<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
COMPLETE MANAGEMENT, INC.
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
COMPLETE MANAGEMENT, INC.
Notice of Annual Meeting of Shareholders to be held July 16, 1997
---------------------
The Annual Meeting of Shareholders of Complete Management, Inc. will be
held at the American Stock Exchange, 86 Trinity Place, New York City, on July
16, 1997 at 9:30 A.M., Eastern Daylight Savings Time, for the purpose of
considering and acting upon the following:
1. Election of seven Directors
2. Confirmation of the appointment of Arthur Andersen LLP as auditors for
the fiscal year ending December 31, 1997.
3. Approval of an amendment to the Company's 1995 Stock Option Plan to
increase by 1,000,000 shares the number of Common Shares which may be
optioned and sold under the Plan.
4. Any and all matters incident to the foregoing, and such other business
as may legally come before the meeting and any adjournments or
postponements thereof.
The Board of Director has fixed the close of business on June 12, 1997 as
the record date for determining the shareholders having the right to notice of
and to vote at the meeting.
By order of the Board of Directors
Steven M. Rabinovici
Chairman of the Board
New York, New York
June 16, 1997
- --------------------------------------------------------------------------------
IMPORTANT: Every shareholder, whether or not he or she expects to attend the
annual meeting in person, is urged to execute the proxy and return
it promptly in the enclosed business reply envelope.
<PAGE>
COMPLETE MANAGEMENT, INC.
---------------------
PROXY STATEMENT
For Annual Meeting of Shareholders
to be Held July 16, 1997
---------------------
Proxies in the form enclosed with this Statement are solicited by
Management of Complete Management, Inc. ("Complete" or the "Company") to be
used at the Annual Meeting of Shareholders to be held at 9:30 A.M. Eastern
Daylight Savings Time on July 16, 1997, for the purposes set forth in the
Notice of Meeting and this Proxy Statement. Complete's principal executive
offices are at 254 West 31st Street, New York, New York 10001. The approximate
date on which this Statement and the accompanying proxy will be mailed to
Shareholders is June 16, 1997.
THE VOTING AND VOTE REQUIRED
On the record date for the meeting, June 12, 1997, there were outstanding
10,111,423 Common Shares, each of which will be entitled to one vote.
Directors are elected by a plurality of the votes cast at the meeting.
Confirmation of the appointment of auditors is by the affirmative vote of a
majority of the votes cast at the meeting. Approval of the amendment (the
"Amendment") to the 1995 Stock Option Plan (the "Stock Option Plan") is by the
affirmative vote of a majority of all outstanding shares entitled to vote
thereon.
All shares represented by valid proxies will be voted in accordance with
the instructions contained therein. A proxy may be revoked by the shareholder
giving the proxy at any time before it is voted, either by oral or written
notice, and a prior proxy is automatically revoked by a shareholder giving a
subsequent proxy or attending and voting at the meeting. Attendance at the
meeting in and of itself does not revoke a prior proxy. In the absence of
instructions, proxies will be voted FOR each of the stated matters being voted
on at the meeting. Shares represented by proxies which are marked "WITHHOLD"
authority to vote for all seven (7) nominees will not be counted in determining
whether a plurality vote has been received for the election of directors.
Similarly, shares represented by proxies which are marked "ABSTAIN" with
respect to the confirmation of auditors will not be counted in determining
whether the requisite vote has been received for such proposal. However, shares
represented by proxies which are marked "ABSTAIN" with respect to the Amendment
to the Stock Option Plan will have the effect of a vote against the Amendment.
In instances where brokers are prohibited from exercising discretionary
authority for beneficial owners who have not returned proxies (so called
"broker non-votes"), those shares will be disregarded and, therefore, have no
effect on the outcome of the vote on each of the proposals except the Amendment
to the Stock Option Plan, where it will have the effect of a vote against the
Amendment.
ELECTION OF DIRECTORS
Seven Directors are to be elected at the Annual Meeting each for a term of
one year and until the election and qualification of a successor.
It is intended that votes pursuant to the enclosed proxy will be cast for
the election of the seven nominees named below. In the event that any such
nominee should become unable or unwilling to serve as a Director, the Proxy
will be voted for the election of such person, if any, as shall be designated
by the Board of Directors. Management has no reason to believe these nominees
will not be available for election.
