As filed with the Securities and Exchange Commission on June 13, 1997.
File No. 33-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
QPQ CORPORATION
(Exact name of issuer as specified in its charter)
Florida 65-064671
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7777 Glades Road
Suite 213
Boca Raton, Florida 33434
(Address of principal executive offices) (Zip Code)
__________________
MANAGEMENT CONSULTING AGREEMENT
WITH MANNY SHULMAN
EMPLOYMENT AGREEMENT WITH
C. LAWRENCE RUTSTEIN
COMPENSATION AGREEMENT WITH
CHARLES B. PEARLMAN
(Full title of the plan)
__________________
C. Lawrence Rutstein, President
7777 Glades Road
Suite 213
Boca Raton, Florida 33434
Telephone No.: (561) 470-6005
(Name and address of agent for service)
Copy to:
Charles B. Pearlman, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, FL 33301
(954) 763-1200
__________________
<PAGE>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered share price fee
================================================================================
Common Stock(1)
($.01 par value) 1,112,840 shares $.2187 $243,378 $73.76
================================================================================
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act
based upon the average of the high and low bid price for the Common Stock,
$.01 per share (the "Common Stock") as reported by NASDAQ on June 10,
1997.
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QPQ CORPORATION
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of Securities;
Registered Consulting Agreements
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
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PROSPECTUS
QPQ CORPORATION
1,112,840 Shares of Common Stock
($.01 par value)
Issued Pursuant to the Company's Consulting Agreement
with Manny Shulman, Employment Agreement with C. Lawrence Rutstein
and Compensation Agreement with Charles B. Pearlman, Esq.
This Prospectus is part of a Registration Statement which registers an
aggregate of 1,112,840 shares of Common Stock, $.01 par value (such shares being
referred to as the "Shares"), of QPQ Corporation (the "Company" or "QPQ") which
have been issued to (i) Manny Shulman ("Shulman"), a consultant to the Company,
pursuant to a written Management Consulting Agreement dated May 15, 1997 (the
"Shulman Consulting Agreement"), providing for the issuance of options to
purchase up to 500,000 shares of the Company's Common Stock (the "Options");
(ii) C. Lawrence Rutstein ("Rutstein"), an employee of the Company, pursuant to
a written Employment Agreement dated May 9, 1997 (the "Rutstein Agreement"),
providing for the issuance of 312,840 shares of the Company's Common Stock; and
(iii) Charles B. Pearlman ("Pearlman"), counsel to the Company, pursuant to a
written compensation agreement dated May 15, 1997 (the "Pearlman Agreement"),
providing for the issuance of 300,000 shares of the Company's Common Stock.
Shulman may sometimes be referred to as "Consultant," and the Shulman Consulting
Agreement may be referred to as the "Agreement". In addition, the Consultant,
Rutstein and Pearlman, in their capacity as selling shareholders, may sometimes
hereafter be collectively referred to as the "Selling Security Holders." All of
the Shares are being issued to the Consultant, Rutstein and Pearlman pursuant to
written consulting or other agreements. The Company has been advised by the
Selling Security Holders that they may sell all or a portion of their Shares
from time to time in the over-the-counter market, in negotiated transactions,
directly or through brokers or otherwise, and that such Shares will be sold at
market prices prevailing at the time of such sales or at negotiated prices, and
the Company will not receive any proceeds from such sales.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable under the terms of the consulting or other
agreements shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
________________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is June ___, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"QPQ." Electronic Reports and other information found through the Electronic
Data Gathering, Analysis & Retrieval System are probably available through the
Commission's website (http://www.sec.gov.).
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to the resale of up to an aggregate of 1,112,840
shares of the Company's Common Stock, to be issued to a consultant of the
Company, an employee of the Company and counsel to the Company pursuant to
written agreements. This Prospectus, which is Part I of the Registration
Statement, omits certain information contained in the Registration Statement.
For further information with respect to the Company and the Shares of the Common
Stock offered by this Prospectus, reference is made to the Registration
Statement, including the exhibits thereto. Statements in this Prospectus as to
any document are not necessarily complete, and where any such document is an
exhibit to the Registration Statement or is incorporated by reference herein,
each such statement is qualified in all respects by the provisions of such
exhibit or other document, to which reference is hereby made, for a full
statement of the provisions thereof. A copy of the Registration Statement, with
exhibits, may be obtained from the Commission's office in Washington, D.C. (at
the above address) upon payment of the fees prescribed by the rules and
regulations of the Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997.
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(c) All reports and documents filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, QPQ
Corporation, 7777 Glades Road, Suite 213, Boca Raton, Florida 33434.
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THE COMPANY
General
- -------
QPQ CORPORATION'S BUSINESSES
QPQ Corporation ("QPQ") develops and operates Domino's Pizza Stores
("Dominos Stores") and until October, 1996 operated a cafe-style restaurant in
the Republic of Poland. QPQ has the exclusive right to develop, operate and,
with the exception of Domino's Stores developed in Warsaw, Poland, franchise to
unrelated third parties ("Non-Affiliated Franchisee") Dominos Stores in Poland
pursuant to the Domino's Development Agreement, as amended to date (the "Dominos
Development Agreement"), with a wholly owned subsidiary of Dominos Pizza, Inc.
("Dominos"). QPQ has also entered into the Commissary Agreement with a wholly
owned subsidiary of Domino's pursuant to which QPQ has been granted the
exclusive right to open and operate a Commissary for all Domino's Stores in
Poland for the ten-year term of the Domino 's Development Agreement and any
renewal term. QPQ opened a Domino's Store in each of March 1994, May 1994 and
August 1994. Since August 1995 QPQ Medical has been in the business of
developing and/or operating centers which offer primary care, medical services
and medically supervised weight lose programs. The weight loss programs use a
protocol which integrates systems and routines of nutrition management, exercise
and prescribed medication and certain other medical services to address the
weight loss and non-weight loss related medical problems of its patients. In
January, May, July and September of 1996, QPQ opened its first four (4) medical
centers. In February 1997, QPQ Medical acquired the medical practice of Dr. Jack
B. Drimmer, P.A. and relocated such practice to its Aventura center. QPQ's
medical centers are located in Kendall, Aventura, Fort Lauderdale and Boca
Raton, Florida. QPQ Medical intends to contain its operations to South Florida
for the immediate future.
QPQ, through its direct or indirect subsidiaries,continues to search for,
investigate and attempt to secure and develop business opportunities on its own
behalf and for its subsidiaries. Moreover, there can be no assurance that QPQ
will be successful in its search for new business opportunities.
