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Raptor Investments Inc – ‘SC 14F1’ on 8/23/01 re: Raptor Investments Inc

On: Thursday, 8/23/01 · Accession #: 1005477-1-500852 · File #: 5-53641

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/23/01  Raptor Investments Inc            SC 14F1                1:42K  Raptor Investments Inc            CT EDGAR123/FA

Statement re: Change in Majority of Directors — Rule 14f-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14F1     Information Statement                                 16     60K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Directors and Executive Officers Persons to be Appointed Directors and Executive Officers Share Purchase Transaction, The Termination of Employment Agreements The Share Purchase Transaction
1	1st Page - Filing Submission
3	The Share Purchase Transaction
7	Directors and Executive Officers
9	Persons to be Appointed Directors and Executive Officers
14	Termination of Employment Agreements

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--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14F-1

INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND RULE 14(F)-1 THEREUNDER

PARAMARK ENTERPRISES, INC.
(Exact name of company as specified in its charter)

Delaware 0-23026 22-3261564
---------- ------- ----------
(State or other jurisdiction of (Commission (IRS Employer Id. No.)
incorporation or organization) File Number)

167 Main Street
Hackensack, NJ 07601
(Address of principal executive offices, including zip code)

201-525-1110
----------------
(Company's telephone number, including area code)

August 24, 2001

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REPORT OF CHANGE IN MAJORITY OF DIRECTORS
August 24, 2001

This report is furnished by the Board of Directors of Paramark
Enterprises, Inc., a Delaware corporation (the "Company"), to the holders of
common stock, par value $0.01 per share, of the Company (the "Common Stock").
This report is being furnished in connection with the change of the Company's
directors to be effected 30 days after the closing of the transaction discussed
below, to be completed on or about September 22, 2001. The Company's new Board
of Directors will consist of Paul Lovito, Matthew Lovito and Marc Lovito.

This report is provided for information purposes only. You are not
required to respond to this report. We Are Not Asking You For A Proxy And You
Are Requested Not To Send A Proxy.

This report is first being mailed on or about August 24, 2001 to
shareholders of record as of August 8, 2001.

BACKGROUND OF TRANSACTION AND CHANGE IN CONTROL

The Company has entered into an Amended and Restated Agreement dated
August 22, 2001 (the "Agreement") between the Company, Messrs. Paul F. Lovito,
Jr., Matthew J. Lovito and Marc A. Lovito (the "Lovitos") and Charles N.
Loccisano, the Chairman of the Company, and Alan S. Gottlich, President and
Chief Financial Officer of the Company. Pursuant to this Agreement, the Company
agreed to sell 500,000 shares of its Common Stock to the Lovitos for an
aggregate purchase price of $30,000 (the "Share Purchase Transaction"). See "The
Share Purchase Transaction."

The Agreement provides that 30 days following the consummation of the
Share Purchase Transaction, the Company's current officers and directors will
resign and will be replaced by directors and officers selected by the Lovitos.
Charles Loccisano, the Company's Chairman, will attend the Board Meeting as an
observer until the earlier of the completion of the share repurchase described
in the Agreement or the Company attaining a minimum bid price of $0.20 per share
for 30 consecutive trading days at any time during the 12 month period following
the completion of the Share Purchase Transaction. See "DIRECTORS AND EXECUTIVE
OFFICERS - Persons to be Appointed Directors and Executive Officers."

The change in the Board of Directors and management following the
consummation of the Share Purchase Transaction will result in a change of
control. Pursuant to the terms of the Agreement, the change in the board and
management will occur on or about September 22, 2001.

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REASON FOR INFORMATION STATEMENT

Because a majority of its directors is being changed otherwise than at a
meeting of shareholders, pursuant to Rule 14f-1 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Company is required
to provide its shareholders and the Securities and Transaction Commission (the
"Commission") with certain information not less than ten days prior to the date
on which the change will take place, or such other time period as may be
established by the Commission. This report is being filed with the Commission
and sent to shareholders in compliance with these Rules and Regulations.

INFORMATION RELATING TO THE COMPANY'S SECURITIES

There were 3,613,383 shares of the Company Common Stock outstanding and
entitled to vote at August 20, 2001. Upon closing of the Share Purchase
Transaction there was a total of 4,113,383 shares outstanding. Each outstanding
share of Common Stock entitles the record holder thereof to one vote on all
matters which are to be presented to shareholders for their consideration. The
Common Stock is the only issued and outstanding stock of the Company.