The nominees for election and certain information about them are shown
below:
STEVEN M. RABINOVICI, 44, has been Chairman of the Board, Chief Executive
Officer and a director of Complete since December 28, 1995. From December 31,
1992 through December 27, 1995 he was the President, Chief Executive Officer
and a director of Medical Management, Inc. ("MMI"), now a wholly owned
subsidiary of Complete. He is a founder of Complete and also provided certain
consulting services to it during 1994
<PAGE>
and 1995. From July 1990 through December 31, 1992, he was an independent
healthcare and business consultant. On July 21, 1992, MEBE Enterprises, Inc.
("MEBE"), the owner and operator of a single Roy Rogers fast food restaurant,
filed for protection under Chapter 11 of the Bankruptcy Code. Mr. Rabinovici
was a founder and principal of MEBE. Earlier in his career, Mr. Rabinovici had
more than 10 years experience in hospital administration, including
approximately two years as associate administrator of Brookdale Hospital
Medical Center, a 1,000 bed teaching hospital, and two years as the
administrator of the Division of Psychiatry, Cornell University New York
Hospital. Mr. Rabinovici has a Bachelors degree from City University of New
York, Brooklyn College, a Masters degree in Public Health from Columbia
University School of Public Health and a Juris Doctorate degree from New York
Law School.
DAVID R. JACARUSO, 52, has been Vice Chairman of the Board of Complete
since December 28, 1995, as well as President, a founder and a director of
Complete since April 1993. From April 1993 through December 27, 1995 he was
Chairman of the Board of Complete. From July 1990 to April 1993 he was an
independent healthcare and business consultant. Mr. Jacaruso was a founder and
principal of MEBE, as discussed above. Earlier in his career, Mr. Jacaruso was
associated with Brookdale Hospital for ten years and with Mt. Sinai Medical
Center, holding various administrative positions including Senior Associate
Administrator for Operations. Mr. Jacaruso has a Bachelors degree in Urban
Health, a Masters degree in Quantitative Analysis from St. John's University,
and he completed a one-year residency at Columbia University School of Public
Health for Hospital Administration.
DENNIS SHIELDS, 30, has been Executive Vice President and director of
Complete since December 28, 1995. Prior thereto he was Vice President, Chief
Operating Officer and a director of MMI since 1992. He is a founder of
Complete. His father, Dr. Lawrence Shields, a founder of MMI and Complete, is
the founder and owner of 95% of the shares of Greater Metropolitan Medical
Services, P.C., a multi-specialty medical practice ("GMMS"), the largest client
of the Company. Mr. Shields has a Bachelor of Arts degree from New York
University School of Liberal Arts.
ARTHUR L. GOLDBERG, 58, has been Senior Executive Vice President and Chief
Operating Officer of the Company since April 2, 1996. From August 1993 through
March 1996 he was an independent management consultant. Prior thereto he was
the Chief Financial Officer of Elek-Tek, Inc., a reseller of computer and
related equipment since December 1990. Mr. Goldberg has a Bachelor's degree in
Business Administration from City University of New York, Juris Doctor and
Masters of Law degrees from New York University School of Law and a Masters of
Business Administration degree from the University of Chicago. He is also a
Certified Public Accountant..
STEVEN COHN, 46, has been a director of Complete since January 3, 1996 and
a member of its Audit and Compensation Committees since April 2, 1996. Mr. Cohn
has been a member of the law firm of Goldberg and Cohn (which has its offices
in Brooklyn, New York) and a State Assemblyman for the 50th Assembly District
for more than the past five years. He has a Doctor of Jurisprudence degree from
Brooklyn Law School, a Masters of Law from New York University School of Law
and a Bachelor of Arts degree from New York University.
STEVEN A. HIRSH, 57, has been a director of Complete and a member of its
Audit and Compensation Committees since September 30, 1996. Mr. Hirsh has been
a portfolio manager for William Harris & Co., a financial services company, for
more than five years. Since 1994 he has also been Chairman, Chief Executive
Officer and President of Astro Communications, Inc., a manufacturer of strobe
lights. He holds a Bachelor of Science degree from the University of Colorado
and Masters of Business Administration from the University of Chicago.
JOSEPH S. TOCCI, 58, has been a director of Complete and a member of its
Audit and Compensation Committees since May 12, 1997. He is as a founder of and
has been a managing partner of Tocci, Goldstein & Co. (formerly Tocci and
Marcano), certified public accountants, for over the past five years. From
October 1993 through December 1995 Mr. Tocci was a director of MMI, which was
acquired by Complete in a merger in January 1996. Mr. Tocci holds a Bachelor's
Degree in Business Administration from Pace College and a Master's Degree in
Taxation and Accounting from Fordham University.