DOMINO'S DEVELOPMENT AGREEMENT
The relationship between QPQ and Domino's is governed principally by the
Domino's Development Agreement. Pursuant to the Domino's Development Agreement,
as amended, QPQ is granted the exclusive right until December 31, 2003 to
develop, operate and, with the exception of Domino's Stores to be developed in
Warsaw, Poland, franchise Domino's Stores in Poland. During the initial term of
the Domino's Development Agreement, which expires on December 31, 2003, QPQ is
required to open and operate, either through affiliates of QPQ ("Affiliated
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<PAGE>
Franchisees") or unrelated third parties ("Non-Affiliated Franchisees"), at
least 50 Domino's Stores in accordance with a schedule that obligates QPQ or its
Non-Affiliated Franchisees to open eight Domino's Stores in 1996 and five, six
or seven Domino's Stores for each of the following seven years. QPQ did not
satisfy the requirements to open eight Domino's stores during 1996 and in March
1997, Domino's granted QPQ an extension until July 1, 1997 to satisfy such
requirement. In addition, Domino's indicated it would be agreeable to a further
six month extension if QPQ provided satisfactory evidence of recapitalization at
a level which, in Domino's sole discretion, will enable QPQ to satisfy its
obligations under the agreement. Domino's Stores developed and/or operated by
Non-Affiliated Franchisees are counted towards QPQ's obligation to open a
minimum number of Domino's Stores. During 1996 QPQ did not open any Domino's
stores. In March 1997, construction began on a Domino's Store consisting of
approximately 100 square meters with a completion date set for June 1997. If QPQ
is in compliance with the Domino's Development Agreement at the expiration of
its Initial Term, QPQ will have the option to extend the Domino's Development
Agreement for an additional 10-year period. In addition to its rights to develop
Domino's Stores, QPQ has been granted the exclusive right to establish a
Commissary for the purpose of supplying food products and supplies to the
Domino's Stores in Poland. QPQ intends to conduct all of its purchasing,
distribution and major food supply preparation operations at or from the
Commissary.
QPQ MEDICAL
Since August 1995 QPQ Medical has been in the business of developing
and/or operating centers which offer primary care, medical services and
medically supervised weight lose programs. The weight loss programs use a
protocol which integrates systems and routines of nutrition management, exercise
and prescribed medication and certain other medical services to address the
weight loss and non-weight loss related medical problems of its patients. In
January, May, July and September of 1996, QPQ opened its first four (4) medical
centers. In February 1997, QPQ Medical acquired the medical practice of Dr. Jack
B. Drimmer, P.A. and relocated such practice to its Aventura center. QPQ's
medical centers are located in Kendall, Aventura and Fort Lauderdale, Florida.
QPQ Medical intends to contain its operations to South Florida for the immediate
future.
The Company's principal executive offices are located at 7777 Glades Road,
Suite 213, Boca Raton, Florida 33434.
AGREEMENTS
On May 15, 1997, the Company entered into a Management Consulting
Agreement with Manny Shulman, pursuant to which the Company granted to Shulman
options to purchase up to an aggregate of 500,000 shares of Common Stock of the
8
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Company at an exercise price of $.06 per share in consideration for consulting
services to be provided to the Company from May 15, 1997 to June 30, 1997. The
Options were fully vested as of the date of grant.
Under the terms of the Shulman Consulting Agreement, Manny Shulman as
Consultant is to undertake for and consult with the Company concerning
management, strategic planning, negotiating with security holders, corporate
organization and structure, identification of business opportunities and other
general corporate issues.
On May 9, 1997, the Company entered into a five (5) year Employment
Agreement with C. Lawrence Rutstein, President of the Company, pursuant to which
the Company issued to Rutstein 200,000 shares of the Company's Common Stock and
an additional 500,000 options to purchase the Company's Common Stock at an
exercise price of $.25 per share as compensation for services rendered and to be
rendered to the Company. The shares and options granted shall be non-dilutive
until December 31, 1997.
On June 1, 1997, the Company entered into a Compensation Agreement with
Charles B. Pearlman, Esq., whereby the Company agreed to issue Pearlman 300,000
shares of the Company's Common Stock as compensation for certain legal services
rendered and to be rendered to the Company by Charles B. Pearlman, Esq. None of
the fees paid or shares issued to Pearlman are in connection with any
capital-raising by the Company or the filing of any registration statement on
behalf of the Company.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock must be made in compliance with
federal and state securities laws. Officers, directors and 10% or greater
stockholders of the Company, as well as certain other persons or parties who may
be deemed to be "affiliates" of the Company under the Federal Securities Laws,
should be aware that resales by affiliates can only be made pursuant to an
effective Registration Statement, Rule 144 or any other applicable exemption.
Officers, directors and 10% and greater stockholders are also subject to the
"short swing" profit rule of Section 16(b) of the Securities Exchange Act of
1934.
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<PAGE>
SALES BY SELLING SECURITY HOLDERS
The following table sets forth the name of the Selling Security Holders,
the amount of shares of Common Stock held directly or indirectly, the amount of
Common Stock to be owned by the Selling Security Holders following sale of such
shares of Common Stock and the percentage of shares of Common Stock to be owned
by the Selling Security Holders following completion of such offering (based on
shares of Common Stock of the Company outstanding at June 1, 1997).
Estimated Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Security Holder Shares Owned be Offered Offering Offering
- --------------- ------------ ---------- -------- --------
Manny Shulman 500,000 (1) 500,000 -0- 0%
C. Lawrence Rutstein 1,094,940 312,840 782,100 (2) 6.1%
Charles B. Pearlman,
Esq. 300,000 300,000 -0- 0%
(1) Includes 500,000 Shares of Common Stock issuable upon exercise of options
to purchase shares of the Company's Common Stock at an exercise price of
$.06 per share.
(2) Includes shares issued pursuant to options to purchase 782,100 shares of
the Company's Common Stock at an exercise price of $.25 per share.
DESCRIPTION OF SECURITIES
The Company is currently authorized to issue up to 100,000,000 shares of
Common Stock, $.01 par value per share, of which 12,106,507 shares were
outstanding as of June 5, 1997. The Company is authorized to issue up to
1,000,000 shares of Preferred Stock, none of which were outstanding.
COMMON STOCK
The Company's Common Stock, $.01 par value, is traded on the NASDAQ
SmallCap Market under the symbol "QPQ" and listed on the Boston Stock Exchange,
under the symbol "IPZ." The following sets forth the range of high and low
closing bid prices for the Common Stock as reported on the NASDAQ during each of
the quarters presented. The quotations set forth below are inter-dealer
quotations, without retail mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions.
High Low
------ ------
1994
First Quarter 3 5/8 2 21/32
Second Quarter 3 2 3/4
Third Quarter 2 1/4 1 1/2
Fourth Quarter 2 1 1/4
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High Low
------ ------
1995
First Quarter 1 5/16 5/8
Second Quarter 2 1/8 21/32
Third Quarter 1 7/16 5/8
Fourth Quarter 2 1/2 5/8
1996
First Quarter 2 3/8 1 5/8
Second Quarter 2 2
Third Quarter 4 3 1/2
Fourth Quarter 2 3/4 2 3/8
1997
First Quarter 2 7/8 13/16
QPQ has not paid any cash dividends on its common stock and QPQ does not
currently intend to declare or pay cash dividends in the foreseeable future. QPQ
intends to retain any earnings that may be generated to provide funds for the
operation of its business.