THE SHARE PURCHASE TRANSACTION

On August 22, 2001 the Company completed the sale of 500,000 shares of its
common stock in a privately negotiated transaction for a purchase price of
$30,000 to the Lovitos pursuant to the Agreement. The purchase price was funded
with personal funds. At August 22, 2001, the Lovitos beneficially owned 12.9% of
the outstanding common stock of the Company. The purchase price will be held in
an escrow account, with Alan Gottlich and Charles Loccisano acting as trustees
and signatories, with such funds to be released to the Company upon satisfaction
of the escrow obligations, which include the satisfaction of the Company's
outstanding obligations and the completion of the stock repurchase (described
below), if required.

The Agreement also provides that within 12 months after the completion of
the stock sale transaction, the Lovitos shall cause Paramark to make an offer to
all holders of the outstanding shares of the Company's common stock to
repurchase their shares at a price of $0.20 per share through a tender offer
provided the market bid price of the Paramark common stock is not greater than
$0.20 per share for any consecutive 30 day period during the one year period
following the closing of the previously described stock sale transaction. As a
result, no assurance can be given that the repurchase will be commenced or that
the repurchase will occur on the terms described herein. If the foregoing offer
to shareholders is required and the Lovitos do not fulfill their obligations in
connection therewith, the Agreement provides that the Lovitos shall take all
actions necessary to add four new members to the Board selected by Messrs.
Loccisano and Gottlich.

Pursuant to the terms of the Agreement, 30 days after the consummation of
the stock purchase transaction, the Company's current officers and directors
will resign and will be

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replaced by the Lovitos on the board. See "Directors and Executive Officers -
Persons to be Appointed Directors and Executive Officers."

The Agreement also provides that each of Messrs. Loccisano and Gottlich
has the right to require the Lovitos to purchase or Paramark to repurchase up to
one-half of their Paramark shares (the "Loccisano/Gottlich Sale Offer") on the
60th day after the earlier of: (i) the completion of a 30 consecutive trading
day period where the Company's common stock had a bid price of $0.20 per share
or higher during the one year period following the consummation of the Stock
Sale Transaction; or (ii) the completion of the Company's repurchase, described
above. The purchase price paid by the Company or the Lovitos for the Loccisano
and Gottlich shares will be $0.20 per share. At August 20, 2001, Messrs.
Gottlich and Loccisano beneficially owned 1,431,924 and 187,339 shares,
respectively, of Paramark common stock.

The proposed payments to Messrs. Gottlich and Loccisano upon the sale of
their shares are subject to a guarantee agreement entered into between the
Lovitos and Messrs. Gottlich and Loccisano. Under the terms of the Lovito
Guarantee Agreement, the Lovitos, jointly and severally, guarantee the
fulfillment of the obligations defined in the Lovito Guarantee. In addition,
under the terms of the Agreement, Messrs. Gottlich and Loccisano agreed not to
tender any shares during the Company's repurchase, if commenced or otherwise
sell their shares except pursuant to the Loccisano/Gottlich Sale Offer for a
specified period. In consideration of this restriction, the Lovitos agreed to
pay Messrs. Loccisano and Gottlich an aggregate fee of $66,000 payable in 12
monthly installments.

The Agreement provides for the establishment of an escrow account which
shall be used to fund certain expenses of Paramark existing prior to the stock
sale transaction including, amounts due to Messrs Loccisano and Gottlich
pursuant to their employment agreements, director and officer insurance premiums
and outstanding trade obligations and legal fees of the Company and Messrs.
Loccisano and Gottlich resulting from the Pensabene litigation.

The obligations of Paramark under the Agreement are also secured by an
Agreement between the Lovitos and Messrs. Loccisano and Gottlich which provides
that Messrs. Loccisano and Gottlich may designate four new board members if the
Lovitos fail to fulfill their obligations under the Agreement and the Lovitos
agree to take all corporate actions necessary to add such individuals to the
board.

As part of these transactions, the Lovitos agreed to enter into consulting
agreements with each of Messrs. Gottlich and Loccisano which require Messrs.
Loccisano and Gottlich to consult with the Lovitos on the operations of a public
company and related matters in exchange for the payment of $24,000 payable in 12
equal monthly installments. Pursuant to the terms of the Agreement, the Lovitos
also agreed to take action to cause Paramark to register the Loccisano and
Gottlich shares for resale pursuant to the applicable requirements of the SEC.
The Agreement also provides that Paramark's obligations to Messrs. Loccisano and
Gottlich pursuant to their employment agreements shall be secured by the
assignment of payments from the Rich Products Asset Purchase Agreement.