2
<PAGE>
Board of Directors, Committees and Related Agreements
The Board of Directors of the Company (the "Board") held six meetings
during fiscal 1996. The Audit and Compensation Committees have yet to meet. The
Audit and Compensation Committees are comprised of Messrs. Cohn, Hirsh and
Tocci. There is no nominating committee. All directors attended more than 75%
of the aggregate number of meetings of the Board and those committees on which
they are members.
The Compensation Committee will review and recommend to the Board the
compensation and benefits of all officers of the Company, review general policy
matters relating to compensation and benefits of employees of the Company and
administer the issuance of stock options and discretionary cash bonuses to the
Company's officers, employees, directors and consultants. The Audit Committee
meets with management and the Company's independent auditors to determine the
adequacy of internal controls and other financial reporting matters. It is the
intention of the Company to appoint only independent directors to the Audit and
Compensation Committees.
Steven Rabinovici, David Jacaruso, Marie Graziosi, Dennis Shields and Dr.
Lawrence Shields, founders of the Company, are parties to a shareholders'
agreement pursuant to which they have agreed to vote (and subsequently voted)
all of their shares of the Company, for a period of 10 years, in favor of
election to the Board of the Company and for such other or additional nominees
as may be designated from time to time and approved by the Board and to vote on
all other matters in accordance with the recommendations of the Board. Marie
Graziosi is the wife of David Jacaruso.
The Board of Directors unanimously recommends a vote FOR the election of
each of the nominees.
CONFIRMATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board proposes that the shareholders ratify the appointment of Arthur
Andersen LLP as the Company's independent auditors for 1997. Arthur Andersen
LLP were the Company's independent auditors for 1995 and 1996. The report of
Arthur Andersen LLP with respect to the Company's financial statements appears
in the Company's Annual Report for the fiscal year ended December 31, 1996. A
representative of Arthur Andersen LLP will be at the annual meeting and will
have an opportunity to make a statement if he desires to do so and will be
available to respond to appropriate questions. In the event the shareholders
fail to ratify the appointment, the Board will consider it a directive to
consider other auditors for a subsequent year.
Approval of the foregoing proposal requires the affirmative vote of a
majority of the votes cast.
The Board of Directors recommends a vote FOR this proposal.
AMENDMENT TO STOCK OPTION PLAN
On August 15, 1995, the Board adopted a Stock Option Plan, ratified and
approved by the shareholders on October 24, 1995, which provides among other
matters, for incentive and non-qualified stock options to purchase 700,000
Common Shares. The Board proposes that the shareholders approve an amendment
(the "Amendment"), approved by the Board on May 7, 1996, to increase by
1,000,000 shares the number of shares for which options may be granted under
the Plan. To date, options to purchase 941,000 shares have been granted under
the Plan, of which options for 241,000 shares are subject to approval by
shareholders of the Amendment. The exercise prices of all outstanding options
are equal to the fair market value of a Common Share on the date of grant,
except that the exercise price of options subject to approval of the Amendment
will equal the fair market value of a Common Share on the date of such
approval.
The purpose of the Plan is to provide incentives to key employees,
directors, independent contractors and agents whose performance will contribute
to the long-term success and growth of the Company, to strengthen the ability
of the Company to attract and retain employees, directors, independent
contractors and agents of high competence, to increase the identity of
interests of such people with those of the Company's shareholders and to help
build loyalty to the Company through recognition and the opportunity for stock
ownership. Until the recent appointment of a third member of the Compensation
Committee, the Plan has been administered by the Board of Directors. In the
future, it will be administered by the Board's Compensation Committee.
3
<PAGE>
Terms of Options
The Plan permits the granting of both incentive stock options and
non-qualified stock options. Generally the option price of both incentive stock
options and non-qualified stock options must be at least equal to 100% of the
fair market value of the shares on the date of grant. The maximum term of each
option is ten years. For any participant who owns shares possessing more than
10% of the voting rights of the Company's outstanding Common Shares, the
exercise price of any incentive stock option must be at least equal to 110% of
the fair market value of the shares subject to such option on the date of grant
and the term of the option may not be longer than five years. Options become
exercisable at such time or times as the Compensation Committee may determine
at the time it grants options.
