SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
COMPLETE WELLNESS CENTERS, 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: Common
Stock, par value $.0001 per share
(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 WELLNESS CENTERS, INC. [LOGO]
1964 HOWELL BRANCH ROAD, SUITE 202
WINTER PARK, FL 32792
(407) 673-3073
September 30, 1999
Dear Stockholder:
The activities during the first half of 1999 have allowed the Company to post
its first profitable quarter and what looks to be our first profitable year.
There are several events that are allowing the Company to reach these goals.
* The Board of Directors was reduced to five members, each
of whom have extensive experience and expertise in
successfully managing and growing profitable companies
* Senior Management was replaced with executives who have a
history of operating successful businesses
* Significant reductions have been made in overhead with
personnel and operating expense reductions, coupled with
a stringent expense control system
* A single company goal focused on the growth and
development of its current and future multi-disciplinary
centers has been accomplished with the divestiture of
Complete Wellness Weight Management, Inc., Complete
Wellness Smoking Cessation, Inc. and Optimum Health
Services, Inc.
* A contractual management relationship with David Kats and
Kats Management Services, the nations leading
Chiropractic Consulting Firm, to run the day to day
clinic operations
* The formation of a Multi-disciplinary Medical Advisory
Board made up of chiropractors and medical doctors from
our clinics
* A marketing and sales program to ensure continued numbers
of new affiliates that represent the highest quality
practices in the country with the best chance of
successfully managing a multi-disciplinary center
In the opinion of the current management, CWC got off track in late 1997 when
CWC management decided to enhance its core business of affiliation and
development of multi-disciplinary centers by adding new services and products
through the acquisition of fifty-six (56) Nutri-System centers, the SmokEnders
licensing agreement and Optimum Health Services (a managed care company). With
the integration of these entities, CWC completely lost its focus of adding and
developing multi-disciplinary centers. The result was a gain of only 11 centers
for 1998 compared to 78 in 1997. Of the $9,668,018 net loss in 1998, $6,076,558
was attributable to these acquisitions. By the end of 1998, the Company had made
the decision to divest itself of these acquisitions.
The other distraction that got CWC off course was the federal investigation. In
November of 1997, the Federal Government seized records and began an
investigation of Complete Wellness Centers, Inc. The investigation is centered
on two (2) clinics in Virginia that allegedly presented fraudulent claims for
CHAMPUS patients. Those two centers were closed as of December 1997.
CWC has cooperated with the government investigation, and as a result of the
investigation, has developed and implemented stringent compliance protocols. The
Company is continuing to assist with the investigation and maintains regular
communication with the U.S. Attorney in order to help bring a conclusion to this
matter. The last communication with the U.S. Attorney was on August 19, 1999.
The timetable given to the Company for resolution was thirty (30) to sixty (60)
days.
1999 will be the year that puts CWC back on course. The Company has been
reshaped and poised to deliver education and growth to our existing clinic base
and has structured itself to market and support a steady stream of new
affiliates.
CWC management feels the Company and its goals represents Healthcare's future by
emphasizing education to allow both the clinics and their patients to make
informed decisions. CWC is ready to deliver to our patients, clinics, doctors
and our shareholders.
Sincerely,
/s/ Joseph J. Raymond, Jr.
Joseph J. Raymond, Jr.
Chairman and CEO
Complete Wellness Centers, Inc.
<PAGE>
COMPLETE WELLNESS CENTERS, INC. [LOGO]
1964 HOWELL BRANCH ROAD, SUITE 202
WINTER PARK, FL 32792
(407) 673-3073
September 30, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Complete Wellness Centers, Inc. (the "Company") to be held
at the Corporate Office in Winter Park, Florida on Monday, November 8, 1999, at
10:00 a.m., local time.
At the Annual Meeting, you will be asked to consider and vote upon the proposals
to (i) elect a Board of five directors, (ii) vote upon a proposal to add 50,000
shares of the Company's $.0001665 par value common stock (the "Common Stock") to
the Company's 1998 Outside Directors Stock Option Plan for non-employee
directors ("Outside Directors") on the Company's Board of Directors, (iii) vote
upon a proposal to add 200,000 shares of the Company's $.0001665 par value
common stock to the Company's 1996 Stock Option Plan, (iv) vote upon a proposal
to establish a 1999 Consultant's Stock Option Plan and add 200,000 shares of the
Company's $.0001665 par value common stock to the 1999 Consultant's Stock Option
Plan, (v) vote upon a proposal to increase the number of shares of par value
$0.01 per share of preferred stock authorized from 2,000,000 shares to
10,000,000 shares which will facilitate the Company's financing plans, and (vi)
to ratify the selection of Amper, Politziner & Mattia P.A. as independent
accountants for the fiscal year ending December 31, 1999.
The accompanying Proxy Statement, which you are urged to read carefully,
provides important information with respect to the foregoing proposals. Whether
or not you plan to attend the Annual Meeting, please complete, date and sign the
enclosed proxy card and promptly return it in the enclosed postage-prepaid
envelope. If you attend the Annual Meeting, you may vote in person even though
you have previously returned the proxy.
On behalf of the Board of Directors,
Joseph J. Raymond, Jr.
Chairman of the Board and
Chief Executive Officer
<PAGE>
COMPLETE WELLNESS CENTERS, INC. [LOGO]
1964 HOWELL BRANCH ROAD, SUITE 202
WINTER PARK, FL 32792
(407) 673-3073
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 8, 1999
To the Stockholders of
COMPLETE WELLNESS CENTERS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Annual Meeting") of Complete Wellness Centers, Inc. (the
"Company") will be held at the Corporate Office, 1964 Howell Branch Road, Suite
202, Winter Park, Florida on Monday, November 8, 1999, at 10:00 a.m., local
time, to consider and act upon the following proposals:
1. To elect a Board of five (5) directors.
2. To consider and vote upon a proposal to add 50,000 shares
of the Company's Common Stock to the 1998 Outside Directors Stock Option Plan
for Outside Directors on the Company's Board of Directors.
3. To consider and vote upon a proposal to add 200,000
shares of the Company's Common Stock to the Company's 1996 Stock Option Plan.