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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information, as of August 8, 2001 as to the
beneficial ownership of Common Stock of each director of the Company and the
executive officers of the Company listed in the Summary Compensation Table
below, all directors and executive officers as a group and persons known by the
Company to beneficially own more than 5% of the Common Stock. Except as set
forth below, no person beneficially owns more than 5% of the Common Stock.

Number of Shares of Percent
Name and Address of Beneficial Common Stock Beneficially
Owners(1) Beneficially Owned (2) Owned
--------------------------------------- ------------------------ -------------

Charles Loccisano 1,431,924 (3) 39.6%
Loccisano Trusts 368,389 10.2%
Alan Gottlich 187,339 (4) 5.2%
Philip Friedman 5,000 0.1%
Paul Bergrin 0 0.0%

All Directors and Executive Officers
as a group (four persons) 1,624,263 45.0%

----------

(1) Unless otherwise indicated, the address of each beneficial owner is that
of the Company's principal executive office.
(2) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Transaction Commission. Accordingly,
they may include securities owned by of for, among others, the wife and/or
minor children of the individual and any other relative who has the same
home as such individual, as well as other securities as to which the
individual has or shares voting or investment power or has the right to
acquire under outstanding stock options within 60 days after the date of
this table. Beneficial ownership may be disclaimed as to certain of the
securities.
(3) Includes 184,195 shares held by The Charles Loccisano Irrevocable Trust
f/b/o Marissa Loccisano all of which are Escrow Shares, and 184,195 shares
held by The Charles Loccisano Irrevocable Trust f/b/o Michael Loccisano
(jointly referred to as the "Loccisano Trusts"), with respect to which Mr.
Loccisano is the settlor. Mr. Loccisano disclaims beneficial ownership of
these shares. Mr. Gottlich and Mr. Feiger are the trustees of the
Loccisano Trusts and posses shared voting and dispositive power.
(4) Includes 155,874 shares held by Mr. Gottlich's spouse, as to which Mr.
Gottlich disclaims beneficial ownership. Excludes 368,389 shares held by
the Loccisano Trusts over which Mr. Gottlich has shared voting and
dispositive power.

The Lovitos have provided the following information to the Company. The
following table lists, as of the closing of the Share Purchase Transaction, the
security ownership of (i) all persons known to the Lovitos who will after the
Share Purchase Transaction own beneficially

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5% or more of the Common Stock; (ii) each person who will be a director of the
Company; and (iii) all persons who will be executive officers of the Company as
a group.

Name and Address of Beneficial Amount and Nature of
Owners (1) Beneficial Ownership (2) Percent of Class
------------------------------------ ------------------------ ----------------

Charles Loccisano(1) 1,431,924 (3) 34.8%
Loccisano Trusts(1) 368,389 9.0%
Alan Gottlich(1) 187,339 (4) 4.6%
Paul F. Lovito, Jr. (5)(6) 229,600 5.6%
Matthew J. Lovito (5)(7) 150,000 3.6%
Marc A. Lovito (5)(8) 150,000 3.6%

All Directors and Executive
Officers as a group (three persons) 529,600 12.9%

----------

(1) The address of this beneficial owner is that of the Company's principal
executive office.
(2) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Transaction Commission. Accordingly,
they may include securities owned by of for, among others, the wife and/or
minor children of the individual and any other relative who has the same
home as such individual, as well as other securities as to which the
individual has or shares voting or investment power or has the right to
acquire under outstanding stock options within 60 days after the date of
this table. Beneficial ownership may be disclaimed as to certain of the
securities.
(3) Includes 184,195 shares held by The Charles Loccisano Irrevocable Trust
f/b/o Marissa Loccisano all of which are Escrow Shares, and 184,195 shares
held by The Charles Loccisano Irrevocable Trust f/b/o Michael Loccisano
(jointly referred to as the "Loccisano Trusts"), with respect to which Mr.
Loccisano is the settlor. Mr. Loccisano disclaims beneficial ownership of
these shares. Mr. Gottlich and Mr. Feiger are the trustees of the
Loccisano Trusts and posses shared voting and dispositive power.
(4) Includes 155,874 shares held by Mr. Gottlich's spouse, as to which Mr.
Gottlich disclaims beneficial ownership. Excludes 368,389 shares held by
the Loccisano Trusts over which Mr. Gottlich has shared voting and
dispositive power.
(5) The address of the Lovitos is 2855 N. University Drive, Suite 320, Coral
Springs, Florida 33065. Paul Lovito is the brother of Matthew and Marc
Lovito.
(6) Includes 200,000 shares held directly and 23,600 shares held by Mr.
Lovito's daughter and 6,000 shares held by a partnership in which Mr.
Lovito is a general partner with sole voting and dispositive power over
the Paramark shares. Mr Lovito expressly disclaims beneficial ownership of
shares held by his brothers.

