRANTED(2) COMPENSATION
- ----------------------- ------ ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Mitchell Rubinson, 1995 $159,976 $15,223(3) 0 -
Chief Executive Officer 1994 $149,382 $ 5,912(4) 0(5) -
1993 $135,846 $19,685(6) 50,000(7) -
Stephen R. Groth, 1995 $117,962(8) $12,084(9) 0 -
1994 $150,000(10) $16,396(11) 0(12) -
1993 $ 98,076(13) $18,750(14) 50,000(15) -
- ------------------------------
</TABLE>
(1) The columns for "Bonus," "Restricted Stock Awards" and "LTIP Payouts" have
been omitted because there is no compensation required to be reported in
such columns.
(2) See "Aggregated Fiscal Year-End Options Value Table" for additional
information concerning options granted.
(3) Represents an automobile allowance of $12,000 and medical insurance
premiums of $3,223.
(4) Represents medical insurance premiums of $5,912.
(5) As of February 27, 1995 each of the options held by Mr. Rubinson was
amended to reduce the stated exercise price therein to the fair market
value of the Common Stock on such date ($1.375). See "Option Repricings."
(6) Represents an automobile allowance of $12,000 and medical insurance
premiums of $7,685.
(7) Represents an option granted to purchase 50,000 shares of Common Stock at
an exercise price of $8.50 per share.
(8) Paid by the Company, which figure includes $35,389 paid by QPQ to the
Company for Mr. Groth's services.
(9) Represents an automobile allowance of $9,000 and medical insurance premiums
of $3,084. Such figure also represents the following sums paid by QPQ to
IFFC for Mr. Groth's services: an automobile allowance of $2,700 and
medical insurance premiums of $925.
(10) Paid by the Company, which figures includes $75,000 paid by QPQ to the
Company for Mr. Groth's services.
(11) Represents an automobile allowance of $4,500, medical insurance premiums of
$1,896 and a housing allowance in Poland of $10,000. Such figure also
represents the following sums paid by QPQ to the Company for Mr. Groth's
services: an automobile allowance of $2,250, medical insurance premiums of
$948 and a housing allowance in Poland of $5,000.
(12) As of February 27, 1995 each of the options held by Mr. Groth was amended
to reduce the stated exercise price therein to the fair market value of the
Common Stock on such date ($1.375). See "Option Repricings."
(13) Paid by the Company, which figure includes $27,403 paid by QPQ to the
Company for Mr. Groth's services.
(14) Represents an automobile allowance of $7,500, medical insurance premiums of
$4,500 and a housing allowance in Poland of $6,000. Such figure also
represents the following sums paid by QPQ to the Company for Mr. Groth's
services: an automobile allowance of $1,875, medical insurance premiums of
$1,125 and a housing allowance in Poland of $3,000.
(15) Represents an option granted to purchase 50,000 shares of Common Stock at
an exercise price of $8.50 per share.
7
<PAGE>
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mitchell Rubinson,
effective June 1, 1992. Mr. Rubinson's employment agreement provides that he
will serve as Chairman of the Board, Chief Executive Officer and President for
an initial term of three years, which the Company may extend for up to two
additional years. His annual salary for the first year is $125,000, subject to
annual 10% increases. Additionally, Mr. Rubinson is entitled to receive an
annual incentive bonus in the amount of 2.5% of the Company's net income, after
tax. Pursuant to the employment agreement, Mr. Rubinson is required to devote
such portion of his business time to the Company as may be reasonably required
by the Company's Board of Directors, but in no event less than 50% of his
business time. Mr. Rubinson is entitled to four weeks of paid vacation during
the first year of the Initial Term and six weeks of paid vacation during any
subsequent year of his employment with the Company. As of November 1, 1994, Mr.
Rubinson's employment agreement with the Company was amended to provide that for
each day of vacation that Mr. Rubinson elects not to take, the Company will pay
him an amount of money equal to the quotient of his then annual salary divided
by 260. Mr. Rubinson's employment agreement requires that he not compete or
engage in any business competitive with the Company's business for the term of
the agreement and for one year thereafter. Mr. Rubinson is, in addition to
salary, entitled to certain fringe benefits including an automobile allowance.
Mr. Rubinson's employment agreement provides for a payment of $125,000 in the
event his employment is terminated by reason of his death or disability and a
severance payment of twice the minimum annual salary then in effect plus the
incentive bonus paid in the prior year, in the event his employment is
terminated by the Company without cause. Mr. Rubinson's employment agreement
does not provide for a severance payment in the event his employment is
terminated for cause. The Company has accrued Mr. Rubinson's salary since May
24, 1996.
AGGREGATED FISCAL YEAR-END OPTIONS VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 1995. No stock options were exercised by the Named Executive Officers during
the year ended December 31, 1995. No stock appreciation rights were granted or
are outstanding.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
HELD AT DECEMBER 31, 1995(1) OPTIONS AT DECEMBER 31, 1995
-------------------------------- -------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- -------------- ---------------- ------------------- ---------------
<S> <C> <C> <C> <C>
Mitchell Rubinson......... 150,000 0 $ 0 $ 0
Stephen R. Groth.......... 40,000 10,000 $ 0 $ 0
- ---------------
</TABLE>
(1) Average of the high ask and low bid quotations for the Company's Common
Stock as reported by NASDAQ on December 29, 1995 was $.5313 and the
closing bid quotation for the Company's Common Stock as reported by the
Wall Street Journal on July 16, 1996 was $.06.
OPTION REPRICINGS
Since the Company's inception, the Company has issued, pursuant to the
terms of the 1993 Stock Option Plan and 1993 Directors Stock Option Plan, a
number of stock options to directors, executive officers and key employees. See
"SECURITY OWNERSHIP" for more information regarding the options granted to
Mitchell Rubinson and Stephen R. Groth. As of February 27, 1995 the exercise
price of each of the stock options granted by the Company was below the fair
market value of the Common Stock underlying the stock options. In an effort to
provide the holders of the stock options additional incentive to use their best
efforts on behalf of the Company, as of February 27, 1995 each of the stock
option agreements between the Company and Mitchell Rubinson and Stephen R. Groth
was amended to reduce the exercise stated therein to the fair market value of
the underlying Common Stock on such date ($1.375).
8
<PAGE>
CERTAIN TRANSACTIONS
SHARED FACILITIES
The Company has shared with QPQ and Capital Brands the use and cost of
office space, Suites 200, 206 and 210 at 1000 Lincoln Road, Miami, Florida.
With respect to Suite 200, the Company, QPQ and Capital Brands were responsible
for $10,274, $0, and $2,400, respectively, of the lease payments made in the
year ended December 31, 1995 and $10,302, $0 and $1,200, respectively, of the
lease payments made in the year ended December 31, 1994. With respect to suite
206, the Company, QPQ and Capital Brands were ultimately responsible for $0,
$756 and $8,829, respectively, of the lease payments made in the year ended
December 31, 1995 and $0, $532 and $2,662, respectively, of the lease payments
made in the year ended December 31, 1994. With respect to Suite 210, QPQ was
solely responsible for the $9,585 and $3,195 total lease payments made during
the year ended December 31, 1995 and December 31, 1994, respectively. The
Company as a result of the Share Exchange with CompScript, Inc. terminated the
agreement as to Capital Brands and subsequently the agreement was terminated
with IFFC in June 1996.
