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
QPQ 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>
QPQ CORPORATION
1000 LINCOLN ROAD, SUITE 206, MIAMI BEACH, FLORIDA 33139
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 19, 1996
-------------------
To the Shareholders
of QPQ Corporation:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders
(the "Annual Meeting") of QPQ Corporation, a Florida corporation (the
"Company"), will be held at 9:00 a.m., local time, on Monday, August 19, 1996,
at the 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
QPQ CORPORATION
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of QPQ 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 9:00 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 206, Miami Beach, Florida 33139, and its telephone number is (305)
674-8115.
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
(3) Such other business as may properly come before the Annual
Meeting, including any adjournments or postponements thereof.
<PAGE>
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 (a) the election of the three nominees for director named
below and (b) in favor of all other proposals described in this Proxy Statement.
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 7,220,000 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 Company's
Chief Executive Officer (the "Named Executive Officer") and (iv) all directors
and executive officers of the Company as a group:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS OF AMOUNT AND NATURE OF OUTSTANDING
BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) SHARES OWNED(2)
- ------------------------------------------ ----------------------- ---------------
<S> <C> <C>
CompScript, Inc........................... 1,125,000 15.58%
Marilyn Rubinson.......................... 1,155,000(3) 16.00%
Mitchell Rubinson......................... 1,832,000(4) 25.37%
Nigel Norton.............................. 1,100,000(5) 15.24%
Dr. Mark Rabinowitz....................... 169,000(6) 2.34%
Dr. Kenneth Favero........................ -0- *
All directors and executive officers as
a group (four persons)................. 2,001,000(7) 25.71%
</TABLE>
- ------------------------------
*Less than 1%.
(1) Unless otherwise indicated, the address of each of the beneficial owners
identified is 1000 Lincoln Road, Suite 206, 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 7,220,000 shares
of Common Stock outstanding.
(3) Such figure includes warrants to purchase 50,000 shares of Common Stock
at an exercise price of $6.60 per share. Ms. Rubinson's address is 11111
Biscayne Blvd., Jockey Club, Tower II, Apt. 1425, Miami, Florida 33181.
Ms. Rubinson is the mother of Mr. Rubinson.
(4) Such figure includes options to purchase 100,000 shares of Common Stock
pursuant to the Company's 1993 Stock Option Plan (Amended) (the "Stock
Option Plan") that are immediately exercisable at an exercise price of
$0.69 per share. Such figure includes options to purchase 100,000 shares
of Common Stock pursuant to the Stock Option Plan that are immediately
exercisable at an exercise price of $1.5625. Such figure includes 39,500
shares of Common Stock owned by Mr. Rubinson's wife. Such figure does
not include shares of the Company's Common Stock beneficially owned by
Mr. Rubinson's parents or children. Mr. Rubinson disclaims beneficial
ownership of the shares owned by his immediate family members.
(5) Mr. Norton's address is La Roccabella, 24 Avenue Princesse Grace, MC
98000 Monaco. Mr. Norton is the brother-in-law of Mitchell Rubinson.
Such figure does not include shares of the Company's Common Stock
beneficially owned by Mr. Norton's wife or children. Mr. Norton
disclaims beneficial ownership of the shares owned by his immediate
family members.
(6) Such figure includes options to purchase 100,000 shares of Common Stock
pursuant to the Stock Option Plan that are immediately exercisable at
an exercise price of $1.5625. Such figure includes warrants to purchase
22,000 shares of Common Stock at an exercise price of $6.00.
(7) See Notes (4) and (6).
3
<PAGE>
POSSIBLE CHANGES IN CONTROL OF THE COMPANY
Until April 26, 1996, Mitchell Rubinson controlled Capital Brands and,
through Capital Brands and certain direct shareholdings, the Company. However,
due to changes in the capitalization of the Company and Capital Brands, Mitchell
Rubinson has ceased to control Capital Brands and may possibly lose control of
the Company.