Federal Income Tax Consequences
Non-qualified Stock Options. The grant of non-qualified stock options will
have no immediate tax consequences to the Company or the employee. The exercise
of a non-qualified stock option will require an employee to include in his
gross income the amount by which the fair market value of the acquired shares
on the exercise date (or the date on which any substantial risk of forfeiture
lapses) exceeds the option price.
Upon a subsequent sale or taxable exchange of the shares acquired upon
exercise of a non-qualified stock option, an employee will recognize long or
short-term capital gain or loss equal to the difference between the amount
realized on the sale and the tax basis of such shares.
The Company will be entitled (provided applicable withholding requirements
are met) to a deduction for Federal income tax purposes at the same time and in
the same amount as the employee is in receipt of income in connection with the
exercise of a non-qualified stock option.
Incentive Stock Options. The grant of an incentive stock option will have
no immediate tax consequences to the Company or the employee. If the employee
exercises an incentive stock option and does not dispose of the acquired shares
within two years after the grant of the incentive stock option nor within one
year after the date of the transfer of such shares to him (a "disqualifying
disposition"), he will realize no compensation income and any gain or loss that
he realizes on a subsequent disposition of such shares will be treated as a
long-term capital gain or loss. For purposes of calculating the employee's
alternative minimum taxable income, however, the option will be taxed as if it
were a non-qualified stock option.
Eligibility
Under the 1995 Stock Option Plan, incentive stock options may be granted
only to employees and non-qualified stock options may be granted to employees
as well as directors, independent contractors and agents. Of the options
previously granted under the Plan, options to purchase 625,000 Common Shares
were awarded to ten officers or former officers, options to purchase 40,000
Common Shares were granted to two outside directors and options to purchase
276,000 Common Shares were granted to 20 key employees. Persons eligible to
receive options consist primarily of 11 officers and 25 key employees of the
Company. The Company has no present plans or understandings to grant any options
under the Plan.
The Company believes that the amendment should be approved so that shares
are available for grant to the key employees, officers and directors as well as
independent contractors and agents upon whose performance and contribution the
long-term success and growth of the Company is dependent.
The Board of Directors unanimously recommends a vote FOR this proposal.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table, together with the accompanying footnotes, sets forth
information, as of June 1, 1997, regarding share ownership of all persons known
by the Company to own beneficially 5% or more of the Company's outstanding
Common Shares, all Named Executives (defined herein), all directors and
nominees, and all directors and officers of the Company as a group:
<TABLE>
<CAPTION>
Name of Shares of Common Stock Percentage
Beneficial Owner (1) Beneficially Owned of Ownership
- ----------------------------------------------------------- ---------------------------- -------------
<S> <C> <C>
Directors, Nominees and Named Executives
Steven M. Rabinovici .................................... 360,126(2) 3.58%
David R. Jacaruso ....................................... 307,452(3) 3.06%
Dennis Shields .......................................... 472,212(4) 4.7 %
Arthur L. Goldberg ....................................... 50,500(5) *
Joseph M. Scotti ....................................... 78,856(6) *
Steven Cohn ............................................. 24,021(5) *
Steven A. Hirsh .......................................... 212,054(7) 2.07%
Joseph S. Tocci .......................................... 5,501 *
All Directors and Officers as a group (14 persons) ...... 1,811,568(8) 17.2 %
5% and Greater Shareholders
Lawrence Shields, M.D. (9) .............................. 1,125,291 11.20%
Mellon Bank Corporation ................................. 1,547,860 15.40%
</TABLE>
* Less than 1%
(1) Address of beneficial owner is c/o Complete Management, Inc. 254 West 31st
Street, New York, NY 10001, except address of Dr. Shields is 26 Court
Street, Brooklyn, New York 11242 and address of Mellon Bank Corporation is
One Mellon Bank Center, Pittsburgh, Pennsylvania 15258
(2) Includes 235,126 shares held as custodian for the benefit of his minor son,
Jeffrey.
(3) Includes shares held by his wife, Marie Graziosi and shares held as
custodian for his minor children, Cara Elizabeth and David Francis.
(4) Dennis Shields is the son of Dr. Lawrence Shields.
(5) Includes options granted under the Company's 1995 Stock Option Plan
exercisable within 60 days of the date hereof as follows: Arthur L.
Goldberg, 50,000 and Steven Cohn, 20,000.
(6) Includes 33,333 options granted under the Company's 1995 Stock Option Plan
exercisable within sixty days from the date hereof. Does not include
options to purchase 12,500 shares which will be exercisable within sixty
days from the date hereof only if shareholders approve the Amendment to
the Company's 1995 Stock Option Plan.
