-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A2rA96C2MoBSj9xjCKsI0oJjCsuP1iBEx6snZdZpEdgqPBUEoKZif7+2qDgEOc3P 8GoXeI3bY/aKfiXp5uIVtw== 0000950144-01-509937.txt : 20020412 0000950144-01-509937.hdr.sgml : 20020412 ACCESSION NUMBER: 0000950144-01-509937 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20011211 GROUP MEMBERS: DOMINIC A. POLIMENI GROUP MEMBERS: JOAN R. GUBITOSI GROUP MEMBERS: ROBERT V. GUBITOSI SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUESTRON TECHNOLOGY INC CENTRAL INDEX KEY: 0000732152 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063] IRS NUMBER: 232257354 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-36323 FILM NUMBER: 1811334 BUSINESS ADDRESS: STREET 1: 6400 CONGRESS AVENUE STREET 2: SUITE 200A CITY: BOCA RATON STATE: FL ZIP: 33487 BUSINESS PHONE: 4072415251 MAIL ADDRESS: STREET 1: 6400 CONGRESS AVENUE STREET 2: SUITE 200A CITY: BOCA RATON STATE: FL ZIP: 33487 FORMER COMPANY: FORMER CONFORMED NAME: JUDICATE INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GULFSTREAM FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000944000 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 650212776 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 6400 CONGRESS AVENUE STREET 2: SUITE 200A CITY: BOCA RATON STATE: FL ZIP: 33487 BUSINESS PHONE: 5612413355 MAIL ADDRESS: STREET 1: 6400 CONGRESS AVENUE STREET 2: SUITE 200A CITY: BOCA RATON STATE: FL ZIP: 33487 SC 13D/A 1 g73265a2sc13da.txt QUESTRON TECHNOLOGY/ GULFSTREAM FINANCIAL SC 13D/A Page 1 of 16 Pages SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(a) Under the Securities Exchange Act of 1934 (Amendment No. 2)* QUESTRON TECHNOLOGY, INC. ------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $.001 PER SHARE --------------------------------------- (Title of Class of Securities) 748372-208 -------------- (CUSIP Number) Dominic A. Polimeni Gulfstream Financial Group, Inc. 6400 Congress Avenue Suite 2000 Boca Raton, FL 33487 (561) 241-5251 -------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 11, 2001 ------------------------------------------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e) 13d-1(f) or 13-d(1)(g), check the following box [ ]. NOTE. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. SEE Rule 13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 748372 20 8 PAGE 2 OF 16 PAGES 1. NAME OF REPORTING PERSON: Gulfstream Financial Group, Inc. ("Gulfstream") S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON: 65-0212776 - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Florida corporation - -------------------------------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: Sole Voting Power: 34,273 BENEFICIALLY shares of Common Stock. (Does not include shares OWNED BY subject to warrants.) EACH ----------------------------------------------------- REPORTING 8. SHARED VOTING POWER Not applicable PERSON WITH ----------------------------------------------------- 9. SOLE DISPOSITIVE POWER: 34,273 shares of Common Stock. (Does not include shares subject to warrants.) ----------------------------------------------------- 10. SHARED DISPOSITIVE POWER Not applicable - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,034,273 shares of Common Stock.* (Including 1,000,000 shares issuable upon exercise of Series IV Warrants.) - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] *Does not include 1,148,862 of 2,183,135 shares of Common Stock beneficially-owned by Mr. Polimeni, or 34,178 shares issuable upon the exercise of options held by Mr. Gubitosi, which are exercisable within 60 days hereof. - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 10.14% of Common Stock, based on 9,202,553 shares of Common Stock outstanding at November 12, 2001. See response to Item 5 herein. - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- CUSIP NO. 748372 20 8 PAGE 3 OF 16 PAGES 1. NAME OF REPORTING PERSON: Dominic A. Polimeni S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON: - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A - -------------------------------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: 14,684 shares of BENEFICIALLY Common Stock OWNED BY ----------------------------------------------- EACH 8. SHARED VOTING POWER: 34,273 shares of REPORTING Common Stock. (Does not include shares PERSON subject to options or warrants.) ----------------------------------------------- 9. SOLE DISPOSITIVE POWER: 14,684 shares of Common Stock ----------------------------------------------- 10. SHARED DISPOSITIVE POWER: 34,273 shares of Common Stock. (Does not include shares subject to options or warrants.) - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,183,135 shares of Common Stock.* (Includes options for 1,134,178 shares of Common Stock held by Mr. Polimeni and Series IV Warrants for 1,000,000 shares of Common Stock held by Gulfstream ) - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] *Does not include options to purchase 42,087 shares held by Mr. Polimeni which become exercisable more than 60 days after the date of this filing. Does not include 34,178 shares of Common Stock issuable upon the exercise of options held by Mr. Gubitosi which are exercisable within 60 days hereof. - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 19.26% of Common Stock, based on 9,202,553 shares of Common Stock outstanding at November 12, 2001. See response to Item 5 herein. - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- CUSIP NO. 748372 20 8 PAGE 4 OF 16 PAGES 1. NAME OF REPORTING PERSON: Joan R. Gubitosi S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON: - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A - -------------------------------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: Not applicable BENEFICIALLY ----------------------------------------------- OWNED BY 8. SHARED VOTING POWER: 34,273 shares of EACH Common Stock. (Does not include shares REPORTING subject to options or warrants.) PERSON WITH ----------------------------------------------- 9. SOLE DISPOSITIVE POWER: Not applicable ----------------------------------------------- 10. SHARED DISPOSITIVE POWER: 34,273 shares of Common Stock. (Does not include shares subject to options or warrants) - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,134,273 shares of Common Stock.* (Includes options for 1,100,000 shares of Common Stock held by Mr. Polimeni and Series IV Warrants for 1,000,000 shares of Common Stock held by Gulfstream.) - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] *Does not include 14,684 shares of Common Stock held by Mr. Polimeni nor 34,178 shares issuable upon the exercise options held by Mr. Polimeni, which are exercisable within 60 days hereof. Does not include 34,178 shares issuable upon the exercise of options held by Mr. Gubitosi, which are exercisable within 60 days hereof. - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 18.88% of Common Stock, based on 9,202,553 shares of Common Stock outstanding at November 12, 2001. See response to Item 5 herein. - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- CUSIP NO. 748372 20 8 PAGE 5 OF 16 PAGES 1. NAME OF REPORTING PERSON: Robert V. Gubitosi S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON: - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS 00 - -------------------------------------------------------------------------------- 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A - -------------------------------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER: None (Does not include BENEFICIALLY shares subject to options) OWNED BY ----------------------------------------------- EACH 8. SHARED VOTING POWER: REPORTING Not applicable PERSON WITH ----------------------------------------------- 9. SOLE DISPOSITIVE POWER: None (Does not include shares subject to options) ----------------------------------------------- 10. SHARED DISPOSITIVE POWER: Not applicable - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 34,178 shares of Common Stock.* (Includes options for 34,178 shares of Common Stock held by Mr. Gubitosi.) - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] *Does not include any shares beneficially owned by Mr. Polimeni, Mrs. Gubitosi or Gulfstream. - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0.37% of Common Stock, based on 9,202,553 shares of Common Stock outstanding at November 12, 2001. See response to Item 5 herein. - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- PAGE 6 OF 16 PAGES ITEM 1. SECURITY AND ISSUER. This Amendment No. 2 to Schedule 13D ("Amendment No. 2") filed by the Reporting Persons named herein with respect to shares of Common Stock, par value $.001 per share ("Common Stock"), of Questron Technology, Inc., a Delaware corporation (the "Company"), amends and restates the Schedule 13D of the Reporting Persons filed on April 10, 1995, as amended by Amendment No. 1 thereto filed on February 17, 1998 (collectively, such Schedule 13D as amended through Amendment No. 1 being referred to as the "Statement.") All share amounts reported in this Amendment No. 2 have been adjusted to reflect the one-for-ten reverse split of the Common Stock which became effective January 2, 1997. ITEM 2. IDENTITY AND BACKGROUND. I. Corporate Securityholder ------------------------ (a) This Amendment No. 2 is being filed by Gulfstream Financial Group, Inc., a Florida corporation (sometimes hereinafter referred to as "Gulfstream"). (b) The address of Gulfstream's principal business and principal office is: 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (c) The