Pursuant to the terms and conditions of a share Exchange Agreement with
CompScript, Inc. and certain CompScript shareholders, the shareholders agreed to
sell the CompScript Shares to Capital Brands in exchange (the "Share Exchange")
for shares of Capital Brands Common Stock. As a result of the Share Exchange,
Shareholders of CompScript own approximately 75% of the issued and outstanding
Capital Brands Common Stock. In connection with the Share Exchange Capital
Brands transferred 250,000 shares of Common Stock to Mitchell Rubinson. in
satisfaction of amounts and to Mr. Rubinson under an Employment Agreement with
Capital Brands.
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 the
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 Shareholders
or when his successor has been duly elected and qualified.
The Company has nominated each of Mitchell Rubinson, Dr. Kenneth Favero,
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.
The directors, nominees for director and executive officers of the
Company are as follows:
NAME AGE POSITION
- -------------------------- ------- -----------------------------------
Mitchell Rubinson......... 49 Chairman of the Board, Chief
Executive Officer, Chief Operating
Officer and President
Dr. Mark Rabinowitz....... 48 Director, Vice Chairman
4
<PAGE>
NAME AGE POSITION
- -------------------------- ------- -----------------------------------
Leon Blumenthal........... 56 Chief Operating Officer and
General Manager of Pizza King
Polska, Sp.zo.o.
Dr. Kenneth Favero........ 49 Director, Chief Operating Officer
of QPQ Medical Weight Loss
Centers, Inc.
MITCHELL RUBINSON has served as the Chairman of the Board, Chief
Executive Officer and President of the Company since its inception in July 1993
and has served as the Chief Operating Officer of the Company since October 1995.
Mr. Rubinson has served as the Chairman of the Board, Chief Executive Officer
and President of Capital Brands since March 1988 and was Capital Brands'
Treasurer 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, IFFC, QPQ Medical Weight Loss Centers, Inc. ("QPQ
Medical"), FCI and International Hotel Corporation ("IHC"). Mr. Rubinson has
been the Chairman of the Board, Chief Executive Officer and President of IFFC, a
minority owned subsidiary of Capital Brands and a publicly traded corporation,
since its incorporation in December 1991, and was the Treasurer of IFFC from
December 1991 to February 1993. IFFC is the exclusive developer and operator,
subject to certain restrictions and site exceptions, of Burger King restaurants
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 principal
shareholder of and has served as a director and the secretary of Weight Loss
Associates, Inc. ("WLA"). WLA has developed and licenses to QPQ Medical a weight
loss system.
LEON BLUMENTHAL has served as the Chief Operating Officer and General
Manager of Pizza King Polska, Sp.zo.o., a wholly owned subsidiary of the Company
that operates the Company's Domino's store business, since March 1995. Mr.
Blumenthal has served as the Senior Vice President, Chief Operating Officer and
General Manager of IFFC since March 1995. Mr. Blumenthal's appointment as
General Manager is subject to the final approval of BKC. 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.
DR. MARK RABINOWITZ has served a director of the Company since January
1996. Dr. Rabinowitz has also served as a director of IFFC 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 served as a director and the president of WLA.
DR. KENNETH FAVERO has served as the Chief Operating Officer of QPQ
Medical since November 1995 and as a Director since July 1996. From 1988 until
July, 1995 Dr. Favero served as the associate administrator of a privately held
medical practice group, Melbourne Internal Medicine Associates ("MIMA"). As the
associate
5
<PAGE>
administrator, Dr. Favero assisted in the growth and restructuring of MIMA from
18 medical doctors, all of which were internal medicine subspecialists providing
services from one facility, to 44 medical doctors, comprised equally of primary
care physicians and internal medicine subspecialists, providing services from
four facilities. Dr. Favero also served as the director of ancillary services
and as member of the budget, managed care, medical records and quality assurance
committees of Medical Associates. Dr. Favero is board certified as a clinical
laboratory director by the American Board of Bioanalysis.
The Company's officers are elected annually by the Board of Directors
and serve at the discretion of the Board. The Company reimburses all directors
for their expenses in connection with their activities as directors of the
Company. The directors make themselves available to consult with the Company's
management. Directors of the Company who are also employees of the Company do
not receive additional compensation for their services as directors.