The Company operates a Burger King restaurant adjacent to a Domino's
pizza store operated by QPQ in Poland. Each restaurant has its own counter
service and kitchen area, but the restaurant and store share a seating space.
The Company and QPQ are jointly and severally liable for, and costs are
allocated between the companies with respect to, the leasehold payments for
the site.
ESCROW SHARES
As of June 1, 1992 Capital Brands placed 200,000 shares of its 1,500,000
shares of Common Stock in escrow (the "Escrow Shares") with Continental Stock
Transfer & Trust Company, as escrow agent, pursuant to an agreement by and among
Capital Brands, the Company, the escrow agent and Whale Securities Co., L.P.,
the underwriter of the Company's initial public offering. Since the Company's
net income for the year ended December 31, 1993 did not equal or exceed
$2,000,000 and, since the Company's net income for the year ended December 31,
1994 did not equal or exceed $5,000,000, the Escrow Shares were, pursuant to the
terms of the escrow agreement, contributed to the capital of the Company on
March 31, 1995.
BUSINESS OPPORTUNITIES
Mitchell Rubinson serves as the Chairman of the Board, Chief Executive
Officer and President of the Company and QPQ. In order to limit possible future
conflicts of interest, QPQ and the Company have agreed that QPQ will not engage
in hamburger fast-food operations and the Company will not engage in pizza
fast-food operations.
CONSULTING AGREEMENT WITH QPQ CORPORATION
On July 25, 1993 the Company entered into a three year consulting
agreement (the "Consulting Agreement") with QPQ. Under the terms of such
agreement, the Company is required to assist QPQ generally with operational and
administrative matters. Pursuant to the Consulting Agreement, as amended on July
27, 1994 and January 1, 1995, the Company provides to QPQ: (1) the services of
the Company's Chief Financial Officer for not more than 30% of his business
time; (2) the services of the Company's Controller for not more than 30% of his
business time; and (3) the services of managerial, general office and staff
personnel of the Company. In exchange for such services, QPQ is required to pay
the Company: (1) 30% of the cost of all compensation and benefits provided by
the Company to its Chief Financial Officer; (2) 27.5% of all compensation and
benefits provided by the Company to its Controller; and (3) all costs and
expenses incurred by the Company in connection with the services rendered
pursuant to the Consulting Agreement. In the year ended December 31, 1995 and
the year ended December 31, 1994, QPQ's payments to the Company pursuant to the
terms of the Consulting Agreement aggregated to $218,742 and $395,020,
respectively. In connection with the signing of the Consulting Agreement, QPQ
granted the Company an option to purchase up to 250,000 shares of QPQ's Common
Stock at an exercise price of $6.00 per share. The Company terminated the
Agreement with QPQ in June 1996 for a payment of $10,000.
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In April 1995 IFFC's majority-owned subsidiary (85%), IFFP, entered
into a consulting agreement (the "Subsidiary Consulting Agreement") with the
wholly-owned subsidiary of QPQ, Pizza King Polska, pursuant to which IFFP has
agreed to provide Pizza King Polska with all general staff and administrative
support required by Pizza King Polska to operate its Domino's Store business.
The services of Leon Blumenthal have been made available to Pizza King Polska
and QPQ pursuant to the Subsidiary Consulting Agreement. In exchange for such
services, IFFP receives from Pizza King Polska a sum equivalent to 10% of Pizza
King Polska's sales and a reimbursement of expenses. In the year ended December
31, 1995 Pizza King Polska's payments to IFFP pursuant to the terms of the
Subsidiary Consulting Agreement aggregated to $116,723.
LOAN TRANSACTIONS
As of September 30, 1994 the Company loaned Capital Brands $20,000 to
cover its operating expenses. On October 28, 1994 Capital Brands repaid the
Company $20,000. In January and February 1996 Capital Brands loaned IFFC an
aggregate of $63,000.
LITIGATION FINANCING AGREEMENT.
As of January 25, 1996 the IFFC Affiliates entered into an Agreement to
Assign Litigation Proceeds (the "Funding Agreement") with Litigation Funding,
Inc., a Florida corporation ("Funding"). Mitchell Rubinson, the chairman of the
board, chief executive officer and president of IFFC is also the chairman of the
board, chief executive officer and president and the sole shareholder of
Funding.
Pursuant to the Funding Agreement, Funding agreed to pay on behalf of
IFFC and/or IFFP up to $500,001 (the "Amount") for all expenses (including
attorneys' fees, court costs and other related expenses, but not judgments or
amounts paid in settlement) actually incurred by or on behalf of IFFC and/or
IFFP in connection with investigating, defending, prosecuting, settling or
appealing the BKC Litigation and any and all claims or counterclaims of BKC
against IFFC and/or IFFP (collectively, the "BKC Matter"). Funding has paid all
amounts it has been requested to pay pursuant to the Funding Agreement.
In consideration of the Amount, IFFC and IFFP each assigned to Funding
a portion of any and all benefits and gross sums, amounts and proceeds that each
of them may receive, collect, realize, otherwise obtain or benefit from in
connection with, resulting from or arising in connection with the BKC Matter or
any related claim, demand, appeal, right and/or cause of action of the IFFC
Affiliates, including, but not limited to, amounts received or entitled to be
received by the IFFC Affiliates in respect of (i) the gross proceeds of any
court ordered decision or judgment (a "Judgment") entered in favor of IFFC
and/or IFFP, (ii) the Sale Proceeds (as such term is defined below, the "Sales
Proceeds") of any sale of the assets of IFFC and/or IFFP to BKC, any of BKC's
affiliates and/or any entity which is introduced to the IFFC Affiliates by BKC
(collectively, the "BKC Entities") in connection with a settlement of the BKC
Matter, (iii) any amounts paid in compromise or settlement (a "Settlement") of
the BKC Matter in whole or in part, (iv) any liabilities or indebtedness of IFFC
or IFFP assumed or satisfied by the BKC Entities (the "Debt Relief Proceeds")
and (v) the monetary value to the IFFC Affiliates of any concessions made by BKC
with respect to its rights under (a) the Development Agreement and/or (b) the
Franchise Agreements and any future franchise agreements between BKC and IFFP
and/or IFFC (the "Contract Modification Proceeds"). All of the IFFC Affiliates'
rights, titles and interests, legal and equitable, in and to such aforementioned
benefits and gross sums, amounts and proceeds are collectively referred to
herein as the "Proceeds."
