<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(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> 2
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
The Wendt-Bristol Health Services Corporation (the "Company"), a Delaware
corporation, will be held on Thursday, July 30, 1998, at 11:00 a.m., at Suite
760, Two Nationwide Plaza, 280 North High Street, Columbus, Ohio for the
following purposes:
(1) To elect eight (8) directors as members of the Board of Directors
to serve until the next annual meeting of stockholders and until their
respective successors are duly elected and qualified;
(2) To consider approval of the Second Amendment to the Wendt-Bristol
Health Services Corporation Employee Stock Option Plan; and
(3) To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
The holders of record of Common Stock of the Company at the close of
business on June 22, 1998, will be entitled to notice of, and to vote at, the
meeting.
For a period of at least ten days prior to the meeting, a complete list
of stockholders entitled to vote at the meeting will be open for examination by
any stockholder during ordinary business hours at the Company's offices at Suite
760, Two Nationwide Plaza, 280 North High Street, Columbus, Ohio 43215.
BY ORDER OF THE BOARD OF DIRECTORS
Sandra W. Weber, Secretary
Columbus, Ohio
June 29, 1998
--------------------
You are cordially invited to attend the meeting in person. Even if you
plan to be present, you are urged to sign, date and mail the enclosed proxy
promptly. However, if you attend the meeting, you may vote in person or by your
proxy.
PLEASE NOTE THAT A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K IS
ENCLOSED HEREWITH.
<PAGE> 3
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
PROXY STATEMENT
for the
ANNUAL MEETING OF STOCKHOLDERS
To be Held July 30, 1998
GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of The Wendt-Bristol Health Services
Corporation (the "Company"). The proxy solicited in connection with this proxy
statement will be used at the Annual Meeting of Stockholders of the Company for
1998 to be held on Thursday, July 30, 1998, at 11:00 a.m., at Suite 760, Two
Nationwide Plaza, 280 North High Street, Columbus, Ohio 43215, and at any
adjournment thereof, for the purposes set forth in the foregoing notice of the
meeting.
Properly executed proxies received in time for the meeting will be
voted as specified therein. If the enclosed form of proxy is executed and
returned, it may nevertheless be revoked upon written notice to either of the
persons named as a proxy or to the Secretary of the Company at any time before
it is exercised, by voting in person at the meeting or by giving a later proxy.
This proxy statement, along with the Annual Report on Form 10-K for the year
ended December 31, 1997 is being mailed on or about June 29, 1998 to all
stockholders of record on June 22, 1998.
The cost of soliciting proxies, including the printing, handling and
mailing of the proxy and related materials and the actual expenses incurred by
brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of stock, will be paid by the Company. If
proxies are not returned to the Company, it may be necessary for certain
officers, directors, employees and other representatives of the Company to
solicit proxies by telephone or telegram or in person.
The Company's principal executive offices are located at Suite 760, Two
Nationwide Plaza, 280 North High Street, Columbus, Ohio 43215, and its telephone
number is (614) 221-6000.
The shares entitled to vote at the meeting consist of shares of common
stock of the Company ("Common Stock") with each share entitling the holder of
record to one vote. At the close of business on June 22, 1998, the record date
for the meeting, there were outstanding ____________ shares of Common Stock.
Under Delaware law and the Company's Bylaws, the aggregate number of
votes entitled to be cast by all stockholders present in person or represented
by proxy at the meeting, whether those stockholders vote for, against or abstain
from voting on any matter, will be counted for purposes of determining the
minimum number of affirmative votes required for approval of such matters, and
the total number of votes cast for each of these matters will be counted for
purposes of determining whether sufficient affirmative votes have been cast.
Abstentions and withheld votes with respect to any matter will have the same
legal effect as a vote against the matter.
1
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors has voted to increase in number from seven to
eight members effective with this 1998 Annual Meeting. Therefore, eight (8)
directors are to be elected at the meeting to hold office until the 1999 Annual
Meeting of Stockholders and until their respective successors are elected and
qualified.