The Company has agreed for a period expiring September 21, 1996, if
requested by Reich & Co., Inc., the underwriter of the Company's initial public
offering ("Reich"), to use its best efforts to cause an individual selected by
Reich to be elected to the Company's Board of Directors. The Company will also
permit a representative of Reich to be present at all meetings of the Company's
Board of Directors. Such representative will be entitled to the same notices and
communications sent by the Company to its Directors and to attend Directors'
meetings, but will not be entitled to vote thereat. Reich has not selected any
such designee or representative as of the date of this Proxy Statement.
Under the terms of the Domino's Development Agreement, dated June 11,
1993, between QPQ and Domino's, Inc., the Company and Capital Brands have agreed
with Domino's to use their best efforts to elect Mr. Rubinson as an officer and
director of the Company until 2003.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1995, the Company's Board of
Directors took action eleven times by unanimous written consent. The Board does
not presently have a stock option, audit, nomination or similar committee.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation paid to the
Company's Named Executive Officer. 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
FISCAL ANNUAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION GRANTED(2) COMPENSATION
- --------------------------- ------ ----------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Mitchell Rubinson, 1995 $141,551 $ 0 100,000(3) -
Chief Executive Officer 1994 $128,365 $ 0 0(4) -
1993 $35,907 $ 0 100,000(5) -
</TABLE>
- ------------------------------
6
<PAGE>
(1) The columns for "Bonus", "Restricted Stock Awards" and "LTIP Payments"
have been omitted because there is no compensation required to be
reported in such columns.
(2) See "Aggregated Fiscal Year-end Option Value Table" and "Option
Repricings" for additional information concerning options granted.
(3) Represents an option granted to purchase 100,000 shares of Common Stock
at an exercise price of $1.5625
(4) As of March 7, 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 ($0.69). See "Option Repricings."
(5) Represents an option granted to purchase 100,000 shares Common Stock at
an exercise price of $6.00 per share.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mitchell Rubinson,
effective July 23, 1993, which provides that he will serve as Chairman of the
Board, Chief Executive Officer and President for an initial term of three years,
commencing on September 22, 1993, which the Company may extend for up to two
additional years. His annual salary for the second year was $137,500, subject to
annual ten percent 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 his 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, subject to his other business
interests. Mr. Rubinson's employment agreement with the Company provides that he
is entitled to six weeks of paid vacation a year. As of March 31, 1995, 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 shall pay
him an amount of money equal to the quotient of his then current annual salary
divided by 260.
Mr. Rubinson's employment agreement requires that he not compete or
engage in a business competitive with the Company's business for the term of the
agreement and for one year thereafter. 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.
From July 1993 until March 7, 1995, Mr. Jakowicz served the Company as
its Senior Vice President and Chief Operating Officer pursuant to an employment
agreement. As of March 7, 1995, Mr. Jakowicz resigned from his positions as an
officer and a director of the Company, the Company granted Mr. Jakowicz a
termination package valued at approximately $38,000 and Mr. Jakowicz's
employment agreement with the Company was canceled.
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officer as of December 31,
1995. No stock options were exercised by the Named Executive Officer during the
period ended December 31, 1995. No stock appreciation rights were granted or are
outstanding.
7
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY
HELD AT DECEMBER 31, 1995 OPTIONS AT DECEMBER 31, 1995(1)
-------------------------------- --------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- --------------- -------------- --------------------- --------------
<S> <C> <C> <C> <C>
Mitchell Rubinson 200,000 0 $149,750 $0
- --------------------
</TABLE>
(1) The average of the high ask and low bid quotations for the Company's
Common Stock as reported by NASDAQ on December 31, 1995 was $1.875 and
the closing bid quotation for the Company's Common Stock as reported by
THE WALL STREET JOURNAL on July 16, 1996 was $2.00.
OPTION REPRICINGS
Since the Company's inception, the Company has issued, pursuant to the
terms of the Company's Stock Option Plan and Directors Plan, a number of stock
options to directors, executive officers and key employees. As of March 7, 1995,
the exercise price of each of the outstanding stock options granted by the
Company was higher than the fair market value of the Common Stock underlying the
options. In an effort to provide the holders of the stock options an additional
incentive to use their best efforts on behalf of the Company, as of March 7,
1995, each of the stock option agreements between the Company and Mitchell
Rubinson and Stephen R. Groth, the Company's former Chief Financial Officer, was
amended to reduce the exercise price stated therein to the fair market value of
the underlying Common Stock on such date ($0.69). See "SECURITY OWNERSHIP" for
more information regarding the options granted to Mitchell Rubinson. In July
1996, Mr. Groth agreed to a cancellation of all options held by him in
consideration of a $25,000 payment.