Specifically, IFFC and IFFP each individually assigned, set over,
transferred and conveyed to Funding all of its right, title and interest in and
to the sum of the following (the "Assigned Proceeds"): (i) fifty percent (50%)
of the Proceeds to the extent that such amount does not exceed Funding's
Expenses ("Funding's Expenses"), which are defined as the sum of the aggregate
amount of money paid by Funding as the Amount and the amount of money expended
by Funding if it assumes the prosecution of the BKC Matter; (ii) fifty percent
(50%) of any Proceeds, excluding any Sales Proceeds, in excess of the sum of
Funding's Expenses and the IFFC Affiliates' Expenses (as such term is defined
below, the "IFFC Affiliates' Expenses"); and (iii) fifty percent (50%) of any
Sales Proceeds in excess of the sum of Funding's Expenses and the IFFC
Affiliates' Expenses.
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Subject to Funding's recovery of Funding's Expenses, IFFC and IFFP have
retained the right to and shall be entitled to recover from the Proceeds the sum
of (i) $303,731, and (ii) all of the amounts they may expend in the future in
connection with the BKC Matter, before Funding shall be entitled to receive any
other Proceeds.
The definition of Sales Proceeds in the Funding Agreement varies
depending upon whether the transaction is structured as (1) a sale by IFFC of
all or substantially all of its equity interest in IFFP (an "Equity Sale"), or
(2) a sale by IFFP of all or substantially all of its assets (an "Asset Sale").
In the event of an Equity Sale, Sale Proceeds are defined as the difference
between the value of the consideration paid to or for the benefit of IFFC and a
sum which is designed to roughly approximate the net market value of the assets
and liabilities underlying the equity interest purchased. In the event of an
Asset Sale, Sale Proceeds are defined as the difference between the value of the
consideration paid to or for the benefit of IFFP and a sum which is designed to
roughly approximate the net market value of the assets and liabilities
purchased.
Pursuant to the Funding Agreement, proceeds other than cash are deemed
to have a value equal to the fair market value of such assets on the date such
Proceeds are payable to IFFC, IFFP or Funding. Provided, however, if such cash
Proceeds are not all to be paid within 90 days of a Judgment or Settlement, then
the net present value of the cash Proceeds to be paid are to be calculated by an
independent certified public accountant (the "Appraiser") selected by the
Company and Funding. The value of non-cash Proceeds are to be determined by the
Appraiser.
In connection with the execution and delivery of the Funding Agreement,
IFFC, IFFP, Funding and a law firm (the "Escrow Agent") entered into an Escrow
Agreement. Pursuant to the Funding Agreement and the Escrow Agreement, except
for Proceeds which the Escrow Agent cannot reduce to physical possession, all
Proceeds, if any, resulting from the BKC Matter are to be delivered to the
Escrow Agent before they are delivered to the IFFC Affiliates and/or Funding.
The Escrow Agent is required to dispose of Proceeds only in accordance with (1)
the joint written instructions of the Company, IFFP and Funding, or (2) the
instructions of a court of competent jurisdiction. The Funding Agreement
provides that the Escrow Agent shall first apply all Readily Available Cash
Proceeds (as such term is defined below, the "Readily Available Cash Proceeds")
to satisfy Funding's rights to Proceeds (assigned to Funding by IFFC or IFFP)
before any non-Readily Available Cash Proceeds are delivered to Funding by the
Escrow Agent on behalf of such company. Readily Available Cash Proceeds are
defined to be all cash Proceeds payable to IFFC, IFFP or Funding within one (1)
year of a Judgement or Settlement. In the event that the Readily Available Cash
Proceeds are not sufficient to satisfy Funding's rights in Proceeds (assigned to
Funding by such company), then IFFC and IFFP have each agreed to pay out of its
individually available "cash and cash equivalents" (the "Cash Resources") an
amount of Cash Resources to satisfy the deficiency. In the event that the
Readily Available Cash Resources of a company are insufficient to cover the
deficiency, such company, subject to Funding's agreement, will have the right to
elect which assets it will deliver to Funding in satisfaction of Funding's
rights to receive Proceeds. In the event that Funding is unable to agree with a
company with respect to which assets such company will deliver to Funding, then
the matter shall be submitted to a court of competent jurisdiction.
In consideration of the Amount, IFFC also assigned to Funding a security
interest (the "Security Interest") in its entire equity interest in IFFP (the
"IFFP Stock"). The Security Interest secures the delivery to Funding of all the
Assigned Proceeds. In order to perfect the Security Interest, IFFC has agreed to
take all such actions as are necessary under the laws of the Republic of Poland
("Poland") and the State of Florida to transfer title to the IFFP Stock to the
Escrow Agent; provided, however, that IFFC has retained beneficial ownership of
the IFFP Stock, including the right to vote the IFFP Stock, unless Funding does
not receive the Assigned Proceeds in accordance with the terms of the Funding
Agreement and such nonreceipt is not rectified within 45 days (an "Event of
Default"). IFFC has further agreed to deliver to the Escrow Agent such documents
as are necessary to file with the appropriate authorities in Poland to, if an
Event of Default occurs, officially transfer legal and beneficial title to the
IFFP Stock to Funding. IFFC and Funding have agreed that record title to the
IFFP Stock is being transferred to the Escrow Agent to provide Funding a
perfected security interest in the IFFP Stock without being forced to rely on
Poland's apparently deficient system of recording and perfecting security
interests. If (1) Funding receives the Assigned Proceeds in accordance with the
terms of the Funding Agreement or (2) it becomes apparent that Funding shall not
ever be entitled to receive any Proceeds, then Funding is required to
immediately issue a notice to the Escrow Agent with respect to the IFFP Stock,
and the Security Interest is to be satisfied and extinguished.
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In the event the IFFP Stock is transferred to Funding, the proceeds of
any sale of, or other realization upon, all or any part of the IFFP Stock shall
be applied by Funding in the following order of priority: FIRST, to payment of
the expenses of such sale or other realization, including all expenses,
liabilities and advances incurred or made by the Funding or its counsel in
connection therewith or in connection with the care or safekeeping of any or all
of the IFFP Stock; SECOND, to payment of Funding's right to the Assigned
Proceeds; and FINALLY, any surplus then remaining shall be paid to the Company,
or its successors or assigns, or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
In the event that the IFFC Affiliates fail to use their best efforts to
vigorously pursue their claims against BKC, then Funding shall have the right
to, at its own expense, participate in and assume the prosecution of the IFFC
Affiliates' claims in the BKC Matter ("Assume the Prosecution"). In order for
Funding to Assume the Prosecution, it must first provide the IFFC Affiliates
written notice of its intention to Assume the Prosecution and identify which
material action or actions the IFFC Affiliates failed to take in order to
vigorously pursue their claims against BKC. If the IFFC Affiliates do not or
cannot take action or actions to compensate for their past failure or failures
to take action, then Funding may Assume the Prosecution.
In connection with the execution of the Funding Agreement, the Chairman
of the Board unconditionally guaranteed to the IFFC Affiliates Funding's payment
of the Amount.
