As filed with the Securities and Exchange Commission on August 29, 1997
Registration No. 33-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------
COMPLETE MANAGEMENT, INC.
(Exact Name of Registrant as Specified in Its Charter)
New York 8742 11-3149119
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Incorporation Classification Code Number) Identification
or Organization) Number)
254 West 31st Street
New York, NY 10001
(212) 273-0600
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)
-----------------------------
1995 Stock Option Plan, as amended
Consultant Options
Bonus Share Plan
Steven M. Rabinovici
Chairman and Chief Executive Officer
Complete Management, Inc.
254 West 31st Street
New York, NY 10001
(212) 273-0600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
-------------------------------
with a copy to:
Stephen A. Zelnick, Esq.
Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue, Suite 902
New York, New York 110022
(212) 838-1177
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum
Title of Securities Amount to be Proposed Maximum Aggregate Offering Amount of
to be Registered Registered (1) Offering Price Per Share Price Registration Fee
---------------- -------------- ------------------------ ----- ----------------
<S> <C> <C> <C> <C>
Common Shares (par value $.001
per share) issuable pursuant
to Options granted or to be
granted under the 1995 Stock
Option Plan, as amended (the
"Option Plan")
Common Shares subject to
options granted under
the Option Plan (2) 1,557,013 $11.95 $ 18,606,305 $5,638.27
Common Shares isssuable
pursuant to additional
options that may be
granted under the Option
Plan (3) 142,987 $14.91 $ 2,131,936 $ 646.04
Common Shares issuable upon
exercise of Consultant Options (4) 245,000 $ 9.84 $ 2,410,800 $ 730.54
Common Shares reserved for issuance
under the Bonus Share Plan (3) 30,000 $14.91 $ 447,300 $ 135.55
----------- ------------ ---------
TOTAL 1,975,000 $ 23,596,341 $7,150.40
</TABLE>
(1) Includes, in addition to the number of Common Shares stated above and
pursuant to Rule 416, an indeterminate number of additional shares or rights
which by reason of certain events specified in the 1995 Option Plan, as amended
or in the Consultant Options (collectively the "Plans") become subject to the
Plans.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average exercise
price of $11.95 per share for outstanding options to purchase total of 1,557,013
Common Shares.
(3) Estimated in accordance with rule 457(c) and (h), the proposed maximum
offering price per share, proposed maximum aggregate offering price and the
amount of the registration fee are based upon the average of the high and low
prices reported on the American Stock Exchange on August 27, 1997, with respect
to Shares available for grant under the 1995 Stock Option Plan, as amended, and
Shares available for issuance under the Bonus Share Plan.
(4) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average exercise
price of $9.84 per share for outstanding options to purchase of 245,000 Common
Shares.
2
<PAGE>
COMPLETE MANAGEMENT, INC.
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form
S-8 (plan information and registrant information) will be sent or given to
employees as specified by Rule 428(b)(i) of the Securities Act of 1933, as
amended (the "Securities Act"). Such documents need not be filed with the
Securities and Exchange Commission either as part of this Registration Statement
or as prospectuses or prospectus supplements pursuant to Rule 424 of the
Securities Act. These documents, which include the statement of availability
required by Item 2 of Form S-8, and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the requirements of Section
10(a) of the Securities Act.
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<PAGE>
COMPLETE MANAGEMENT, INC.
Cross Reference Sheet Pursuant to Regulation S-K, Item 501(b)
Form S-3 Item Number and Caption Location in Prospectus
1. Forepart of the Registration Statement and
Outside Front Cover................................Outside Front Cover
2. Inside Front and Outside Back Cover Pages of
Prospectus.........................................Inside Front and Outside
Back Cover Page
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges.......................Risk Factors
4. Use of Proceeds....................................Use of Proceeds
5. Determination of Offering Price....................*
6. Dilution...........................................*
7. Selling Security-Holders...........................Selling Shareholders
8. Plan of Distribution...............................Front Cover Page; Plan of
Distribution
9. Description of Securities to be Registered.........*
10. Interests of Named Experts and Counsel.............*
11. Material Changes...................................*
12. Incorporation of Certain Information
by Reference.......................................Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position of
Indemnification....................................*
* Not applicable or answer is in the negative.
4
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
COMPLETE MANAGEMENT, INC.
879,792 COMMON SHARES
This Prospectus may be used by certain persons (the "Selling
Shareholders") who may be deemed to be affiliates of Complete Management, Inc.,
a New York corporation (the "Company"), to sell Common Shares, par value $.001
per share, of the Company (the "Common Shares"), which have been acquired or
will be acquired by the Selling Shareholders pursuant to the exercise of all or
any portion of certain stock options granted pursuant to the Company's 1995
Stock Option Plan, as amended (the "Option Plan"), or of certain options granted
to consultants and agents of the Company (the "Consultant Options"), (the Option
Plan and Consultant Options are referred to together as the "Plans"). It is
anticipated that the Selling Shareholders will offer Common Shares for sale at
prevailing prices on the American Stock Exchange or on other principal Stock
Exchanges or National Market Quotation Systems on the date of sale. All proceeds
from any sale of such Common Shares will inure to the benefit of the Selling
Shareholders. The Company will receive none of the proceeds from the sale of the
Common Shares which may be offered hereby, but may receive funds upon the
exercise of stock options pursuant to which the Selling Shareholders will
acquire the Common Shares covered by this Prospectus, which funds, if any, will
be used by the Company for working capital. All expenses of the registration
incurred in connection herewith are being borne by the Company, but all selling
and other expenses incurred by individual Selling Shareholders will be borne by
such Selling Shareholders.
The Common Shares are listed and traded on the American Stock Exchange
under the symbol CMI. On August 12, 1997, the last reported sale price was
15 3/4 per share.
SEE "RISK FACTORS" FOR CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 29, 1997
No person has been authorized to give any information or make any
representations not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Selling Shareholders. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the Common Shares in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation.
No action has been or will be taken in any jurisdiction by the Company
or the Selling Shareholders that would permit a public offering of the Common
Shares or possession or distribution of this Prospectus in any jurisdiction
where action for that purpose is required, other than in the United States.
Persons into whose possession this Prospectus comes are required by the Company
and the Selling Shareholders to inform themselves about and to observe any
restrictions as to the offering of the Common Shares and the distribution of
this Prospectus.