principal business of Gulfstream: Gulfstream was formed for the purpose of providing financial consulting and investment banking services. (d) During the last five (5) years, Gulfstream has not been convicted in a criminal proceeding. (e) During the last five (5) years, Gulfstream has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and is not subject to a judgment, decree or final order enjoining further violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. II. Executive Officers and Directors of, and Persons Controlling, Gulfstream Financial Group, Inc. -------------------------------------------------------------- Dominic A. Polimeni ------------------- (a) This Amendment No. 2 is also being filed by Dominic A. Polimeni, the President, one of two Directors and a principal stockholder of Gulfstream. (b) Mr. Polimeni's business address is 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (c) Mr. Polimeni's principal occupation is as a Director and the Chairman and Chief Executive Officer of the Company. Mr. Polimeni is also a financial consultant and investment banker for Gulfstream, which has offices located at 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. PAGE 7 OF 16 PAGES (d) During the last five (5) years, Mr. Polimeni has not been convicted in a criminal proceeding. (e) During the last five (5) years, Mr. Polimeni has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and is not subject to a judgment, decree or final order enjoining further violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Polimeni is a United States citizen. Joan R. Gubitosi ---------------- (a) This Amendment No. 2 is also being filed by Joan R. Gubitosi, the Secretary, one of two Directors and a principal stockholder of Gulfstream. (b) Mrs. Gubitosi's business address is 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (c) Mrs. Gubitosi's principal occupation is serving as a Director and the Secretary for Gulfstream, which has offices located at 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (d) During the last five (5) years, Mrs. Gubitosi has not been convicted in a criminal proceeding. (e) During the last five (5) years, Mrs. Gubitosi has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and is not subject to a judgment, decree or final order enjoining further violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mrs. Gubitosi is a United States citizen. Robert V. Gubitosi -------------------- (a) This Amendment No. 2 is also being filed by Robert V. Gubitosi, the spouse of Mrs. Gubitosi. (b) Mr. Gubitosi's business address is 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (c) Mr. Gubitosi's principal occupation is serving as a Director and the President and Chief Financial Officer of the Company. Mr. Gubitosi is also a financial consultant and investment banker for Gulfstream, which has offices located at 6400 Congress Avenue, Suite 2000, Boca Raton, FL 33487. (d) During the last five (5) years, Mr. Gubitosi has not been convicted in a criminal proceeding. PAGE 8 OF 16 PAGES (e) During the last five (5) years, Mr. Gubitosi has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and is not subject to a judgment, decree or final order enjoining further violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Gubitosi is a United States citizen. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. GULFSTREAM FINANCIAL GROUP, INC. Gulfstream acquired 4,000 shares in a private offering for $60,000 in cash. These funds were derived from Gulfstream's working capital. Gulfstream acquired an additional 258,130 shares in a share exchange agreement with the Company whereby Gulfstream exchanged all of its shares of common stock of Quest Electronic Hardware, Inc., a Delaware corporation ("Quest"). See Item 6. DOMINIC A. POLIMENI In addition to the securities acquired by Gulfstream as reported above, Mr. Polimeni acquired the Company's securities as described below. On July 2, 1998, Mr. Polimeni acquired 14,533 shares of Common Stock upon the conversion of 10,000 shares of the Company's Series B Preferred Stock. He had acquired the Series B Preferred Stock in a private transaction on September 15, 1997 using $77,500 of personal funds. In addition, on July 2, 1998, Mr. Polimeni acquired 151 shares of Common Stock as a dividend in respect of his Series B Preferred Stock. Effective March 29, 1999, pursuant to the terms of the Company's employment agreement with Mr. Polimeni, Mr. Polimeni received options to purchase 1,100,000 shares of Common Stock at an exercise price of $4.50 per share (the "March 1999 Options"). Such options expire on March 29, 2009. Mr. Polimeni was granted options pursuant to the Company's 1996 Stock Option Plan to purchase 26,265 shares of Common Stock at $3.5625 per share effective November 19, 1999, of which 17,510 shares have vested and are currently exercisable and of which 8,755 shares vest and become exercisable on November 19, 2002. All such options expire on November 19, 2009. Mr. Polimeni was granted options pursuant to the Company's 1996 Stock Option Plan to purchase 50,000 shares of Common Stock at $3.33 per share effective August 7, 2001, of which 16,668 shares have vested and are currently exercisable and of which 16,666 shares vest and become exercisable on August 7, 2002 and August 7, 2003. All such options expire on August 7, 2011. JOAN R. GUBITOSI Mrs. Gubitosi has not acquired any securities separate from those in which she holds a beneficial interest and which were reported as acquired by Gulfstream and Mr. Polimeni in this item 3. ROBERT V. GUBITOSI Mr. Gubitosi was granted options to purchase 26,265 shares of Common Stock at $3.5625 per share effective November 19, 1999, of which 17,510 shares have vested and are currently exercisable and of which 8,755 shares vest and become exercisable on November 19, 2002. All such options expire on November 19, 2009. PAGE 9 OF 16 PAGES Mr. Gubitosi was granted options to purchase 50,000 shares of Common Stock at $3.33 per share effective August 7, 2001, of which 16,668 shares have vested and are currently exercisable and of which 16,666 shares vest and become exercisable on August 7, 2002 and August 7, 2003. All such options expire on August 7, 2011. ITEM 4. PURPOSE OF TRANSACTION. The securities of the Company referenced herein were acquired for investment purposes. The Company has disclosed in its periodic reports filed with the SEC that the Company continues to work with its investment banker exploring strategic alternatives, including exploring possible sources of investments in the Company, possible refinancing of the Company's indebtedness or a possible sale of the Company or some or all of its assets. Although these explorations are continuing and the Company has stated that it has received some indications of interest in further discussion concerning these possible transactions, the Company has not received any proposals or entered into any negotiations with respect to possible investments, financings or sales. Other than as described in the foregoing paragraph, the Reporting Persons (and their affiliates) have no present plans or proposals which relate to or would result in the acquisition or disposition by any person of securities of the Company. The Reporting Persons (and their affiliates) will periodically review their investments in the Company and at any time the amount of such investments may be increased or decreased. Except as may otherwise be set forth herein, the Reporting Persons do not at the present time have any plans or proposals which relate to or would result in: (1) The acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (2) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (3) A sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (4) Any change in the present Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; (5) Any material change in the present capitalization or dividend policy of the Company; (6) Any other material change in the Company's business or corporate structure; (7) Changes in the Company's articles of incorporation, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (8) Causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (9) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (10) Any action similar to any of those enumerated above. PAGE 10 OF 16 PAGES ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) and (b) GULFSTREAM FINANCIAL GROUP, INC. Gulfstream beneficially owns 1,034,273 shares of Common Stock, of which 34,273 shares are held of record and 1,000,000 shares are issuable upon the exercise of warrants, all of which warrants are exercisable within 60 days of the date hereof. Such warrants became exercisable at $5.75 per share as of March 4, 1998 and expire on March 4, 2002 (the "Series IV Warrants"). Such 1,034,273 shares represent approximately 10.14% of the outstanding shares of Common Stock, based on the outstanding shares as of November 12, 2001. Gulfstream has the sole power to vote and dispose of 34,273 shares of Common Stock. Gulfstream would have the sole power to vote and dispose of the 1,000,000 shares of Common Stock issuable upon the exercise of the Series IV Warrants, all of which are exercisable within 60 days of the date hereof, if such shares were acquired upon the exercise of the Series IV Warrants. Mr. Polimeni and Mrs. Gubitosi are each 50% stockholders in Gulfstream, and, therefore, share voting and investment power with respect to the foregoing 34,273 shares and 1,000,000 shares issuable upon the exercise of Series IV Warrants. Gulfstream