4. To consider and vote upon a proposal to establish a 1999
Consultant's Stock Option Plan and to add 200,000 shares of the Company's Common
Stock to the Company's 1999 Consultant's Stock Option Plan.
5. To consider and vote upon a proposal to increase the
number of shares of Preferred Stock authorized from 2,000,000 shares to
10,000,000 shares.
6. To ratify the selection of Amper, Politziner & Mattia
P.A. as independent accountants for the fiscal year ending December 31, 1999.
7. To transact such other business as may properly come
before the meeting or any adjournments thereof.
Only holders of record of the Company's Common Stock at the
close of business on September 30, 1999, the Record Date for the Annual Meeting,
are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael T. Brigante
Michael T. Brigante
Secretary
Winter Park, FL
September 30, 1999
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE,
DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY BY FAX TO (516) 254-7622
OR BY MAIL IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
<PAGE>
COMPLETE WELLNESS CENTERS, INC.
1964 HOWELL BRANCH ROAD, SUITE 202
WINTER PARK, FL 32792
(407) 673-3073
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 8, 1999
----------------
INTRODUCTION
General
This Proxy Statement is being furnished to holders of the
Common Stock, par value $.0001665 per share ("Common Stock"), of Complete
Wellness Centers, Inc., a Delaware corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Stockholders to be held on Monday, November 8, 1999
at the Corporate Office in Winter Park, Florida at 10:00 a.m., local time, and
at any and all adjournments or postponements thereof (the "Annual Meeting"). The
cost of this solicitation will be borne by the Company. This Proxy Statement and
enclosed proxy card are being mailed to the Company's stockholders on or about
October 6, 1999.
Matters to be considered at the Annual Meeting
At the Annual Meeting, the stockholders will be asked to
consider and vote upon the following proposals:
1. To elect a Board of five (5) directors.
2. To consider and vote upon a proposal to add 50,000 shares
of the Company's $.0001665 par value Common Stock to the 1998 Outside Directors
Stock Option Plan for Outside Directors on the Company's Board of Directors.
3. To consider and vote upon a proposal to add 200,000
shares of the Company's $.0001665 par value Common Stock to the Company's 1996
Stock Option Plan.
4. To consider and vote upon a proposal to establish a 1999
Consultant's Stock Option Plan and to add 200,000 shares of the Company's
$.0001665 par value Common Stock to the Company's 1999 Consultant's Stock Option
Plan,
5. To consider and vote upon a proposal to increase the
number of shares of par value $0.01 per share Preferred Stock from 2,000,000 to
10,000,000 shares.
6. To ratify the selection of Amper, Politziner & Mattia LLP
as independent accountants for the fiscal year ending December 31, 1999.
all as more fully described in this Proxy Statement.
<PAGE>
Voting at the Annual Meeting
Only holders of record of Common Stock at the close of
business on September 30, 1999 (the "Record Date") are entitled to notice of and
to vote at the Annual Meeting, each such holder of record being entitled to one
vote per share on each matter to be considered at the Annual Meeting. On the
Record Date, there were 4,344,315 shares of Common Stock issued and outstanding.
The presence, in person or by properly executed proxy, of
the holders of a majority of the outstanding shares of Common Stock entitled to
vote at the Annual Meeting (2,172,158 shares of the 4,344,315 shares
outstanding) is necessary to constitute a quorum at the Annual Meeting. All
abstentions and broker non-votes, if any, will be included as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum at the Annual Meeting. A plurality vote of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting is required to
elect the Board of five (5) directors. The affirmative vote by the holders of a
majority of the shares of Common Stock present in person or by proxy at the
Annual Meeting is required (i) to adopt the proposal to amend the Company's 1998
Outside Directors Stock Option Plan by the addition of 50,000 shares of
$.0001665 par value Common Stock, (ii) to adopt a proposal to amend the
Company's 1996 Stock Option Plan by the addition of 200,000 shares of $.0001665
par value Common Stock, (iii) to adopt the proposal to adopt and amend the
Company's 1999 Consultant's Stock Option Plan by the addition of 200,000 shares
of $.0001665 par value Common Stock, (iv) to adopt a proposal to increase the
number of shares of $0.01 par value Preferred Stock from 2 million shares to 10
million shares, and (v) to ratify the selection of Amper, Politziner & Mattia
P.A. as independent accountants for the fiscal year ending December 31, 1999.
If the enclosed Proxy Card is properly executed and returned
to the Company prior to the vote at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions marked thereon. Shares
represented by proxies which are marked "WITHHOLD AUTHORITY" to vote for (i) all
five (5) nominees or (ii) any individual nominee(s) for election as directors
and are not otherwise marked "FOR" the other 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"
on any other proposal will not be counted in determining whether the requisite
vote has been received for such proposal. IN THE ABSENCE OF INSTRUCTIONS, THE
SHARES WILL BE VOTED FOR ALL THE PROPOSALS SET FORTH IN THE NOTICE OF ANNUAL
MEETING. At any time prior to its exercise, a proxy may be revoked by the holder
of Common Stock granting the proxy by delivering written notice of revocation,
or a duly executed proxy bearing a later date, to the Secretary of the Company
at the address of the Company set forth on the first page of this Proxy
Statement or by attending the Annual Meeting and voting in person.
ELECTION OF DIRECTORS
At the Annual Meeting, the entire Board of five (5)
directors is to be elected to hold office until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified. Unless
otherwise specifically directed by stockholders executing proxies, it is
intended that all proxies in the accompanying form received in time for the
Annual Meeting will be voted at the Annual Meeting FOR the election of the five
(5) nominees named below, all of whom currently are directors of the Company. In
the event any nominee should become unavailable for election for any presently
unforeseen reason, it is intended that the proxies will be voted for such
substitute nominee as may be designated by the present Board of Directors.
2
<PAGE>
Each nominee's name, age, office with the Company, the year
first elected a director and certain biographical information are set forth
below:
<TABLE>
<CAPTION>
YEAR FIRST ELECTED
NAME AGE A DIRECTOR (2) POSITION
- ----------------------------- --- ------------------ ---------------------------------------
<S> <C> <C> <C>
Joseph J. Raymond Jr. 37 1998 Chairman of the Board, Chief Executive
Officer and Director
Sergio R. Vallejo D.M.D. 36 1998 President, Chief Operating Officer and
Director
E. Eugene Sharer 65 1996 Director
Donald S. Radcliffe (1) 54 1999 Director
John K. Pawlowski (1) 62 1999 Director
<FN>
- ------------
(1) Member of Audit Committee.