As of March 25, 1997, the Company believes there were in excess of 300
holders of record of the Company's Common Stock.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held
of record on all matters to be voted on by Shareholders. There is no cumulative
voting with respect to the election of directors, with the result that the
holders of more than 50 percent of the shares voted for the election of
directors can elect all of the directors. The holders of Common Stock are
entitled to receive dividends when as and if declared by the Board of Directors
out of funds legally available therefor. In the event of liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining available for distribution to
them after payment of liabilities and after provision has been made for each
class of stock, if any, having preference over the Common Stock. Holders of
shares of Common Stock, as such, have no conversion, preemptive or other
subscription rights, and there are no redemption provisions applicable to the
Common Stock. All of the outstanding shares of Common Stock are fully paid and
nonassessable.
PREFERRED STOCK
The Company is authorized to issue preferred stock with such designation,
rights and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without shareholder
11
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approval, to issue preferred stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the voting power or other
rights of the holders of the Common Stock. In the event of issuance, the
preferred stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company.
TRANSFER AGENT
The Transfer Agent for the shares of Common Stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, New York 10004.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., counsel for the Company, Fort Lauderdale, Florida.
INDEMNIFICATION
The Company has authority under Section 607.0850 of the Florida Business
Corporation Act to indemnify its directors and officers to the extent provided
for in such statute. The Company's Articles of Incorporation provide the Company
shall indemnify and make sure its officers and directors the fullest extent not
prohibited by law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended maybe permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The documents listed in (a) through (c) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996.
(b) The Registrant's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 1997.
(c) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the Registrant's
document referred to in (a) above.
(d) The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
Item 4. Description of Securities
- ------- -------------------------
A description of the Company's securities is set forth in the Prospectus
incorporated as a part of this Registration Statement.
Item 5. Interests of Named Experts and Counsel
- ------- --------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- ------- -----------------------------------------
The Company has authority under Section 607.0850 of the Florida Business
Corporation Act to indemnify its directors and officers to the extent provided
for in such statute. The Company's articles of incorporation provide the Company
shall indemnify and make sure its officers and directors the fullest extent not
prohibited by law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended maybe permitted to directors, officers and controlling
i
<PAGE>
persons of the Company pursuant to the foregoing provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 7. Exemption from Registration Claimed
- ------- -----------------------------------
Inasmuch as the Consultant, Rutstein and Pearlman were knowledgeable,
sophisticated and had access to comprehensive information relevant to the
Company, such transactions were undertaken in reliance on the exemption from
registration provided by Section 4(2) of the Act.
Item 8. Exhibits
- ------- --------
Exhibit Description
- ------- -----------
(4)(a) Management Consulting Agreement with Manny Shulman.
(4)(b) Employment Agreement with C. Lawrence Rutstein.
(4)(c) Compensation Agreement with Charles B. Pearlman, Esq.
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares pursuant to the above Consulting Agreement,
Employment Agreement and Compensation Agreement.
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in the
opinion filed as exhibit (5) hereto
(23.2) Consents of independent certified public accountants
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Item 9. Undertakings
- ------- ------------
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Act may
be permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S- 8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boca Raton and the State of Florida, on the 13th
day of June, 1997.
QPQ CORPORATION
By: /s/ C. Lawrence Rutstein
-----------------------------------
C. Lawrence Rutstein
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
Chief Executive Officer
and President (Principal
Executive Officer and
/s/ C. Lawrence Rutstein Principal Accounting Officer) June 13, 1997
- ---------------------------
C. Lawrence Rutstein
/s/ Robert Hausman
- --------------------------- Director June 13, 1997
Robert Hausman
iv
MANNY SHULMAN
7777 Glades Road, Suite 213
Boca Raton, Florida 33434
May 15, 1997
Mr. C. Lawrence Rutstein
QPQ Corporation
7777 Glades Road, Suite 213
Boca Raton, Florida 33434
Re: Management Consulting Agreement
-------------------------------
Gentlemen:
Formalizing our earlier discussions this is to acknowledge and confirm the
terms of our Management Consulting Agreement ("Consulting Agreement") as
follows:
1. APPOINTMENT OF SHULMAN & ASSOCIATES. QPQ Corporation (the "Company")
hereby engages Manny Shulman ("Shulman") and Shulman hereby agrees to render
services to the Company as a management consultant, strategic planner and
advisor.
2. DUTIES. During the term of this Agreement Shulman shall provide
advice to, undertake for and consult with the Company concerning management,
strategic planning, negotiating with security holders, corporate organization
and structure, identification of business opportunities and other general
corporate matters in connection with the operation of the business of the
Company.
3. TERM. The term of this Consulting Agreement shall be for a period
commencing May 15, 1997 and terminating June 30, 1997.
4. COMPENSATION. As compensation for its services hereunder, Shulman
shall be issued options to purchase up to 500,000 shares of Common Stock, $.01
par value (the "Options") of the Company exercisable at $.06 per share. Options
to purchase the 500,000 Shares of Common Stock shall vest on the date hereof.
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5. PURCHASE OF SHARES. The Options shall be issued solely in exchange
for the contemplated services and appropriate investment restrictions shall be
noted against the shares underlying such Options upon issuance.
6. EXPENSES. Shulman shall be entitled to reimbursement by the Company
of such reasonable out-of-pocket expenses as Shulman may incur in performing
services under this Consulting Agreement. Any significant expenses shall be
approved in advance with the Company.
7. REGISTRATION. The Company agrees to provide Shulman with
registration rights at the Company's cost and expense and include the shares of
Common Stock underlying the Options in a registration statement on Form S-8 to
be filed by the Company with the Securities and Exchange Commission within the
proximate future.
8. CONFIDENTIALITY. Shulman will not disclose to any other person, firm
or corporation, nor use for its own benefit, during or after the term of this
Consulting Agreement, any trade secrets or other information designated as
confidential by the Company which is acquired by Shulman in the course of its
performing services hereunder. (A trade secret is information not generally
known to the trade which gives the Company an advantage over its competitors.
Trade secrets can include, by way of example, products or services under
development, production methods and processes, sources of supply, customer
lists, marketing plans and information concerning the filing of pendency of
patent applications). Any management advice rendered by Shulman pursuant to this
Consulting Agreement may not be disclosed publicly in any manner without the
prior written approval of Shulman. The provisions of this paragraph 8 shall
survive the termination and expiration of this Consulting Agreement.
9. INDEMNIFICATION. The Company agrees to indemnify and hold Shulman
harmless from and against all losses, claims, damages, liabilities, costs or
expenses (including reasonable attorneys' fees (collectively the "Liabilities")
joint and several, arising out of the performance of this Consulting Agreement,
whether or not Shulman is a party to such dispute. This indemnity shall not
apply, however, and Shulman shall indemnify and hold the Company, its
affiliates, control persons, officers, employees and agents harmless from and
against all liabilities attributable to the negligence or willful misconduct of
Shulman in the performance of his services hereunder which gave rise to the
losses, claim, damage, liability, cost or expense sought to be recovered
hereunder.