In July 1996, Funding agreed to pay on behalf of IFFC and/or IFFP up to
an additional $250,000 for additional expenses actually incurred by or on behalf
of IFFC and/or IFFP in the BKC Matter. In exchange for such consideration,
Funding shall be entitled to an additional twenty-five percent (25%) of the
Proceeds and the term Assigned Proceeds shall be amended to mean seventy-five
percent (75%) of the Proceeds.
INTERNATIONAL HOTEL CORPORATION
As of March 28, 1995, Capital Brands, Mitchell Rubinson and Marilyn
Rubinson sold all of their debt and equity interest in IHC to IFFC in exchange
for 336,364, 31,818 and 31,818 shares, respectively, of restricted IFFC Common
Stock (the "IFFC Shares"). IHC was organized in January 1994 to develop
franchised Holiday Inn Express Hotels in Poland pursuant to an agreement, dated
February 9, 1994 (the "Holiday Inn Development Agreement"), with Bass
International Holdings N.V., a Dutch company ("Bass"). Capital Brands and
Mitchell Rubinson agreed to use their best business efforts to convince Bass to
modify, if necessary, the terms of the Holiday Inn Development Agreement so that
IHC would not, solely because it had not developed a Holiday Inn Express Hotel
by September 1, 1995, lose its exclusive development rights (the "Exclusivity
Extension") or rights to apply $200,000 already paid to Bass against future
franchise application fees (the "Franchise Fee Extension"). Since Bass has not
consented to the Exclusivity Extension nor the Franchise Fee Extension, IFFC has
exercised its right to require Capital Brands, Mitchell Rubinson and Marilyn
Rubinson to transfer all of the IFFC Shares back to IFFC, and IFFC has
transferred its equity interest in IHC bank to Capital Brands, Mitchell Rubinson
and Marilyn Rubinson.
PRIVATE PLACEMENT WITH MITCHELL RUBINSON
In June 1996, after considering various alternatives including the
market price for the common stock, its trading volume and various time
constraints, the Board of Directors authorized issuance of 2,200,000 shares of
the Company's Common Stock for a total purchase price of $110,000 to Mitchell
and Edda Rubinson. The Company used the proceeds from the sale of the shares for
payment of interest on the Company's debentures.
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PROPOSAL TO APPROVE THE INCREASE OF THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Company's Board of Directors has proposed an amendment to Article
III of the Company's Articles of Incorporation that would increase the number of
authorized shares of the Company's Common Stock from 10,000,000 to 100,000,000
shares. The adoption of the amendment requires approval of the amendment by the
Company's shareholders.
The Board of Directors is empowered to authorize the issuance of Common
Stock. As of July 19, 1996, the Company had 6,253,534 shares of Common Stock
issued and outstanding and 3,123,677 shares of Common Stock reserved for
issuance, including: (i) 1,452,000 shares of Common Stock reserved for issuance
upon conversion of 43,560 shares of the Company's Preferred Stock (conversion
price of $3.00 per share); (ii) 290,800 shares of Common Stock reserved for
issuance upon exercise of warrants (exercise price of $7.00 per share); (iii)
324,235 shares of Common Stock reserved for issuance upon conversion of
$2,756,000 in principal amount of Debentures (conversion price of $8.50 per
share); (iv) 117,647 shares of Common Stock reserved for issuance upon
conversion of $1,000,000 in principal amount of Debentures underlying warrants
(conversion price of $8.50 per share); (v) 238,995 shares of Common Stock
reserved for issuance upon exercise of warrants at an exercise price of
approximately $.6875 per share; (vi) 251,000 shares of Common Stock reserved for
issuance upon the exercise of outstanding options under the Company's Stock
Option Plan and Directors Stock Option Plan (collectively, the "Plans"); (vii)
399,000 shares reserved for issuance upon exercise of options available for
future grant under the Plans; and (viii) 50,000 shares of Common Stock reserved
for issuance upon exercise of warrants (exercise price of $.2813 per share).
Accordingly, the Company had only approximately 622,789 shares of Common Stock
available for future issuance or reservation. If this proposal is approved,
approximately 90,622,789 shares of Common Stock will be available for future
issuance or reservation.
The Board of Directors believes that it in the best interest of the
Company to increase the authorized number of shares of Common Stock to
100,000,000 so that there will be a substantial number of authorized but
unissued shares of Common Stock available for issuance from time to time, in the
discretion of the Board, and in such amounts, for such purposes and on such
terms as the Board may from time to time determine, without further shareholder
approval except as may be required by applicable laws, rules and regulations.
The Board of Directors believes that, although no future transactions involving
the issuance of Common Stock are presently contemplated, the increase in the
authorized number of shares of the Company's Common Stock will give the Company
added flexibility to act in the future with respect to equity offerings,
acquisitions, financing programs, dividends with respect to the Company's Series
A Preferred Stock, stock dividends or splits, corporate planning and other
corporate transactions without delay and expense of shareholder action each time
an opportunity requiring the issuance of shares may arise. Any then current
holders of the Company's Common Stock may experience dilution if the Company
decides to issue additional shares of Common Stock. No holder of the Company's
Common Stock has any preemptive right to subscribe for any securities of the
Company.
In addition to such corporate purposes, an increase in the number of
authorized shares of Common Stock could be used to make more difficult a change
in control of the Company. Under certain circumstances the Board of Directors
could create impediments to, or frustrate persons seeking to effect, a takeover
or transfer of control of the Company by causing such shares to be issued to a
holder or holders who might side with the Board in opposing a takeover bid that
the Board of Directors determines is not in the best interest of the Company and
its shareholders. Furthermore, the existence of such additional authorized
shares of Common Stock might have the effect of discouraging any attempt by a
person or entity, through the acquisition of a substantial number of shares of
Common Stock, to acquire control of the Company since the issuance of such
additional shares could dilute the Common Stock ownership of such person or
entity. The Company is not aware of any such action that may be proposed or
pending.
The Board recommends that the first paragraph of Article III of the
Company's Articles of Incorporation be amended and restated to read as follows:
The aggregate number of shares of all classes of capital stock
which this Corporation shall have authority to issue is One Hundred and
One Million (101,000,000), consisting of (i) One Hundred Million
(100,000,000) shares of common stock, par value $0.01 per share (the
"Common Stock"), and (ii) One Million (1,000,000) shares of preferred
stock, par value $0.01 per share (the "Preferred Stock").
A copy of the entire text of Article III of the Articles of
Incorporation, amended as proposed herein, is provided herewith as Exhibit A to
this Proxy Statement. The bold face portions of the first paragraph of Article
III, as set forth in Exhibit A, reflect the changes in the Company's Articles of
Incorporation that will result from the approval of this proposed amendment at
the Annual Meeting.
If the amendment to the Articles of Incorporation is approved at the
Annual Meeting, it will become effective upon the filing of the amendment with
the Secretary of State of the State of Florida, which is expected to be
accomplished as promptly as practicable after such approval is obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THIS PROPOSAL
TO INCREASE THE COMPANY'S AUTHORIZED COMMON STOCK.