(2) C. Thomas McMillen, James McMillen M.D., and Robert Mrazek all resigned from
the board in February, 1999 and Frederick Simon resigned from the board in
July, 1999.
</FN>
</TABLE>
Joseph J. Raymond, Jr. has been Chairman/Chief Executive
Officer of Complete Wellness Centers, Inc. since voted in by the Board of
Directors on February 18, 1999. Previously, he served as Chairman/ CEO of
Transworld Services Group from 1988 to 1997. Mr. Raymond founded the staffing
company and grew it to a $45,000,000 company employing 4,000 employees
nationwide. In 1997, the company merged with Corestaff Services, a billion
dollar staffing company, where he served as the Vice President of Operations
through January 1998. Prior to joining CWC, he was President of RVR Consulting
Group, Inc., a financial consultant company, and still holds that position. Mr.
Raymond brings organizational, managerial and financial expertise to the
company.
Sergio R. Vallejo, D.M.D. has been on the Board of Directors
of Complete Wellness Centers, Inc. since May 1998, became the Chief Operations
Officer on February 18, 1999 and became the President of the Company July 25,
1999. While attending graduate school, Mr. Vallejo founded PVM Prescription
Center, an institutional pharmacy that provided medications and supplies to the
residents of long-term care facilities throughout Central Florida. In 1989, Mr.
Vallejo successfully merged three thriving dental practices into one, forming
Jones Wilson Vallejo Associates, P.A. In 1996, Mr. Vallejo assumed
responsibility as the Director of Pharmacy Operations in Florida for Subscript
Pharmacy Corporation, an international company with 44 pharmacies in the United
States alone. Prior to joining CWC, he was Vice President of RVR Consulting
Group, Inc., and still holds that position. Mr. Vallejo is experienced in many
aspects of medical practice management, including strategic planning, finance
and budgeting, profit and loss forecasting, staff recruitment and training,
policy development, and resources and facilities management.
E. Eugene Sharer was the President of the Company from April
1996 until July 1998 and has been a director of the Company since April 1996. On
March 31, 1999 his employment contract with the Company expired. He was the
Treasurer of the Company from February 1997 until March 1999. He was Chief
Operating Officer from April 1996 until November 1997, and Chief Financial
Officer from February 1997 until February 1998. From 1991 to 1995 he was
President and Chief Operating Officer of R.O.W. Sciences, Inc., a health
research company. In August 1995, Mr. Sharer formed Sharer Associates, a
management consulting company, which he has returned to. From 1989 to 1990 he
was Executive Vice President, Chief Operating Officer and Director of Iverson
Technology Corporation and from 1985 through 1988, he was President and Director
of Calculon Corporation and a Vice President of Atlantic Research Corporation,
the parent company of Calculon. Between 1980 and 1985, Mr. Sharer was Vice
President of the Systems Division and subsequently the Systems Group at Computer
Sciences Corporation. Prior to that, he held several managerial positions with
IBM.
Donald S. Radcliffe became a member of the board of
Directors on September 16, 1999. Mr. Radcliffe has been the principle of
Radcliffe and Associates since 1990. His company provides financial consulting
services to public companies including financial and operating evaluation and
advice. Mr.
3
<PAGE>
Radcliffe was Executive Vice President, Chief Operating Officer and Financial
Officer of World-Wide Business Centers, Inc. with responsibilities for planning,
financial management, computer systems, personnel and office space. Prior to
that, he worked for Main Hurdman as a partner in the Management Advisory Service
area as Director of Computer Audit Services. Engagements were principally
computer systems, financial audits/forecasting and financial controls. Prior to
that, he was also a Systems Analyst at IBM. He holds an MBA degree from
Dartmouth, is licensed as a CPA in New York State and is on the board of two
public companies and one private company.
John K. Pawlowski became a member of the Board of Directors
on March 29, 1999. Mr. Pawlowski has served over thirty-five years in the
healthcare industry. His success is attributed to his ability to organize and
direct a quality management team while developing controls to operate a
financially sound organization. Mr. Pawlowski was President and Chief Operating
Officer of Riverview Medical Center, which he grew from a 195 bed healthcare
institution to a 500 bed Medical Center, with an operating budget of $120
million annually. He showed a positive bottom line in eighteen of the twenty-
three years he served. He is currently the Chief Executive Officer and a partner
in a healthcare-consulting corporation known as Contract Marketing Company. This
entity currently provides engineering management services and commodities to
hospitals.
MEETINGS AND COMMITTEES
The Board of Directors met 15 times and acted 2 times by
written consent during fiscal 1998. No director attended fewer than 90% of the
total meetings of the Board of Directors.
The Board of Directors currently has one committee. The
Audit Committee reviews the internal accounting policies of the Company and
consults with, and reviews the services provided by the Company's independent
accountants. The Audit Committee met once during fiscal 1998 to review the
report of the Company's independent auditors for fiscal year 1997. The Audit
Committee of the Board of Directors is currently comprised of John Pawlowski and
Donald Radcliffe.
COMPENSATION OF DIRECTORS
The Company does not currently compensate, and does not
anticipate compensating its directors for their services as directors, except
that each of the Company's Outside Directors will receive a director's fee of
$500 per meeting for attendance at Board of Directors or committee meetings, and
7,500 options to purchase the Company's Common Stock, exercisable over a period
of five years at a price to be determined by the plan administrators on the date
of grant, which shall not be less than the fair market value of the Company's
publicly traded Common Stock on the date of issuance. The options to be issued
to the Outside Directors shall be granted upon appointment to the Board of
Directors and vested 50% immediately and the remainder after one year of
service. In addition, each of the Company's directors receives reimbursement of
all ordinary and necessary expenses incurred in attending any meeting or any
committee meeting of the Board of Directors. Currently, all directors hold
office until the next annual meeting of stockholders and until their successors
have been duly elected and qualified. The Company's executive officers are
appointed annually and serve at the direction of the Board of Directors, subject
to the terms of existing employment agreements.