10. MISCELLANEOUS. This Consulting Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and
supersedes and cancels any prior communications, understandings and agreements
between the parties. This Consulting Agreement cannot be modified or changed,
nor can any of its provisions be waived, except by written agreement signed by
all parties. This Consulting Agreement shall be governed by the laws of the
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State of Florida. In the event of any dispute as to the terms of this Consulting
Agreement, the prevailing party in any litigation shall be entitled to
reasonable attorneys' fees.
Please confirm that the foregoing correctly sets forth our understanding
by signing the enclosed copy of this letter where provided and returning it to
us at your earliest convenience.
Very truly yours,
By: /s/ Manny Shulman
-------------------------------
Manny Shulman
ACCEPTED AND AGREED TO as of the 15th day of May, 1997.
QPQ CORPORATION
By: /s/ C. Lawrence Rutstein
--------------------------------
C. Lawrence Rutstein
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is effective as of
May 9, 1997 (the "Effective Date"), between QPQ Corporation, a Florida
corporation (the "Company"), whose principal place of business is 7777 Glades
Road, Suite 213, Boca Raton, FL 33434, and C. Lawrence Rutstein, an individual
(the "Employee"), whose address is 3400 South Ocean Boulevard, Apt. 14L,
Highland Beach, FL 33487.
WHEREAS, the Company is a Florida corporation engaged in providing medical
services, developing restaurants and other activities;
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company; and
WHEREAS, the Company has established a valuable reputation and goodwill in
its business, with expertise in all aspects of its businesses (the "Business");
and
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and the Employee do hereby agree as follows:
1. RECITALS. The above recitals are true, correct, and are herein
incorporated by reference.
2. EMPLOYMENT. The Company hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and conditions hereinafter
set forth.
3. AUTHORITY AND POWER DURING EMPLOYMENT PERIOD.
(a) DUTIES AND RESPONSIBILITIES. During the term of this
Agreement, Employee shall serve as Chief Executive Officer and Chairman of the
Board of Directors of the Company and shall have general executive and operating
supervision over the property, business and affairs of the Company, its
subsidiaries and divisions, subject to the guidelines and direction of the board
of directors of the Company. It is further the intention of the parties that at
all times during the "Term," as hereinafter defined, of this Agreement, the
Employee shall serve as a member of the board of directors of the Company and
shall be elected and serve through the Term of the Agreement as chairman of the
board of directors. In the event Employee shall at any time not be on the board
of directors of the Company and serving as chairman of such board, it shall be
presumed (if Employee so elects) that the Employee has been terminated other
than for cause and Employee shall have all of the rights specified in Section
6(f) of this Agreement just as if the Employee had been terminated "Without
Cause."
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(b) TIME DEVOTED. Throughout the term of the Agreement, the
Employee shall devote the necessary time and attention to the business and
affairs of the Company consistent with the Employee's senior executive position
with the Company, except for reasonable vacations and except for illness or
incapacity, but nothing in the Agreement shall preclude the Employee from
engaging in personal business and/or serving as a member of the board of
directors of other related companies, charitable and community affairs. However,
the Company acknowledges that employee engages in other business activities
provided that such activities do not interfere with the regular performance of
the Employee's duties and responsibilities under this Agreement.
4. TERM. The Term of employment hereunder will commence on the
Effective Date as set forth above and be for five (5) years from the Effective
Date provided that the Employee shall be entitled to three one-year extensions
to be exercisable by written notice given by the Employee to the Company at
least forty-five (45) days before the expiration of the Term or a Renewal Term,
as the case may be, unless terminated pursuant to Section 6 of this Agreement.
5. COMPENSATION AND BENEFITS.
(a) SALARY. The Employee shall be paid a base salary (the "Base
Salary"), payable bi-weekly, at an annual rate of no less than One Hundred
Twenty Thousand Dollars ($120,000) for the first year, with annual incremental
increases of the greater of: (i) the percentage increase in the Consumer Price
Index, all items, as published by the United States Department of Labor, since
the Effective Time (in the case of the first annual increase) or since the most
recent anniversary of the Effective Time (in the case of all subsequent annual
increases), or (ii) six percent (6%) of the previous year's base salary.
(b) BONUS COMPENSATION.
(i) OPTIONS. Employee shall be initially granted 200,000
shares of stock as a signing bonus and an additional 500,000 options to purchase
QPQ Common Stock at an exercise price of $.25 per share. Such options shall vest
immediately and expire ten (10) years from the date of this Agreement. Employee
shall receive annually an additional 200,000 options to purchase QPQ Common
Stock. The exercise price shall be the average of the closing bid and asked
price for QPQ Common Stock for the twenty (20) trading days prior to the date of
this grant. The shares and options granted shall be non-dilutive until December
31, 1997.
(c) EMPLOYEE BENEFITS. The Employee shall be entitled to participate
in all benefit programs of the Company currently existing or hereafter made
available to executives and/or other salaried employees, including, but not
limited to, pension and other retirement plans, group life insurance,
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hospitalization, surgical and major medical coverage, sick leave, salary
continuation, vacation and holidays, cellular telephone and all related costs
and expenses, long-term disability, and other fringe benefits.
(d) VACATION. During each fiscal year of the Company, the Employee
shall be entitled to reasonable time and to utilize such vacation as the
Employee shall determine; provided however, that the Employee shall evidence
reasonable judgment with regard to appropriate vacation scheduling.
Notwithstanding the foregoing, Employee shall be entitled to four (4) weeks
vacation per year.
(e) BUSINESS EXPENSE REIMBURSEMENT. During the Term and any
Renewal Term of employment, the Employee shall be entitled to receive proper
reimbursement for all reasonable, out-of-pocket expenses incurred by the
Employee (in accordance with the policies and procedures established by the
Company for its senior executive officers) in performing services hereunder,
provided the Employee properly accounts therefor.
(f) AUTOMOBILE EXPENSES. The Company shall provide the Employee
with an automobile of the Employee's choice. The Company shall also be
responsible for all expenses in connection with such automobile including, but
not limited to, maintenance, insurance and gas.
(g) MEMBERSHIPS, DUES. The Company shall provide to the Employee a
membership in a social, charitable or religious organization or club, which
membership shall be either in the name of the Employee or in the name of the
Company, as determined by the Employee.
(h) CHARITABLE CONTRIBUTIONS. The Company shall pay or reimburse
the Employee for charitable donations or contributions made, which amount and
which charities shall be determined in the sole discretion of the Employee,
provided, however, that such donations or contributions shall not exceed $10,000
in any fiscal year.
(i) LIFE INSURANCE. The Company shall pay or reimburse Employee
for premiums and other charges associated with such life insurance policies as
Employee and the Company shall mutually agree.
6. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
(a) DEATH. In the event of the death of the Employee during the
Term or any Renewal Term of the Agreement, salary shall be paid to the
Employee's designated beneficiary, or, in the absence of such designation, to
the estate or other legal representative of the Employee for a period of one (1)
year from and after the date of death. The Company shall also be obligated to
pay to the Employee's estate or heirs, as the case may be, such amount of Bonus
based upon (i) the formula set forth in Section 5(b) of this Agreement for the
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fiscal year in which the death of the Employee occurred, (ii) divided by twelve
(12); and (iii) then multiplied by the number of months or any portions thereof
the Employee was employed by the Company just prior to the Employee's death.