5
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1993, as
amended (the "Securities Act"), with respect to the Common Shares offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Shares, reference is made
to such Registration Statement, including the exhibits and schedules thereto.
The statements contained in this Prospectus as to the contents of any document
filed as an exhibit are of necessity brief descriptions thereof and are not
necessarily complete; each such statement is qualified in its entirety by
reference to such document. The Registration Statement, including exhibits and
schedules thereto, may be inspected without charge at the facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the regional offices of the Commission located at
Seven World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the
materials may be obtained from the Public Reference Section of the Commission,
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
its public reference facilities in New York, New York, and Chicago, Illinois, at
prescribed rates. In addition, electronically filed documents, including
reports, proxy and information statements and other information regarding the
Company can be obtained from the SECs Web site at: http://www.sec.gov. Such
reports, proxy and information statements can also be inspected at the offices
of the American Stock Exchange at 86 Trinity Place, New York, New York
10006-1881.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are hereby incorporated by reference, except as superseded or modified
herein:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
3. The Company's Current Report on Form 8-K with respect to an event
occurring on June 17, 1997; and
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997.
5. The description of the Common Shares contained in the Company's
Registration Statement on Form 8-A (Registration No. 0-27260),
registering such shares pursuant to Section 12 of the Exchange Act
including any amendment or report updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of Common Shares shall be deemed to be incorporated
in and made a part of this Prospectus by reference from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is also incorporated by reference
herein modifies or replaces such statement. Any statements so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Upon oral or written request, the Company will provide without charge a copy of
any document incorporated in this Prospectus by reference, exclusive of exhibits
(unless such exhibits are specifically incorporated by reference into such
documents), to each person, including any beneficial owner, to
6
<PAGE>
whom this Prospectus is delivered. Requests for such documents should be
directed to Complete Management, Inc., 254 West 31st Street, New York New York
10001, Attention: Joseph Scotti, Corporate Secretary, telephone: (212) 273-0600.
7
<PAGE>
THE COMPANY
The Company provides physician practice management services, including
network services, to physicians and hospitals in the densely populated New York
Metropolitan Area, including Long Island, the Hudson Valley region and portions
of New Jersey and Connecticut. Since June 1997, the Company has also operated
the largest preferred provider organization ("PPO") in the State of New Jersey.
At June 30, 1997 the Company provided a full range of services to 150
physicians, more limited services, primarily billing and collection,
transcription and temporary staffing, to approximately 1,100 physicians and 32
hospitals and PPO network services to 8,000 physicians and 120 hospitals in New
Jersey and, to a lesser extent, New York and Connecticut.
The Company was incorporated in New York on December 30, 1992 and
commenced operations on April 1, 1993. Its principal executive offices are
located at 254 West 31st Street, New York, New York 10001 and its telephone
number is (212) 273-0600.
RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Shares offered hereby.
Dependence on Principal Client. Substantially all, 65% and 38% of the
net revenues of the Company in 1995, 1996 and the six months ended June 30, 1997
were earned under management contracts with Greater Metropolitan Medical
Services ("GMMS"). A substantial part of the growth in the Company's business is
a direct result of the growth of the GMMS medical practice. The continued
vitality of the GMMS medical practice is subject to numerous risks, including
the loss of its key medical personnel, malpractice claims and liability for
failure to comply with applicable regulations. There is no assurance that GMMS
will continue to operate successfully. For the six months ended June 30, 1997
owner physician payroll and entity income at GMMS showed net income of $720,000,
as compared to a loss of $1,125,000 in calendar 1996. A failure by GMMS to
operate successfully, could jeopardize GMMS' ability to pay management fees to
the Company. Moreover, although the two management services agreements between
the Company and GMMS covering all management services, other than billing and
collection, expire June 2025 and July 2001, respectively (with a provision for
the automatic extension of the latter agreement in five year intervals at the
option of the Company), there is no assurance that the Company and GMMS will
continue to maintain a productive working relationship. The founder of GMMS is a
founder and principal shareholder of the Company.
Ratios of Debt to Net Tangible Book Value. At June 30, 1997, the
Company had a net tangible book value of $132 million and its ratio of total
debt to net tangible book value was $2.68 to 1 If the Company experiences
unanticipated costs, write-offs of investments or other assets or operating or
other losses, the Company's leverage could increase. Such increased leverage (i)
could adversely affect the ability of the Company to obtain additional financing
in the future for working capital, capital expenditures or other purposes,
should it need to do so, (ii) will require that a substantial portion of the
Company's cash flow from operations be dedicated to debt service, (iii) could
place the Company at a competitive disadvantage, if it is more highly leveraged
than its competitors, and (iv) could make the Company more vulnerable to a
downturn in its business.
Dependence on Third-Party Payor Reimbursements; Possible Decreases in
Reimbursement Rates. For the year ended December 31, 1996, approximately 30% and
18% of the revenues of GMMS came from no-fault insurance carriers and workers'
compensation insurers, respectively. Payments from these sources generally have
long collection cycles. The Company's engagement by GMMS is based, in part, on
its belief in the Company's receivables collection skills and its ability to
8
<PAGE>
collect such payments for them as expeditiously as feasible. If the laws and
regulations establishing these third-party payors are amended, rescinded or
overturned with the effect of eliminating this system of payment reimbursement
for injured parties, the ability of the Company to market its management
services to GMMS and other clients with similar practices could be adversely
affected. To the extent that the medical practices receiving the Company's
services are dependent on third-party payors, changes in such payors' policies
that reduce reimbursement rates could impair clients' ability to pay management
fees to the Company.
Risk of Lower Margins. Certain services offered by the Company are
provided in accordance with fee schedules based on the Company's estimate of the
cost of providing these services. Such fee schedules are not readily subject to
modification. Accordingly, an unanticipated increase in costs, such as those for
personnel, space, equipment or capital, would have a substantial and adverse
impact on the Company's operating margins and net income. There is no assurance
that the Company's actual costs will not exceed its estimated costs. Both the
professional fees earned by hospitals and medical practices and the cost of
providing non-medical services to them vary substantially with the nature of the
medical activities undertaken, the effectiveness of the medical services
provided, the location of the hospital or medical practice and numerous other
factors. Further, there is no assurance that the Company's future business
relationships will provide margins comparable to those currently earned under
existing agreements.