Directors who are employees of the Company and certain other
Executive Officers have entered into employment arrangements with the Company.
See "Executive Compensation - Employment and Termination Arrangements."
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of
the Common Stock on the Record Date by (i) each person known by the Company to
own beneficially five percent or more of such shares, (ii) each director and
nominee for election as a director, (iii) each person named in the Summary
Compensation Table under "Executive Compensation" of this Proxy Statement, and
(iv) all directors and executive officers as a group, together with their
respective percentage ownership of the outstanding shares:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------------
CURRENTLY ACQUIRABLE WITHIN PERCENT OF
NAME AND ADDRESS OWNED 60 DAYS(1) OUTSTANDING**
- ------------------------------------------------- --------- ------------------ -------------
<S> <C> <C> <C>
Michael T. Brigante.............................. 14,520 20,334(2) *
17 Daniel Drive
Belle Mead, NJ 08502
Eric S. Kaplan, D.C.............................. 0 66,666(3) 1.5%
4727 Marlwood Lane
Palm Beach Gardens, FL
C. Thomas McMillen............................... 219,500 0 5.1%
1103 South Carolina Ave S.E.
Washington, D.C. 20003
John K. Pawlowski................................ 0 3,750(4) *
2 Daniel Drive
Ocean, NJ 07712
Donald Radcliffe................................. 20,018 3,750(5) *
575 Madison Avenue, Suite 1006
New York, NY 10022
Joseph J Raymond, Jr............................. 123,670 3,750(6) 2.9%
4074 Scarlet Iris Place
Winter Park, FL 32792
E. Eugene Sharer................................. 126,667 28,750(7) 3.6%
12404 Beall Spring Road
Potomac, MD 20854
Sergio R. Vallejo................................ 23,200 7,500(8) *
875 Hanover Way
Lakeland, FL 33813
Wexford Spectrum Investors LLC................... 0 618,274(9) 12.5%
411 West Putnam Avenue
Greenwich, CT 06830
Imprimis Investors LLC........................... 0 2,473,097(9) 36.3%
411 West Putnam Avenue
Greenwich, CT 06830
Stratus Services Group, Inc...................... 500,000(10) 0 11.5%
500 Craig Road, Suite 201
Manalapan, NJ 07726
RVR Consulting Group, Inc........................ 0 400,629(11) 8.4%
P.O. Box 2148
Goldenrod, FL 32733
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------------
CURRENTLY ACQUIRABLE WITHIN PERCENT OF
NAME AND ADDRESS OWNED 60 DAYS(1) OUTSTANDING**
- ------------------------------------------------- --------- ------------------ -------------
<S> <C> <C> <C>
Structure Management, Inc........................ 227,000 0 5.2%
500 Craig Road, Suite 201
Manalapan, NJ 07726
All directors and executive...................... 308,075 535,129 17.3%
officers as a group (7 persons)
<FN>
- ------------
* Less than 1%.
** Percent of Outstanding is based on shares Currently Owned plus shares
Acquirable Within 60 Days (1) as a percentage of total shares outstanding at
September 30, 1999 (4,344,315 shares) plus shares Acquirable Within 60 Days
(1) by the named person or group indicated.
(1) Reflects number of shares of Common Stock acquirable upon exercise of
options.
(2) Includes shares subject to stock options which became exercisable on
the following schedule: 6,000 shares on April 6, 1998; 3,334 shares on
July 2, 1999; 3,000 shares on September 2, 1998; 8,000 shares on
September 2, 1999.
(3) Includes shares subject to stock options which became exercisable on
the following schedule: 25,000 shares on April 6, 1997; 25,000 shares
on April 6, 1998; and 16,666 shares on July 25, 1998.
(4) Includes 3,750 shares subject to stock options which became exercisable
on March 29, 1999.
(5) Includes 3,750 shares subject to stock options which will become
exercisable on November 8, 1999.
(6) Includes 3,750 shares subject to stock options which became exercisable
on September 2, 1998.
(7) Includes 10,000 shares subject to stock options that became exercisable
on March 31, 1999, 15,000 shares subject to stock options that became
exercisable on April 6, 1999 and 3,750 shares that became exercisable
on April 1, 1999. Does not include 8,193 shares held in trust by Wilma
I. Sharer, the wife of Mr. Sharer of which he disavows any beneficial
ownership.
(8) Includes 7,500 shares subject to stock options which became exercisable
on May 26, 1999.
(9) Entities hold a Senior Cumulative Convertible Preferred Stock position
which is convertible for shares of the Company's Common Stock
commencing January 23, 1998 at a conversion price of $1.75 per share.
Imprimis Investors LLC is an investor in the equity pool funding the
aforementioned transaction administered by Wexford Spectrum Investors
LLC. The Preferred Stock bears a dividend of 8% per annum through
December 31, 2000, provided that the dividend is currently paid on a
quarterly basis, and if not paid in cash, the dividend accrues at 10%
per annum paid on a quarterly basis in shares of Preferred Stock
through December 31, 2000. After December 31, 2000, the dividend on the
Preferred Stock is 12% per annum.
(10) The principal of Stratus Services Group, Inc is Joseph J. Raymond,
Sr., the father of Joseph J. Raymond Jr., the Company's Chairman and
Chief Executive Officer.
(11) RVR Consulting Group, Inc. holds Preferred Stock in the Company in two
issues. The first is the Senior Cumulative Convertible Preferred Stock
obtained in a private transaction in February 1999 with Wexford
Spectrum Investors LLC and Imprimis Investors LLC (refer to note 9
above). The second is the Junior Cumulative Convertible Preferred
Stock issued by the Company in August 1999 as consideration for a
loan to equity conversion. Shares of the Junior Cumulative
Convertible Preferred Stock have the same features as described in
note 9, except shares are subordinate to the shares of Senior
Cumulative Convertible Preferred Stock. The Chief Executive Officer
(Mr. Raymond, Jr.) and the President (Mr. Vallejo) of the Company are
the principals of RVR Consulting Group, Inc.
(12) The principal of Structure Management, Inc. is Jeffrey Raymond, the
brother of Joseph Raymond, Jr., the Company's Chairman and Chief
Executive Officer.