disclaims beneficial ownership of the following shares of Common Stock: (i) the 14,684 shares held of record by Mr. Polimeni; (ii) the 34,178 shares issuable upon the exercise of the options held by Mr. Polimeni; (iii) the 1,100,000 shares issuable upon the exercise of the March 1999 Options held by Mr. Polimeni; and (iv) the 34,178 shares issuable upon the exercise of options held by Mr. Gubitosi. DOMINIC A. POLIMENI Mr. Polimeni beneficially owns 2,183,135 shares of Common Stock, of which (i) 14,684 shares are held of record by Mr. Polimeni, (ii) 34,178 represent that portion of the options which are exercisable within 60 days of the date hereof, (iii) 1,100,000 represent the March 1999 Options, all of which are exercisable within 60 days of the date hereof, (iv) 34,273 shares are held of record by Gulfstream and (v) 1,000,000 shares represent the Series IV Warrants, which are held of record by Gulfstream and all of which are exercisable within 60 days of the date hereof. Such 2,183,135 shares represent approximately 19.26% of the outstanding shares of Common Stock, based on the outstanding shares as of November 12, 2001. Mr. Polimeni has the sole power to vote and dispose of 14,684 shares of Common Stock. Mr. Polimeni would have the sole power to vote and dispose of the 34,178 shares of Common Stock issuable upon the exercise of that portion of the options which are exercisable within 60 days of the date hereof, if such shares were acquired upon the exercise of the options. Pursuant to a shareholders agreement between Mr. Polimeni and Mrs. Gubitosi, Mr. Polimeni and Mrs. Gubitosi have the shared power to vote and dispose of the 1,100,000 shares of Common Stock issuable upon the exercise of the March 1999 Options, all of which are exercisable within 60 days of the date hereof, if such shares were acquired upon the exercise of the March 1999 Options. Mr. Polimeni is the indirect beneficial owner of the 34,273 shares of Common Stock held of record by Gulfstream and has the shared power with Mrs. Gubitosi to vote and dispose of such shares. Mr. Polimeni is also the indirect beneficial owner of and would have the shared power with Mrs. Gubitosi to vote and dispose of the 1,000,000 shares of Common Stock issuable upon the exercise of the Series IV Warrants held of record by Gulfstream, all of which are exercisable within 60 days of the date hereof, PAGE 11 OF 16 PAGES if such shares were acquired by Gulfstream upon the exercise of the Series IV Warrants. Mr. Polimeni disclaims beneficial ownership of the 34,178 shares issuable upon the exercise of options held by Mr. Gubitosi. JOAN R. GUBITOSI Mrs. Gubitosi beneficially owns 2,134,273 shares of Common Stock, of which (i) 1,100,000 represent the March 1999 Options held of record by Mr. Polimeni, all of which are exercisable within 60 days of the date hereof and in which Mrs. Gubitosi holds a beneficial interest under a shareholders agreement between Mr. Polimeni and Mrs. Gubitosi, (ii) 34,273 shares are held of record by Gulfstream and (iii) 1,000,000 shares represent that portion of Series IV Warrants, which are held of record by Gulfstream and all of which are exercisable within 60 days of the date hereof. Such 2,134,273 shares represent approximately 18.88% of the outstanding shares of Common Stock, based on the outstanding shares as of November 12, 2001. Mrs. Gubitosi and Mr. Polimeni have the shared power to vote and dispose of the 1,100,000 shares of Common Stock issuable upon the exercise of the March 1999 Options, all of which are exercisable within 60 days of the date hereof, if such shares were acquired upon the exercise of the March 1999 Options. Mrs. Gubitosi is the indirect beneficial owner of the 34,273 shares of Common Stock held of record by Gulfstream and has the shared power with Mr. Polimeni to vote and dispose of such shares. Mrs. Gubitosi is also the indirect beneficial owner of and would have the shared power with Mr. Polimeni to vote and dispose of the 1,000,000 shares of Common Stock issuable upon the exercise of the Series IV Warrants held of record by Gulfstream, all of which are exercisable within 60 days of the date hereof, if such shares were acquired by Gulfstream upon the exercise of the Series IV Warrants. Mrs. Gubitosi disclaims beneficial ownership of the following shares of Common Stock: (i) the 14,684 shares held of record by Mr. Polimeni; (ii) the 34,178 shares issuable upon the exercise of the options held by Mr. Polimeni; and (iii) the 34,178 shares issuable upon the exercise of options held by Mr. Gubitosi. ROBERT V. GUBITOSI Mr. Gubitosi beneficially owns 34,178 shares of Common Stock representing that portion of certain options granted to Mr. Gubitosi by the Company which are exercisable within 60 days of the date hereof. Such 34,178 shares represent approximately 0.37% of the outstanding shares of Common Stock, based on the outstanding shares as of November 12, 2001. Mr. Gubitosi disclaims beneficial ownership of (i) the 1,034,273 shares owned beneficially by Gulfstream, (ii) the 2,134,273 shares owned beneficially by his spouse, Mrs. Gubitosi, and (iii) the 2,183,135 shares owned beneficially by Mr. Polimeni. (c) 226,000 shares of Common Stock held by Gulfstream were sold from Gulfstream's margin account by a securities broker as a result of a margin call, on the dates and at the prices shown below: Number of Price Per Date Shares Share -------- --------- --------- 10/01/01 1,000 $1.85 10/02/01 10,000 $2.00 10/03/01 10,000 $2.05 10/04/01 1,000 $1.98 PAGE 12 OF 16 PAGES 10/08/01 1,500 $1.69 10/09/01 21,000 $1.33 10/10/01 36,300 $0.86 10/10/01 1,000 $0.80 10/11/01 86,100 $0.75 10/12/01 50,600 $0.70 10/15/01 7,500 $0.68 TOTAL: 226,000 Other than the transactions described herein, none of the Reporting Persons has effected any transaction in the securities of the Company during the past sixty (60) days. (d) Mr. Polimeni and Mrs. Gubitosi, the principal stockholders of Gulfstream, have the right to receive or the power to direct the receipt of dividends from, or proceeds from the sale of, the securities of the Company held by Gulfstream. Pursuant to a shareholders agreement between Mr. Polimeni and Mrs. Gubitosi, Mrs. Gubitosi also has a shared right with Mr. Polimeni to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the 1,100,000 March 1999 Options, upon the exercise thereof. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Pursuant to a Purchase of Assets Agreement dated as of November 29, 1994 between Quest Electronic Hardware, Inc., a privately owned Delaware corporation ("Quest"), and Arrow Electronics, Inc., a New York corporation ("Arrow"), Quest acquired on March 31, 1995 the fasteners distribution business (the "Fasteners Business") of Arrow for the aggregate purchase price of approximately five million dollars ($5,000,000) and the assumption of certain obligations of the Fasteners Business. Pursuant to a Share Acquisition Agreement dated as of November 29, 1994 by and among Gulfstream, Phillip D. Schwiebert ("Schwiebert"), Quest and the Company, the Company acquired on March 31, 1995 all of the outstanding shares of Quest. At the closing of the transaction, the Company issued to the stockholders of Quest (Gulfstream and Schwiebert) 387,194 shares of Common Stock, which represented such number of newly issued, fully paid and non-assessable shares of the Company, in exchange for all of the issued and outstanding shares of common stock of Quest owned by such stockholders as was necessary in order for such stockholders to own in the aggregate at the date of the aforementioned closing twenty-five percent (25%) of the Common Stock which was issued and outstanding on a fully diluted basis as of the date of closing. Pursuant to an Employment Agreement dated as of November 29, 1994 between Quest and Dominic A. Polimeni, Quest agreed to employ Mr. Polimeni, and Mr. Polimeni agreed to serve as Chairman, Chief Executive Officer and Chief Financial Officer of Quest for a period of five (5) years unless terminated pursuant to the terms of said agreement. PAGE 13 OF 16 PAGES Mr. Polimeni also was named a Director and the President and Chief Operating Officer of the Company. Pursuant to a Management Advisory and Consulting Agreement dated as of November 29, 1994 between Gulfstream and the Company, Gulfstream agreed to provide administrative services to the Company and to act as an advisor and consultant to the management of the Company to assist the Company in the expansion of Quest's business, obtaining financing and maximizing profitability. In consideration of Gulfstream's services thereunder, the Company agreed to compensate Gulfstream during the term of said agreement at an annual rate and to grant to Gulfstream, subject to certain conditions and restrictions, warrants to purchase at a price of $0.10 per share up to 2.5% (or a cumulative amount of 10%) of the Common Stock outstanding as of March 31, 1995 in respect of the initial fiscal year where pre-tax earnings of Quest shall equal or exceed the following targets: (i) $1,400,000; (ii) $1,800,000; (iii) $2,200,000; and (iv) $2,600,000. In order to provide partial financing for the acquisition of the Fasteners Business, the Company entered into a private placement of its securities pursuant to a Private Placement Memorandum dated as of January 10, 1995. In connection with such private placement, Gulfstream acquired 4,000 shares of the Common Stock for an aggregate purchase of $60,000 pursuant to a Subscription Agreement dated March 30, 1995. Pursuant to an Exchange Agreement dated as of November 