CERTAIN TRANSACTIONS
SHARED FACILITIES
The Company has shared with IFFC 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, IFFC and Capital Brands were ultimately
responsible for $0, $10,274 and $2,400, respectively, of the lease payments made
in the year ended December 31, 1995 and $0, $10,302, and $1,200, respectively,
of the lease payments made in the year ended December 31, 1994. With respect to
Suite 206, the Company, IFFC and Capital Brands were ultimately responsible for
$756, $0, and $8,829, respectively, of the lease payments made in the year ended
December 31, 1995 and $532.50, $0 and $2,662.50, respectively, of the lease
payment made in the year ended December 31, 1994. With respect to Suite 210, the
Company was solely responsible for the $9,585 and $3,195 in 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 Domino's pizza store ("Domino's Store") adjacent
to a Burger King restaurant operated by IFFC in Poland. They each have their own
counter service and kitchen area, but share a seating space. The Company and
IFFC are jointly and severally liable for, and costs are allocated between the
companies with respect to, the leasehold payments for the site.
8
<PAGE>
BUSINESS OPPORTUNITIES
Mitchell Rubinson serves as the Chairman of the Board, Chief Executive
Officer and President of the Company and IFFC. In order to limit possible future
conflicts of interest, IFFC and the Company have agreed that the Company will
not engage in hamburger fast-food operations and IFFC will not engage in pizza
fast-food operations.
PRIVATE OFFERING
As of December 31, 1994, the Company had working capital of $1,085,490.
After discussions with the Company in March 1995, the Company's accountants
advised the Company that if the Company was unable to obtain additional funds
they would have substantial doubt as to the Company's ability to operate as a
going concern. After considering various alternatives and factors, including the
market price of the Common Stock, its trading volume and various time
constraints, the Board of Directors of the Company authorized a private offering
of up to 4,000,000 shares of Common Stock. As of March 30, 1995, IPC sold in a
private offering (the "Private Offering") 3,400,000 shares of restricted Common
Stock, 1,000,000 shares to each of Mitchell Rubinson, Marilyn Rubinson and Nigel
Nortan and 400,000 shares to an unaffiliated third party. Marilyn Rubinson, the
mother of Mr. Rubinson, Nigel Norton, the brother-in-law of Mr. Rubinson and Ms.
Kasdin have each taken the position that they have not entered into any
contracts, arrangements or understanding with Mr. Rubinson with respect to
control of the Company. In July 1996, QPQ sold in a private offering 1,195,000
shares of Restricted Common Stock including 200,000 shares to Mitchell Robinson,
100,000 shares to Nigel Norton, 25,000 shares to Dr. Mark Rabinowitz, 50,000
shares to each of Mr. Robinson's children and 100,000 shares each to Glenna
Kasdin as Trustee for her children. Ms. Kasdin is Mr. Norton's wife and Mr.
Rubinson's sister. See "SECURITY OWNERSHIP - Possible Changes in Control of the
Company."
CONSULTING AGREEMENT
On July 25, 1993 the Company entered into a three year consulting
agreement (the "Consulting Agreement") with IFFC. Under the terms of such
agreement, IFFC is to assist the Company generally with operational and
administrative matters. Pursuant to the Consulting Agreement, as amended on July
27, 1994 and January 1, 1995, IFFC will provide to the Company: (1) the services
of IFFC's Chief Financial Officer for not more than 30% of his business time;
(2) the services of IFFC's Controller for not more than 30% of each of his
business time; and (3) the services of managerial, general office and staff
personnel of IFFC. In exchange for such services, the Company is required to pay
IFFC: (1) 30% of all compensation and benefits provided by IFFC to its Chief
Financial Officer; (2) 27.5% of all compensation and benefits provided by IFFC
to its Controller; and (3) all costs and expenses incurred by IFFC in connection
with the services rendered pursuant to the Consulting Agreement. For the fiscal
years ended December 31, 1995 and December 31, 1994, the Company's payments to
IFFC pursuant to the terms of the Consulting Agreement aggregated to $218,742
and $395,020, respectively. The Company terminated the agreement with IFFC in
June 1996. In connection with the signing of the Consulting Agreement, the
Company granted IFFC an option to purchase up to 250,000 shares of the Company's
Common Stock at an exercise price of $6.00 per share, this option was also
terminated in June 1996 for a $10,000 cash payment.