(7) Includes 150,000 shares held directly. Mr Lovito expressly disclaims
beneficial ownership of shares held by his brothers.

(8) Includes 150,000 shares held directly. Mr Lovito expressly disclaims
beneficial ownership of shares held by his brothers.

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DIRECTORS AND EXECUTIVE OFFICERS

Present Officers and Directors

The following persons currently serve as officers and directors of the Company:

Name Age Position with the Company Director Since
-------------------- ------- --------------------------------- ----------------

Charles Loccisano 53 Chairman, Chief Executive 1992
Officer and Director
Alan Gottlich 40 President, Chief Financial 1992
Officer, Treasurer and Director
Philip Friedman 54 Director 1993
Paul Bergrin 44 Director 1996

The following is a description of the business experience of the Company's
directors and officers.

Charles Loccisano has been the Chairman, Chief Executive Officer and
Director of the Company since its acquisition in June 1992. Since 1980, Mr.
Loccisano has primarily engaged in the acquisition, development and/or
management of real estate through his general partnership interest in various
real estate limited partnerships. Some of these partnerships were forced to file
for protection under the United States Bankruptcy Code after a turndown in the
real estate market in 1997. Some of these partnerships were successfully
reorganized and some lost their real properties in bankruptcy and/or to
foreclosure. In November 1999, Mr. Loccisano voluntarily pled guilty to one
count of a misdemeanor for making false statements to the United States
Department of Housing and Urban Development (HUD). This plea was the result of
his activities as a principal and officer of Harmon/Envicon Associates, a
national real estate syndication company, during the period of June 1991 through
December 1992. Mr. Loccisano was also a principal of a company that owned five
Roy Roger restaurants and three T.J. Cinnamons bakeries in New Jersey from 1989
through 1994. In addition, Mr. Loccisano was a general partner in a 200 room
hotel in Morristown New Jersey which was acquired in 1991 and was sold in 1998.

Alan Gottlich has been the Vice Chairman, Chief Financial Officer and
Director of the Company since its acquisition in June 1992, and the President
since October, 1996. Prior thereto, Mr. Gottlich was primarily engaged in the
acquisition, development and/or management of real estate through his general
partner interest in various real estate limited partnerships. In November 1999,
Mr. Gottlich voluntarily pled guilty to one count of a misdemeanor for making
false statements to HUD. This plea was the result of his activities as an
employee of Harmon/Envicon Associates, a national real estate syndication
company, during the period of June 1991 through December 1992. Mr. Gottlich was
also a principal of a company that owned five Roy Rogers restaurants and three
T.J. Cinnamons bakeries in New Jersey from 1989 through 1994. Prior to that, Mr.
Gottlich was a staff accountant at Touche Ross & Co.

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Philip Friedman has been a Director of the Company since August 1993. Mr.
Friedman is the president of McAlister's Corporation, operator and franchiser of
the McAlister's Deli Restaurant chain. From 1984 through 1986, he was he was
Vice President of Finance and Administration for Cini-Little International,
Inc., the largest food service consulting firm in the United States. While with
P. Friedman & Associates, Mr. Friedman has taken interim executive positions
with certain clients. In 1996, Mr. Friedman was named interim President of Panda
Management Company, Inc. a national chain of restaurants serving Chinese food.
In 1998 he served as Chairman of the Board for Rosti Restaurants and is the
President and principal shareholder of P. Friedman & Associates, Inc., a food
management and consulting company based in Rockville, Maryland. Mr. Friedman
graduated from the University of Connecticut with Bachelors and Masters degrees
and received his MBA from the Wharton School of Business at the University of
Pennsylvania. Mr. Friedman serves as a director of Roadhouse Grill, Inc. and
Eateries, Inc., both publicly traded companies.

Paul Bergrin has been a Director of the Company since November 1996. Mr.
Bergrin has been a partner in the law firm of Pope, Grossman, Bergrin Toscano
and Verdesco for more than the last five years specializing in criminal and
civil litigation.

Compensation of Directors

The Company provides compensation to outside directors at the rate of $300
per month, and provides reimbursement of travel and other expenses incurred in
attending meetings. Directors who are employees of the Company do not receive
fees for attendance at directors' meetings.