8, 1996 among Gulfstream, Schwiebert and the Company (the "Exchange Agreement"), Gulfstream exchanged its rights to receive warrants to purchase 10% of the Common Stock outstanding on March 31, 1995 for an option for 120,000 shares exercisable at $3.75 per share, which became exercisable as of May 8, 1997 and was due to expire on November 8, 2006. This option was terminated on March 1, 1999 pursuant to a certain Termination of Management Advisory and Consulting Agreement between the Company and Gulfstream on such date (the "Termination Agreement"). Also pursuant to the Exchange Agreement, Gulfstream was entitled to receive options to acquire additional shares of Common Stock at an exercise price equal to the fair market value of the Common Stock at the date of grant if the pre-tax income targets set forth below were met or exceeded in any fiscal year up to and including fiscal year 2001: No. of Additional Shares Pre-tax Income at Least ------------------------ ----------------------- 333,333 $2,500,000 333,333 $3,500,000 333,334 $4,500,000 Options for 666,667 of the foregoing shares were subsequently granted. The foregoing options for 666,667 shares as well as the right to receive the remaining option for 333,333 shares were terminated pursuant to the Termination Agreement on March 1, 1999. Gulfstream also held an option for 40,500 shares under the Company's 1996 Stock Option Plan, exercisable at $6.625 per share, which became exercisable as follows: 13,500 shares as of June 22, 1998; 13,500 shares as of March 22, 1999; and 13,500 shares as of December 22, 1999. Such options were terminated pursuant to the Termination Agreement on March 1, 1999. Effective March 29, 1999, pursuant to the terms of the Company's employment agreement with Mr. Polimeni dated March 29, 1999, Mr. Polimeni received the March 1999 Options. Pursuant to the terms of a shareholders agreement between Mr. Polimeni and Mrs. Gubitosi, beneficial interest in such options is shared equally by Mr. Polimeni and Mrs. Gubitosi. PAGE 14 OF 16 PAGES As described above in item 3, Mr. Polimeni also was granted options to purchase Common Stock effective November 19, 1999 and August 7, 2001. As described above in item 3, Mr. Gubitosi was granted options to purchase Common Stock effective November 19, 1999 and August 7, 2001. Except as set forth in the immediately preceding paragraphs, there are no contracts, arrangements, understandings or relationships (legal or otherwise, except for the marital relationship between Mr. and Mrs. Gubitosi and the contractual and legal relationships inherent in the relationships between or among Gulfstream and either or both of Mr. Polimeni and Mrs. Gubitosi as a result of any of their positions as executive officers, directors and principal stockholders of Gulfstream) between or among the undersigned or any of them, or between or among the undersigned and any other person with respect to any securities of the Company, including but not limited to transfer or voting of any such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. None of the shares of Common Stock reported herein as beneficially owned by the undersigned are pledged or otherwise subject to a contingency the occurrence of which would give another person voting or investment power over such securities. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit Number Document -------------- -------- 1 Purchase of Assets Agreement dated as of November 29, 1994 between Quest Electronic Hardware, Inc. and Arrow Electronics, Inc. (previously filed as part of the Statement) 2 Share Acquisition Agreement dated as of November 29, 1994 by and among Gulfstream Financial Group, Inc., Philip D. Schwiebert, Quest Electronic Hardware, Inc. and Judicate, Inc. (previously filed as part of the Statement) 3 Employment Agreement dated as of November 29, 1994 between Quest Electronic Hardware, Inc. and Domenic Polimeni (previously filed as part of the Statement) 4 Management Advisory and Consulting Agreement dated as of November 29, 1994 between Gulfstream Financial Group, Inc. and Judicate, Inc. (previously filed as part of the Statement) 5 Subscription Agreement dated March 30, 1995 between Judicate, Inc. and Gulfstream Financial Group, Inc. (previously filed as part of the Statement) 6 Exchange Agreement dated as of November 8, 1996 by and among the Company, Gulfstream Financial Group, Inc. and Phillip Schwiebert, incorporated by reference to Exhibit 10.21 to Amendment No. 1 to the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on February 25, 1997 (File No. 333-18243) 7 Stock Option Grant Agreement between the Company and Gulfstream Financial Group, Inc. made as of November 8, 1996, incorporated by reference to Exhibit 10.22 to the PAGE 15 OF 16 PAGES Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1996 8 1996 Stock Option Plan, incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on December 19, 1996 (File No. 333-18243) 9 Employment Agreement between the Company and Dominic A. Polimeni dated March 29, 1999, incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1998 10 Shareholders Agreement dated March 29, 1999 by and between Dominic A. Polimeni and Joan R. Gubitosi 11 Termination of Management Advisory and Consulting Agreement dated March 1, 1999 by and between Gulfstream Financial Group, Inc. and the Company, incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1998 12 Stock Option Agreement dated March 29, 1999 by and between the Company and between Dominic A. Polimeni 13 Stock Option Agreement dated November 19, 1999 by and between the Company and between Dominic A. Polimeni 14 Stock Option Agreement dated November 19, 1999 by and between the Company and Robert V. Gubitosi 15 Stock Option Agreement dated August 7, 2001 by and between the Company and between Dominic A. Polimeni 16 Stock Option Agreement dated August 7, 2001 by and between the Company and Robert V. Gubitosi PAGE 16 OF 16 PAGES SIGNATURES After reasonable inquiry and to the best of the knowledge and belief of the undersigned, each of the undersigned certifies that the information set forth in this Amendment No. 2 to Schedule 13D is true, complete and correct. Dated: December 11, 2001 GULFSTREAM FINANCIAL GROUP, INC. By: /s/ Dominic A. Polimeni ------------------------------------- Dominic A. Polimeni President /s/ Dominic A. Polimeni ----------------------------------------- Dominic A. Polimeni /s/ Joan R. Gubitosi ----------------------------------------- Joan R. Gubitosi /s/ Robert V. Gubitosi ----------------------------------------- Robert V. Gubitosi EXHIBIT INDEX Exhibit Number Document -------------- -------- 1 Purchase of Assets Agreement dated as of November 29, 1994 between Quest Electronic Hardware, Inc. and Arrow Electronics, Inc. (previously filed as part of the Statement) 2 Share Acquisition Agreement dated as of November 29, 1994 by and among Gulfstream Financial Group, Inc., Philip D. Schwiebert, Quest Electronic Hardware, Inc. and Judicate, Inc. (previously filed as part of the Statement) 3 Employment Agreement dated as of November 29, 1994 between Quest Electronic Hardware, Inc. and Domenic Polimeni (previously filed as part of the Statement) 4 Management Advisory and Consulting Agreement dated as of November 29, 1994 between Gulfstream Financial Group, Inc. and Judicate, Inc. (previously filed as part of the Statement) 5 Subscription Agreement dated March 30, 1995 between Judicate, Inc. and Gulfstream Financial Group, Inc. (previously filed as part of the Statement) 6 Exchange Agreement dated as of November 8, 1996 by and among the Company, Gulfstream Financial Group, Inc. and Phillip Schwiebert, incorporated by reference to Exhibit 10.21 to Amendment No. 1 to the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on February 25, 1997 (File No. 333-18243) 7 Stock Option Grant Agreement between the Company and Gulfstream Financial Group, Inc. made as of November 8, 1996, incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1996 8 1996 Stock Option Plan, incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on December 19, 1996 (File No. 333-18243) 9 Employment Agreement between the Company and Dominic A. Polimeni dated March 29, 1999, incorporated by reference to Exhibit 10.2 to the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1998 10 Shareholders Agreement dated March 29, 1999 by and between Dominic A. Polimeni and Joan R. Gubitosi 11 Termination of Management Advisory and Consulting Agreement dated March 1, 1999 by and between Gulfstream Financial Group, Inc. and the Company, incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission for the fiscal year ended December 31, 1998 12 Stock Option Agreement dated March 29, 1999 by and between the Company and between Dominic A. Polimeni 13 Stock Option Agreement dated November 19, 1999 by and between the Company and between Dominic A. Polimeni 14 Stock Option Agreement dated November 19, 1999 by and between the Company and Robert V. Gubitosi 15 Stock Option Agreement dated August 7, 2001 by and between the Company and between Dominic A. Polimeni 16 Stock Option Agreement dated August 7, 2001 by and between the Company and Robert V. Gubitosi EX-10 3 g73265a2ex10.txt SHAREHOLDERS AGREEMENT EXHIBIT 10 SHAREHOLDER'S AGREEMENT This Shareholder's Agreement, dated as of March 29, 1999, is between Joan R. Gubitosi ("Gubitosi"), a 50% shareholder of Gulfstream Financial Group, Inc., a Florida corporation ("Gulfstream"), and Dominic A. Polimeni, a 50% shareholder of Gulfstream ("Polimeni"). WHEREAS, Polimeni in his capacity as Chairman, President