Except as set forth herein, other death benefits will be determined in
accordance with the terms of the Company's benefit programs and plans.
(b) DISABILITY.
(i) In the event of the Employee's disability, as
hereinafter defined, the Employee shall be entitled to compensation in
accordance with the Company disability compensation practice for senior
executives, including any separate arrangement or policy covering the Employee,
but in all events the Employee shall continue to receive the Employee's salary
for a period, at the annual rate in effect immediately prior to the commencement
of disability, of not less than 180 days from the date on which the disability
has deemed to occur as hereinafter provided below. Any amounts provided for in
this Section 6(b) shall be offset by other long-term disability benefits
provided to the Employee by the Company.
(ii) "Disability," for the purposes of this Agreement, shall
be deemed to have occurred in the event (A) the Employee is unable by reason of
sickness or accident, to perform the Employee's duties under this Agreement for
an aggregate of 180 days in any twelve-month period or (B) the Employee has a
guardian of the person or estate appointed by a court of competent jurisdiction.
Termination due to disability shall be deemed to have occurred upon the first
day of the month following the determination of disability as defined in the
preceding sentence.
Anything herein to the contrary notwithstanding, if, following a
termination of employment hereunder due to disability as provided in the
preceding paragraph, the Employee becomes reemployed, whether as an Employee or
a consultant to the Company, any salary, annual incentive payments or other
benefits earned by the Employee from such employment shall offset any salary
continuation due to the Employee hereunder commencing with the date of
re-employment.
(c) TERMINATION BY THE COMPANY FOR CAUSE.
(i) Nothing herein shall prevent the Company from
terminating Employment for "Cause," as hereinafter defined. The Employee shall
continue to receive salary only for the period ending with the date of such
termination as provided in this Section 6(c). Any rights and benefits the
Employee may have in respect of any other compensation shall be determined in
accordance with the terms of such other compensation arrangements or such plans
or programs.
(ii) "Cause" shall mean and include those actions or events
specified below in subsections (A) through (E) to the extent the same occur, or
the events constituting the same take place, subsequent to the date of execution
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of this Agreement: (A) Committing or participating in an injurious act of fraud,
gross neglect or embezzlement against the Company; (B) committing or
participating in any other injurious act or omission wantonly, willful,
recklessly or in a manner which was grossly negligent against the Company,
monetarily or otherwise; (C) engaging in a criminal enterprise involving moral
turpitude; (D) conviction of an act or acts constituting a felony under the laws
of the United States or any state thereof; or (E) any assignment of this
Agreement by the Employee in violation of Section 14 of this Agreement. Anything
herein to the contrary notwithstanding, the employment of Employee shall not be
terminable by the Company for Cause if the grounds for such termination
includes, but is not limited to: (i) the result of bad judgment or poor economic
results on the part of the Employee, (ii) any act or omission believed by
Employee in good faith to have been in or not opposed to the interests of the
Company, or (iii) any act or omission in respect of which a determination could
properly be made that Employee met the applicable standard of conduct described
for indemnification or reimbursement or payment of expenses under the Articles
of Incorporation or Bylaws of the Company or the laws of the State of Florida or
the directors' and officers' liability insurance of the Company, in each case as
in effect at the time of such act or omission.
(iii) Notwithstanding anything else contained in this
Agreement, this Agreement will not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Employee a notice of
termination stating that the Employee committed one of the types of conduct set
forth in this Section 6(c) contained in this Agreement and specifying the
particulars thereof and the Employee shall be given a thirty (30) day period to
cure such conduct, if possible.
(d) TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE.
(i) The foregoing notwithstanding, the Company may terminate
the Employee's employment for whatever reason it deems appropriate provided,
however, that in the event such termination is not based on cause, as provided
in Section 6(c) above, the Company may terminate this Agreement upon giving
three (3) months' prior written notice. During such three (3) month period, the
Employee shall continue to perform the Employee's duties pursuant to this
Agreement, and the Company shall continue to compensate the Employee in
accordance with this Agreement. The Employee will receive, at the Employee's
option either (A) a lump sum equal to the "Compensation and Benefits," as
hereinafter defined, for the remaining balance of the Term of this Agreement, at
the then current rate, reduced to present value, as set forth in Section 280G of
the Internal Revenue Code or (B) for the remaining balance of the Term or any
Renewal Term of this Agreement from and after the date of any such termination
and the Company shall on the last day of each calendar month pay to the Employee
such "Compensation and Benefits," which shall be an amount equal to (Y) one
hundred percent (100%) of the Employee's compensation and benefits set forth in
Section 5, which shall specifically include the Base Salary and Bonus, which
Bonus shall be payable on a pro-rata basis for the year in which the Employee's
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employment was terminated other than for cause (the "Compensation and
Benefits"), on the date of any such termination, divided by (Z) twelve (12);
provided however that if (A) there is a decrease in the Employee's Compensation
and Benefits, which specifically include the Employee's then Base Salary and
Bonus, for any reason other than the targets set forth in Section 5(b) are not
met, and (B) the Employee is terminated without cause, the Compensation and
Benefits shall be as existed immediately prior to such a decrease. The Employee
will be entitled to continued Compensation and Benefits coverage and credits as
provided in Section 5 or to reimbursement for the cost of providing the Employee
with comparable benefit coverage during the term in which the Employee is
receiving payments from the Company after termination pursuant to Section 6(d).
Such benefit coverage will not be offset by comparable coverage provided to the
Employee in connection with subsequent employment.
(ii) In the event the Employee's employment with the Company
is terminated pursuant to this Section 6(d), Section 6(f) or Section 6(g),
Section 7(a) of this Agreement and all references thereto shall be inapplicable
as to the Employee and the Company.
(iii) The foregoing notwithstanding, the Employee's employment
may not be terminated by the Company for any reason other than pursuant to
Section 6(a), Section 6(b) and/or Section 6(c) during the first three (3) years
of this Agreement.
(e) VOLUNTARY TERMINATION. In the event the Employee terminates
the Employee's employment on the Employee's own volition (except as provided in
Section 6(f) and/or Section 6(g) prior to the expiration of the Term or during
any Renewal Term of this Agreement, including any renewals thereof, such
termination shall constitute a voluntary termination and in such event the
Employee shall be limited to the same rights and benefits as provided in
connection with a termination for Cause as provided in Section 6(c).
(f) CONSTRUCTIVE TERMINATION OF EMPLOYMENT. If the Employee so
elects, a termination by the Company without Cause under Section 6(d) shall be
deemed to have occurred upon the occurrence of one or more of the following
events without the EXPRESS written consent of the Employee:
(i) a significant change in the nature or scope of the
authorities, powers, functions, duties or responsibilities attached to
Employee's position as described in Section 3; or
(ii) five percent (5%) reduction in the Employee's base
salary or any change in the method of calculating Employee's Bonus Compensation
hereunder which would be detrimental to Employee in any respect; or
(iii) a material breach of the Agreement by the Company; or
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(iv) a material reduction of the Employee's benefits under
any employee benefit plan, program or arrangement (for Employee individually or
as part of a group) of the Company as then in effect or as in effect on the
Effective Date of the Agreement, which reduction shall not be effectuated for
similarly situated employees of the Company; or
(v) failure by a successor company to assume the obligations
under this Agreement.