Each member of the Special Committee, formed in June 2000 for the purposes
of reviewing and advising the Company in connection with the Rich Products
Transaction and the Brooks Street Transaction, will receive compensation equal
to $12,500 payable out of the proceeds of the Rich Products Transaction.

Committees of the Board of Directors

The Board of Directors has established compensation, audit and option
committees. The members of the Compensation Committee, the Audit Committee and
the Option Committee consists of Philip Friedman and Paul Bergrin. The Audit
Committee, the Compensation Committee and the Option Committee each held one
meeting in fiscal 2000. The Audit Committee adopted an Audit Committee charter
on May 31, 2000, a copy of which is attached as Appendix A.

The Audit Committee reviews and examines detailed reports of the Company's
independent public accountants; consults with the independent public accountants
regarding internal accounting controls, audits results and financial reporting
procedures; recommends the engagement and continuation of engagement of the
Company's independent public accountants; and meets with, and reviews and
considers recommendations of, the independent public accountants. The Board of
Directors believes the members of the Audit Committee are independent as defined
in Rule 4200(a)(15) of the NASDAQ's Listing Standards.

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The Compensation Committee reviews the performance of senior management
and key employees whose compensation is the subject of review and approval by
the Committee; periodically reviews and recommends to the Board of Directors
compensation arrangements for senior management and key employees; and
periodically reviews the main elements of, and administers, the Company's
compensation and benefit programs, other than the 1993 Stock Option Plan and the
1996 Stock Option Plan. This committee met one time during fiscal 2000.

The Option Committee administers the 1993 Stock Option Plan and the 1996
Stock Option Plan and, to the extent provided by such Plans, determines the
persons to whom options are granted, the exercise price, term and number of
shares covered by each option to be granted. In addition, the Option Committee
exercises all discretionary power regarding the Plan's operations. All options
outstanding under 1993 Stock Option Plan and the 1996 Stock Option Plan were
cancelled in January 2001. This committee met one time during fiscal 2000.

In June 2000, the Board of Directors established a Special Committee for
the purposes of reviewing and advising the Company in connection with the sale
of assets to Rich Products Manufacturing Corporation (the "Rich Products
Transaction") and the Brooks Street Companies, Inc. The members of the Special
Committee consist of Philip Friedman and Paul Bergrin, the Company's outside
Directors. This committee met three times during fiscal 2000.

Persons to be Appointed Directors and Executive Officers. Thirty days
after the closing of the Share Purchase Transaction, the following persons will
be appointed to serve as the Board of Directors and Executive Officers of the
Company. The appointments will be made by the present Board of Directors who
will then resign. Under the Company's Articles of Incorporation and Bylaws, no
shareholder approval of the change in directors and officers is required.

Name Age Position with the Company
------------------ ----------- ----------------------------------------------
Paul F. Lovito, Jr. 32 Director, Chairman, President and
Chief Executive Officer
Matthew J. Lovito 28 Director, Vice President and Chief Financial
Officer
Marc A. Lovito 26 Director, Vice President and Secretary

Paul F. Lovito, Jr. has been President and Chairman of LBI Group, Inc., a
business consulting company, since June 1994. Mr. Lovito is Chairman and Chief
Executive Officer of LBI Properties, Inc., a development stage real estate
holding company, a position he has held since February 1998. He also serves as
Chairman of LBI EWeb Communities, Inc., an internet holding company, a position
he had held since June 2000. Mr. Lovito has been the Chairman and President of
LBI Asset Management, LP, a Delaware partnership which provides management
services to the related companies, a position he had held since July 1998. Mr.
Lovito is also the general partner in LBI Capital Partners, LP, a hedge fund, a
position he has held since July 1998. All of the foregoing entities are located
in Coral Springs, Florida.

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Matthew J. Lovito has been a Vice President with LBI Group, Inc. since
June 1994. In addition, Mr. Lovito is a Vice President of LBI Properties, Inc.
and LBI EWeb Communities, Inc., positions he has held since February 1998 and
June 2000. Mr. Lovito is also a partner in LBI Asset Management LP and LBI
Capital Partners LP, positions he has held since July 1998.

Marc A. Lovito has been a Vice President with LBI Group, Inc., since June
1994. Mr. Lovito is President of LBI Properties, Inc., a position he has held
since February 1998, and Vice President of LBI EWeb Communities, Inc. Mr. Lovito
is also a partner in LBI Asset Management LP and LBI Capital Partners LP,
positions he has held since July 1998.