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.
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<PAGE>
LICENSE AGREEMENT
As of November 9, 1995 QPQ Medical entered into a license agreement (the
"License Agreement") with Weight Loss Associates, Inc. ("Weight Loss
Associates"), a corporation owned by Dr. Rabinowitz, a director of QPQ, and Mr.
Rubinson, QPQ's Chairman of the Board, Chief Executive Officer and President,
pursuant to which QPQ Medical has acquired the exclusive rights subject to
certain restrictions, to use and sublicense a weight loss system and certain
proprietary marks developed by Weight Loss Associates. The weight loss system
(the "Program") integrates systems and routines of nutrition management,
exercise and prescribed medication.
Under the License Agreement, Weight Loss Associates is required to
assist QPQ Medical in developing and operating the Weight Loss Centers and other
businesses (collectively, the "Weight Loss Business") that utilize the Program,
which assistance includes, but is not limited to, the following: providing to
QPQ Medical the Program; providing to QPQ Medical the information necessary to
prepare operations and marketing materials which describe how the Program should
be implemented; providing to QPQ Medical information necessary to prepare a
comprehensive business plan with respect to the Program; providing to QPQ
Medical any assistance or information reasonably deemed necessary or desirable
by QPQ Medical in connection with any of its efforts to secure financing for the
Business; providing any assistance or information reasonably deemed necessary or
desirable by QPQ Medical in connection with any of his efforts to sub-license
the Program and/or Marks; providing to QPQ Medical in connection with any of its
efforts to (i) obtain any governmental license, authorization, permits, consent
or approval with respect to use of the Program and/or Marks, and (ii) respond to
any governmental authority inquiries with respect to the Business; providing to
QPQ Medical technical advice regarding the development and marketing of the
Business; and continuing to use its best efforts to develop and/or enhance the
value of the Business and Program.
Weight Loss Associates is also responsible for the establishment of all
protocols to be followed in connection with the implementation of the Program by
QPQ Medical. Subject to Weight Loss Associates' consent otherwise, QPQ Medical
is prohibited from overriding, modifying or otherwise causing non-conformity
with such protocols established by Weight Loss Associates in connection with the
implementation of the Program.
QPQ Medical shall pay Weight Loss Associates, Inc., as royalties for the
license of the Program, (i) a percentage of QPQ Medical's "Operating Profit"
from each of its product lines associated weight loss, and (ii) a percentage of
QPQ Medical's "Extraordinary Gain" from certain events. Payments shall be made
in arrears not later that the twentieth day of each month. For purposes of the
License Agreement, Operating Profit is generally defined in accordance with
Statement of Financial Accounting Standards No. ^ 14 but excludes royalties
payable to Weight Loss Associates and certain other items. For purposes of the
License Agreement, "Extraordinary Gain" is defined to include the gain
associated with the events described in APB Opinion No. ^ 30, including: (a) the
disposal of a business segment, (b) extraordinary items, and (c) unusual or
infrequent items. The calculation of an Extraordinary Gain is made in accordance
with APB Opinion No. 30 and generally accepted accounting principles, with the
following modifications: (a) Extraordinary Gain is computed without reduction or
allowance for events which give rise to a negative Extraordinary Gain, (b)
Extraordinary Gain is computed without reduction or allowance for federal or
state income taxes, and (c) in computing Extraordinary Gain, estimated Operating
Profit or negative Operating Profit between "measurement date" and the "disposal
date" (as such terms are defined in APB Opinion No. 30) do not enter into the
computation of Extraordinary Gain. The License Agreement also provides that
Weight Loss Associates and its employees, officers or directors are entitled to
reimbursement from QPQ Medical for ordinary and necessary out-of-pocket expenses
incurred by them in the course of performing their duties under the License
Agreement. QPQ Medical will be required to make payments to Weight Loss
Associates even if QPQ medical fails to develop the system into a profitable
business concept.