</FN>
</TABLE>
6
<PAGE>
On the Record Date, the outstanding Common Stock was held by approximately 921
stockholders of record.
REPORTS UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity security
(collectively, "Section 16 reporting persons"), to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission. Section 16 reporting persons are required by regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended December 31, 1998,
all Section 16(a) filing requirements applicable to Section 16 reporting persons
were satisfied, except: a late Form 3 was filed in May 1998 reporting the
initial beneficial equity security ownership at the time of the initial public
offering of the Company in February 1997 as shown in the Company's Prospectus
dated February 19, 1997 for the following persons: C. Thomas McMillen, former
Chairman of the Board and Chief Executive Officer, E. Eugene Sharer, former
President, and Treasurer, Danielle F. Milano, M.D., former Vice President for
Medical Affairs, Robert J. Mrazek, former Director, James J. McMillen, M.D.,
former Director, Robert Libauer, former Director, and Eric S. Kaplan, D.C.,
former President and Director. A late Form 3 that should have been filed in July
1997 was filed in May 1998 reporting the initial beneficial equity security
ownership of former Secretary F. Ryan Knoll on July 25, 1997, the date he became
Secretary of the Company. A late Form 5, that should have been filed in February
1998, was filed in May 1998 reporting the granting of employee stock options
under the Company's various employee stock option plans that should have been
reported on a Form 4 in 1997 for the following persons: C. Thomas McMillen, E.
Eugene Sharer, Robert J. Mrazek, James J. McMillen, M.D. and Eric S. Kaplan,
D.C. and reporting transactions by E. Eugene Sharer and Danielle F. Milano, M.D.
that should have been reported on a Form 4 in 1997.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation
paid and accrued by the Company to its Chief Executive Officer and each of its
other four most highly compensated executive officers for the years ended
December 31, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------
NAME AND ------------------------------- ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION
- ---------------------------- ---- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
C. Thomas McMillen 1998 155,719 0 35,000(1) 2,008(1*)
Chairman and Chief 1997 135,000 0 100,000(1) 1,338(1*)
Executive Officer 1996 0 0 0 0
E. Eugene Sharer 1998 141,781 0 10,000(2) 17,250(3)
Vice Chairman 1997 132,500 0 15,000(2) 15,500(3)
1996 0 0 116,667(2) 9,000(3)
Eric S. Kaplan, D.C. 1998 76,517 0 60,000(4) 71,901(5)
President 1997 60,000 0 100,000(4) 79,796(5)
Chief Operating Officer 1996 16,000 0 46,666(4) 26,000(5)
Michael T. Brigante 1998 102,931 0 9,000(6) 21,194(7)
Vice President Finance/ 1997 90,000 0 6,000(6) 18,796(7)
Chief Financial Officer 1996 29,500 0 40,000(6) 15,750(7)
<FN>
- ------------
(1) Exercisable cumulatively at the rate of approximately 33% of the underlying
shares per year, commencing April 1998. (1*) Company paid portion of health
insurance premiums.
(2) Exercisable cumulatively at the rate of approximately 33% of the underlying
shares per year, commencing April 1996.
(3) Represents the amount attributable to the lease of an automobile for
corporate use and portion of health insurance premiums.
(4) Exercisable at the rate of 33% of the underlying shares granted per year,
commencing August 1996.
(5) Represents amounts attributable to the lease of an automobile for corporate
use ($2,000 in 1996, $6,000 in 1997 and $6,000 in 1998), compensation for
consulting services rendered to the Company ($24,000 in 1996, $60,000 in
1997 and $60,000 in 1998) and housing in connection with services rendered
to the Company ($9,000 in 1997) and company paid portion of health insurance
premiums.
(6) Exercisable cumulatively at the rate of approximately 33% of the underlying
shares per year, commencing March 1996.
(7) Represents amounts attributable to the lease of an automobile for corporate
use ($5,000 in 1997 and $6,000 in 1998), compensation for consulting
services rendered to the Company ($10,500 in 1996) and housing in connection
with services rendered to the Company ($5,250 in 1996, $9,000 in 1997 and
$9,000 in 1998) and company paid portion of health insurance premiums.
</FN>
</TABLE>
8
<PAGE>
The following table sets forth certain information
concerning options granted during 1998 to the individuals named in the Summary
Compensation Table:
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
NUMBER OF SECURITIES GRANTED
UNDERLYING OPTIONS TO ALL EXERCISE PRICE EXPIRATION
NAME GRANTED(#) EMPLOYEES ($/SHARE) DATE
- ------------------------- -------------------- -------------- -------------- ----------
<S> <C> <C> <C> <C>
C. Thomas McMillen....... 35,000 16.58% $ 3.33 7/02/2003
E. Eugene Sharer......... 10,000 5.68% $ 3.03 7/06/2003
Eric S. Kaplan, D.C...... 60,000 28.43% $ 3.03 7/02/2003
Michael T. Brigante...... 10,000 4.74% $ 3.03 7/02/2003
9,000 5.11% $ 2.88 9/02/2003
</TABLE>
The following table presents the value of unexercised
options held at December 31, 1998 by the individuals named in the Summary
Compensation Table:
OPTIONS VALUE TABLE
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
OPTIONS
AT YEAR-END (#) VALUE OF UNEXERCISED IN-THE-
EXERCISABLE(E)/ MONEY OPTIONS AT YEAR-END($)*
NAME UNEXERCISABLE(U) EXERCISABLE(E)/UNEXERCISABLE
- --------------------------------- -------------------------- ------------------------------
<S> <C> <C>
C. Thomas McMillen............... 50,000(E) $ 0(E)
85,000(U) $ 0(E)
E. Eugene Sharer................. 25,000(E) $ 2,200(E)
Eric S. Kaplan, D.C.............. 108,326(E) $ 45,982(E)
16,667(U) $ 3,667(U)
Michael T. Brigante.............. 28,667(E) $ 45,915(E)
3,000(U) $ 1,125(U)
<FN>
- ------------
* Values are calculated by subtracting the exercise price from the fair market
value of the Common Stock at year end.