and Chief Executive Officer of Questron Technology, Inc. ("Questron") has been awarded options to purchase 1,100,000 shares of Questron's common stock at a price of $4.50 per share, which options have a 10 year life. WHEREAS, Polimeni was appointed to his position at Questron by virtue of his role and capacity at Gulfstream. NOW, THEREFORE, Gubitosi and Polimeni agree as follows: 1. Polimeni conveys and Gubitosi accepts a 50% beneficial ownership interest in the options to purchase Qustron's common stock referred to above; 2. Gubitosi and Polimeni shall each be responsible for 50% of the tax consequence associated with the exercise of the options to purchase Qustron's common stock referred to above; and 3. Gubitosi agrees to indemnify Polimeni for Gubitosi's 50% portion of the tax consequences associated with the exercise of the options to purchase Qustron's common stock referred to above. IN WITNESS WHEREOF, Gubitosi and Polimeni have signed this agreement as of the date and year first above written. /s/ Dominic A. Polimeni /s/ Joan R. Gubitosi -------------------------------- ------------------------------- Dominic A. Polimeni, Joan R. Gubitosi, Shareholder Shareholder EX-12 4 g73265a2ex12.txt STOCK OPTION AGREEMENT/ DOMINIC A. POLIMENI EXHIBIT 12 NO. OF SHARES: 1,100,000 --------- QUESTRON TECHNOLOGY, INC. STOCK OPTION AGREEMENT THIS AGREEMENT made as of March 29, 1999, between QUESTRON TECHNOLOGY, INC., a Delaware corporation (`Company") and Dominic A. Polimeni ("Executive"). 1. GRANT OF OPTION The Company, effective March 29, 1999 ("Date of Grant") hereby grants to the Executive the option to purchase all or any part of an aggregate of 1,100,000 shares of common stock, par value $0.001 per share, of Questron ("Common Stock") on the terms and conditions herein set forth ("Option"). 2. PURCHASE PRICE The purchase price of the shares of Common Stock subject to the Option shall be $4.50 per share ("Exercise Price per Share"), purchasable as set forth in and subject to the terms and conditions of this agreement. 3. TERMS OF OPTION A. VESTING AND EXERCISABILITY OF OPTION. The Option shall vest and become exercisable immediately as of the date hereof. The Option entitles Executive to purchase, in whole at any time or in part from time to time, the shares of Common Stock subject to the Option, provided Executive is continuously employed by Employer. Notwithstanding the foregoing, the Option shall not be exercised unless such exercise is in compliance with the Securities Act of 1933, as amended (the "Securities Act"), all other applicable laws and regulations (including state securities laws) and the requirements of any securities exchange or interdealer quotation system on which the shares of Common Stock may be listed or included for quotation. B. EXPIRATION DATE. Except as otherwise provided in this Section 3, the Option may not be exercised after March 29, 2009; PROVIDED, HOWEVER, if Executive terminates his employment with Employer or Employer terminates Executive's employment other than for Cause (as defined herein) prior to such date, any unexercised portion of the Option shall be terminated sixty (60) days after the date of termination of Executive's employment with Employer. If Executive's employment is terminated by Employer or Cause, any unexercised portion of the Option shall terminate immediately. C. EXERCISE PROCEDURE. Subject to the conditions set forth in this Section 3, the Option shall be exercised by Executive's delivery of written notice of exercise to the Secretary of Questron, specifying the number of shares of Common Stock to be purchased and the Exercise Price per Share to be paid therefor and accompanied by payment in accordance with Section 3D hereof. Executive may purchase less than the total number of shares of Common Stock covered hereby, provided that no exercise of less than all the Option may be for less than 100 whole shares of Common Stock. D. PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price for shares of Common Stock purchases upon exercise of an Option shall be made by delivery to Questron of the "Exercise Price," payable in cash (by certified check), or any other method that is specifically authorized by Questron on or before the time of exercise. For purposes of this Agreement, the term "Exercise Price" shall mean the number of shares of Common Stock being purchased by Executive pursuant to the exercise of the Option multiplied by the Exercise Price per Share. E. DELIVERY OF SHARES OF COMMON STOCK. Questron shall (subject to the foregoing), upon payment of the Exercise Price per Share for the number of shares of Common Stock purchased and paid for, make prompt delivery of such shares of Common Stock to Executive. No shares of Common Stock shall be issued and delivered upon exercise of an Option unless and until, in the opinion of counsel for Questron, there shall have been full compliance with any applicable registration requirements of the Securities Act, any applicable listing requirements of any national securities exchange or interdealer quotation system on which stock of the same class is then traded or included for quotation, and any other requirements of law, including state securities laws, or of any regulatory bodies having jurisdiction over such issuance and delivery. As a condition to the exercise of this Option, Questron may require Executive to make such representations and warranties to Questron as may be required to determine whether such exercise would constitute a violation of any applicable law or regulation. If it is determined pursuant to this Section 3 that an Option may not be exercised, then Questron must return to Executive, within one (1) business day, any payment made by Executive to Questron with respect to such Option. E. NON-TRANSFERABILITY OF OPTION. The Options are personal and no rights granted in connection with the Option may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise), except by will or the laws of descent and distribution, nor shall any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of an Option of such rights contrary to the provisions hereof, or upon the levy of any attachment or similar process upon any Option or such rights, this Options granted hereunder and all such rights shall, at the election of Questron, become null and void. Notwithstanding the foregoing, and to the extent that any such transfer is in accordance with all applicable federal and state securities laws, Executive shall be allowed to transfer the Option to a trust for the sole benefit of Executive and/or members of Executive's immediate family (a "Permitted Transfer"); PROVIDED, HOWEVER, that prior to making any Permitted Transfer, Executive shall notify the Company in writing of such proposed Permitted Transfer and such proposed Permitted Transfer shall not be effective until Executive and the proposed transferee shall have executed whatever documentation Employer may deem appropriate to reflect the foregoing. F. RIGHTS AS A STOCKHOLDER. Executive shall have no rights as a stockholder with respect to any shares of Common Stock which may be purchased by exercise of the Option unless and until a certificate representing such shares is duly issued to Executive. No adjustment shall be made for dividends or other rights for which the record date is prior to the date on such stock certificate. G. RECAPITALIZATION. In the event that the outstanding shares of Common Stock of Questron are changed into or exchanged for a different number or kind of shares or other securities of Questron by reason of any recapitalization, reclassification, stock split, stock dividend, combination or subdivision, Questron shall make an appropriate and proportionate adjustment in the number, kind, and Exercise Price per Share, of shares or other securities subject to the unexercised Option or portions thereof granted prior to such adjustment. H. REORGANIZATION. In the event that there is a reorganization or liquidation of Questron, prior to the expiration date of the Option, Questron shall, with respect to the Option or any unexercised portion hereof, as to outstanding Options, either (A) in the case of a merger, consolidation or reorganization of Questron, make appropriate provision for the protection of any such outstanding Options by the substitution on an equivalent basis of appropriate stock of Questron, or of the merged, consolidated or otherwise reorganized corporation that will be issuable in respect of the shares of Common Stock of Question (provided that no additional benefits shall be conferred upon Executive as a result of such substitution), or (B) upon written notice to Executive, provide that all unexercised Options must be exercised within a specified number of days of the date of such notice or they will be terminated, or (C) upon written notice to Executive, provide that all unexercised Options shall be purchased by Questron or its successor within a specified number of days of the date of such notice at a purchase price per share equal to the difference between the transaction value per share over the Exercise Price per Share of the Option. Any Option or portion thereof purchased by Questron in this manner shall be canceled and shall have no further force or effect. 