It is the intention of the persons named in the enclosed form of proxy
to vote such proxy FOR the election of the director nominees named below unless
authorization is withheld on the proxy. Management does not contemplate that any
nominee will be unable or unwilling to serve as a director or become unavailable
for any reason, but if such should occur before the meeting, a proxy voted for
any such individual will be voted for another nominee to be selected by the
Board of Directors.
The enclosed form of proxy provides a means for stockholders to vote
for all of the nominees listed therein, to withhold authority to vote for one or
more of such nominees or to withhold authority to vote for all of such nominees.
Each properly executed proxy received in time for the meeting will be voted as
specified therein. If a stockholder does not specify otherwise, the shares
represented by his or her proxy will be voted for the nominees listed therein
or, as noted above, for other nominees selected by the Board of Directors. The
shares held by each stockholder who signs and returns the enclosed form of proxy
will be counted for purposes of determining the presence of a quorum at the
meeting.
The Board of Directors has designated the following nominees, each of
whom is presently a director of the Company, except for David E. Fernie, for
election as directors of the Company:
<TABLE>
<CAPTION>
Name Age Current Positions with Company
---- --- ------------------------------
<S> <C> <C>
Marvin D. Kantor 69 Chairman of the Board, Director
Sheldon A. Gold 55 President, Treasurer, Chief Executive Officer,
Director, member of Audit Committee
Reed A. Martin 44 Executive Vice President, Chief Operating
Officer and Director
Gerald M. Penn 61 Director, Vice President of Medical
Affairs (1998), member of Audit Committee
until December 31, 1997
Harold T. Kantor 65 Vice Chairman of the Board, Director
Paul H. Levine 58 Director, member of Audit Committee
Clemente Del Ponte 47 Director
David E. Fernie 50 Nominee as Director
</TABLE>
The Board of Directors and Audit Committee met two times in 1997, at which all
members were present.
The Audit Committee's responsibilities include reviewing the Company's audit
procedures and policies, reviewing potential conflicts of interest, monitoring
internal controls and financial reporting, selecting the Company's independent
accountants and making recommendations concerning these matters to the Board of
Directors.
2
<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table and the text following the table set forth certain
information with respect to the Directors and Executive Officers (being
all of the Directors of the Company, except for Mr. Levine, Mr. Del
Ponte and Mr. Fernie) of the Company. Each Director serves until the
next Annual Meeting of Stockholders of the Company and until his
successor is elected and qualifies, unless such Director resigns or
dies prior thereto. Each Executive Officer serves at the pleasure of
the Board.
<TABLE>
<CAPTION>
Name Age Current Positions with Company
---- --- ------------------------------
<S> <C> <C>
Marvin D. Kantor 69 Chairman of the Board, Director
Sheldon A. Gold 55 President, Treasurer, Chief Executive Officer
Director, member of Audit Committee
Reed A. Martin 44 Executive Vice President, Chief Operating
Officer and Director
Charles R. Cicerchi 38 Vice President of Finance, Principal Financial
and Accounting Officer
Gerald M. Penn 61 Director, Vice President of Medical
Affairs (1998), member of Audit Committee
until December 31, 1997
Harold T. Kantor 65 Vice Chairman of the Board, Director
Paul H. Levine 58 Director, member of Audit Committee
Clemente Del Ponte 47 Director
David E. Fernie 50 Nominee as a Director
</TABLE>
Marvin D. Kantor has been Chairman of the Board since May 1988; prior
to June 1993 he had also been President and Chief Executive Officer of
the Company and W-B since May 1988. In addition, he is a Director of
all of the Company's subsidiaries and serves as a Director on
Telequest. He is a brother of Harold T. Kantor.