Inability to Collect or Delay in Collecting Management Fees. Collection
by the Company of its management fees may be adversely affected by the
uncollectibility of its clients' medical fees from third-party payors (including
workers' compensation insurers, no-fault insurance carriers, no-fault payment
pool, Medicare and commercial insurers) or by the long collection cycles for
those receivables, even though clients of the Company are liable for the
Company's fees regardless of whether they receive payment for their medical
services. The Company has historically deferred collecting amounts owed to it
when its clients have experienced delays in collecting from third-party payors.
The requirements of many third-party payors regarding claims submission are
detailed and complex and payments may be delayed or refused if the payors'
requirements are not complied with in full. Many third-party payors,
particularly insurance carriers covering automobile no-fault and workers'
compensation claims, refuse, as matter of business practice, to pay claims
unless submitted to arbitration. It is the Company's experience that insurance
carriers delay payment of claims until just prior to the arbitration hearing.
The Company's management has determined, based on actual results, industry
factors, and GMMS' historical collection experience prior to its association
with the Company, that this entire collection process generally spans a period
averaging approximately three years. As a result, the Company requires more
capital to finance its receivables than do businesses with shorter receivable
collection cycles. Further, third-party payors may reject medical claims if, in
their judgment, the procedures performed were not medically necessary or if the
charges exceed such payor's allowable fee standards. The Company is generally
prepared to take all legally available steps, including arbitration, to collect
the receivables generated by its clients, whether owned by the Company or by the
client. Nevertheless, some of those receivables may be uncollectible if
third-party payors determine that the Company's clients performed medically
unnecessary procedures, charged excessive fees for procedures, or completed
claim forms improperly. The inability of the Company's clients to collect their
receivables could adversely affect their ability to pay the Company's fees.
Inability to Collect Loans to Clients. The Company has provided
financing to GMMS and other clients, either through loans or the purchase of
receivables, to open or renovate offices, acquire medical practices, add medical
specialties and acquire diagnostic imaging and other equipment. When the Company
makes loans to its clients it generally takes a security interest in the assets
of such clients (including receivables not otherwise assigned to the Company) to
secure repayment. Inasmuch as clients' receivables may also secure payment to
the Company of any unpaid management fees from such clients, there is a risk
that its clients will be unable to repay such loans on a timely basis, if at
all, and, in any such event, that the Company's security interest in its
clients' receivables will be inadequate to repay both the loan obligations and
other amounts due to the Company.
9
<PAGE>
Inability to Effect Expansion Strategy. The Company's expansion
strategy includes increasing the number and type of medical practices to which
it provides management services in its current market, other areas in New York
State and selected other markets including New Jersey, and securing contracts on
behalf of its clients with managed care organizations. The Company intends to
identify primary care and specialty medical practices to be acquired by existing
clients or to become clients of the Company, possibly in conjunction with the
Company's purchase of certain fixed assets and/or accounts receivable of such
medical practice. There is no assurance, however, that suitable medical
practices will be identified which are either willing to be acquired or to
contract for the management services offered by the Company. Moreover, there is
no assurance that the Company can expand its business outside the New York
Metropolitan Area or into other states. In order to operate effectively in new
locations, the Company must achieve acceptance in the local market and, in order
to operate in other states, the Company must adapt its procedures to each such
state's regulatory requirements and systems.
Management of Growth and Expansion. The Company is undergoing
substantial growth. This growth places significant demands on the Company's
management, and its technical, financial and other resources. To manage its
growth effectively, the Company must maintain a high level of operational
quality and efficiency, continue to enhance its operational, financial and
management systems and expand, train and manage its management and staff. The
Company has only limited experience in simultaneously providing physician
practice management services to several practices. To execute its growth
strategy, the Company plans to significantly increase the number of physician
practices under management. There can be no assurance that the Company will be
able to manage growth effectively, and any failure to do so could have a
material adverse effect on the Company's business, financial condition and
results of operations and the price of the Common Shares.
Cost Containment and Reimbursement Trends. Government and private
third-party payors are seeking to contain healthcare costs by imposing lower
reimbursement and higher utilization rates and negotiating reduced payment
schedules with service providers. One method for achieving this objective has
been the use of a resource-based relative value scale ("RBRVS") payment
methodology for physician services implemented by the federal government through
the Medicare program. The RBRVS began to cover certain physician services in
1992 and was fully phased in on December 31, 1996. RBRVS is a fee schedule that
pays similarly situated physicians the same amount for the same services, with
certain geographical and other adjustments. The RBRVS is adjusted each year, and
is subject to increases or decreases at the discretion of Congress. RBRVS has
reduced payment rates for certain of the procedures historically provided by the
physician groups managed by the Company. RBRVS-type of payment systems have also
been adopted by certain private third-party payors and may become a predominant
fee for service payment methodology. Widespread implementation of such
RBRVS-type programs could reduce payments by third-party payors. Rates paid by
many private third-party payors, including those that provide Medicare
supplemental insurance, are based on the physician and hospital's usual and
customary charges which are generally higher than Medicare payment rates. A
decrease in the number of privately insured patients seen by the practices
managed by the Company could cause the revenues of such practices to decrease
and in turn adversely affect the Company's results of operations. Thus, there
can be no assurance that the Company's revenues from its relationship with such
affiliated physicians will be sufficient to achieve or maintain profitability.
The Company believes that cost containment trends will continue to result in a
reduction from historical levels in per-patient revenue for medical practices.
Further reductions in payments to physicians or other changes in reimbursement
for healthcare services could have an adverse effect on the Company's
operations. There can be no assurance that the effect of any or all of these
changes in third-party reimbursement could be offset by the Company through cost
reductions, increased volume, introduction of new services and systems or
otherwise.
Risks Associated with Capitated Fee Arrangements. Physicians and other
healthcare providers are, increasingly, being asked to provide professional
services on a risk-sharing or capitated basis. Under these arrangements, the
healthcare provider often receives a predetermined amount per
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patient per month in exchange for providing specified services to patients
covered by the arrangement. Such arrangements pass the economic risk of
providing care from the payor to the provider. Capitation fee arrangements are
relatively new but are rapidly becoming important in the New York marketplace.