(7) Consists of (i) 14,833 shares and 94,444 shares issuable on the conversion
of Convertible Subordinated Notes owned by a trust of which Mr. Hirsh is
the portfolio manager with investment power, (ii) 50,000 shares issuable
upon conversion of Convertible Subordinated Notes owned by a limited
partnership of which Mr. Hirsh is a general partner with investment power
and (iii) 8,333 shares and 44,444 shares issuable on conversion of
Convertible Subordinated Notes owned by Astro Communications, Inc., a
company of which Mr. Hirsh is President and Chief Executive Officer.
(8) Includes (i) 285,832 shares issuable upon exercise of options exercisable
within 60 days of the date hereof and (ii) 188,888 shares issuable on the
conversion of Convertible Subordinated Notes, but excludes 29,166 shares
which will be exercisable within 60 days of the date hereof only if
shareholders approve the amendment to the Company's 1995 Stock Option
Plan.
(9) Dr. Lawrence Shields is the father of Dennis Shields.
5
<PAGE>
COMPENSATION OF DIRECTORS AND OFFICERS
AND RELATED MATTERS
Summary Compensation Table
The following table sets forth certain summary information concerning the
aggregate total annual salary and bonus paid or accrued by the Company for
services rendered in 1995 and 1996 to its chief executive officer and to the
other executive officers named below who received annual compensation in excess
of $100,000 (the "Named Executives").
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------- --------------------
Common Shares All other
Name and principal position Year Salary ($) Bonus ($) Underlying Options Compensation
- ---------------------------------- ------ ----------------- ----------- -------------------- -------------
<S> <C> <C> <C> <C> <C>
Steven M. Rabinovici
Chairman & CEO 1996 250,000 -- -- 24,672
1995 109,842(1) -- -- 21,124
David R. Jacaruso
Vice Chairman, President 1996 250,000 -- -- 17,389
1995 165,063(2) -- -- 6,334
Arthur L. Goldberg
Senior Executive Vice President, 1996 140,978 -- 100,000 --
Chief Operating Officer 1995 -- -- -- --
Dennis Shields
Executive Vice President 1996 250,000 -- -- 32,498
1995 136,920(3) -- -- 19,870
Joseph M. Scotti 1996 171,771 -- 75,000 12,981
Executive Vice President 1995 117,225 -- -- 10,004
</TABLE>
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(1) Consists of fees of $30,650 from Complete for consultation and advice to
senior management and salary from MMI of $79,192.
(2) Includes consulting fees of $63,075 paid by Complete to Marie Graziosi, Mr.
Jacaruso's wife.
(3) Consists of fees of $57,728 from Complete for consultation and advice to
senior management and salary from MMI of $79,192.
6
<PAGE>
Stock Options
The following tables show certain information with respect to incentive
and non-qualified stock options granted in 1996 to Named Executives under the
1995 Stock Option Plan and the aggregate value at December 31, 1996 of such
options. The per share exercise price of all options is equal to the fair
market value of a Common Share on the date of grant. No Options granted to
Named Executives have been exercised.
Option Grants in 1996
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Individual Grants of Options
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<TABLE>
<CAPTION>
Potential Realizable
Value At
Percent Of Assumed Annual Rates of
Total Stock
Number of Options Price Appreciation for
Securities Granted Exercise Option Term
Underlying To Employees Price Expiration ------------------------
Name Option # in 1996 ($/Sh) Date 5% ($) 10% ($)
- ------------------- ------------ -------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
100,000(1) 11.1 % 8.375 4/1/06 $526,699 $1,334,759
Arthur L. Goldberg
50,000(2) 5.55% 8.375 4/1/06 $263,350 $667,380
Joseph M. Scotti
25,000(3) 2.78% (4) 9/30/06 (5) (5)
</TABLE>
(1) Options vest in two equal annual installments beginning April 2, 1997.
(2) Options vest in three equal annual installments beginning April 2, 1996.
(3) Options vest in two equal annual installments beginning September 30, 1996;
provided, however, that the options shall vest only after shareholder
approval of the Amendment to the 1995 Stock Option Plan.
(4) The exercise price will equal the fair market value of a Common Share at
the close of business on the date the Amendment to the 1995 Stock Option
Plan is approved by shareholders.
(5) The potential realizable value cannot be determined because an exercise
price has not been established.