2 I. WITHHOLDING TAXES. Questron's obligation to deliver shares of Common Stock upon the exercise of an Option shall be subject to Executive's satisfaction of all applicable federal, state and local income and employment tax withholding requirements with respect to the Option. In satisfaction of such tax withholding requirements, Executive may make a written election, which may be accepted or rejected in the discretion of Employer, to have withheld a portion of the shares of Common Stock issuable to him upon exercise of the Option, having an aggregate fair market value, on the date preceding the date of such issuance, equal to the amount of the tax withholding requirements. 4. EXECUTIVE'S REPRESENTATIONS Executive hereby: A. represents and warrants that the Option and any shares of Common Stock issuable upon exercise thereof (together, the "Securities") are being acquired as an investment and not with a view to the distribution thereof; B. acknowledges that none of the Securities have been registered under the Securities Act, in reliance on an exemption therefrom, and that none of the Securities have been approved or disapproved by the United States Securities and Exchange Commission or by any other Federal or state agency; and C. acknowledges that none of the Securities can be sold, transferred or assigned unless registered by Questron (which Executive has the right to compel) pursuant to the Securities Act and any applicable state securities laws, or unless an exemption therefrom is available, and, accordingly, it may not be possible for Executive to liquidate its investment in the Securities, and agrees not to sell, assign or otherwise transfer or dispose of the Securities unless such Securities have been so registered or an exemption from registration is available. 5. LEGEND ON STOCK CERTIFICATE Executive understands that, any shares of Common Stock acquired upon exercise of an Option may not have been registered under the Securities Act nor the securities laws of any state. Accordingly, unless all such registrations are then in effect, all stock certificates representing shares of Common Stock issued to Executive upon exercise of an Option shall have affixed thereto a legend substantially in the following form, in addition to any other legends required by applicable state law: "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT') OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (1) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (11) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (111) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE." 3 6. ACCEPTANCE OF PROVISIONS The execution of this Agreement by the Executive shall constitute the Executive's acceptance of an agreement to all of the terms and conditions of this Agreement. 7. NOTICES All notices and other communications required or permitted under this Agreement shall be in writing and shall be given either by (i) personal delivery or regular mail or (ii) first class registered or certified mail, return receipt requested. Except as otherwise provided in Section 3 hereof, on the exercise, in whole or in part, of the Option, any such communication shall be deemed to have been given on the date of receipt in the cases referred to in clause (i) of the preceding sentence and on the second day after the date of mailing in the cases referred to in clause (ii) of the preceding sentence. All such communications to the Company shall be addressed to it, to the attention of its Secretary or Treasurer, at its principal office at the address first set forth above, and to the Executive at his last address appearing on the records of the Company or, in each case, to such other person or address as may be designated by like notice hereunder. 8. MISCELLANEOUS This Agreement contains a complete statement of all the arrangements between the parties with respect to their subject matter, and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to the agreements made and to be performed exclusively in Delaware. The headings of this Agreement are solely for convenience of reference and shall not affect its meaning or interpretation. QUESTRON TECHNOLOGY, INC. By: /s/ Milton M. Adler ------------------------------------- Milton M. Adler Secretary EXECUTIVE By: /s/ Dominic A. Polimeni ------------------------------------- Dominic A. Polimeni EX-13 5 g73265a2ex13.txt STOCK OPTION AGREEMENT/ DOMINIC A. POLIMENI EXHIBIT 13 NO. OF SHARES: 26,265 ------ QUESTRON TECHNOLOGY, INC. NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT made as of November 19, 1999 between QUESTRON TECHNOLOGY, INC., a Delaware corporation ("Company"), with an address of 6400 Congress Avenue, Suite 2000, Boca Raton, Florida 33487 and Dominic A. Polimeni ("Employee"), with an address of 6567 Newport Lake Circle, Boca Raton, Florida 33496. 1. INCORPORATION BY REFERENCE OF PLAN The provisions of the Company's 1996 Stock Option Plan ("Plan"), a copy of which is being furnished herewith to the Employee, are incorporated by reference herein and shall govern as to all matters not expressly provided for in this Agreement. Terms not defined herein have the meanings set forth in the Plan. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall govern. 2. GRANT OF OPTION The Company, effective Novembe 19, 1999 ("Date of Grant"), hereby grants to the Employee, the option to purchase all or any part of an aggregate of 26,265 shares of Common Stock on the terms and conditions herein set forth ("Option"). 3. PURCHASE PRICE The purchase price of the shares of Common Stock subject to the Option shall be $3.5625 per share subject to the adjustment as provided in Section 4 of the Plan. 4. TERMS OF OPTION A. EXERCISE DATES: The Option shall vest and become exercisable as to 8,755 shares on each of November 19, 2000, November 19, 2001, and November 19, 2002, conditioned upon a Termination of Employment not having occurred on or before each such date. B. FINAL TERMINATION: Notwithstanding anything herein to the contrary, the Option shall no longer be exercisable ten (10) years from the Date of Grant or such earlier time as prescribed under the Plan or this Agreement. C. RESTRICTIONS: This Option is subject to all the terms and conditions set forth in the Plan including, but not limited to, the following: i. This Option is not transferable, as provided in Section 8(e) of the Plan. ii. This Option lapses upon the Employee's Termination of Employment (other than due to Disability or death), as provided in Section 8(h) of the Plan. iii. The Employee's legal representative may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Employee's death, as provided in Section 8(f) of the Plan. iv. The Employee, or his legal representative, as provided in Section 8(g) of the Plan may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Disability. v. This Option is subject to adjustment pursuant to the provisions of Section 4 of the Plan and is subject to the amendment and termination provisions of Section 11 of the Plan. D. EXERCISE: This Option shall be exercised, in whole, or, from time to time, in part, by written notice received by the Secretary or Treasurer of the Company not later than 5:00 P.M. prevailing local time, on or prior to the date the Option is to expire, specifying the number of shares of Common Stock to be purchased, and accompanied by full payment by certified or bank check or such other instrument as the Company may accept, as set forth in Section 8(d) of the Plan. Payment in full or in part may also be made in the form of shares of common Stock owned by the Employee, which shall be free and clear of all liens, encumbrances and restrictions of any kind whatsoever and the Employee may be requested to represent and warrant to such effect and to take such other steps with respect to this form of payment as the Company shall require. Any such exercise shall also be subject to receipt by the Company of the representation and undertaking set forth in Section 4.E. hereof. Any such exercise will be subject to the "cash out" provisions of Section 8(i) of the Plan. E. SECURITIES LAW RESTRICTIONS: The Company has filed a registration statement under the Securities Act of 1933 ("Act") with respect to the shares of Common Stock subject to the Option. Should the shares of Common Stock subject to the Option cease to be covered by such registration statement, the Company shall require that the offer and sale of such shares be exempt from the registration provisions of the Act in conformity with the provisions of Rule 144 issued by the Securities and Exchange Commission under the Act or, in the opinion of counsel acceptable to the Company, some other exemption from registration available under the Act. 5. ACCEPTANCE OF PROVISIONS The execution of this Agreement by the Employee shall constitute the Employee's acceptance of and agreement to all of the terms and conditions of the Plan and this Agreement. 6. NOTICES All notices and other communications required or permitted under the Plan and this Agreement shall be in writing and shall be given either by (i) personal delivery or regular mail or (ii) first class registered or certified mail, return receipt requested. Except as otherwise provided in paragraph 4.D. hereof, on the exercise, in whole or in part, of the Option, any such communication shall be deemed to have been given on the date of receipt in the cases referred to in clause (i) of the preceding sentence and on the second day after the date of mailing in the cases referred to in clause (ii) of the preceding sentence. All such communications to the Company shall be addressed to it, to the attention of its Secretary or Treasurer, at its principal office at the address first set forth above, and to the Employee at his last address appearing on the records of the Company or, in each case, to such other person or address as may be designed by like notice hereunder. 