While the growth of such arrangements could result in greater predictability of
revenues for those clients of the Company who enter into such arrangements, it
may create new risks and uncertainties for the profitability of these clients
and their ability to pay the Company's management fees. Additionally, the
Company may be required to negotiate capitated fee arrangements for its clients
to maintain their competitive position in the marketplace. There can be no
assurance that the Company will be able to negotiate satisfactory arrangements
for its clients or be able to provide the service of negotiating such
arrangements at commercially reasonable rates. To the extent that medical
practice clients have reduced profitability as a result of capitated fee
arrangements there can be no assurance that the Company will be able to derive
sufficient revenues from its relationships with such clients to maintain
profitability or sustain its current level of operations.
Government Regulation. The healthcare industry is highly regulated by
numerous laws and regulations at the federal, state and local levels. Regulatory
authorities have broad discretion to interpret and enforce these laws and
promulgate corresponding regulations. Violations of these laws and regulations
(as determined by agencies or judicial authorities) may result in substantial
criminal and/or civil penalties and disqualification from participation in
Medicare, Medicaid and other payor programs. The Company believes that its
current operations are in material compliance with these laws and regulations
and the structure of the Company's relationships with its medical practice and
hospital clients (including GMMS, the Company's principal medical practice
client, whose 95% shareholder, Dr. Lawrence Shields, is a founder and principal
shareholder of the Company) is similar in material respects to that of many
firms in the physician practice management industry. Nevertheless, the laws and
regulations in this area are extremely complex and subject to changing
interpretation, many aspects of the Company's business and business
opportunities have not been the subject of federal or state regulatory review or
interpretation, and the Company has neither obtained nor applied for an opinion
of any regulatory or judicial authority that its business operations are in
compliance with applicable laws and regulations. Thus, there is no assurance
that the Company's operations have been in compliance at all times with all such
laws and regulations. Nor is there assurance that a court or regulatory
authority will not determine that the Company's past, current or future
operations (including the purchase and lease-back of client assets, the
provision of financing to new or existing clients, the purchase of client
accounts receivable and, if appropriate, the granting of an equity interest in
the Company to a client) violate applicable laws or regulations. If the
Company's interpretation of the relevant laws and regulations is inaccurate, the
Company's business and its prospects could be materially and adversely affected.
For example, if the Company were determined to be a diagnostic and treatment
center or engaged in the corporate practice of medicine, it could be found
guilty of criminal offenses and be subject to substantial civil penalties,
including fines, and an injunction preventing continuation of its business. The
following are among the laws and regulations that affect the Company's
operations and development activities: Corporate Practice of Medicine; Fee
Splitting; Self-Referral Laws; Anti-Kickback and Anti-Trust Laws; Certificates
of Need; Regulation of Diagnostic Imaging Facilities; No-Fault Insurance and
Workers' Compensation. In addition, the federal government and New York State
are considering numerous new laws and regulations that, if enacted, could result
in comprehensive changes to the health industry and the payment for, and
availability of, healthcare services.
Many aspects of the laws and regulations that cover the Company's
operations and relationships have not been definitively interpreted by
regulatory authorities. Regulatory authorities have broad discretion concerning
how these laws and regulations are interpreted and how they are enforced. The
Company may, therefore, be subject to lengthy and expensive investigations of
its business operations or to prosecutions which may have uncertain merit, by a
variety of state and federal governmental authorities. If the Company or any of
its physician or hospital clients were found by an agency or judicial authority
to be in violation of these laws and regulations, the Company could be subject
to criminal and/or civil penalties, including substantial fines, injunctive
relief and disqualification from
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participation in Medicare, Medicaid and other payor programs. Such developments
could limit the Company's ability to provide or could restrict or make
unprofitable some of the services the Company provides to its clients,
generally.
Forward-Looking Information. In connection with certain past
acquisitions and the entry into long-term physician practice management
agreements the Company has disclosed expected additions to its revenues from
such transactions. Such revenue forecasts are forward-looking information and as
such are inherently subject to risk and uncertainty. Important factors,
including the risk factors set forth herein, could cause the Company's actual
results from these transactions to differ materially and adversely from the
projections, or the additional revenues from these transactions could be offset
by a diminution of other revenues. Accordingly, there can be no assurance that
the Company will achieve the projected revenues, or, if attained, what effect
such revenues will have on the Company's net earnings or earnings per share.
Dependence upon Key Personnel. The Company is dependent upon the
expertise and abilities of its management, including its Chairman and Chief
Executive Officer, Steven Rabinovici. The loss of the services of Mr. Rabinovici
or other key members of management could have a material adverse effect on the
business of the Company. The Company is also indirectly dependent on Dr.
Lawrence W. Shields and other senior physicians at GMMS, whose loss could
adversely affect GMMS' practice and the financial condition and results of
operations of the Company. The Company is the beneficiary of key man insurance
policies on the lives of Steven M. Rabinovici and Dr. Lawrence W. Shields in the
amounts of $2,000,000 and $10,000,000, respectively.
Competition. The medical practice management field is highly
competitive. A number of large hospitals in New York State and elsewhere have
acquired medical practices and this trend is expected to continue. The Company
expects that more competition will develop, in part as a result of its having
demonstrated that management companies can operate in the highly regulated New
York environment. Potential competitors include large hospitals and a number of
public corporations operating through a regional or national network of offices
that have greater financial and other resources than the Company.
Technological Obsolescence. Both the software and hardware used by the
Company in connection with the services it provides have been subject to rapid
technological change. Although the Company believes that its technology can be
upgraded as necessary, the development of new technologies or refinements of
existing technology could make the Company's existing equipment obsolete.
Although the Company is not currently aware of any pending technological
developments that would be likely to have a material adverse effect on its
business, there is no assurance that such developments will not occur. In order
to maintain management efficiencies and quality of service provided to its
clients the Company is seeking to develop, with the use of outside consultants,
new management information systems, including physician practice management
software both for its internal use and use by it and its clients in managing the
professional service and business aspects of their practices, respectively. New
software products used in these systems may contain errors or defects,
especially when first introduced, and such errors or defects could have a direct
material adverse effect upon the Company's business, operating results and
financial condition or as indirect material adverse effect thereon as a result
of damage or harm to its clients' medical practices occasioning loss of client
relationships or reduced revenues.