Aggregated 1996 Year End Option Values
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Common Shares Value of Unexercised
Underlying Unexercised Options In-The-Money Options at
At 12/31/96 (#) 12/31/96 (1) ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- -------------------------------- --------------------------
<S> <C> <C>
Arthur L. Goldberg 0/100,000 $0/$450,000
Joseph M. Scotti 25,000/50,000 $75,000/$149,998.5(2)
</TABLE>
- ------------
(1) Based on the closing price of $12.873 as quoted on the American Stock
Exchange.
(2) Represents the in-the-money value of options to purchase 50,000 Common
Shares at an exercise price of $8.375 (see "Option Grants in 1996" table
above). The exercise price of the options to purchase 25,000 Common Shares
has not yet been determined and, thus , the in-the-money value of these
options cannot be calculated. The exercise price of such options will
equal the fair market value of a Common Share on the date the Amendment to
the Stock Option Plan is approved by shareholders.
<PAGE>
Employment Contracts
In October 1995, the Company entered into an employment agreement with
Steven M. Rabinovici, which became effective on January 3, 1996, providing for
his employment as Chairman of the Board and Chief Executive Officer for an
initial term expiring on December 31, 1999. On December 31 of each year, the
term is automatically extended for an additional year unless on or before such
date either party elects to terminate the agreement at the expiration of the
term. The agreement provides for an annual base salary of $250,000 and for
participation in all executive benefit plans. The agreement also provides,
among other things, that, if Mr. Rabinovici's employment is terminated without
cause (as defined in the agreement), the Company will pay him an amount equal
to the salary which would have been payable to him over the unexpired term of
his employment agreement.
7
<PAGE>
In October 1995, the Company entered into an employment agreement with
David R. Jacaruso, which became effective on January 3, 1996, providing for his
employment as Vice Chairman of the Board and President for an initial term
expiring on December 31, 1999. On December 31 of each year, the term is
automatically extended for an additional year unless on or before such date
either party elects to terminate the agreement at the expiration of the term.
The agreement provides for an annual base salary of $250,000 and for
participation in all executive benefit plans. The agreement also provides,
among other things, that, if Mr. Jacaruso's employment is terminated without
cause (as defined in the agreement), the Company will pay him an amount equal
to the salary which would have been payable to him over the unexpired term of
his employment agreement.
In October 1995, the Company entered into an employment agreement with
Dennis Shields, which became effective on January 3, 1996, providing for his
employment as Executive Vice President for an initial term expiring on December
31, 1999. On December 31 of each year, the term is automatically extended for
an additional year unless on or before such date either party elects to
terminate the agreement at the expiration of the term. The agreement provides
for an annual base salary of $250,000 and for participation in all executive
benefit plans. The agreement also provides, among other things, that, if his
employment is terminated without cause (as defined in the agreement), the
Company will pay Mr. Shields an amount equal to the salary which would have
been payable to him over the unexpired term of his employment agreement.
In January 1996, the Company entered into an employment agreement with
Joseph M. Scotti, which became effective on January 3, 1996, providing for his
employment as Vice President and Chief Financial Officer for an initial term
expiring on December 31, 1999. The agreement provides for an annual base salary
of $175,000 and for participation in all executive benefit plans. The agreement
also provides, among other things, that, if Mr. Scotti's employment is
terminated without cause (as defined in the agreement), the Company will pay
him an amount equal to the salary which would have been payable to him over the
unexpired term of his employment agreement.
In March 1996, the Company entered into an employment agreement, as
amended, with Arthur L. Goldberg providing for his employment as Senior
Executive Vice President and Chief Operating Officer expiring on March 10,
2000. The agreement provides for an annual base salary of $200,000, for
participation in all executive benefit plans and for the grant of an option for
100,000 shares exercisable for a ten year period.
Compensation Policies Applicable to Senior Executives
The Compensation Committee of the Board, composed of three independent
outside directors, has yet to meet. The Committee will assume the
responsibility, now with the Board at large, for establishing and administering
compensation policies applicable to the Company's executive officers. The key
objective in setting such policies is to develop a program designed to attract
and retain executives critical to the success of the Company and to reward and
motivate these executives for performance which enhances the profitability of
the Company and creates value for its shareholders.
To achieve these objectives, the Board has developed a competitive, market
driven, base salary program coupled with a long-term incentive program
consisting of incentive, non-qualified and performance based stock options with
extended vesting periods. The Board may also award discretionary cash bonuses.
Base salaries, prior to incentive awards, for executive officers are fixed at
levels believed to be within a competitive range for comparable positions in
comparable companies.