</FN>
</TABLE>
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has entered into certain employment and
termination agreements with the following executive officers:
In February 1999, Joseph J. Raymond, Jr. was elected
Chairman and Chief Executive Officer and has served in that capacity until
September of 1999. On September 18, 1999, we entered into an employment
agreement with Mr. Raymond providing for his employment as Chairman of the Board
and Chief Executive Officer for a two year term expiring in September 2001. The
agreement provides for an annual base salary of $75,000 and participation in all
executive or employee profit sharing bonus or stock option plans established by
us. In addition, Mr. Raymond is to be paid a performance bonus of 5% of the net
profit earned in the fiscal year and paid within 30 days of the end of the
fiscal year.
In February 1999, Mr. Sergio R. Vallejo was elected Chief
Operating Officer and has served in that capacity until July of 1999. In July of
1999, he was elected President and Chief Operating Officer. On September 18,
1999, we entered into an employment agreement with Mr.Vallejo providing for his
employment as President and Chief Operating Officer for a two year term expiring
in September 2001. The agreement provides for an annual base salary of $75,000
and participation in all executive or employee profit sharing bonus or stock
option plans established by us. In addition, Mr. Vallejo is to be
9
<PAGE>
paid a performance bonus of 5% of the net profit earned in the fiscal year and
paid within 30 days of the end of the fiscal year.
In July 1996, the Company entered into an employment
agreement with Mr. C. Thomas McMillen providing for his employment, as Chairman
of the Board and Chief Executive Officer, for a term expiring in March 1999. In
June, 1998, the agreement was extended to September 2000. The employment
agreement provides for an annual base salary for Mr. McMillen of $150,000. Mr.
McMillen was to participate in all executive benefit plans and had the use of a
Company car. The agreement also provided, among other things, that if his
employment is terminated without cause (as defined in the agreement), the
Company would pay Mr. McMillen an amount equal to one year's base salary,
payable over a one year period. Mr. McMillen was relieved of all duties in
February 1999 and resigned as a director at that time. The Company is currently
negotiating a termination agreement with Mr. McMillen.
In March 1996, the Company entered into an employment
agreement with Mr. E. Eugene Sharer providing for his employment as President
and Chief Operating Officer for a term expiring in March 1999. Mr. Sharer was
named Vice Chairman of the Company in July 1998. He was granted 10,000 shares of
Common Stock with that appointment. The employment agreement provided for an
annual base salary for Mr. Sharer of $150,000 effective upon closing of the IPO,
and for participation in all executive benefit plans, as well as an automobile
allowance of $1,000 per month. Mr. Sharer was granted options to purchase
116,667 shares of the Company's Common Stock at an exercise price of $0.03 per
share. On the date of such grant, 16,667 of those options were exercisable, of
which 10,000 were exercised in 1996. The remaining options have vested and have
been exercised. The agreement also provided, among other things, that if his
employment was terminated without cause (as defined in the agreement) the
Company would pay to him an amount equal to one year's base salary, payable over
a one year period. Mr. Sharer completed his employment contract in March 1999
and currently remains as a director and is performing certain consulting
services for the Company.
In March 1996, the Company entered into an employment
agreement with Mr. Michael Brigante for his services as corporate controller for
a term expiring on September 30, 1999. The Employment Agreement provided for an
annual base salary for Mr. Brigante of $90,000 beginning January 1, 1997 and for
participation in all executive benefit plans plus an automobile allowance of
$500 per month. Mr. Brigante was granted options to purchase 40,000 shares. The
options have vested as to all 40,000 shares and have been exercised. On February
23, 1998, Mr. Brigante was elected to the position of Sr. Vice President for
Finance and Chief Financial Officer. His annual compensation increased to
$100,000 at that time. Subsequent to his employment, Mr. Brigante was granted
6,000, 10,000, 9,000 and 10,000 shares in options dated April 6, 1997, July 2,
1998, September 2, 1998 and September 1, 1999, respectively, and the automobile
allowance was increased to $850 per month. He currently serves as the Chief
Financial Officer and Secretary of the Company.
In August 1996, the Company entered into an employment
agreement with Eric S. Kaplan D.C. providing for his employment as Senior
Director for Operations and Development for a term expiring in August 1999. The
employment agreement provided for a base salary of $4,000 per month, which was
accrued until the closing of the IPO. After such closing, Dr. Kaplan became
entitled to an automobile allowance of $500 per month. Dr. Kaplan was granted
options to purchase 46,667 shares of the Company's Common Stock at an exercise
price of $0.60 per share. These options have vested with respect to all 46,667
shares. His salary was subsequently increased to $150,000 per year including
that portion which was contained in his consulting agreement. The agreement also
provided, among other things, that if his employment was terminated by mutual
agreement or upon his death or disability, the Company would pay an amount equal
to $60,000, payable over a six month period. On April 6, 1997, Dr. Kaplan became
a Senior Vice President and a director of the Company. In November 1997, he was
named Chief Operating Officer and in July 1998 he was named President. Dr.
Kaplan was subsequently granted 50,000, 50,000, 25,000 and 35,000 stock options
on April 6, 1997, July 25, 1997, July 2, 1998 and July 2, 1998 respectively. Dr.
Kaplan left the employ of the Company effective June 30, 1999 and remains a
consultant to the Company.
10
<PAGE>
The employment agreements require the full-time services of
such employees. The agreements also contain covenants restricting the employee
from engaging in any activities competitive with the business of the Company
during the term of such agreement and for a period of one year thereafter, and
prohibiting the employee from disclosing confidential information regarding the
Company.
REQUIRED VOTE
A plurality vote of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting is required to elect the
Board of five (5) directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
ITS FIVE (5) NOMINEES FOR DIRECTORS.
INCREASE THE NUMBER OF SHARES IN THE OUTSIDE DIRECTORS STOCK OPTION PLAN
On March 30, 1998, the Board of Directors approved and the
shareholders subsequently approved the establishment of a stock option plan for
Outside Directors on the Company's Board of Directors or on the Boards of
Directors of any of the Company's subsidiaries (the "Directors Option Plan").