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INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand served as the Company's independent public
accountants for the fiscal year ended December 31, 1995. The Board of Directors
has selected Coopers & Lybrand as the Company's independent public accountants
for the fiscal year ending December 31, 1996. One or more representatives of
Coopers & Lybrand are expected to be present at the Annual Meeting, will have
the opportunity to make a statement if they desire to do so and are expected to
be available to respond to appropriate questions from shareholders.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
A shareholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1997 Annual Meeting of Shareholders
must deliver a proposal in writing to the Company's principal executive offices
no later than December 28, 1996.
By Order Of The Board of Directors
MITCHELL RUBINSON
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER AND PRESIDENT
Miami Beach, Florida
July 24, 1996
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EXHIBIT A
ARTICLE III
CAPITAL STOCK
The aggregate number of shares of all classes of capital stock that
this Corporation shall have authority to issue is ONE HUNDRED AND ONE MILLION
(101,000,000) shares, consisting of (i) One Hundred Million (100,000,000) shares
of common stock, par value $0.01 per share (the "Common Stock"), and (ii) one
million (1,000,000) shares of preferred stock, par value $0.01 per share (the
"Preferred Stock").
The designations and the preferences, limitations and relative rights
of the Preferred Stock and the Common Stock are as follows:
A. PROVISIONS RELATING TO THE PREFERRED STOCK.
1. GENERAL. The Preferred Stock may be issued from time to time
in one or more classes or series, the shares of each class or series to have
such designations and powers, preferences, and rights, and qualifications,
limitations and restrictions thereof as are stated and expressed herein and in
the resolution or resolutions providing for the issue of such class or series
adopted by the Board of Directors as hereinafter prescribed.
2. PREFERENCES. Subject to the rights of the holders of the
Corporation's common stock, as set forth in Section B of this Article III,
authority is hereby expressly granted to and vested in the Board of Directors to
authorize the issuance of the Preferred Stock from time to time in one or more
classes or series, to determine and take necessary proceedings fully to effect
the issuance and redemption of any such Preferred Stock, and, with respect to
each class or series of the Preferred Stock, to fix and state by the resolution
or resolutions from time to time adopted providing for the issuance thereof the
following:
(a) whether or not the class or series is to have
voting rights, full or limited, or is to be without voting rights;
(b) the number of shares to constitute the class or
series and the designations thereof;
(c) the preferences and relative, participating,
optional or other special rights, if any, and the qualifications, limitations or
restrictions thereof, if any, with respect to any class or series;
(d) whether or not the shares of any class or series
shall be redeemable and if redeemable the redemption price or prices, and the
time or times at which and the terms and conditions upon which such shares shall
be redeemable and the manner of redemption;
(e) whether or not the shares of a class or series
shall be subject to the operation of retirement or sinking funds to be applied
to the purchase or redemption of such shares for retirement, and if such
retirement or sinking fund or funds be established, the annual amount thereof
and the terms and provisions relative to the operation thereof;
(f) the dividend rate, whether dividends are payable
in cash, stock of the Corporation, or other property, the conditions upon which
and the times when such dividends are payable, the preference to or the relation
to the payment of the dividends payable on any other class or classes or series
of stock, whether or not such dividend shall be cumulative or noncumulative, and
if cumulative, the date or dates from which such dividends shall accumulate;
(g) the preferences, if any, and the amounts thereof
that the holders of any class or series thereof shall be entitled to receive
upon the voluntary or involuntary dissolution of, or upon any distribution of
the assets of, the Corporation;
(h) whether or not the shares of any class or series
shall be convertible into, or exchangeable for, the shares of any other class or
classes or of any other series of the same or any other class or classes of the
Corporation and the conversion price or prices or ratio or ratios or the rate or
rates at which such conversion or exchange may be made, with such adjustments,
if any, as shall be stated and expressed or provided for in such resolution or
resolutions; and
(i) such other special rights and protective provisions
with respect to any class or series as the Board of Directors may deem
advisable.
The shares of each class or series of the Preferred Stock may vary from
the shares of any other series thereof in any or all of the foregoing respects.
The Board of Directors may increase the number of shares of Preferred Stock
designated for any existing class or series by a authorized and unissued shares
of Preferred Stock not designated for any other class or series. The Board of
Directors may decrease the number of shares of the Preferred Stock designated
for any existing class or series by a resolution, subtracting from such series
unissued shares of the Preferred Stock designated for such class, or series,
and the shares so subtracted shall become authorized, unissued and undesignated
shares of the Preferred Stock.
3. PROVISIONS RELATING TO THE SERIES A PREFERRED STOCK.
(a) DESIGNATION AND RANK.
The series of preferred stock is designated "Series A Convertible
Preferred Stock", and the number of shares which shall constitute such Series
shall be 83,920 shares, par value $.01 per share. All shares of Series A
Convertible Preferred Stock shall rank equally and be identical in all respects
and shall rank equally with respect to dividend payments and liquidation
preferences with the highest ranking preferred stock of the Company hereinafter
designated by the Board of Directors.
(b) DIVIDENDS.
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The Company shall pay dividends on the Series A Convertible
Preferred Stock at an annual rate of 6% ($6.00 per share) and no more. All such
dividends may, at the option of the Company, be paid through the issuance of
shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), cash or a combination of cash and Common Stock, whether or not such
dividends have been declared by the Company's Board of Directors. Dividends
shall accrue cumulatively from and including the date of issuance of the Series
A Convertible Preferred Stock and shall be paid in equal semi-annual payments on
June 15 and December 15 (the "Dividend Payment Dates") in each year through the
date of conversion or redemption of such preferred stock, to all holders of
record on a date not more than 10 days prior to the date on which such dividends
are payable. For purposes of paying dividends in Common Stock, the price of the
Common Stock shall be the average of the daily closing prices of the Common
Stock for the 30 consecutive full business days preceding the day in question.
The closing price for each business day shall be the last reported sale price,
or, in the case that no such reported sale takes place on such day, the average
of the last reported sale prices for the last three trading days, in either case
as officially reported by the principal securities exchange on which the Common
Stock is listed or admitted for trading or as reported in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or, if
the Common Stock is not listed or quoted on a principal securities exchange or
NASDAQ (or if NASDAQ ceases to report closing sales prices), the closing bid
price furnished by the National Association of Securities Dealers, Inc. through
NASDAQ, or similar organization if NASDAQ is no longer reporting such
information, or if the Common Stock is not quoted by NASDAQ, then as reported by
the National Quotation Bureau Incorporated, or if not quoted by the National
Quotation Bureau Incorporated, the average of the closing bid and asked prices
as furnished by any member of the National Association of Securities Dealers,
Inc. selected from time to time by the Company for that purpose.
(i) The Series A Convertible Preferred Stock
shall be preferred as to the payment of dividends over the shares of all Common
Stock and any other class or classes of stock of the Company but shall rank in
parity with any class of preferred stock of the Company, if any, which so
provides. Dividends (whether current or in arrears) on the Series A Convertible
Preferred Stock shall be paid before any dividends on any junior stock shall be
declared and set apart for payment or paid.