7. MISCELLANEOUS This Agreement and the Plan contain a complete statement of all the arrangements between the parties with respect to their subject matter, and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed exclusively 2 in Delaware. The headings in this Agreement are solely for convenience of reference and shall not affect its meaning or interpretation. QUESTRON TECHNOLOGY, INC. By: /s/ Robert V. Gubitosi -------------------------------------- Robert V. Gubitosi President and Chief Financial Officer EMPLOYEE By: /s/ Dominic A. Polimeni -------------------------------------- 3 EX-14 6 g73265a2ex14.txt STOCK OPTION AGREEMENT/ ROBERT V. GUBITOSI EXHIBIT 14 NO. OF SHARES: 26,265 ------ QUESTRON TECHNOLOGY, INC. NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT made as of November 19, 1999 between QUESTRON TECHNOLOGY, INC., a Delaware corporation ("Company"), with an address of 6400 Congress Avenue, Suite 2000, Boca Raton, Florida 33487 and Robert V. Gubitosi ("Employee"), with an address of 18540 Long Lake Drive, Boca Raton, Florida 33496. 1. INCORPORATION BY REFERENCE OF PLAN The provisions of the Company's 1996 Stock Option Plan ("Plan"), a copy of which is being furnished herewith to the Employee, are incorporated by reference herein and shall govern as to all matters not expressly provided for in this Agreement. Terms not defined herein have the meanings set forth in the Plan. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall govern. 2. GRANT OF OPTION The Company, effective Novembe 19, 1999 ("Date of Grant"), hereby grants to the Employee, the option to purchase all or any part of an aggregate of 26,265 shares of Common Stock on the terms and conditions herein set forth ("Option"). 3. PURCHASE PRICE The purchase price of the shares of Common Stock subject to the Option shall be $3.5625 per share subject to the adjustment as provided in Section 4 of the Plan. 4. TERMS OF OPTION A. EXERCISE DATES: The Option shall vest and become exercisable as to 8,755 shares on each of November 19, 2000, November 19, 2001, and November 19, 2002, conditioned upon a Termination of Employment not having occurred on or before each such date. B. FINAL TERMINATION: Notwithstanding anything herein to the contrary, the Option shall no longer be exercisable ten (10) years from the Date of Grant or such earlier time as prescribed under the Plan or this Agreement. C. RESTRICTIONS: This Option is subject to all the terms and conditions set forth in the Plan including, but not limited to, the following: i. This Option is not transferable, as provided in Section 8(e) of the Plan. ii. This Option lapses upon the Employee's Termination of Employment (other than due to Disability or death), as provided in Section 8(h) of the Plan. iii. The Employee's legal representative may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Employee's death, as provided in Section 8(f) of the Plan. iv. The Employee, or his legal representative, as provided in Section 8(g) of the Plan may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Disability. v. This Option is subject to adjustment pursuant to the provisions of Section 4 of the Plan and is subject to the amendment and termination provisions of Section 11 of the Plan. D. EXERCISE: This Option shall be exercised, in whole, or, from time to time, in part, by written notice received by the Secretary or Treasurer of the Company not later than 5:00 P.M. prevailing local time, on or prior to the date the Option is to expire, specifying the number of shares of Common Stock to be purchased, and accompanied by full payment by certified or bank check or such other instrument as the Company may accept, as set forth in Section 8(d) of the Plan. Payment in full or in part may also be made in the form of shares of common Stock owned by the Employee, which shall be free and clear of all liens, encumbrances and restrictions of any kind whatsoever and the Employee may be requested to represent and warrant to such effect and to take such other steps with respect to this form of payment as the Company shall require. Any such exercise shall also be subject to receipt by the Company of the representation and undertaking set forth in Section 4.E. hereof. Any such exercise will be subject to the "cash out" provisions of Section 8(i) of the Plan. E. SECURITIES LAW RESTRICTIONS: The Company has filed a registration statement under the Securities Act of 1933 ("Act") with respect to the shares of Common Stock subject to the Option. Should the shares of Common Stock subject to the Option cease to be covered by such registration statement, the Company shall require that the offer and sale of such shares be exempt from the registration provisions of the Act in conformity with the provisions of Rule 144 issued by the Securities and Exchange Commission under the Act or, in the opinion of counsel acceptable to the Company, some other exemption from registration available under the Act. 5. ACCEPTANCE OF PROVISIONS The execution of this Agreement by the Employee shall constitute the Employee's acceptance of and agreement to all of the terms and conditions of the Plan and this Agreement. 6. NOTICES All notices and other communications required or permitted under the Plan and this Agreement shall be in writing and shall be given either by (i) personal delivery or regular mail or (ii) first class registered or certified mail, return receipt requested. Except as otherwise provided in paragraph 4.D. hereof, on the exercise, in whole or in part, of the Option, any such communication shall be deemed to have been given on the date of receipt in the cases referred to in clause (i) of the preceding sentence and on the second day after the date of mailing in the cases referred to in clause (ii) of the preceding sentence. All such communications to the Company shall be addressed to it, to the attention of its Secretary or Treasurer, at its principal office at the address first set forth above, and to the Employee at his last address appearing on the records of the Company or, in each case, to such other person or address as may be designed by like notice hereunder. 7. MISCELLANEOUS This Agreement and the Plan contain a complete statement of all the arrangements between the parties with respect to their subject matter, and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed exclusively 2 in Delaware. The headings in this Agreement are solely for convenience of reference and shall not affect its meaning or interpretation. QUESTRON TECHNOLOGY, INC. By: /s/ Dominic A. Polimeni ------------------------------------- Dominic A. Polimeni Chairman and Chief Executive Officer EMPLOYEE By: /s/ Robert V. Gubitosi ------------------------------------- 3 EX-15 7 g73265a2ex15.txt STOCK OPTION AGREEMENT/ DOMINIC A. POLIMENI EXHIBIT 15 NO. OF SHARES: 50,000 ------ QUESTRON TECHNOLOGY, INC. NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT made as of August 7, 2001 between QUESTRON TECHNOLOGY, INC., a Delaware corporation ("Company"), with an address of 6400 Congress Avenue, Suite 2000, Boca Raton, Florida 33487 and Dominic A. Polimeni ("Employee"), with an address of 6567 Newport Lake Circle, Boca Raton, Florida 33496. 1. INCORPORATION BY REFERENCE OF PLAN The provisions of the Company's 1996 Stock Option Plan ("Plan"), a copy of which is being furnished herewith to the Employee, are incorporated by reference herein and shall govern as to all matters not expressly provided for in this Agreement. Terms not defined herein have the meanings set forth in the Plan. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall govern. 2. GRANT OF OPTION The Company, effective August 7, 2001 ("Date of Grant"), hereby grants to the Employee, the option to purchase all or any part of an aggregate of 50,000 shares of Common Stock on the terms and conditions herein set forth ("Option"). 3. PURCHASE PRICE The purchase price of the shares of Common Stock subject to the Option shall be $3.33 per share subject to the adjustment as provided in Section 4 of the Plan. 4. TERMS OF OPTION A. EXERCISE DATES: The Option shall vest and become exercisable as to 16,668 shares on August 7, 2001, 16,666 shares on August 7, 2002, and 16,666 shares on August 7, 2003, conditioned upon a Termination of Employment not having occurred on or before each such date. B. FINAL TERMINATION: Notwithstanding anything herein to the contrary, the Option shall no longer be exercisable ten (10) years from the Date of Grant or such earlier time as prescribed under the Plan or this Agreement. C. RESTRICTIONS: This Option is subject to all the terms and conditions set forth in the Plan including, but not limited to, the following: i. This Option is not transferable, as provided in Section 8(e) of the Plan. ii. This Option lapses upon the Employee's Termination of Employment (other than due to Disability or death), as provided in Section 8(h) of the Plan. iii. The Employee's legal representative may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Employee's death, as provided in Section 8(f) of the Plan. iv. The Employee, or his legal representative, as provided in Section 8(g) of the Plan may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Disability. v. This Option is subject to adjustment pursuant to the provisions of Section 4 of the Plan and is subject to the amendment and termination provisions of Section 11 of the Plan. D. EXERCISE: This Option shall be exercised, in whole, or, from time to time, in part, by written notice received by the Secretary or Treasurer of the