The plan provides for the grant of incentive and nonqualified stock options,
provided that the maximum number of shares of Common Stock of the Company that
may be issued upon the exercise of options granted pursuant to the Directors
Option Plan is 50,000. Under the Directors Option Plan, each Outside Director
will receive an option for 7,500 shares for every year of service on the
Company's Board of Directors. Subsequently, on September 29, 1999 the Board
adopted a resolution to increase the number of shares authorized in the
Directors Stock Option Plan by 50,000 shares bringing the total authorized under
the Directors Option Plan to 100,000 shares. The Company currently has three
Outside Directors eligible to participate in the Directors Option Plan.
In the event of any stock dividend, stock split,
recapitalization, combination, reclassification, or like change in the capital
structure of the Company, appropriate adjustments will be made to the shares,
subject to the Directors Option Plan, and to outstanding options. To the extent
that any outstanding option under the Directors Option Plan expires or
terminates prior to exercise in full or if shares issued upon the exercise of an
option are repurchased by the Company, the shares of Common Stock for which such
option is not exercised or the repurchased shares will be returned to the
Directors Option Plan and will become available for future grants.
The Directors Option Plan is administered by the Board of
Directors or a duly appointed committee of the Board of Directors; the exercise
price of options granted pursuant to the Directors Option Plan is determined by
the plan administrators of the Board of Directors.
The executive officers of the Company believe that the
addition in the number of shares available in the Directors Option Plan is
important to permit the Company to obtain and retain the service of qualified
persons who are neither employees nor officers of the Company to serve as
members of the Board of Directors.
REQUIRED VOTE
Approval of the increase in the number of shares in the
Outside Directors Stock Option Plan requires the separate affirmative vote by
the holders of a majority of the shares of Common Stock present in person or
represented by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSAL TO INCREASE THE NUMBER OF SHARES BY 50,000 SHARES IN THE STOCK OPTION
PLAN FOR OUTSIDE DIRECTORS ON THE COMPANY'S BOARD OF DIRECTORS.
INCREASE THE NUMBER OF SHARES IN THE 1996 STOCK OPTION PLAN
The plan currently provides for the grant of incentive and
nonqualified stock options, provided that the maximum number of shares of Common
Stock of the Company that may be issued upon the exercise of options granted
pursuant to the 1996 Stock Option Plan is 400,000. Under the 1996 Stock
11
<PAGE>
Option Plan, employees of the Company and others may be granted options as
incentives for continued service to the Company. Subsequently, on September 29,
1999 the Board adopted a resolution to increase the number of shares authorized
in the 1996 Stock Option Plan by 200,000 shares bringing the total authorized
under the 1996 Stock Option Plan to 600,000 shares.
In the event of any stock dividend, stock split,
recapitalization, combination, reclassification, or like change in the capital
structure of the Company, appropriate adjustments will be made to the shares,
subject to the 1996 Option Plan, and to outstanding options. To the extent that
any outstanding option under the 1996 Option Plan expires or terminates prior to
exercise in full or if shares issued upon the exercise of an option are
repurchased by the Company, the shares of Common Stock for which such option is
not exercised or the repurchased shares will be returned to the 1996 Option Plan
and will become available for future grants.
The 1996 Option Plan is administered by the Board of
Directors or a duly appointed committee of the Board of Directors; the exercise
price of options granted pursuant to the 1996 Option Plan is determined by the
plan administrators of the Board of Directors.
The executive officers of the Company believe that the
addition in the number of shares available in the 1996 Option Plan is important
to permit the Company to obtain and retain the service of qualified persons who
are employees or officers of the Company.
REQUIRED VOTE
Approval of the increase in the number of shares in the 1996
Stock Option Plan requires the separate affirmative vote by the holders of a
majority of the shares of Common Stock present in person or represented by
proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSAL TO INCREASE THE NUMBER OF SHARES BY 200,000 SHARES IN THE 1996 STOCK
OPTION PLAN FOR EMPLOYEES AND OFFICERS OF THE COMPANY.
APPROVE THE ESTABLISHMENT OF AND INCREASE THE NUMBER OF SHARES IN THE 1999
CONSULTANT'S STOCK OPTION PLAN
On March 8, 1999, the Board of Directors approved the
establishment of the 1999 Consultant's Stock Option Plan and the shareholders
are asked to approve the establishment of a stock option plan for Consultants to
the Company (the "Consultant's Option Plan"). The plan as approved by the board
provides for the grant of both incentive and nonqualified stock options,
provided that the maximum number of shares of Common Stock of the Company that
may be issued upon the exercise of options granted pursuant to the Consultant's
Option Plan is 475,000. Under the Consultant's Option Plan, companies providing
services to the Company and individuals similarly employed may be granted
options to purchase Common Stock at an exercise price established by the Board
of Directors and which vests at a time and interval established by the Board of
Directors. Subsequently, on September 29, 1999 the Board adopted a resolution to
increase the number of shares authorized in the Consultant's Option Plan by
200,000 shares bringing the total authorized under the Consultant's Option Plan
to 675,000 shares.
In the event of any stock dividend, stock split,
recapitalization, combination, reclassification, or like change in the capital
structure of the Company, appropriate adjustments will be made to the shares,
subject to the Consultant's Option Plan, and to outstanding options. To the
extent that any outstanding option under the Consultant's Option Plan expires or
terminates prior to exercise in full or if shares issued upon the exercise of an
option are repurchased by the Company, the shares of Common Stock for which such
option is not exercised or the repurchased shares will be returned to the
Consultant's Option Plan and will become available for future grants.
The Consultant's Option Plan is administered by the Board of
Directors, the exercise price of options granted pursuant to the Consultant's
Option Plan is determined by the Board of Directors.
The executive officers of the Company believe that the
establishment of and an addition to the number of shares available in the
Consultant's Option Plan is important to permit the Company to
12
<PAGE>
obtain and retain the services of qualified persons and/or companies who are
neither employees nor officers of the Company to provide financial, legal and
technical services to the Company.
REQUIRED VOTE
Approval of the establishment of and an increase in the
number of shares in the 1999 Consultant's Stock Option Plan requires the
separate affirmative vote by the holders of a majority of the shares of Common
Stock present in person or represented by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED CONSULTANT'S OPTION PLAN AND THE PROPOSAL TO INCREASE THE NUMBER OF
SHARES BY 200,000 SHARES IN THE 1999 CONSULTANT'S STOCK OPTION PLAN.