(ii) All dividends payable on the Series A
Convertible Preferred Stock shall be cumulative.
(iii) Accruals of dividends shall not bear
interest.
(c) DISSOLUTION, LIQUIDATION OR WINDING-UP.
In the event of a dissolution, liquidation or winding-up of the Company,
whether voluntary or involuntary, the holders of each share of Series A
Convertible Preferred Stock by reason of their ownership thereof, shall be
entitled to receive in exchange for and in redemption of their Series A
Convertible Preferred Stock, prior and in preference to any distribution of any
of the assets or surplus funds of the Company to the holders of Common Stock and
any other class or classes of stock of the Company (except those that shall rank
in parity with the Series A Convertible Preferred Stock), an amount equal to One
Hundred Dollars ($100) per share, plus all accrued but unpaid dividends, whether
or not declared, on such shares.
If upon any such liquidation, dissolution or winding up of the Company,
its net assets shall be insufficient to permit the payment in full of the
amounts to which holders of all outstanding shares of the Series A Convertible
Preferred Stock are entitled as above provided, the entire net assets of the
Company remaining shall be distributed among the holders of shares of Series A
Convertible Preferred Stock in amounts proportionate to the full preferential
amounts to which they and holders of shares of preferred stock if any, ranking
in parity with the Series A Convertible Preferred Stock as to rights and
preferences are respectively entitled. For the purpose of this Section III, the
voluntary sale, lease, exchange or transfer, for cash, shares of stock,
securities or other consideration, of all or substantially all the Company's
property or assets to, or its consolidation or merger with, one or more
corporations, shall not be deemed to be a liquidation, dissolution or winding
up of the Company, voluntary or involuntary.
(d) VOTING RIGHTS.
Except as otherwise specifically provided by the Company's Articles of
Incorporation or by Florida law, the holders of Series A Convertible Preferred
Stock shall not be entitled to vote on any matters required or permitted to be
submitted to the shareholders of the Company for their approval.
(e) CONVERSION PROVISIONS.
The holders of the Series A Convertible Preferred Stock shall have
conversion rights as follows:
(i) RIGHT TO CONVERT. Subject to the provisions
for adjustment set forth below, after June 30, 1995 (the "Conversion Date"), and
for a period prior to its earlier redemption or repurchase by the Company, each
of Series A Convertible Preferred Stock shall be convertible, at the option of
the holder thereof and upon surrender of the certificate or certificates
evidencing the shares to be converted to the transfer agent or the Company for
the Series A Convertible Preferred Stock, into fully paid and nonassessable
shares of Common Stock of the Company at a conversion price of $3.00 per share
(the "Conversion Price"), subject to adjustment as described in paragraph (c)
below. The right to convert shares of the Series A Convertible Preferred Stock
called for redemption shall terminate on the date fixed for redemption provided
that the Company has complied with Section VI(c).
(ii) ISSUANCE OF SHARES OF COMMON STOCK ON
CONVERSION. As promptly as practicable after the surrender of shares of Series A
Convertible Preferred Stock for conversion in the manner herein provided, the
Company shall deliver or cause to be delivered, at the office or agency at which
such surrender is made, to or upon the written order of the holder of shares of
Series A Convertible Preferred Stock so surrendered, certificates representing
the number of duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock of the Company into which such shares of Series A
Convertible Preferred Stock may be converted and cash in respect of any fraction
of a share of Common Stock issuable upon such conversion. Any such conversion
shall be deemed to have been made immediately prior to the close of business on
the date on which such share(s) of Series A Convertible Preferred Stock shall
have been surrendered for conversion in the manner herein provided accompanied
by written notice, so that the rights of the holder of such share(s) of Series A
Convertible Preferred Stock as holders thereof, shall cease at such time and the
person or persons entitled to receive the shares of Common Stock upon conversion
of the Series A Convertible Preferred Stock shall be treated for all purposes as
having become the record holder or holders of such shares of Common Stock at
such time; provided, however, that no such surrender on any date when the stock
transfer books of the Company shall be closed shall be effective
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to constitute the person or persons entitled to receive shares of Common Stock,
upon conversion of such shares of Series A Convertible Preferred Stock, as the
record holder or holders of such shares on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open and such conversion shall be at the applicable Conversion Price
in effect at such time.
(iii) ADJUSTMENT OF CONVERSION PRICE. The
Conversion Price shall be subject to adjustment from time to time as follows:
a) In the event that the Company
shall at any time after the date hereof subdivide or combine the outstanding
shares of Common Stock or issue additional shares of Common Stock as a dividend
or other distribution on the Common Stock, the Conversion Price in effect
immediately prior to such subdivision or combination of such shares or share
dividend or distribution shall be proportionately adjusted so that, with respect
to each such subdivision of shares or share dividend or distribution, the number
of shares of Common Stock deliverable upon conversion of each share of Series A
Convertible Preferred Stock shall be increased in proportion to the increase in
the number of shares of the then outstanding Common Stock resulting from such
subdivision of shares or share dividend or distribution, and with respect to
each such combination of shares, the number of shares of the Common Stock
deliverable upon conversion of each share of Series A Convertible Preferred
Stock shall be decreased in proportion to the decrease in the number of shares
of the then outstanding Common Stock resulting from such combination of shares.
Any such adjustment in the Conversion Price shall become effective, in the case
of any such subdivision or combination of shares, at the close of business on
the effective date thereof, and, in the case of any such share dividend or
distribution, at the close of business on the record date fixed for the
determination of shareholders entitled thereto or on the first business day
during which the stock transfer books of the Company shall be closed for the
purpose of such determination, as the case may be.
b) In the case of any capital
reorganization or any reclassification of the Common Stock, or in the case of
the consolidation or merger of the Company with or into any other corporation or
in case of any sale or transfer of all or substantially all of the assets of the
Company, the holder of each share of Series A Convertible Preferred Stock then
outstanding shall have the right thereafter to convert the Series A Convertible
Preferred Stock into the kind and amount of shares of stock and other securities
and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such share(s) of Series A Convertible
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger, sale or transfer; and,
in any such case, appropriate adjustment (as determined in good faith by the
Board of Directors of the Company) shall be made in the application of the
provisions of this Section V(c) (including provisions with regard to the
adjustment of the Conversion Price) in order that the rights and interests of
the holders thereafter shall be as nearly equivalent as may be practicable to
the rights and interests provided for in this Section.
c) Whenever the Company shall
fix a record date for the holders of the Common Stock for the purpose of
determining the holders entitled (for a period expiring within 45 days after
such record date) to subscribe for or purchase shares of Common Stock at a price
per share less than the Market Price (as defined below) of the Common Stock as
of such record date, the Conversion Price shall be adjusted so that the number
of shares of the Common Stock into which each share of Series A Convertible
Preferred Stock shall thereafter be convertible shall be determined by
multiplying the number of shares of the Common Stock into which each share of
Series A Convertible Preferred Stock was theretofore convertible by a fraction
of which the numerator shall be the number of shares of the Common Stock
outstanding immediately prior to the taking of such record plus the number of
additional shares of Common Stock offered for subscription or purchase, and of
which the denominator shall be the number of shares of the Common Stock
outstanding immediately prior to the taking of such record plus the number of
shares of the Common Stock which the aggregate offering price (without deduction
of any expenses, including commissions or discounts) of the total number of
shares of the Common Stock so offered would purchase at the Market Price of the
Common Stock as of the record date. In the case of the proposed issuance of
Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market value
thereof as determined by the Board of Directors of the Company. This subsection
shall not apply in the case of any shares of Common Stock proposed to be issued
by the Company as or as a result of a stock dividend payable in shares of Common
Stock or as a result of any subdivision or split-up of the outstanding shares of
Common Stock.