(vi) a change in the Executive principal office to a location
outside the Broward and Palm Beach County, Florida area.
Anything herein to the contrary notwithstanding, the Employee shall give written
notice to the Board of Directors of the Company that the Employee believes an
event has occurred which would result in a Constructive Termination of the
Employee's employment under this Section 6(f), which written notice shall
specify the particular act or acts, on the basis of which the Employee intends
to so terminate the Employee's employment, and the Company shall then be given
the opportunity, within fifteen (15) days of its receipt of such notice to cure
said event, provided, however, there shall be no time period permitted to cure a
second or subsequent occurrence under this Section 6(f) (whether such second
occurrence be of the same or a different event specified in subsections (i)
through (v) above).
(g) TERMINATION FOLLOWING A CHANGE OF CONTROL.
(i) In the event that a "Change in Control" or an "Attempted
Change in Control" as hereinafter defined, of the Company shall occur at any
time during the Term hereof, the Employee shall have the right to terminate the
Employee's employment under this Agreement upon thirty (30) days written notice
given at any time within one year after the occurrence of such event, and such
termination of the Employee's employment with the Company pursuant to this
Section 6(g)(i), then, in any such event, such termination shall be deemed to be
a Termination by the Company Other than for Cause and the Employee shall be
entitled to such Compensation and Benefits as set forth in Subsection 6(d) of
this Agreement.
(ii) For purposes of this Agreement, a "Change in Control" of
the Company shall mean a change in control (A) as set forth in Section 280G of
the Internal Revenue Code or (B) of a nature that would be required to be
reported in response to Item 1 of the current report on Form 8K, as in effect on
the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"); provided that, without limitation, such a change
in control shall be deemed to have occurred at such time as:
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(A) any "person", other than the Employee, (as such
term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's outstanding securities then
having the right to vote at elections of directors; or,
(B) the individuals who at the commencement date of
the Agreement constitute the Board of Directors cease for any reason to
constitute a majority thereof unless the election, or nomination for election,
of each new director was approved by a vote of at least two thirds of the
directors then in office who were directors at the commencement of the
Agreement; or
(C) there is a failure to elect four or more (or such
number of directors as would constitute a majority of the Board of Directors
(candidates nominated by management of the Company to the Board of Directors; or
(D) the business of the Company for which the
Employee's services are principally performed is disposed of by the Company
pursuant to a partial or complete liquidation of the Company, a sale of assets
(including stock of a subsidiary of the Company) or otherwise.
Anything herein to the contrary notwithstanding, this Section 6(g)(ii) will not
apply where the Employee gives the Employee's explicit written waiver stating
that for the purposes of this Section 6(g)(ii) a Change in Control shall not be
deemed to have occurred. The Employee's participation in any negotiations or
other matters in relation to a Change in Control shall in no way constitute such
a waiver which can only be given by an explicit written waiver as provided in
the preceding sentence.
An "Attempted Change in Control" shall be deemed to have occurred if
any substantial attempt, accompanied by significant work efforts and
expenditures of money, is made to accomplish a Change in Control, as described
in subparagraphs (A), (B), (C) or (D) above whether or not such attempt is made
with the approval of a majority of the then current members of the Board of
Directors.
(iii) In the event that, within twelve (12) months of any
Change in Control of the Company or any Attempted Change in Control of the
Company, the Company terminates the employment of the Employee under this
Agreement, for any reason other than for Cause as defined in Section 6(c), or
the Employee's employment is constructively terminated as defined in Section
6(g)(iv), then, in any such event, such termination shall be deemed to be a
Termination by the Company Other than for Cause and the Employee shall e
entitled to such Compensation and Benefits as set forth in Subsection 6(d) of
this Agreement.
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(iv) For purposes of this Section 6(g), the Employee's
employment shall be deemed constructively terminated in the event one or more of
the following events occurs without the express written consent of the Employee:
(A) Significant change in the nature or scope of the
authorities, powers, functions, duties or responsibilities attached to
Employee's position as described in Section 3; or
(B) A five percent (5%) reduction in the Employee's
salary below the salary in effect immediately prior to such reduction or a
reduction in the target bonus participation under Section 5(d) as a percentage
of salary; or
(C) Material breach of the Agreement by the Company;
or
(D) Material reduction of the Employee's benefits
under any employee benefit plan, program or arrangement (for Employee
individually or as part of a group) of the Company as then in effect or as in
effect on the effective date or the Agreement, which reduction shall not be
effectuated for similarly situated employees of the Company; or
(E) Failure by a successor company to assume the
obligations under the Agreement; or
(F) Change in the Employee's principal office to a
location outside the Palm Beach-Broward County, Florida area.
(v) Anything in this Section 6(g) to the contrary
notwithstanding, in no event will any action or non-action by the Employee at
any time prior to the first anniversary date of the applicable Change in Control
or Attempted Change in Control (including any action or non-action prior to the
effective date of this Agreement) be deemed consent to any of the events
described in this Section 6(g).
(vi) Anything herein to the contrary notwithstanding, in the
event the circumstances giving rise to an Attempted Change in Control are
included in those circumstances giving rise to an actual Change in Control the
twelve (12) month period under this Section 6 will be deemed to have recommenced
on the date the actual Change in Control occurred.
7. COVENANT NOT TO COMPETE AND NON-DISCLOSURE OF INFORMATION.
(a) COVENANT NOT TO COMPETE. Except as set forth in Section
6(d)(ii) of this Agreement, the Employee acknowledges and recognizes the highly
competitive nature of the Company's business and the goodwill, continued
patronage, and specifically the names and addresses of the Company's Clients (as
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hereinafter defined) constitute a substantial asset of the Company having been
acquired through considerable time, money and effort. Accordingly, in
consideration of the execution of this Agreement, the Employee agrees to the
following:
(i) That during the Restricted Period (as hereinafter
defined) and within the Restricted Area (as hereinafter defined), the Employee
will not, individually or in conjunction with others, directly or indirectly,
engage in any Business Activities (as hereinafter defined), whether as an
officer, director, proprietor, employer, partner, independent contractor,
investor (other than as a holder solely as an investment of less than 1% of the
outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent or otherwise.
(ii) That during the Restricted Period and within the
Restricted Area, the Employee will not, directly or indirectly, compete with the
Company by soliciting, inducing or influencing any of the Company's clients
which have a business relationship with the Company at the time during the
Restricted Period to discontinue or reduce the extent of such relationship with
the Company.