Liability to Clients' Patients and Others; Insurance. If misdiagnoses
are made by the Company's clients using equipment furnished by the Company or if
clients' patients or operating personnel suffer injury as a result of using such
equipment or if persons are injured on premises leased by the Company to its
clients, liability claims could be filed by such client or patient, as the case
may be, against the Company. Further, any substantial liability incurred by a
client not covered by insurance could impair that client's ability to pay
management fees to the Company. While the Company seeks to protect itself from
liability claims both by requiring that its clients carry substantial
12
<PAGE>
medical malpractice and other liability insurance and by carrying its own
general liability insurance, there is no assurance that such insurance would be
adequate to fund such claims or that the insurance companies would not find a
basis to deny coverage.
Limitation of Director Liability. The Company's Certificate of
Incorporation provides that a director of the Company will not be personally
liable to the Company or its Shareholders for monetary damages for breach of the
fiduciary duty of care as a director, including breaches which constitute gross
negligence, subject to certain limitations imposed by the New York Business
Corporation Law. Thus, under certain circumstances, neither the Company nor the
Shareholders will be able to recover damages even if directors take actions
which harm the Company.
Dividends. The Company has not paid any dividends and does not
currently anticipate paying cash dividends in the future. There can be no
assurance that the Company will ever pay cash dividends.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Shares by the Selling Shareholders, but may receive funds upon the exercise of
stock options pursuant to which the Selling Shareholders will acquire Common
Shares covered by this Prospectus, which funds, if any, will be used by the
Company for working capital.
SELLING SHAREHOLDERS
The Common Shares covered by this Prospectus are being registered for
reoffers and resales by Selling Shareholders of the Company who may acquire such
Common Shares pursuant to the exercise of stock options granted under the Plans.
The Selling Shareholders named on the following table may resell all, a portion,
or none of the Common Shares that they acquire pursuant to the exercise of stock
options under the Plans.
Key employees deemed to be "affiliates" of the Company who acquire
registered Common Shares under the Plans may be added to the Selling
Shareholders listed below from time to time, either by means of a post-effective
amendment hereto or by use of a prospectus filed pursuant to Rule 424(c) under
the Securities Act. An "affiliate" is defined in Rule 144 under Securities Act
as a "person that directly, or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Company".
The following table sets forth information with respect to the number
of Common Shares beneficially owned by each of the Selling Shareholders as of
August 12, 1997. The address of each Selling Shareholder is c/o Complete
Management, Inc., 254 West 31st Street, New York, New York 10001.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF SELLING SHAREHOLDER AND NUMBER OF SHARES COVERED BY SHARES BENEFICIALLY OWNED
POSITION WITH THE COMPANY BENEFICIALLY OWNED (1) THIS PROSPECTUS AFTER THE OFFERING (2)
- -------------------------------- ---------------------- --------------- -----------------------
NUMBER PERCENTAGE
------ ----------
<S> <C> <C> <C> <C>
Steven M. Rabinovici
Chairman and Chief Executive
Officer 460,126 (3) 100,000 360,126 3.3%
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF SELLING SHAREHOLDER AND NUMBER OF SHARES COVERED BY SHARES BENEFICIALLY OWNED
POSITION WITH THE COMPANY BENEFICIALLY OWNED (1) THIS PROSPECTUS AFTER THE OFFERING (2)
- -------------------------------- ---------------------- --------------- -----------------------
NUMBER PERCENTAGE
------ ----------
<S> <C> <C> <C> <C>
David R. Jacaruso
Vice Chairman, President and
Director 407,452 (4) 100,000 307,452 2.8%
Arthur L. Goldberg
Senior Executive Vice President,
Chief Operating Officer, Chief 100,500 (5) 100,000 500 *
Financial Officer and
Director
Robert Keating
Senior Executive, Vice
President, Director of Opera-
tions - Medical Legal Services 150,000 (6) 150,000 0 *
Dennis Shields
Executive Vice President and
Director 572,212 (7) 100,000 472,212 4.4%
Joseph M. Scotti
Executive Vice President and
Secretary 92,523 (8) 50,000 42,523 *
Dennis W. Simmons
Executive Vice President -
Practice Development and
Managed Care 100,000 (9) 100,000 0 *
Kenneth Theobalds
Executive Vice President -
Workers' Compensation 25,000 (10) 25,000 0 *
Claire Cardone
Vice President 137,337 (11) 30,000 107,337 1%
Richard DeMaio
Vice President - Operations 39,843 (12) 30,000 9,843
John T. Dooley
Vice President and Chief
Information Officer 50,000 (13) 50,000 0 *
Kenneth S. Schwartz, M.D.
Vice President - Medical Affairs 46,722 (14) 4,792 41,930 *
Steven Cohn
Director 24,021 (15) 20,000 4,021 *
Joseph Tocci
Director 25,501 (16) 20,000 5,501 *
</TABLE>
*Less than 1% of the outstanding Common Shares.
14
<PAGE>
(1) Includes Common Shares subject to options which have not yet vested and
therefore are not exercisable within 60 days of the date hereof, although such
Common Shares are not "beneficially" owned within the meaning of Section 13(d)
of the Exchange Act.
(2) Based upon 10,743,829 Common Shares outstanding as of August 12, 1997 plus
in the case of each Selling Shareholder assuming that all Common Shares covered
by this Prospectus are sold and that no additional shares are purchased or sold
by any Selling Shareholder.
(3) Includes 100,000 shares issuable upon exercise of options. Also includes
235,126 shares held by his son Jeffrey.
(4) Includes 100,000 shares issuable upon exercise of options. Also includes
shares held by his wife, Marie Graziosi and shares held as custodian for his
minor children, Cara Elizabeth and David Francis.
(5) Includes 100,000 shares issuable upon exercise of options.
(6) Consists of 150,000 shares issuable upon exercise of options.
(7) Includes 100,000 shares issuable upon exercise of options.
(8) Includes 50,000 shares issuable upon exercise of options.
(9) Consists of 100,000 shares issuable upon exercise of options.
(10) Consists of 25,000 shares issuable upon exercise of options.
(11) Includes 30,000 shares issuable upon exercise of options.
(12) Includes 30,000 shares issuable upon exercise of options.
(13) Consists of 50,000 shares issuable upon exercise of options.
(14) Includes 4,792 shares issuable upon exercise of options.