Sheldon A. Gold is a certified public accountant and has been President
and Chief Executive Officer of the Company since June 1993. Prior
thereto and since March 1992 he had been Vice Chairman of the Board and
since May 1988 he had been Executive Vice President, Treasurer, and
Chief Financial and Accounting Officer of the Company. He again became
Treasurer and Chief Financial and Accounting Officer of the Company in
July 1992 until May, 1996. In addition, he has been a Director of the
Company since May 1988. He has also been the President of W-B since
June 1993, Executive Vice President between 1979 and June 1993, and
Chief Financial and Accounting Officer of W-B from 1979 through May,
1996.
Reed A. Martin, elected as a Director in May 1992, has since June 1993
been Executive Vice President and Chief Operating Officer, since May
1991 he had been a Senior Vice President of the Company supervising
operations. Mr. Martin is a son-in-law of Marvin D. Kantor.
3
<PAGE> 6
Charles R. Cicerchi is a certified public accountant and has been Vice
President of Finance since joining the Company in September, 1994.
Since May, 1996 he has been the Principal Financial and Accounting
Officer of the Company. Prior thereto, he was Controller of Speer
Industries, a mechanical contractor, where he was responsible for all
accounting and treasury functions for the period 1990 to 1994.
Dr. Gerald M. Penn, M.D., Ph.D., was elected as a director on February
8, 1995 and became the Vice President of Medical Affairs of the Company
on January 1, 1998. He serves on the stock option committee and also
served on the audit committee through December 31, 1997. Dr. Penn was
previously Chairman and Medical Director of the Department of Pathology
at Grant Medical Center 1981-1996. Educated at The Ohio State
University, Doctor Penn received his medical degree from the College of
Medicine and a doctoral degree in biochemistry. He completed a
pathology residency at University Hospital and postgraduate training at
The Rockefeller University, New York, NY. He is board certified in
clinical and anatomical pathology, immunopathology and hematopathology.
He serves on the Board of Trustees of the Columbus Medical Association
Foundation.
Harold T. Kantor has been Vice-Chairman since June 1993 and a Director
of the Company since May 1988. In addition, he has been Vice President
of W-B since October 1985. He is a brother of Marvin D. Kantor.
Paul H. Levine has been a Director since January, 1990 and serves on
the audit and stock option committee. He is President of Nichols and
Levine Asset Management, Inc., a registered investment advisor. Mr.
Levine is an attorney and a certified public accountant and has been
active in venture capital, investment banking and financial consulting
since 1972. He is also a Director of Learning Technologies, Inc.
Clemente Del Ponte was elected as a director on June 18, 1997. For the
past five years he has been the managing director of McBridge Advisory,
Ltd., an import/export consulting agency. Prior thereto, he was an
independent consulting agent. Mr. Del Ponte resides in Lugano,
Switzerland.
David E. Fernie has been nominated to serve as a director of the
Company. He has been Professor of Education at Ohio State University
since 1984. Prior to that, he was Assistant Professor at the University
of Houston. With professional interests in teaching and learning in
schools, he received his Ed.D from the University of Massachusetts at
Amherst, and his Bachelors degree in political theory from Harvard
College.
4
<PAGE> 7
PROPOSAL 2
AMENDMENT TO THE COMPANY'S EMPLOYEE STOCK OPTION PLAN
The Company desires to amend The Wendt-Bristol Health Services
Corporation Employee Stock Option Plan (the "Plan"). The Second Amendment was
adopted by the Board of Directors of Wendt-Bristol and became effective as of
June , 1998, subject to the approval by the Company's stockholders.
The Plan currently provides that the aggregate number and class of
shares which may be the subject of options granted pursuant to the Plan are
250,000 shares of Common Stock. The Company desires to increase the amount of
shares which may be the subject of options granted pursuant to the Plan to
500,000 shares of Common Stock. The par value per share which may be the subject
of options granted pursuant to the Plan will remain $.01.
Additionally, the Second Amendment amends Paragraph 12 of the Plan,
titled, "Grant of Options to Non-Employee Directors." Currently under the Plan,
Non-Employee Directors receive a grant of options to purchase 10,000 shares
after serving in that capacity for 1 year, and additional options to purchase
1,000 shares on each anniversary date thereafter. Under the proposed Second
Amendment, the Plan would operate in the same manner, except that Non-Employee
Directors would receive an option for the purchase of 10,000 shares on each
fifth anniversary of receiving the initial 10,000 stock option instead of 1,000.