(iii) That during the Restricted Period and within the
Restricted Area, the Employee will not (A) directly or indirectly recruit,
solicit or otherwise influence any employee or agent of the Company to
discontinue such employment or agency relationship with the Company, or (B)
employ or seek to employ, or cause or permit any business which competes
directly or indirectly with the Business Activities of the Company (the
"Competitive Business") to employ or seek to employ for any Competitive Business
any person who is then (or was at any time within six (6) months prior to the
date Employee or the Competitive Business employs or seeks to employ such
person) employed by the Company.
(iv) That during the Restricted Period the Employee will not
interfere with, or disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between the Company and any
customer, employee or agent of the Company.
(b) NON-DISCLOSURE OF INFORMATION. The Employee acknowledges that
the Company's trade secrets, private or secret processes, methods and ideas, as
they exist from time to time, customer lists and information concerning the
Company's products, services, training methods, developments, technical
information, marketing activities and procedures, credit and financial data
concerning the Company and/or the Company's Clients, and (the "Proprietary
Information") are valuable, special and unique assets of the Company, access to
and knowledge of which are essential to the performance of the Employee
hereunder. In light of the highly competitive nature of the industry in which
the Company's business is conducted, the Employee agrees that all Proprietary
Information, heretofore or in the future obtained by the Employee as a result of
the Employee's association with the Company shall be considered confidential.
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In recognition of this fact, the Employee agrees that the Employee, during
the Restricted Period, will not use or disclose any of such Proprietary
Information for the Employee's own purposes or for the benefit of any person or
other entity or organization (except the Company) under any circumstances unless
such Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the Company, the
Employee is legally required to disclose such Proprietary Information. Documents
(as hereinafter defined) prepared by the Employee or that come into the
Employee's possession during the Employee's association with the Company are and
remain the property of the Company, and when this Agreement terminates, such
Documents shall be returned to the Company at the Company's principal place of
business, as provided in the Notice provision (Section 10) of this Agreement.
(c) DOCUMENTS. "Documents" shall mean all original written,
recorded, or graphic matters whatsoever, and any and all copies thereof,
including, but not limited to: papers; books; records; tangible things;
correspondence; communications; telex messages; memoranda; work-papers; reports;
affidavits; statements; summaries; analyses; evaluations; client records and
information; agreements; agendas; advertisements; instructions; charges;
manuals; brochures; publications; directories; industry lists; schedules; price
lists; client lists; statistical records; training manuals; computer printouts;
books of account, records and invoices reflecting business operations; all
things similar to any of the foregoing however denominated. In all cases where
originals are not available, the term "Documents" shall also mean identical
copies of original documents or non-identical copies thereof.
(d) COMPANY'S CLIENTS. The "Company's Clients" shall be deemed to
be any persons, partnerships, corporations, professional associations or other
organizations for whom the Company has performed Business Activities.
(e) RESTRICTIVE PERIOD. The "Restrictive Period" shall be deemed
to be during the Term or Renewal Term of this Agreement and for a period of
twelve (12) months following termination of this Agreement.
(f) RESTRICTED AREA. The Restricted Area shall be deemed to mean
any county of any state in which the Company is providing service at the time of
termination.
(g) BUSINESS ACTIVITIES. "Business Activities" shall be deemed to
include any business activities concerning consulting, pharmaceutical and
accounting services to nursing homes and assisted living residents provided by
the Company and any additional activities which the Company or any of its
affiliates may engage in during the term of this Agreement.
(h) COVENANTS AS ESSENTIAL ELEMENTS OF THIS AGREEMENT. It is
understood by and between the parties hereto that the foregoing covenants
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contained in Sections 7(a) and (b) are essential elements of this Agreement, and
that but for the agreement by the Employee to comply with such covenants, the
Company would not have agreed to enter into this Agreement. Such covenants by
the Employee shall be construed to be agreements independent of any other
provisions of this Agreement. The existence of any other claim or cause of
action, whether predicated on any other provision in this Agreement, or
otherwise, as a result of the relationship between the parties shall not
constitute a defense to the enforcement of such covenants against the Employee.
(i) SURVIVAL AFTER TERMINATION OF AGREEMENT. Notwithstanding
anything to the contrary contained in this Agreement, the covenants in Sections
7(a) and (b) shall survive the termination of this Agreement and the Employee's
employment with the Company.
(j) REMEDIES.
(i) The Employee acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the provisions of
Section 7(a) or (b) herein would be inadequate and the breach shall be per se
deemed as causing irreparable harm to the Company. In recognition of this fact,
in the event of a breach by the Employee of any of the provisions of Section
7(a) or (b), the Employee agrees that, in addition to any remedy at law
available to the Company, including, but not limited to monetary damages, all
rights of the Employee to payment or otherwise under this Agreement and all
amounts then or thereafter due to the Employee from the Company under this
Agreement may be terminated and the Company, without posting any bond, shall be
entitled to obtain, and the Employee agrees not to oppose the Company's request
for equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available to the Company.
(ii) The Employee acknowledges that the granting of a
temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 7(a) or (b) and consequently agrees,
upon proof of any such breach, to the granting of injunctive relief prohibiting
any form of competition with the Company. Nothing herein contained shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach.
8. INDEMNIFICATION. The Employee shall continue to be covered by the
Articles of Incorporation and/or the Bylaws of the Company with respect to
matters occurring on or prior to the date of termination of the Employee's
employment with the Company, subject to all provisions of Florida and Federal
law and the Articles of Incorporation and Bylaws of the Company then in effect.
Such reasonable expenses, including attorneys' fees, that may be covered by the
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Articles of Incorporation and/or Bylaws of the Company shall be paid by the
Company on a current basis in accordance with such provision, the Company's
Articles of Incorporation and Florida law. To the extent that any such payments
by the Company pursuant to the Company Articles of Incorporation and/or Bylaws
may be subject to repayment by the Employee pursuant to the provisions of the
Company's Articles of Incorporation or Bylaws, or pursuant to Florida or Federal
law, such repayment shall be due and payable by the Employee to the Company
within twelve (12) months after the termination of all proceedings, if any,
which relate to such repayment and to the Company's affairs for the period prior
to the date of termination of the Employee's employment with the Company and as
to which Employee has been covered by such applicable provisions.
9. WITHHOLDING. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Employee or the Employee's
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company may accept other arrangements
pursuant to which it is satisfied that such tax and other payroll obligations
will be satisfied in a manner complying with applicable law or regulation.
10. NOTICES. Any notice required or permitted to be given under the
terms of this Agreement shall be sufficient if in writing and if sent postage
prepaid by registered or certified mail, return receipt requested; by overnight
delivery; by courier; or by confirmed telecopy, in the case of the Employee to
the Employee's last place of business or residence as shown on the records of
the Company, or in the case of the Company to its principal office as set forth
in the first paragraph of this Agreement, or at such other place as it may
designate.
11. WAIVER. Unless agreed in writing, the failure of either party, at
any time, to require performance by the other of any provisions hereunder shall
not affect its right thereafter to enforce the same, nor shall a waiver by
either party of any breach of any provision hereof be taken or held to be a
waiver of any other preceding or succeeding breach of any term or provision of
this Agreement. No extension of time for the performance of any obligation or
act shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
12. COMPLETENESS AND MODIFICATION. This Agreement constitutes the entire
understanding between the parties hereto superseding all prior and
contemporaneous agreements or understandings among the parties hereto concerning
the Employment Agreement. This Agreement may be amended, modified, superseded or
canceled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties or, in the case of a waiver, by the party to be charged.