(15) Includes 20,000 shares issuable upon exercise of options.
15
<PAGE>
COMPLETE MANAGEMENT, INC.
REGISTRATION STATEMENT ON FORM S-8
PART II
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are hereby incorporated by reference, except as superseded or
modified herein:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
3. The Company's Current Report on Form 8-K with respect to an event
occurring on June 17, 1997; and
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997.
5. The description of the Company's Common Shares, contained in the
Company's Registration Statement on Form 8-A (Registration No. 0-27260)
registering such shares pursuant to Section 12 of the Exchange Act
including any amendment or report updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Registration Statement
and prior to the termination of the offering of Common Shares shall be deemed to
be incorporated in and made a part of this Prospectus by reference from the date
of filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that is also incorporated
by reference herein modifies or replaces such statement. Any statements so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Upon oral or written request, the Company will provide without charge a
copy of any document incorporated in this Prospectus by reference, exclusive of
exhibits (unless such exhibits are specifically incorporated by reference into
such documents), to each person, including any beneficial owner, to whom this
Prospectus is delivered. Requests for such documents should be directed to
Complete Management, Inc., 254 West 31st Street, New York New York 10001,
Attention: Joseph Scotti, Corporate Secretary, telephone (212) 273-0600
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Legal matters in connection with the issuance of Common Shares offered
hereby have been passed upon for the Company by Morse, Zelnick, Rose & Lander,
LLP. Members of the firm beneficially own an aggregate of 83,094 Common Shares.
16
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 722 and 723 of the New York Business Corporation Law grant to
the Company the power to indemnify the officers and directors of the Company as
follows:
(a) A corporation may indemnify any person made, or threatened to be
made, a party to an action or proceeding other than one by or in the right of
the corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other corporation of any type of
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
corporation served in any capacity at the request of the corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.
(b) The termination of any such civil or criminal action or proceeding
by judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation or that he had reasonable
cause to believe that his conduct was unlawful.
(c) A corporation may indemnify any person made, or threatened to be
made, a party to an action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he, his testator or intestate,
is or was a director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, against amounts paid in settlement
and reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interest of
the corporation, except that no indemnification under this paragraph shall be
made in respect of (1) a threatened action, or a pending action which is settled
or otherwise disposed of, or (2) any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation, unless and only
to the extent that the court on which the action was brought, or, if no action
was brought, any court of competent jurisdiction, determines upon application
that, in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such portion of the settlement amount and
expenses as the court deems proper.
(d) For the purpose of this section, a corporation shall be deemed to
have requested a person to serve an employee benefit plan where the performance
by such person of his duties to the corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of
17
<PAGE>
the plan; excise taxes assessed on a person with respect to an employee benefit
plan pursuant to applicable law shall be considered fines; and action taken or
omitted by a person with respect to an employee benefit plan in the performance
of such person's duties for a purpose reasonably believed by such person to be
in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the
corporation.
Payment of indemnification other than by court award is as follows:
(a) A person who has been successful, on the merits or otherwise, in
the defense of a civil or criminal action or proceeding of the character
described in section 722 shall be entitled to indemnification as authorized in
such section.
(b) Except as provided in paragraph (a), any indemnification under
section 722 or otherwise permitted by section 721, unless ordered by a court
under section 724 (Indemnification of directors and officers by a court), shall
be made by the corporation, only if authorized in the specific case:
(1) By the board acting by a quorum consisting of directors
who are not parties to such action or proceeding upon a finding that the
director or officer has met the standard of conduct set forth in section 722 or
established pursuant to section 721, as the case may be; or
(2) If a quorum under subparagraph (1) is not obtainable or,
even if obtainable, a quorum of disinterested directors so directs:
(A) By the board upon the opinion in writing of
independent legal counsel that indemnification is proper in the circumstances
because the applicable standard of conduct set forth in such sections has been
met by such director or officer; or
(B) By the shareholders upon a finding that the
director or officer has met the applicable standard of conduct set forth in such
sections.
(C) Expenses incurred in defending a civil or
criminal action or proceeding may be paid by the corporation in advance of the
final disposition of such action or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amounts as, and to the
extent, required by paragraph (a) of section 725.
The Company's certificate of incorporation provides as follows:
SIXTH: The personal liability of directors to the corporation or its
shareholders for damages for any breach of duty in such capacity is hereby
eliminated except that such personal liability shall not be eliminated if a
judgment or other final adjudication adverse to such director establishes that
his acts or omissions were in bad faith or involved intentional misconduct or a
knowing violation of law or that he personally gained in fact a financial profit
or other advantage to which he was not legally entitled or that his acts
violated Section 719 of the Business Corporation Law.
EIGHTH: (a) Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer,
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Business Corporation Law, as the same exists or may hereafter
be amended (but, in case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights than
said law permitted the Corporation to
18
<PAGE>
provide prior to such amendment), against all expense, liability and loss
(including attorney's fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that, except as provided in paragraph (b) hereof, the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this Section shall be
a contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Business Corporation Law requires,
the payment of such expenses incurred by a director or officer (in his or her
capacity as a director or officer and not in any other capacity in which service
was or is rendered by such person while a director or officer, including,
without limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of
this Section is not paid in full by the Corporation within thirty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has no met the standards of conduct which make it
permissible under the Business Corporation Law for the Corporation to indemnify
the claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its Shareholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the Business Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its Shareholders) that the claimant has
not met such applicable standard or conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(c) Non-Exclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, by-law, agreement, vote of Shareholders or
disinterested directors or otherwise.
(d) Insurance. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability or loss
under the Business Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
19
<PAGE>
ITEM 8. INDEX TO EXHIBITS
The following Exhibits are filed as part of this Registration
Statement.
Exhibit No. Description
----------- -----------
4.1 Certificate of Incorporation of the Registrant (*)
4.2 Certificate of Amendment to Certificate of
Incorporation of Registrant filed on December 1, 1995
(*)
4.3 1995 Stock Option Plan of Registrant (*)
4.4 Amendment to 1995 Stock Option Plan approved by
Registrant's Shareholders on July 16, 1997
4.5 Form of Consultant Options
4.6 Bonus Share Plan
4.7 Form of Bonus Share Awards
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP
regarding legality of Securities
23.1 Consent of Arthur Andersen, LLP
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP
(included in Exhibit 5.1)
24 Power of Attorney (included on Signature Page)
(*) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 No.-97894.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement.