AUDIT COMMITTEE REPORT

On March 28, 2001, the Audit Committee reviewed the audited financial
statements and discussed the financial statements with management. The Audit
Committee also conducted discussions with its independent auditors, Amper,
Politziner & Mattia, P.C., regarding the matters required by SAS 61
"Condification of Statements on Auditing Standards" and the Independence
Standards Board Standard No. 1, "Independence Discussion with Audit Committees."
The Audit Committee has discussed with and received the required written
disclosures and a confirming letter from Amper, Politziner & Mattia, P.C.
regarding its independence and has discussed with Amper, Politziner & Mattia,
P.C. its independence. Based upon the review and discussions referred to above,
the Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2000.

The Audit Committee Report shall not be deemed incorporated by reference
in any document previously or subsequently filed with the Securities and
Exchange Commission that incorporates by reference all or any portion of this
proxy statement, except to the extent that the Company specifically requests
that the Report be specifically incorporated by reference.

The Audit Committee

Philip Friedman Paul Bergrin

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EXECUTIVE COMPENSATION

The following table sets forth the total annual compensation paid or
accrued by the Company for services in all capacities for the Chief Executive
Officer and each other officer who made in excess of $100,000 (salary plus
bonuses) (the "Named Officers") for the fiscal years ended December 31, 2000,
1999 and 1998. No other executive officers of the Company who were serving as
such at the end of such fiscal years received salary and bonus in excess of
$100,000.

[Enlarge/Download Table]

Long Term
Annual Compensation Compensation Awards
----------------------------- ---------------------
Name and Other Annual Securities
Principal Position Year Salary Bonus Comp. (1) Underlying Options
------------------------ ----------- ---------------- ------------- ------------------- ---------------------

Charles Loccisano, 2000 $237,070 (2) -- $12,000 --
Chairman and Chief 1999 193,678 -- 12,000 --
Executive Officer 1998 189,935 (3) $105,984 12,000 312,125 (6)

2000 1999 $168,305 (4) -- $ 9,000 --
Alan Gottlich, 1998 138,342 -- 9,000 --
President and Chief 125,818 (5) $ 52,992 9,000 188,250 (6)
Financial Officer

----------
(1) These amounts represent reimbursable automobile expenses.
(2) $49,091 of this amount represents salary accruals from 1999 paid during
2000.
(3) $17,500 of this amount represents salary accruals from 1997 paid during
1998.
(4) $3,173 of this amount represents salary accruals from 1999 paid during
2000.
(5) $11,250 of this amount represents salary accruals from 1997 paid during
1998.
(6) In January 1998, the Board of Directors approved a resolution by the
Option Committee whereby the Company canceled stock options previously
granted to Messrs. Loccisano and Gottlich to purchase shares of common
stock in the amount of 417,500 and 251,000 respectively, and granted new
options to purchase shares of common stock in the amount of 313,125 and
188,250, respectively. These options were cancelled in January 2001.

Consulting Agreements

As part of the Agreement with the Lovitos, the Lovitos agreed to enter
into consulting agreements with each of Messrs. Gottlich and Loccisano which
require Messrs. Loccisano and Gottlich to consult with the Lovitos on the
operations of a public company and related matters in exchange for the payment
of $24,000 payable in 12 equal monthly installments.

Employment Agreements

The Company entered into an employment agreement with Charles Loccisano,
the Company's Chairman, Chief Executive Officer and Director dated October 1,
1997, which employment agreements current term expires on October 1, 2003, and
requires severance payments in the event of termination without cause equal to
two times Mr. Loccisano's base salary plus one-half of the aggregate bonuses
paid over the previous three fiscal years. This

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agreement was terminated as of January 1, 2001. See "Certain Transactions -
Termination of Employment Agreements."

The Company also entered into an employment agreement with Alan Gottlich,
the Company's President, Chief Financial Officer and Director dated October 1,
1997, which employment agreements current term expires on October 1, 2003, and
requires severance payments in the event of termination without cause equal to
two times Mr. Gottlich's base salary plus one-half of the aggregate bonuses paid
over the previous three fiscal years. This agreement was terminated as of
January 1, 2001. See "Certain Transactions - Termination of Employment
Agreements."

Legal Proceedings

In January 2001, the Company and certain of its officers, including Messrs
Gottlich and Loccisano, were named as a defendant in a civil action filed by
Pensabene International, Inc. (the "Plaintiff") in the Superior Court in Marion
County, California entitled Pensabene International Inc. d/b/a Lady Baltimore
Bakery, et al. vs. Paramark Enterprises, Inc., et al. (Case No. 006365). The
claim is for damages for misappropriation of trade secrets, trade libel, breach
of confidentiality, breach of fiduciary duty, tortuous interference with
economic relations, breach of contract, common law palming off, unfair business
practices and a violation of state antitrust laws. This action arose resulted
from the Company's employment of Kandy Konn, a former employee and consultant of
the Plaintiff. The Plaintiff is seeking an unspecified amount of damages. The
Company believes these claims are frivolous and without merit, and the Company
intends to vigorously defend this action.