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13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one agreement.
14. BINDING EFFECT/ASSIGNMENT. This Agreement shall be binding upon the
parties hereto, their heirs, legal representatives, successors and assigns. This
Agreement shall not be assignable by the Employee but shall be assignable by the
Company in connection with the sale, transfer or other disposition of its
business or to any of the Company affiliates controlled by or under common
control with the Company.
15. GOVERNING LAW. This Agreement shall become valid when executed and
accepted by Company. The parties agree that it shall be deemed made and entered
into in the State of Florida and shall be governed and construed under and in
accordance with the laws of the State of Florida. Anything in this Agreement to
the contrary notwithstanding, the Employee shall conduct the Employee's business
in a lawful manner and faithfully comply with applicable laws or regulations of
the state, city or other political subdivision in which the Employee is located.
16. FURTHER ASSURANCES. All parties hereto shall execute and deliver
such other instruments and do such other acts as may be necessary to carry out
the intent and purposes of this Agreement.
17. HEADINGS.. The headings of the sections are for convenience only and
shall not control or affect the meaning or construction or limit the scope or
intent of any of the provisions of this Agreement.
18. SURVIVAL. Any termination of this Agreement shall not, however,
affect the ongoing provisions of this Agreement which shall survive such
termination in accordance with their terms.
19. SEVERABILITY. The invalidity or unenforceability, in whole or in
part, of any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
portions thereof.
20. ENFORCEMENT. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Agreement, the
successful party will be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs.
21. VENUE. Company and Employee acknowledge and agree that the U.S.
District for the Southern District of Florida, or if such court lacks
jurisdiction, the 15th Judicial Circuit (or its successor) in and for Palm Beach
County, Florida, shall be the venue and exclusive proper forum in which to
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adjudicate any case or controversy arising either, directly or indirectly, under
or in connection with this Agreement and the parties further agree that, in the
event of litigation arising out of or in connection with this Agreement in these
courts, they will not contest or challenge the jurisdiction or venue of these
courts.
22. CONSTRUCTION. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS READ ALL OF THE TERMS OF THIS
AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO ABIDE BY ITS TERMS AND
CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of date
set forth in the first paragraph of this Agreement.
THE COMPANY:
QPQ Corporation
By: /S/ Robert Hausman
-------------------
Robert Hausman
THE EMPLOYEE:
/s/ C. Lawrence Rutstein
- -------------------------
C. Lawrence Rutstein
15
COMPENSATION AGREEMENT
----------------------
THIS AGREEMENT is made as of the 1st day of June, 1997 by and between QPQ
CORPORATION (the "Company") and CHARLES B. PEARLMAN. ("Pearlman").
WHEREAS, the Company is a publicly-held company.
WHEREAS, Pearlman is ana attorney practicing corporate and securities law
and performs legal services for the Company.
WHEREAS, the Company desires to compensate Pearlman for such legal
services rendered and to be rendered.
WHEREAS, Pearlman has agreed to accept such engagement upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the recitals, promises and conditions
in this Agreement, the parties hereto agree as follows:
1. RECITALS. The foregoing recitals are true and correct.
2. ENGAGEMENT. The Company hereby engages Pearlman to provide it with
certain legal services as same relate to matters involving corporate and/or
securities law (the "Services") and Pearlman hereby accepts such engagement.
3. COMPENSATION. As partial compensation for the Services, the Company
shall pay APTB an aggregate of 300,000 shares of the Company's Common Stock par
value $.01 per share (the "Compensation Stock"). In connection therewith, the
Company shall file a registration statement on Form S-8 with the Securities and
Exchange Commission registering the Compensation Stock under the Securities Act
of 1933, as amended.
4. REGISTRATION. The Company agrees to provide Pearlman with
registraion rights at the Company's cost and expense and include the shares of
Common Stock in a registration statement to be filed by the Company with the
Securities and Exchange Commission within the proximate future.
5. MISCELLANEOUS.
(a) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective legal representatives,
administrators, executors, successors, subsidiaries and affiliates.
(b) This Agreement shall be governed and construed in accordance
with the laws of the State of Florida.
<PAGE>
(c) This Agreement constitutes the entire agreement between the
parties. No promises, guarantees, inducements or agreements, oral or written,
express or implied, have been made other than as contained in this Agreement.
This Agreement can only be modified or changed in writing signed by both parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and date first above written.
WITNESSES: QPQ CORPORATION
By: /s/ C. Lawrence Rutstein
------------------------------------
C. Lawrence Rutstein, President
/s/ Charles B. Pearlman
-------------------------------------
Charles B. Pearlman
2
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
June 13, 1997
QPQ Corporation
7777 Glades Road, Suite 213
Boca Raton, Florida 33434
Re: Registration Statement on Form S-8 - QPQ Corporation-Common
Stock issued pursuant to Consulting, Employment and Compensation
Agreements
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission (the "Commission") with respect to the
registration by QPQ Corporation (the "Company") of an aggregate of 1,112,840
shares of Common Stock, par value $.01 per share (the "Common Stock"), issued
pursuant to a Management Consulting Agreement with Manny Shulman, an Employment
Agreement with C. Lawrence Rutstein and a Compensation Agreement with Charles B.
Pearlman (collectively the "Agreements").
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Agreements, the Company's
Articles of Incorporation, By-Laws and corporate minutes provided to us by the
Company. In all such examinations, we have assumed the genuineness of all
signatures on original documents, and the conformity to originals or certified
documents of all copies submitted to us as conformed, photostat or other copies.
In passing upon certain corporate records and documents of the Company, we have
necessarily assumed the correctness and completeness of the statements made or
included therein by the Company and we express no opinion thereon.
<PAGE>
QPQ Corporation
June 13, 1997
Page 2
Based upon and in reliance of the foregoing, we are of the opinion that
the shares of Common Stock when issued in accordance with the terms of the
Agreements, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
/s/ Atlas, Pearlman, Trop & Borkson, P.A.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated March 29, 1996, on our audit of the consolidated
financial statements of QPQ Corporation and Subsidiaries as of December 31, 1995
and for the year then ended, which report is included in the Company's 1996
Annual Report on Form 10-KSB.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Miami, Florida
June 11, 1997
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We consent to the incorporation by reference in this Registration Statement on
Form S-8 and related prospectus of QPQ Corporation, for the registration of
1,112,840 shares of its common stock, of our report dated March 27, 1997, with
respect to the consolidated financial statements of QPQ Corporation and
Subsidiaries included in its Annual Report on Form 10-KSB for the year ended
December 31, 1996.
/s/ Moore Stephens Lovelace, P.L.
MOORE STEPHENS LOVELACE, P.L.
Certified Public Accountants
Orlando, Florida
June 11, 1997