(i) To include any prospectus require d by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
20
<PAGE>
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be initial bona fide
offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining
liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating
to the securities offering herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item
6 of this Registration Statement, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any section, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of New York, State of New York on this 27th day of
August 1997.
COMPLETE MANAGEMENT, INC.
By: /S/ Steven Rabinovici
-------------------------
Steven Rabinovici
Chairman and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Complete Management,
Inc., hereby severally constitute and appoint Arthur L. Goldberg and Stephen A.
Zelnick, and each of them singly, our true and lawful attorneys with full power
to them, and each of them singly, to sign for us and in our names in the
capacities indicated below the Registration Statement on Form S-8 filed herewith
and any and all pre-effective and post-effective amendments to said Registration
Statement, and generally to do all such things in our names and on our behalf in
our capacities as officers and directors to enable Complete Management, Inc. to
comply with the provisions of the Securities Act, and all requirements of the
Commission, hereby ratifying and confirming our signatures, as they may be
signed by our said attorneys or any of them, to said Registration Statement and
any and all amendments thereto.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed on August 27, 1997 by the following persons in the
capacities indicated.
Signature Title
- --------- -----
/S/ Steven Rabinovici Chairman and Chief Executive
- -------------------------
Steven Rabinovici
/S/ David R. Jacaruso Director
- -------------------------
David R. Jacaruso
/S/ Arthur L. Goldberg Chief Financial Officer and Director
- -------------------------
Arthur L. Goldberg
/S/ Dennis Shields Director
- -------------------------
Dennis Shields
/S/ Steven Cohn Director
- -------------------------
Steven Cohn
/S/ Steven A. Hirsh Director
- -------------------------
Steven A. Hirsh
/S/ Joseph S. Tocci Director
- -------------------------
Joseph S. Tocci
22
<PAGE>
INDEX TO EXHIBITS
The following Exhibits are filed as part of this Registration
Statement.
Exhibit No. Description
----------- -----------
4.1 Certificate of Incorporation of the Registrant (*)
4.2 Certificate of Amendment to Certificate of Incorporation
of Registrant filed on December 1, 1995 (*)
4.3 1995 Stock Option Plan of Registrant (*)
4.4 Amendment to 1995 Stock Option Plan approved by
Registrant's Shareholders on July 16, 1997
4.5 Form of Consultant Options
4.6 Bonus Share Plan
4.7 Form of Bonus Share Awards
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP regarding
legality of Securities
23.1 Consent of Arthur Andersen, LLP
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP
(included in Exhibit 5.1)
24 Power of Attorney (included on Signature Page)
(*) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 No.-97894.
EXHIBIT 4.4
Amendment of 1995 Stock Option Plan
Under an amendment to the Registrant's 1995 Stock Option Plan proposed
by the Board of Directors and approved by Registrant's shareholders on July 16,
1997 the number of shares for which Options may be granted under the Plan was
increased from 700,000 shares to 1,700,000 shares.
EXHIBIT 4.5
FORM OF CONSULTANT OPTIONS
COMPLETE MANAGEMENT, INC.
STOCK OPTION AGREEMENT
COMPLETE MANAGEMENT, INC., a New York corporation (the "Company"),
hereby grants to ___________________ (the "Optionee") stock options (each an
"Option" and collectively the "Options") to purchase a total of __________
shares (each a "Share" and collectively the "Shares") of the Company's common
stock, par value $.001 per share (the "Common Stock") on the terms and
conditions set forth herein.
1. Term.
(a) The Options are granted on the date first above written.
(b) The Options shall expire at the close of business on February 4,
2002 (the "Termination Date").
2. Price.
The purchase price upon exercise of an Option is $_______ per Share.
3. Characterization of Options.
The Options granted pursuant to this Agreement are intended to
constitute non-qualified stock options subject to Section 83 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Options granted pursuant to
this Agreement are not intended to be Incentive Stock Options, as defined in
section 422 of the Code.
4. Written Notice of Exercise.
The Options may be exercised only by delivering to the Secretary of the
Company, at its principal office within the time specified in Paragraph 1 or
such shorter time as is otherwise provided for herein, a written notice of
exercise substantially in the form described in Paragraph 9.
5. Anti-Dilution Provisions.
(a) Subject to any required action by the stockholders of the Company,
the number of Shares covered by the Options shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split or the payment of any stock dividend with respect
to the Common Stock of the Company, or any other increase or decrease in the
number of issued shares of Common Stock effected without the receipt of
consideration by the Company. No change shall be made in the aggregate purchase
price to be paid for the Shares, but the aggregate purchase price shall be
allocated among all the Shares after giving effect to the adjustment; provided,
however, that any fractional Shares resulting from any such adjustment shall be
eliminated.
(b) In the event of a proposed dissolution or liquidation of the
Company, or in the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into any other
corporation, the Board of Directors of the Company (the "Board") shall, as to
outstanding Options, either (i) make appropriate provision for the protection of
any such outstanding Options by the substitution on an equitable basis of
appropriate stock of the Company or of the merged, consolidated or otherwise
reorganized corporation which will be issuable in respect to one share of Common
Stock; provided, only that the excess of the aggregate fair market value of the
Shares immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of the Shares
subject to such options immediately before such substitution over the purchase
price thereof, or (ii) upon written notice to the Optionee, 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. In any such case, the Board may,
in its discretion, advance the lapse of any waiting or installment periods and
exercise dates.
<PAGE>
6. Investment Representation and Legend of Certificates.
Optionee agrees that until such time as a registration statement under
the Securities Act of 1933, as amended, becomes effective with respect to the
Option and/or the Shares, the Optionee is taking the Options and will take the
Shares for investment purposes only and not for resale or distribution. The
Company shall have the right to place upon the face of any stock certificate or
certificates evidencing the Shares such legend as the Board may prescribe for
the purpose of preventing disposition of the Shares in violation of the
Securities Act of 1933, as amended.
7. Certain Rights Not Conferred by Options.
The Optionee shall not, by virtue of holding the Options, be
entitled to any rights of a stockholder in the Company.
8. Expenses.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of the Shares pursuant hereto and all other
fees and expenses necessarily incurred by the Company in connection therewith.