The base salary levels for all of the Named Executives, except Messrs.
Goldberg and Scotti, were established prior to the Company's initial public
offering (the "IPO") and the expansion of the Board from three members to its
current size. The Board believes that the salary levels determined prior to the
IPO are consistent with its policies for determining base salary levels. In
view of the pre-existing employment arrangements with certain Named Executives,
the Board determined not to award stock options or cash bonuses to such
executives. The base salaries and stock option grants to Messrs. Goldberg and
Scotti, and the base salary levels of and option grants to all other executive
officers of the Company were determined in accordance with the Board's
policies.
Submitted by:
-------------
Steven M. Rabinovici Richard DeMaio
David R. Jacaruso Steven Cohn
Joseph M. Scotti Steven A. Hirsh
Dennis Shields Joseph S. Tocci
8
<PAGE>
Compensation of Directors
Outside directors are granted options to purchase 20,000 Common Shares,
exercisable for 50% of the shares covered immediately upon grant and for the
remainder of the shares following one year's service, as soon as practicable
after taking office. Mr. Hirsh has waived this grant. The per share exercise
price of such options is equal to the fair market value of a Common Share on
the date of grant.
Comparative Performance by the Company
The following graph shows a comparison of cumulative total returns for the
Company, the American Stock Exchange Market Index ("AMEX") and a peer group
index.
200 |-------------------------------------------------------------------------|
| # |
| # |
150 |-------------------------------------#-----------------------------------|
| |
| *@ *@ @ |
100 |----#*@-------------*@---------------------------------------------------|
| # * |
| |
50 |-------------------------------------------------------------------------|
| |
| |
0 |-------------------------------------------------------------------------|
12/31/1995 3/31/1996 6/30/1996 9/30/1996 12/31/1996
- ----------------------------- FISCAL YEAR ENDING ------------------------------
COMPANY BASE 12/31/1995 3/31/1996 6/30/1996 9/30/1996 12/31/1996
COMPLETE MANAGEMENT,
INC. 100.00 101.43 95.71 147.14 180.00 147.14
PEER GROUP INDEX 100.00 100.00 99.71 105.85 109.09 95.95
AMEX MARKET INDEX 100.00 100.00 104.44 105.62 104.09 105.72
===============================================================================
# = COMPLETE MANAGEMENT, INC. * = PEER GROUP INDEX @ = AMEX MARKET INDEX
===============================================================================
Assumes $100 invested on December 28, 1995
Assumes dividends reinvested
Fiscal year ending December 31, 1996
o Source: Media General Financial Services, Inc.
9
<PAGE>
Certain Relationships and Related Transactions
The Company is party to two practice management services agreements with
GMMS pursuant to which it provides comprehensive management services and
management services related to diagnostic imaging equipment. The agreements
expire on June 2025 and July 2001, respectively. The founder and owner of 95%
of the shares of GMMS is Dr. Lawrence Shields, a founder of the Company. The
Company earned all of its net revenues in 1995 and approximately 65% of its net
revenues in 1996 under the two management agreements with GMMS.
Immediately following the closing of the Company's IPO on January 3, 1996,
the Company acquired the assets and business of MMI through its merger into a
wholly-owned subsidiary. In the Merger, the MMI shareholders received .778
Common Shares of Complete for each MMI common share which they held. The
holders of outstanding options to purchase MMI common shares received a number
of Common Shares of Complete equal to the difference between their aggregate
option exercise prices and the value thereof at $7.00 per share. An aggregate
of 2,364,444 and 93,281 Common Shares were issued in the Merger to MMI
shareholders and option holders, respectively.
The Company is the beneficiary of key-man life insurance policies
aggregating $10,000,000 covering the life of Dr. Lawrence Shields, the 95%
shareholder of GMMS, the Company's principal client.
As of December 8, 1995 an Omnibus Settlement Agreement (the "Settlement
Agreement") was entered into among Complete, MMI, Steven Rabinovici, David
Jacaruso, Dennis Shields, Dr. Lawrence Shields and Gail Shields ("Ms.