The term "Market Price" means
the average of the daily closing prices of the Common Stock for the 30
consecutive full business days preceding the day in question. The closing price
for each business day shall the last reported sale price, or, in the case that
no such reported sale takes place on such day, the average of the last reported
sale prices for the last three trading days, in either case as officially
reported by the principal securities exchange on which the Common Stock is
listed or admitted for trading or as reported on NASDAQ or, if the Common Stock
is not listed or quoted on a principal securities exchange or NASDAQ (or if
NASDAQ ceases to report closing sales prices), the closing bid price furnished
by the National Association of Securities Dealers, Inc. through NASDAQ, or
similar organization if NASDAQ is no longer reporting such information, or if
the Common Stock is not quoted by NASDAQ, then as reported by the National
Quotation Bureau Incorporated, or if not quoted by the National Quotation Bureau
Incorporated, the average of the closing bid and asked prices as furnished by
any member of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose.
d) Whenever the Company shall
fix a record date for the holders of the Common Stock for the purpose of
determining the holders entitled to receive any distribution of evidences of its
indebtedness, capital stock or assets (other than dividends or distributions
payable out of earnings or earned surplus and dividends payable in stock for
which adjustment is made pursuant to subparagraph i) of this Section V(c)), or
rights to subscribe for or purchase any evidences of the Company's indebtedness
or assets (other than rights referred to in the preceding subparagraph iii)),
the Conversion Price shall be adjusted so that the number of shares of Common
Stock into which each share of Series A Convertible Preferred Stock shall
thereafter be convertible shall be determined by multiplying the number of
shares of the Common Stock into which each share of Series A Convertible
Preferred Stock was theretofore convertible by a fraction of which the numerator
shall be the aggregate Market Price of the Common Stock as of the record date
and of which the denominator shall be the aggregate Market Price of the Common
Stock as of the record date less the difference between the aggregate fair
market value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive) of the portion of the assets, capital stock
or evidences of indebtedness so
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distributed or of such subscription or purchase rights and the aggregate
consideration, if any, received therefor, applicable to the Common Stock.
e) Notwithstanding anything to
the contrary provided herein, no adjustment in the Conversion Price shall be
required unless such adjustment would result in an increase or decrease of at
least 1% in the Conversion Price or the Conversion Price as last adjusted, as
the case may be; provided however, that any adjustments which by reason of this
subparagraph v) are not required to be made shall be carried forward until used
and taken into account in any subsequent adjustment.
f) The provisions of this
Section V(c) shall similarly apply to successive subdivisions, combinations,
reorganizations, reclassifications, consolidations, mergers, sales or transfers.
Adjustments made pursuant to subparagraphs iii) and iv) of this Section V(c)
shall be made successively whenever any record date referred to therein is
fixed; and in the event that any rights offering or subscription referred to in
such subparagraphs is not made, the Conversion Price shall again be adjusted to
be Conversion Price which would be in effect if such record date had not been
fixed.
g) For the purpose of making the
adjustments referred to in the applicable provisions of this Section V, the
books of the Company shall, absent manifest error, control absolutely in
determining the number of outstanding shares of Common Stock and the number of
additional shares issued or decreased as a result of any stock dividend,
subdivision or combination.
(iv) NO FRACTIONAL SHARES TO BE ISSUED. No
fractional share of Common Stock shall be issued upon the conversion of the
Series A Convertible Preferred Stock. Instead of any fractional share of Common
Stock which would otherwise be issuable upon conversion of any share(s) of
Series A Convertible Preferred Stock, the Company shall pay to the holder
thereof, a cash adjustment in respect of such fraction in an amount equal to the
same fraction of the closing price per share of Common Stock (determined in the
manner provided in the second sentence of the definition of "Market Price" in
Section V(c)(iii) above) as of the business day next preceding the date of such
conversion as of which the closing price can be determined.
(v) RESERVATION OF COMMON STOCK ISSUABLE UPON
CONVERSION. The Company shall at all times reserve and keep available out of its
authorized but unissued shares the full number of shares of Common Stock into
which all shares of Series A Convertible Preferred Stock from time to time
outstanding are convertible.
(vi) PAYMENT OF TAXES UPON CONVERSION. The
Company will pay any and all issue and other taxes that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of
shares of Series A Convertible Preferred Stock. The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of Common Stock in a name other than that in
which the shares of Series A Convertible Preferred Stock converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of any such tax,
or has established, to the satisfaction of the Company, that such tax has been
paid.
(vii) NOTICES OF RECORD DATE. In the event of
any taking by the Company of a record of the holders of securities other than
the Series A Convertible Preferred Stock for the purpose of determining the
holders thereof who are entitled to receive any 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 Company shall mail to each holder of the Series A Convertible Preferred
Stock at least twenty (20) 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 rights, and the amount and character of such
dividend, distribution or rights.
(f) REDEMPTION.
(i) OPTIONAL REDEMPTION. Shares of the Series
A Convertible Preferred Stock may, at the option of the Company, be redeemed by
the Company at any time, provided that the closing price of the Common Stock
exceeds 150% of the Conversion Price of the Series A Convertible Preferred Stock
for a period of ten (10) consecutive trading days prior to such redemption. If
the Company should determine to redeem the Series A Convertible Preferred Stock,
such shares shall be redeemable at the Company's election in whole or in part at
any time or from time to time, with funds legally available for such purpose
under Florida law, at a redemption price of One Hundred Dollars ($100) per share
plus an amount equal to all accrued and unpaid dividends.
(ii) PRO RATA REDEMPTION. If less than all
shares of Series A Convertible Preferred Stock are redeemed at any time under
this Section IV, shares of Series A Convertible Preferred Stock held by each
holder of record thereof shall be called for redemption pro rata, according to
the number of shares of Series A Convertible Preferred Stock held by such
holder, subject, however, to such adjustment as may be equitably determined by
the Company in order to avoid the redemption of fractional shares.