10
<PAGE>
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 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 7,220,000 shares of Common Stock
issued and outstanding and 2,683,910 shares of Common Stock reserved for
issuance, including: (i) 1,405,660 shares of Common Stock reserved for issuance
upon the exercise of publicly traded warrants (exercise price of $6.60 per
share); (ii) 38,250 shares of Common Stock reserved for issuance upon the
exercise of underwriter warrants (exercise price of .25 per share); (iii)
125,000 shares of Common Stock reserved for issuance upon the exercise of
warrants underlying warrants (exercise price of $9.00 per share; exercise price
of $.145 per Warrant); (iv) 115,000 shares of Common Stock reserved for issuance
upon the exercise of warrants (exercise price of $.875); (v) 597,500 shares of
Common Stock reserved for issuance upon the exercise of outstanding options
under the Company's stock option plans; and (vi) 402,500 shares of Common Stock
reserved for issuance upon the exercise of options available for future grant
under the Company's stock option plans. Accordingly, the Company has only 96,090
shares of Common Stock authorized for future issuance or reservation. If this
proposal is approved, approximately 90,096,090 shares of Common Stock will be
available for future issuance or reservation.
The Board of Directors believes that it is 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 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, 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. The 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
11
<PAGE>
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.
RELATIONSHIP WITH 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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<PAGE>
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;
<PAGE>
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 resolution, adding to such
class or series 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.
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.
C. POSSIBLE REQUIRED DISPOSITION OR REDEMPTION OF COMMON STOCK.
1. If (a) any competitor (a "Competitor") of Domino's Pizza
International, Inc. ("Domino's") owns of record or is the beneficial owner of
more than 5% of the outstanding shares of the Common Stock of the Corporation,
and (b) the Corporation's Board of Directors, in its sole judgment and
discretion, determines that, as a result thereof, the continued ownership of the
Common Stock by such Competitor could have a material adverse impact on the
business, financial condition or results of operations of the Corporation, the
Corporation shall have the right, but not the obligation, to (i) require the
Competitor to dispose of such amount of the shares of Common Stock held of
record or owned beneficially by the Competitor as the Corporation's Board of
Directors, in its sole judgment and discretion, determines, or (ii) to redeem
from the Competitor such amount of the shares of Common Stock held of record or
owned beneficially by the Competitor as the Company's Board of Directors, in its
sole judgment and discretion, determines (the occurrence of any such event and
determination being hereinafter referred to as a "Disposition Determination").
The shares of Common Stock that the Corporation requires the Competitor to
dispose of or that the Corporation elects to redeem are referred to hereinafter
as the "Disposition Shares."
2
<PAGE>
Although the Corporation's Board of Directors is entitled to consult with
Domino's and such other individuals as are desirable or necessary to make an
informed decision, the determination of whether or not a Competitor of the
Corporation is a Competitor of Domino's will be made by the Corporation's Board
of Directors in its sole judgment and discretion.