Shields"), the former wife of Dr. Lawrence Shields. Under the terms of the
Settlement Agreement, as revised on December 21, 1995, the Company arranged for
the sale of 117,187 MMI common shares owned by Ms. Shields at a net price to
Ms. Shields of $5.50 per share and obtained Ms. Shields' release as the maker
of a promissory note for a bank loan whose proceeds were used by GMMS (which
had previously been satisfied by GMMS) and as lessee of certain premises
occupied by GMMS, which lease has been assigned to the Company. There was no
material impact on the financial statements of Complete or MMI as a result of
the foregoing settlement.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the best of the Company's knowledge, based solely on review of the
copies of such forms furnished to the Company, or written representations that
no other forms were required, the Company believes that all Section 16(a)
filing requirements applicable to its officers and directors were complied with
during 1996 except that Steven Cohn, John T. Dooley, Robert Keating, Steven M.
Rabinovici, Lawrence Shields, and Kenneth Theobalds each had one late report
relating to one transaction and Joseph M. Scotti had one late report relating
to two transactions.
10
<PAGE>
MISCELLANEOUS
Other Matters
Management knows of no matter other than the foregoing to be brought
before the Annual Meeting of Shareholders, but if such other matters properly
come before the meeting, or any adjournment thereof, the persons named in the
accompanying form of proxy will vote such proxy on such matters in accordance
with their best judgment.
Reports and Financial Statements
Complete's Annual Report for the year ended December 31, 1996 including
Audited Financial Statements, accompanies this Proxy Statement. Such Report and
Financial Statements contained therein are not incorporated herein by reference
and are not considered part of this soliciting material.
A Copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K, without exhibits, will be provided without charge to
any shareholder submitting a written request. Such request should be addressed
to Joseph M. Scotti, Secretary, Complete Management, Inc., 254 West 31st
Street, New York, New York 10001.
Solicitation of Proxies
The entire cost of the solicitation of proxies will be borne by Complete.
Complete has retained Georgeson & Company, Inc. to solicit proxies in the form
enclosed and will pay such firm a fee of $6,500. In addition, proxies may be
solicited by directors, officers and regular employees of Complete, without
extra compensation, by telephone, telegraph, mail or personal interview.
Complete will also reimburse brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expenses for sending proxies and proxy
material to the beneficial owners of its Common Shares.
Shareholder Proposals
Shareholder proposals intended to be presented at the Company's 1998
Annual Meeting must be received by the Company for inclusion in the Company's
proxy statement relating to that meeting not later than February 16, 1998. Such
proposals should be addressed to Joseph M. Scotti, Secretary, Complete
Management, Inc. 254 West 31st Street, New York, New York 10001.
EVERY SHAREHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO ATTEND THE ANNUAL
MEETING IN PERSON, IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE.
By order of the Board of Directors
Steven M. Rabinovici
Chairman of the Board
New York, New York
June 16, 1997
11
<PAGE>
PROXY
COMPLETE MANAGEMENT, INC.
This Proxy is solicited by the Board of Directors for the
Annual Meeting on July 16, 1997
The undersigned hereby appoints Steven M. Rabinovici, David R. Jacaruso
and Arthur L. Goldberg and each of them, with full power of substitution, the
attorneys and proxies of the undersigned to attend the Annual Meeting of
Shareholders of Complete Management, Inc. to be held on July 16, 1997 at 9:30
a.m. and at any adjournment thereof, hereby revoking any proxies heretofore
given, to vote all Common Shares of the Company held or owned by the
undersigned as indicated on the proposals as more fully set forth in the Proxy
Statement, and in their discretion upon such other matters as may come before
the meeting.
1. ELECTION OF DIRECTORS -- Steven M. Rabinovici, David R. Jacaruso, Dennis
Shields, Arthur L. Goldberg, Steven Cohn, Steven A. Hirsh and Joseph S.
Tocci.
/ / FOR all nominees.
/ / WITHHOLD authority to vote for all nominees.
/ / FOR all nominees EXCEPT nominee(s) written below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Confirmation of the appointment of Arthur
Andersen LLP as auditors for the fiscal
year ending December 31, 1997. / / / / / /
3. The approval of the amendment to the 1995
Stock Option Plan / / / / / /
(Continued, and to be Signed, on Reverse Side)
- --------------------------------------------------------------------------------
The shares represented by this Proxy will be voted as directed or if no
direction is indicated, will be voted FOR each of the proposals.
The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.
Date: ______________________, 1997
__________________________________
Signature of Shareholder
__________________________________
Signature of Shareholder
DATE AND SIGN EXACTLY AS NAME
APPEARS HEREON. EACH JOINT TENANT
MUST SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, TRUSTEE,
ETC., GIVE FULL TITLE IF SIGNER
IS CORPORATION, SIGN IN FULL
CORPORATE NAME BY AUTHORIZED
OFFICER.