INCREASE THE NUMBER OF SHARES OF PREFERRED STOCK AUTHORIZED
On September 16, 1999, the Board of Directors approved an
increase to the number of shares of Preferred Stock authorized from 2 million
shares to 10 million shares. Such increase must be approved by the shareholders
of Common Stock. It is the Board of Director's intent to issue Preferred Stock
for the purpose of raising capital in the future.
Preferred Stock may be issued in one or more series and
having such rights, privileges and limitations, including voting rights,
conversion privileges and/or redemption rights, as may, from time to time, be
determined by the Board of Directors of the Company. Preferred Stock may be
issued in the future in connection with acquisitions, financings or such other
matters as the Board of Directors deems appropriate. In the event that any such
shares of Preferred Stock are to be issued, a Certificate of Designation,
setting forth the series of such Preferred Stock and the relative rights,
privileges and limitations with respect thereto, shall be filed with the
Secretary of State of the State of Delaware.
REQUIRED VOTE
Approval of the increase in the number of shares of
Preferred Stock authorized requires the separate affirmative vote by the holders
of a majority of the shares of Common Stock present in person or represented by
proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSAL TO INCREASE THE NUMBER OF PREFERRED SHARES AUTHORIZED FROM 2 MILLION
SHARES TO 10 MILLION SHARES.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors voted as of March 4, 1999 to appoint
Amper, Politziner & Mattia, P.A. as independent accountants for the Company for
fiscal 1999.
Ernst & Young LLP served as independent accountants for the
Company from June 1996 through September 30, 1998. Amper, Politziner & Mattia,
P.A. has served thus far in 1999. This appointment is being submitted to the
holders of Common Stock for ratification. Although law does not require the
submission of this matter to stockholders, if the holders of Common Stock do not
ratify the appointment, the Board of Directors will reconsider its selection of
independent accountants.
A representative of Amper, Politziner & Mattia, P.A. may be
present at the Annual Meeting. This representative will have the opportunity to
make a statement if such representative desires to do so and will be available
to respond to appropriate questions presented at the Annual Meeting.
REQUIRED VOTE
Ratification of Amper, Politziner & Mattia, P.A., requires
the separate affirmative vote by the holders of a majority of the shares of
Common Stock present in person or represented by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
AMPER, POLITZINER & MATTIA, P.A. AS INDEPENDENT ACCOUNTANTS FOR THE COMPANY FOR
FISCAL 1999.
13
<PAGE>
OTHER BUSINESS
Management does not know of any matter to be brought before
the Annual Meeting other than as described above. In the event any other matter
properly comes before the Annual Meeting, the persons named in the accompanying
form of proxy have discretionary authority to vote on such matters.
STOCKHOLDER PROPOSALS FOR THE
2000 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder proposal to be considered for inclusion in
the Company's proxy soliciting material for the 2000 Annual Meeting of
Stockholders must be received by the Company at its principal office by December
31, 1999.
ANNUAL REPORT ON FORM 10-KSB
The Company is a "small business issuer" within the meaning
of Item 10(a) of Regulation S-B. Accordingly, the Company is complying with the
executive compensation disclosure requirements applicable to small business
issuers (adopted by the Securities and Exchange Commission on October 15, 1992)
in this year's proxy statement.
A copy of the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1998 and the Chairman of the Board's Letter to
the Stockholders dated September 30, 1999, which together comprise the Company's
1998 Annual Report to Stockholders, is being delivered herewith.
By Order of the Board of Directors,
/s/ Michael T. Brigante
Michael T. Brigante, Secretary
Dated: September 30, 1999
Winter Park, FL
14
<PAGE>
P R O X Y
COMPLETE WELLNESS CENTERS, INC.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph Raymond, Jr. and Sergio Vallejo,
D.M.D. and each of them, proxies, each with the power of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of Complete
Wellness Centers, Inc. on November 8, 1999, and any adjournments and
postponements thereof, upon all matters as may properly come before the
Annual Meeting. Without otherwise limiting the foregoing general authorization,
the proxies are instructed to vote as indicated herein.
PLEASE COMPLETE, DATE AND SIGN ON THE REVERSE SIDE AND FAX TO (516) 254-7622
OR MAIL IN THE ENCLOSED ENVELOPE.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MATTERS (1), (2), (3), (4), (5),
AND (6) AND LISTED BELOW TO COME BEFORE THE ANNUAL MEETING:
<TABLE>
<S> <C> <C> <C>
FOR AGAINST
(1) To elect a Board of five (5) directors. FOR the nominees listed below / / / /
(except as marked WITHHOLD AUTHORITY) to vote for all five(5) to the
contrary below five (5) nominees listed below:
Joseph Raymond, Jr., Sergio Vallejo, D.M.D., E. Eugene Sharer, Donald
Radcliffe, and John Pawlowski.
To WITHHOLD AUTHORITY to vote for any individual nominee(s), print such
nominee's name below:
FOR AGAINST ABSTAIN
(2) To increase the number of shares by 50,000 shares of the Company's Common / / / / / /
Stock for outside directors of the Company's Board of Directors.
(3) To add 200,000 shares of the Company's Common Stock to the 1996 Stock / / / / / /
Option Plan.
(4) To establish a 1999 Consultant's Stock Option Plan and increase the / / / / / /
number of shares of the Company's Common Stock authorized in the Plan
from 475,000 to 675,000 shares.
(5) To increase the number of Preferred Shares authorized from 2 million to / / / / / /
10 million shares.
(6) To ratify the selection of Amper, Politziner & Mattia, P.A. as / / / / / /
independent accountants for the fiscal year ending December 31, 1999.
(7) Upon any and all other business that may come before the Annual Meeting. / / / / / /
</TABLE>
Check here if you plan to attend the Annual Meeting of Stockholders. / /
THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WILL BE
VOTED FOR THE MATTERS DESCRIBED IN PARAGRAPHS (1), (2), (3),(4), (5), AND (6)
AND UNLESS THE STOCKHOLDER SPECIFIES OTHERWISE, IN WHICH CASE IT WILL BE VOTED
AS SPECIFIED.
SIGNATURE(S):___________________________________________________________________
DATE ____________________________________________________________________ , 1999
Note: Executors, Administrators, Trustees, etc. should give full title.