9. Exercise of Options.
(a) Notwithstanding any other provision of this Agreement, the Options
shall vest and become exercisable on the date hereof.
(b) An Option shall be exercisable by written notice of such exercise,
in the form prescribed by the Board or the committee appointed by the Board to
administer the Plan, to the Secretary of the Company, at its principal office.
The notice shall specify the number of Options being exercised (which number, if
less than all of the Options then subject to exercise, shall be 100 or a
multiple thereof) and shall be accompanied by payment (i) in cash or by check in
the amount of the full purchase price of such Shares or (ii) in such other
manner as the Board or the Committee shall deem acceptable. With respect to
Options which constitute non-qualified stock options and are granted to
employees of the Company, such notice must also be accompanied by a payment, in
cash or check, in an amount equal to the withholding taxes (income and
employment) payable with respect to such exercise.
(c) No Shares shall be delivered upon exercise of any Option until all
laws, rules and regulations which the Board may deem applicable have been
complied with. If a registration statement under the Securities Act of 1933, as
amended, is not then in effect with respect to the Shares issuable upon such
exercise, the Company may require as a condition precedent that the person
exercising the Options give to the Company a written representation and
undertaking, satisfactory in form and substance to the Board, that such person
is acquiring the Shares for their own account for investment purposes only and
not with a view to the distribution thereof.
(d) The person exercising an Option shall not be considered a record
holder of the Shares so purchased for any purpose until the date on which such
person is actually recorded as the holder of such Shares in the records of the
Company.
COMPLETE MANAGEMENT, INC.
By: _____________________________________
Steven Rabinovici, Chief Executive Officer
Accepted as of the date first set forth above.
______________________________
By: __________________________
EXHIBIT 4.6
Bonus Share Plan
The Registrant may issue up to 30,000 Shares to the full or part-time
employees of the Registrant and its Subsidiaries, but excluding officers of the
Registrant, on such terms and conditions as may from time to time be determined
by the Registrant's Compensation Committee. No Shares may be granted under the
Plan after August 12, 1999.
EXHIBIT 4.7
Form of Bonus Share Awards
August ____, 1997
To: Qualified Employees of
Complete Management, Inc.
And its Subsidiaries
Re: Bonus Shares
In consideration of past services rendered by Qualified Employees, as
defined below, Complete Management, Inc. (the "Company") has awarded to each
such employee 12 Common Shares of the Company, par value $.001 per share (the
"Shares" or "Bonus Shares"), subject to certain risks of forfeiture, and has
instructed its Transfer Agent, The Continental Stock Transfer Company, to issue
certificates for 12 Bonus Shares in the name of each Qualified Employee and to
hold such certificates for each such Employee under the terms and conditions
hereinafter set forth. Qualified Employees are full or part-time employees of
the Company or a subsidiary of the Company (a "Subsidiary") as of August 1,
1997, other than officers of the Company.
The Bonus Shares represented by the certificates issued in the names of
Qualified Employees hereunder are subject to the risk of forfeiture to the
extent of one Share for each month or portion thereof less than 12 months from
and after August 1, 1997 during which a Qualified Employee does not remain an
employee of the Company or a Subsidiary.
To facilitate the delivery of certificates to Employees for the
appropriate number of Shares and the cancellation of Shares that are forfeited
under the formulation set forth above, the Company will advise the Transfer
Agent promptly after July 31, 1998 as to the number of Shares forfeited by each
Qualified Employee, which Shares shall be cancelled, and shall instruct the
Transfer Agent to deliver a certificate to the Qualified Employee for the
balance of Shares initially issued in his name (by deducting the number of
forfeited Shares from 12).
Until a certificate is delivered to him, a Qualified Employee with
respect to all Shares issued in his name that have not been forfeited shall be
entitled to all the rights and privileges of a holder, including the right to
vote and receive and retain cash dividends declared thereon, excepting only the
right to transfer or dispose of such Shares.
The Company has registered these Bonus Shares under a Registration
Statement on Form S-8. Accordingly, the Qualified Employees, upon receiving such
Shares after July 31, 1998 may sell or otherwise dispose of such Shares without
restriction.
Very truly yours,
COMPLETE MANAGEMENT, INC.
By: __________________________
EXHIBIT 5.1
August 28, 1997
Complete Management, Inc.
254 West 31st Street
New York, New York 10001
Re: Complete Management, Inc.
1995 Stock Option Plan
Consultant Options
Gentlemen:
We have acted as Counsel to Complete Management, Inc., a New York
corporation (the "Company") in connection with the preparation of a registration
statement on Form S-8 (the "Registration Statement") to be filed with the
Securities Exchange Commission under the Securities Act of 1933, as amended to
register the offering by the Company of 1,700,000 Common Shares par value $.001
per share (the "Common Shares") issuable upon exercise of options granted and to
be granted under the Company's 1995 Stock Option Plan, as amended (the "Option
Plan"), 245,000 Common Shares upon exercise of options granted to consultants
and agents of the Company ("Consultant Options") and up to 30,000 Common Shares
to be issued under the Bonus Share Plan.
In this regard, we have reviewed the Certificate of Incorporation of
the Company, as amended, resolutions adopted by the Company's Board of
Directors, the Option Plan, the form of Options granted thereunder, the form of
Consultant Options and the Bonus Share Plan and the Bonus Share Awards awarded
thereunder, and such other records, documents, statutes and decisions as we have
deemed relevant in rendering this opinion.
Based upon the foregoing, we are of the opinion that the Common Shares
issuable upon the exercise of the Consultant Options, the Common Shares issuable
upon exercise of the options granted and to be granted pursuant to the Option
Plan and the Common Shares to be issued under the Bonus Share Plan have been
duly and validly authorized for issuance and when issued and delivered as
contemplated by the Registration Statement will be legally issued, fully paid
and non-assessable.
We consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement. Members of this firm own an aggregate of 83,094 Common
Shares.
Very truly yours,
/S/ Morse, Zelnick, Rose & Lander, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our reports dated March
6, 1997 included (or incorporated by reference) in Complete Management, Inc.'s
Form 10-K for the year ended December 31, 1996 and to all references to our Firm
included in this registration statement on Form S-8.
/S/ ARTHUR ANDERSEN LLP
New York, New York
August 28, 1997