Company not later than 5:00 P.M. prevailing local time, on or prior to the date the Option is to expire, specifying the number of shares of Common Stock to be purchased, and accompanied by full payment by certified or bank check or such other instrument as the Company may accept, as set forth in Section 8(d) of the Plan. Payment in full or in part may also be made in the form of shares of common Stock owned by the Employee, which shall be free and clear of all liens, encumbrances and restrictions of any kind whatsoever and the Employee may be requested to represent and warrant to such effect and to take such other steps with respect to this form of payment as the Company shall require. Any such exercise shall also be subject to receipt by the Company of the representation and undertaking set forth in Section 4.E. hereof. Any such exercise will be subject to the "cash out" provisions of Section 8(i) of the Plan. E. SECURITIES LAW RESTRICTIONS: The Company has filed a registration statement under the Securities Act of 1933 ("Act") with respect to the shares of Common Stock subject to the Option. Should the shares of Common Stock subject to the Option cease to be covered by such registration statement, the Company shall require that the offer and sale of such shares be exempt from the registration provisions of the Act in conformity with the provisions of Rule 144 issued by the Securities and Exchange Commission under the Act or, in the opinion of counsel acceptable to the Company, some other exemption from registration available under the Act. 5. ACCEPTANCE OF PROVISIONS The execution of this Agreement by the Employee shall constitute the Employee's acceptance of and agreement to all of the terms and conditions of the Plan and this Agreement. 6. NOTICES All notices and other communications required or permitted under the Plan and this Agreement shall be in writing and shall be given either by (i) personal delivery or regular mail or (ii) first class registered or certified mail, return receipt requested. Except as otherwise provided in paragraph 4.D. hereof, on the exercise, in whole or in part, of the Option, any such communication shall be deemed to have been given on the date of receipt in the cases referred to in clause (i) of the preceding sentence and on the second day after the date of mailing in the cases referred to in clause (ii) of the preceding sentence. All such communications to the Company shall be addressed to it, to the attention of its Secretary or Treasurer, at its principal office at the address first set forth above, and to the Employee at his last address appearing on the records of the Company or, in each case, to such other person or address as may be designed by like notice hereunder. 7. MISCELLANEOUS This Agreement and the Plan contain a complete statement of all the arrangements between the parties with respect to their subject matter, and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed exclusively 2 in Delaware. The headings in this Agreement are solely for convenience of reference and shall not affect its meaning or interpretation. QUESTRON TECHNOLOGY, INC. By: /s/ Robert V. Gubitosi ------------------------------------- Robert V. Gubitosi President and Chief Financial Officer EMPLOYEE By: /s/ Dominic A. Polimeni ------------------------------------- 3 EX-16 8 g73265a2ex16.txt STOCK OPTION AGREEMENT/ ROBERT V. GUBITOSI EXHIBIT 16 NO. OF SHARES: 50,000 ------ QUESTRON TECHNOLOGY, INC. NON-QUALIFIED STOCK OPTION AGREEMENT THIS AGREEMENT made as of August 7, 2001 between QUESTRON TECHNOLOGY, INC., a Delaware corporation ("Company"), with an address of 6400 Congress Avenue, Suite 2000, Boca Raton, Florida 33487 and Robert V. Gubitosi ("Employee"), with an address of 18540 Long Lake Drive, Boca Raton, Florida 33496. 1. INCORPORATION BY REFERENCE OF PLAN The provisions of the Company's 1996 Stock Option Plan ("Plan"), a copy of which is being furnished herewith to the Employee, are incorporated by reference herein and shall govern as to all matters not expressly provided for in this Agreement. Terms not defined herein have the meanings set forth in the Plan. In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall govern. 2. GRANT OF OPTION The Company, effective August 7, 2001 ("Date of Grant"), hereby grants to the Employee, the option to purchase all or any part of an aggregate of 50,000 shares of Common Stock on the terms and conditions herein set forth ("Option"). 3. PURCHASE PRICE The purchase price of the shares of Common Stock subject to the Option shall be $3.33 per share subject to the adjustment as provided in Section 4 of the Plan. 4. TERMS OF OPTION A. EXERCISE DATES: The Option shall vest and become exercisable as to 16,668 shares on August 7, 2001, 16,666 shares on August 7, 2002, and 16,666 shares on August 7, 2003, conditioned upon a Termination of Employment not having occurred on or before each such date. B. FINAL TERMINATION: Notwithstanding anything herein to the contrary, the Option shall no longer be exercisable ten (10) years from the Date of Grant or such earlier time as prescribed under the Plan or this Agreement. C. RESTRICTIONS: This Option is subject to all the terms and conditions set forth in the Plan including, but not limited to, the following: i. This Option is not transferable, as provided in Section 8(e) of the Plan. ii. This Option lapses upon the Employee's Termination of Employment (other than due to Disability or death), as provided in Section 8(h) of the Plan. iii. The Employee's legal representative may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Employee's death, as provided in Section 8(f) of the Plan. iv. The Employee, or his legal representative, as provided in Section 8(g) of the Plan may exercise this Option for a period of one year and one day from the date of the Employee's Termination of Employment by reason of Disability. v. This Option is subject to adjustment pursuant to the provisions of Section 4 of the Plan and is subject to the amendment and termination provisions of Section 11 of the Plan. D. EXERCISE: This Option shall be exercised, in whole, or, from time to time, in part, by written notice received by the Secretary or Treasurer of the Company not later than 5:00 P.M. prevailing local time, on or prior to the date the Option is to expire, specifying the number of shares of Common Stock to be purchased, and accompanied by full payment by certified or bank check or such other instrument as the Company may accept, as set forth in Section 8(d) of the Plan. Payment in full or in part may also be made in the form of shares of common Stock owned by the Employee, which shall be free and clear of all liens, encumbrances and restrictions of any kind whatsoever and the Employee may be requested to represent and warrant to such effect and to take such other steps with respect to this form of payment as the Company shall require. Any such exercise shall also be subject to receipt by the Company of the representation and undertaking set forth in Section 4.E. hereof. Any such exercise will be subject to the "cash out" provisions of Section 8(i) of the Plan. E. SECURITIES LAW RESTRICTIONS: The Company has filed a registration statement under the Securities Act of 1933 ("Act") with respect to the shares of Common Stock subject to the Option. Should the shares of Common Stock subject to the Option cease to be covered by such registration statement, the Company shall require that the offer and sale of such shares be exempt from the registration provisions of the Act in conformity with the provisions of Rule 144 issued by the Securities and Exchange Commission under the Act or, in the opinion of counsel acceptable to the Company, some other exemption from registration available under the Act. 5. ACCEPTANCE OF PROVISIONS The execution of this Agreement by the Employee shall constitute the Employee's acceptance of and agreement to all of the terms and conditions of the Plan and this Agreement. 6. NOTICES All notices and other communications required or permitted under the Plan and this Agreement shall be in writing and shall be given either by (i) personal delivery or regular mail or (ii) first class registered or certified mail, return receipt requested. Except as otherwise provided in paragraph 4.D. hereof, on the exercise, in whole or in part, of the Option, any such communication shall be deemed to have been given on the date of receipt in the cases referred to in clause (i) of the preceding sentence and on the second day after the date of mailing in the cases referred to in clause (ii) of the preceding sentence. All such communications to the Company shall be addressed to it, to the attention of its Secretary or Treasurer, at its principal office at the address first set forth above, and to the Employee at his last address appearing on the records of the Company or, in each case, to such other person or address as may be designed by like notice hereunder. 7. MISCELLANEOUS This Agreement and the Plan contain a complete statement of all the arrangements between the parties with respect to their subject matter, and this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed exclusively 2 in Delaware. The headings in this Agreement are solely for convenience of reference and shall not affect its meaning or interpretation. QUESTRON TECHNOLOGY, INC. By: /s/ Dominic A. Polimeni ------------------------------------- Dominic A. Polimeni Chairman and Chief Executive Officer EMPLOYEE By: /s/ ------------------------------------- 3 -----END PRIVACY-ENHANCED MESSAGE-----