RELATED PARTY TRANSACTIONS

Heinz Bakery Products License Agreement

In June 1992, the Company entered into an exclusive 20 year license
agreement with Heinz Bakery Products ("Heinz"), pursuant to which, among other
things, Heinz paid an aggregate of $1.425 million in advance royalties to be
offset by actual royalties earned. The advance royalties owed to Heinz were
guaranteed by Charles Loccisano, the Chairman and Chief Executive Officer of the
Company. In August 1996, the Company entered into an agreement with Heinz to
terminate the license agreement and satisfy the balance due under the promissory
note in the amount of approximately $795,000 based on a payment of $600,000 made
in August 1996, the assignment of a $100,000 promissory note receivable from
Triarc, and the forgiveness of the balance of $95,000. At December 31, 1999, the
Heinz note was paid in full.

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Loans and Investments from Affiliates

In August 2000, Charles Loccisano, the Company's Chairman and Chief
Executive Officer, provided the Company with a loan of $150,000. The loan
provided for a term of one year and provided for interest in the amount of 5%
per annum. The Company granted Mr. Loccisano 50,000 unregistered shares of
common stock in consideration for providing this loan. This loan was repaid in
full out of the proceeds of the Gelt Financial loan in September 2000.

In September 2000, Charles Loccisano, the Company's Chairman and Chief
Executive Officer, provided the Company with a credit line facility in the
amount of $150,000. The credit line loan provided for a term of one year and
provided for interest in the amount of 5% per annum. The Company granted Mr.
Loccisano 150,000 unregistered shares of common stock in consideration for
providing this loan. The terms of this credit line provide that the balance of
this loan were repaid in full out of the proceeds of the Rich Products
Transaction.

Consulting Agreements Arising out of the Rich Products Transaction

Pursuant to the terms of the Rich Products Asset Purchase Agreement,
Charles N. Loccisano, the Chairman, Chief Executive Officer and Director of the
Company, entered into a consulting agreement with Rich Products requiring Mr.
Loccisano to be available to render consulting services as needed by Rich
Products for a period of four years following the closing which occurred on
December 15, 2000. The compensation to Mr. Loccisano pursuant to this agreement
is $50,000 per annum for a period of four years.

Pursuant to the terms of the Rich Products Asset Agreement, Alan S.
Gottlich, the President, Chief Financial Officer and Director of the Company,
entered into a consulting agreement with Rich Products requiring Mr. Gottlich to
be available to render consulting services as needed by Rich Products for a
period of four years following the Closing. The compensation to Mr. Gottlich
pursuant to this agreement is $30,000 per annum for a period of four years
commencing on December 15, 2000.

Pursuant to the terms of the Rich Products Asset Purchase Agreement, Wayne
Sorensen, the General Manager of the Company's baking facility in El Cajon,
California, entered into a consulting agreement with Rich Products requiring Mr.
Sorensen to be available to render consulting services as needed by Rich
Products for a period of four years following the Closing. The compensation to
Mr. Sorensen pursuant to this agreement is $20,000 per annum for a period of
four years commencing on December 15, 2000.

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Termination of Employment Agreements

In September 2000, the Board of Directors of the Company approved the
termination of Mr. Loccisano's Employment Agreement as of January 31, 2001 upon
terms providing Mr. Loccisano compensation equal to one-half the contractual
obligations under the employment agreement, or $276,622 (the contractual
obligation in the employment agreement is $553,244) to be paid in equal
quarterly installments over a period of four years. Pursuant to the terms of the
Agreement, the payment of this obligation is secured by the assignment of
payments due to Paramark under the Rich Products Asset Purchase Agreement.

In September 2000, the Board of Directors of the Company approved the
termination of Mr. Gottlich's Employment Agreement as of January 31, 2001 upon
the terms providing Mr. Gottlich compensation equal to one-half the contractual
obligations under the employment agreement, or $188,224 (the contractual
obligation in the employment agreement is $376,447) to be paid in equal
quarterly installments over a period of four years. Pursuant to the terms of the
Agreement, the payment of this obligation is secured by the assignment of
payments due to Paramark under the Rich Products Asset Purchase Agreement.