(iii) REDEMPTION PROCEDURES. Any redemption of
any or all of the outstanding shares of Series A Convertible Preferred Stock,
whether mandatory or optional, shall be effected as follows:
a) Any such redemption shall be
effected by written notice given by certified or registered mail, postage
prepaid, not less than thirty (30) days nor more than fifty (50) days prior to
the date fixed for redemption to the holders of record of Series A Convertible
Preferred Stock whose shares are to be redeemed at their respective addresses as
the same shall appear on the books of the Company. Each such notice of
redemption shall specify the date fixed for redemption, the redemption price and
place of payment thereof, and if less than all outstanding shares of Series A
Convertible Preferred Stock are to be redeemed, the number of shares of Series A
Convertible Preferred Stock held by each holder of record thereof which are
being called for redemption.
b) On the date fixed for
redemption of any shares of Series A Convertible Preferred Stock, the Company
shall, at least one business day prior to such date deposit the aggregate amount
of the redemption price of the shares called for redemption, except that no such
deposit shall be required with respect to any such shares which prior to the
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<PAGE>
date of such deposit shall have been converted pursuant to the exercise of any
conversion right, with the transfer agent or with a paying agent designated in
the notice of such redemption, for payment to the holders of the shares of
Series A Convertible Preferred Stock being called for redemption and deliver
irrevocable written instructions authorizing such transfer agent to apply such
deposit solely to the redemption of the shares of Series A Convertible Preferred
Stock called for redemption except that any of such deposit which shall not be
required for such redemption because of the exercise of any conversion right of
the shares called for redemption shall be released or repaid to the Company.
c) Notice of redemption having
been duly given, the redemption price of the shares being called for redemption
having been deposited as aforesaid, then on the date for such redemption, the
certificates for the Series A Convertible Preferred Stock called for redemption
(whether or not surrendered) shall be deemed no longer outstanding for any
purpose, and all rights with respect to such shares shall thereupon cease and
terminate, except the right of the holders of such shares to receive, out of
such deposit in trust, on the redemption date, the redemption price to which
they are entitled, without interest.
d) If any holder of shares of
Series A Convertible Preferred Stock called for redemption shall, after the
mailing by the Company of notice of such redemption and prior to the date fixed
for such redemption, convert any shares of Series A Convertible Preferred Stock,
such shares of Series A Convertible Preferred Stock so converted by such holder
(not exceeding, however, the number of shares of Series A Convertible Preferred
Stock held by such holder which shall have been called for redemption) shall be
deemed to constitute shares of Series A Convertible Preferred Stock held by such
holder which shall have been so called for redemption.
e) In case any certificate for
shares of Series A Convertible Preferred Stock shall be surrendered by the
holder thereof for payment in connection with the redemption of only a portion
of the shares represented thereby, the Company shall deliver to or upon the
order of the holder thereof a certificate or certificates for the number of
shares of Series A Convertible Preferred Stock represented by such surrendered
certificate which are not being redeemed.
In case any holder of Series
A Convertible Preferred Stock called for redemption shall not, within ninety
(90) days after deposit by the Company of funds for the redemption thereof,
claim the amount deposited for redemption thereof, the bank trust company or
transfer agent with which such funds were deposited shall, upon demand, pay over
to the Company the balance of such amount so deposited and such bank, trust
company or transfer agent shall thereupon be relieved of all responsibility to
such holder, who shall thereafter look solely to the Company for payment of the
redemption price of his shares.
(iv) NO REISSUE. Shares of Series A Convertible
Preferred Stock which have been converted by the holder thereof or redeemed,
purchased or otherwise acquired by the Company shall be canceled and may not be
reissued, but may be redesignated as provided in Section IV hereof.
(g) REACQUIRED SHARES.
Any shares of Series A Convertible Preferred Stock that have been issued
and subsequently reacquired by the Company upon their conversion for shares of
Common Stock or redeemed or purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares upon their cancellation shall become
authorized but unissued shares of the preferred stock, par value $.01 per share,
of the Company and may be reissued as part of a new series of preferred stock of
the Company to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth in
the Company's Articles of Incorporation.
B. PROVISIONS RELATING TO THE COMMON STOCK.
1. VOTING RIGHTS. Except as otherwise required by law or as
may be provided by the resolutions of the Board of Directors authorizing the
issuance of any class or series of the Preferred Stock, as hereinabove provided,
all rights to vote and all voting power shall be vested exclusively in the
holders of the Common Stock.
2. DIVIDENDS. Subject to the rights of the holders of the
Preferred Stock, the holders of the Common Stock shall be entitled to receive
when, as and if declared by the Board of Directors, out of funds legally
available therefor, dividends payable in cash, stock or otherwise.
3. LIQUIDATING DISTRIBUTIONS. Upon any liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary,
and after the holders of the Preferred Stock shall have been paid in full the
amounts to which they shall be entitled (if any) or a sum sufficient for such
payment in full shall have been set aside, the remaining net assets of the
Corporation shall be distributed pro rata to the holders of the Common Stock in
accordance with their respective rights and interests to the exclusion of the
holders of the Preferred Stock.
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<PAGE>
INTERNATIONAL FAST FOOD CORPORATION
1000 LINCOLN ROAD, SUITE 200
MIAMI, FLORIDA 33139
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned holder of Common Stock of International Fast Food
Corporation, a Florida corporation (the "Company"), hereby appoints Mitchell
Rubinson and Stephen R. Groth, and each of them, as proxies for the undersigned,
each with full power of substitution, for and in the name of the undersigned to
act for the undersigned and to vote, as designated below, all of the shares of
stock of the Company that the undersigned is entitled to vote at the 1996 Annual
Meeting of Shareholders of the Company, to be held on Monday, August 19, 1996,
at 8:30 a.m., local time, at Cheeca Lodge in Islamorada, Florida, and at any
adjournment(s) or postponement(s) thereof.
The Board of Directors unanimously recommends a vote FOR the election of
all the director nominees listed in proposal (1) below and FOR the approval of
proposal (2).
(1) Election of Mitchell Rubinson, Stephen R. Groth and Dr. Mark Rabinowitz
as directors of the Company.
[ ] VOTE FOR all nominees listed above, except vote withheld from the
following nominee(s) (if any).
-----------------------------------------------------------------
[ ] VOTE WITHHELD from all nominees.
(2) Proposal to approve the increase of the number of authorized shares of
the Company's Common Stock from 10,000,000 to 100,000,000 shares by
amending the Company's Articles of Incorporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Upon such other matters as may properly come before the Annual Meeting
and any adjournments thereof.
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting,
and any adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED IN PROPOSAL (1)
ABOVE AND "FOR" THE APPROVAL OF PROPOSAL (2).
(SEE REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting, (ii) the Proxy Statement and (iii) the Company's 1995 Annual Report on
Form 10-KSB and 10-KSB/A.
Dated:________________________ , 1996
_____________________________________
(Signature)
_____________________________________
(Signature if held jointly)
IMPORTANT: Please sign exactly as your
name appears hereon and mail it
promptly even though you may plan to
attend the meeting. When shares are
held by joint tenants, both should
sign. When signing as attorney,
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.
PLEASE MARK, SIGN AND DATE THIS PROXY
CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE
NECESSARY IF MAILED IN THE UNITED
STATES.
2