2. A Competitor will be required to dispose of all Disposition
Shares within 30 days after the Corporation notifies the Competitor of a
Disposition Determination (the "Disposition Determination Notice"), and
beginning on the 30th day after the day on which the Corporation notifies a
Competitor of a Disposition Determination, the Corporation will have the option,
upon notice to the Competitor (the "Notice of Redemption"), to redeem at any
time, or from time to time until the Disposition Determination is revoked, any
or all Disposition Shares in a form of consideration permitted in Paragraph 4
hereof, at the price per share which is the lower of (a) the fair market value
of a share of Common Stock on the day the Corporation notifies the Competitor of
the Disposition Determination, or (b) the fair market value of a share of Common
Stock on the day the Corporation notifies the Competitor of the Corporation's
election to redeem the stock (the "Redemption Price"). For the purposes of this
Article III, Section C, (i) the fair market value of a share of Common Stock on
a day will be the last reported price at which the Common Stock is traded on
that day on the principal market for the Common Stock (whether that is a stock
exchange, an automated quotation system or another organized market) or if the
Common Stock is not traded in an organized market, the fair market value of a
share of the Common Stock as determined in good faith by the Corporation's Board
of Directors, based upon an evaluation provided by an investment banking firm or
other expert in valuing securities selected by the Board of Directors, and (ii)
a Disposition Determination Notice or a Notice of Redemption will be deemed
given to a Competitor two (2) days after the day when it is mailed by first
class mail to the Competitor at the address shown on the stock records of the
Corporation, or, if the Competitor is a beneficial but not a record owner of
stock of the Corporation, at any address of the Competitor shown on any report
or other document filed with the Securities and Exchange Commission or any
successor to that agency, or at the address shown on the stock records of the
Corporation of any record owner of any stock of the Corporation of which the
Competitor is a beneficial owner. The Corporation will be entitled to injunctive
relief in any court of competent jurisdiction to enforce the provisions of this
Article III, Section C and each holder of Common Stock will be deemed to have
acknowledged by acquiring or retaining Common Stock that failure to comply with
this Article III, Section C will expose the Corporation to irreparable injury
for which there is no adequate remedy at law and that the Corporation is
entitled to injunctive relief to enforce the provisions of this Article III,
Section C.
3. Upon the occurrence of a Disposition Determination, the
Corporation shall send a Disposition Determination Notice to the Competitor or
Competitors affected. The Disposition Determination Notice shall, (i) state that
the Disposition Determination has been made and contain a brief description of
the conditions that triggered the Disposition Determination; (ii) state that in
accordance with the terms and provisions of this Article III, Section C, the
Competitor must dispose of all Disposition Shares within 30 days after receipt
of this notice (as receipt is described in this Article III, Section C), and
that beginning on the 30th day after receipt of this notice the Corporation may
exercise its right to redeem any or all of the Disposition Shares and (iii)
state that if the Corporation exercises its right to redeem any or all of the
Competitor's shares it will provide the Competitor with a Notice of Redemption,
which notice shall (a) specify the date on which the closing of the redemption
shall take place (the "Closing Date"); (b) set forth the Redemption Price and
the manner in which the Redemption Price will be paid; and (c) describe any
documents which must be executed and delivered and any other action which the
Corporation will require of the Competitor in connection with the redemption.
4. The "Redemption Price" per share shall be the price determined
pursuant to the provisions of paragraph 2 of this Article III, Section C. On the
Closing Date, the Corporation shall pay the Redemption Price in the following
form and manner: (i) delivery of the full amount of the Redemption Price to the
subject Competitor in cash or immediately available funds; or (ii) delivery to
the Competitor of a promissory note of the Corporation in favor of the
Competitor in the principal amount of the Redemption Price; or (iii) delivery to
the Competitor of a combination of cash and a promissory note in the aggregate
amount of the Redemption Price. If the Corporation elects to pay all or a
portion of the Redemption Price by promissory note, such promissory note shall
bear interest at the prime rate reported in the "Money Rates" section of the
Wall Street Journal on the fifth business day preceding
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<PAGE>
the Closing Date, such interest to be payable monthly in cash. The principal of
such promissory note shall be payable in one single payment on the maturity date
of such promissory note, which maturity date shall be the fifth anniversary date
of the promissory note or, if earlier, such date, if any, established by
applicable statute or regulation as the latest permissible maturity date that
will permit such promissory note not to be deemed an impermissible investment
interest in the Corporation. On the Closing Date, the Competitor shall deliver
to the Corporation the certificate or certificates for the Disposition Shares
being redeemed, a stock power duly executed by the Competitor and such other
documents as the Corporation deems reasonably necessary or desirable to effect
the intentions of this Article.
4
<PAGE>
QPQ CORPORATION
1000 LINCOLN ROAD, SUITE 206
MIAMI BEACH, FLORIDA 33139
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned holder of Common Stock of QPQ Corporation, a Florida
corporation (the "Company"), hereby appoints Mitchell Rubinson and Dr. Kenneth
Farero, 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 9:00
a.m., local time, at the 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) below.
(1) Election of Mitchell Rubinson, Dr. Kenneth Farero 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.
(SEE REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
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).
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
Forms 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