Consulting Agreements

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than 10% of the Common Stock, to file with the Securities
and Transaction Commission (the "SEC") initial reports of beneficial ownership
("Forms 3") and reports of changes in beneficial ownership of Common Stock and
other equity securities of the Company ("Forms 4"). Officers, directors, and
greater than 10% shareholders of the Company are required by SEC regulations to
furnish to the Company copies of all Section 16(a) reports that they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company, all Section 16(a) filing requirements applicable to
its officers, directors, and greater than 10% beneficial owners were complied
with for the fiscal year ended December 31, 2000.

By Order of the Board of Directors

Charles N. Loccisano
Chairman

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APPENDIX A

PARAMARK ENTERPRISES, INC.

AUDIT COMMITTEE CHARTER

Composition

There shall be a committee of the board of directors (the "Board") of Paramark
Enterprises, Inc. (the "Company") to be known as the audit committee which, no
later than June 14, 2001, shall have at least two (2) members, comprised solely
of independent directors, as such term is defined in Rule 4200(a)(15) of the
NASDAQ Stock Market ("NASD") corporate governance requirements, subject to the
exception in Rule 4310(c)(26)(B)(ii) of the NASD corporate governance
requirements.

The Board shall elect or appoint a chairman of the audit committee who will have
authority to act on behalf of the audit committee between meetings.

Responsibilities

The responsibilities of the audit committee are as follows:

o Ensure its receipt from the outside auditor of a formal written
statement, delineating all relationships between the outside auditor
and the Company consistent with the Independence Standards Board
Standard 1.
o Actively engage in a dialogue with the outside auditor with respect
to any disclosed relationships or services that may impact the
objectivity and independence of the outside auditor and be
responsible for taking, or recommending that the Board take,
appropriate action to oversee the independence of the outside
auditor.
o In view of the outside auditor's ultimate accountability to the
Board and the audit committee, as representatives of the
shareholders, the audit committee, acting together with the Board,
has the ultimate authority and responsibility to select, evaluate,
and, where appropriate, replace the outside auditor (or nominate an
outside auditor for shareholder approval in any proxy statement).
o Review with the outside auditor, the Company's internal auditor (if
any), and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the
Company, and elicit any recommendations for the improvement of such
internal control procedures or particular areas where new or more
detailed controls or procedures are desirable.
o Consider, in consultation with the outside auditor and management of
the company, the audit scope and procedures.

A-1

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o Review the financial statements contained in the annual report to
shareholders with management and the outside auditor to determine
that the outside auditor is satisfied with the disclosure and
content of the financial statements to be presented to the
shareholders.
o Meet with the internal auditor (if any), outside auditor or the
management privately to discuss any matters that the audit
committee, the internal auditor (if any), the outside auditor or the
management believe should be discussed privately with the audit
committee.
o Review and reassess the adequacy of the committee's charter
annually.
o Make such other recommendations to the Board on such matters, within
the scope of its functions, as may come to its attention and which
in its discretion warrant consideration by the Board.

Limitations

The audit committee is responsible for the duties set forth in this charter but
is not responsible for either the preparation of the financial statements or the
auditing of the financial statements. Management has the responsibility for
preparing the financial statements and implementing internal controls and the
independent accountants have the responsibility for auditing the financial
statements and monitoring the effectiveness of the internal controls. The review
of the financial statements by the audit committee is not of the same quality as
the audit performed by the independent accountants. In carrying out its
responsibilities, the audit committee believes its policies and procedures
should remain flexible in order to best react to a changing environment.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘SC 14F1’ Filing	Date	First	Last	Other Filings

	10/1/03	11	12
	9/22/01	2		8-K
	8/24/01	1	2
Filed on:	8/23/01			8-K, SC TO-I
	8/22/01	2	3	8-K
	8/20/01	3	4
	8/8/01	2	5
	6/14/01	15
	3/28/01	10		10KSB40
	1/31/01	14
	1/1/01	12
	12/31/00	10	14	10KSB40
	12/15/00	13		8-K
	5/31/00	8
	12/31/99	11	12	10KSB40, 10KSB40/A
	12/31/98	11		10KSB
	10/1/97	11	12
				List all Filings

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Filing Submission 0001005477-01-500852 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Raptor Investments Inc – ‘SC 14F1’ on 8/23/01 re: Raptor Investments Inc

On: Thursday, 8/23/01 · Accession #: 1005477-1-500852 · File #: 5-53641

Statement re: Change in Majority of Directors — Rule 14f-1Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Statement re: Change in Majority of Directors — Rule 14f-1
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