Therefore, under the Plan as proposed to be amended by the Second Amendment,
Non-Employee Directors would receive an additional 9,000 stock options every
five years. Lastly, under the Plan Paul H. Levine would receive an additional
10,000 share stock option upon approval by the stockholders as a result of his
having passed his fifth anniversary.
The description of this Second Amendment to the Plan is a summary only
and is qualified by the terms of the Second Amendment to The Wendt-Bristol
Health Services Corporation Employee Stock Option Plan itself, a copy of which
is attached to this Proxy Statement as Exhibit A.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE SECOND
AMENDMENT TO THE WENDT-BRISTOL HEALTH SERVICES CORPORATION EMPLOYEE STOCK
OPTION PLAN.
EXECUTIVE COMPENSATION
GENERAL. The following table sets forth the total annual compensation
paid or accrued by the Company and its subsidiaries to or for the
account of (i) the President (the chief executive officer) of the
Company and (ii) for the Company's most highly compensated executive
officers other than the chief executive officer who were serving as
executive officers at December 31, 1997 and with respect each of whom
such compensation exceeded $100,000.
5
<PAGE> 8
<TABLE>
SUMMARY COMPENSATION TABLE
--------------------------
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------- ------
SECURITIES
UNDERLYING
NAME AND OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY SARS (#) COMP.($)**
------------------ ---- ------ -------- ----------
<S> <C> <C> <C> <C>
Sheldon A. Gold, 1997 $160,000 * $15,532
President and Chief 1996 150,000 50,000/0 --
Executive Officer 1995 140,000 * --
Marvin D. Kantor, 1997 140,000 * 65,028
Chairman of the 1996 130,000 * 75,866
Board 1995 127,404 * 65,028
</TABLE>
----------
* Not applicable
**Includes life insurance premiums paid by the Company for each of
named persons (see Form 10-K Note 11). For the fiscal year ended
December 31, 1997, the amounts paid by the Company for each of the
named is:
LIFE
NAME INSURANCE
---- ---------
Sheldon A. Gold $15,532
Marvin D. Kantor $65,028
6
<PAGE> 9
OPTIONS. The following table sets forth information respecting the
grant by the Company of options to purchase shares of its Common Stock
and other information related to options granted by the Company:
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------
INDIVIDUAL GRANTS
-----------------
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE VALUE ($)
- ---- ------------ ------------ -------- ---- ----------
<S> <C> <C> <C> <C> <C>
None
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FY-END-#SHRS AT FY END-$
SHARES --------------- -------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
----------- -------- --------------- -------------
<S> <C> <C> <C> <C>
Sheldon A. Gold 0 0 50,000/0 $ 62,500/0
</TABLE>
- ----------
All options held by Mr. Sheldon A. Gold were exercisable at December 31,1997.
All were "in-the-money". American Stock Exchange reported quotations for the
Common Stock of the Company on December 31, 1997, are: high, $1.25; low,
$1.1875; and close, $1.25; such prices on February 28, 1998 are: high, $1.25;
low, $1.25; and close, $1.25. The exercise price of each of the options of Mr.
Sheldon A. Gold is $.875 and the options expire on May 23, 2001.
7
<PAGE> 10
SPLIT-DOLLAR INSURANCE POLICIES. The following table sets forth
information as of December 31, 1997, concerning split-dollar insurance
policies on the lives of the named persons in the Summary Compensation
Table (1):
<TABLE>
<CAPTION>
INITIAL FACE INSURANCE PREMIUMS
AMOUNT OF ADVANCED IN EXCESS OF
NAME OF INSURED (2) POLICY ISSUED CASH VALUE (5)
------------------- ------ ------ --------------
<S> <C> <C> <C>
Marvin D. Kantor $1,500,000(3) 06/08/92 $421,000
Sheldon A. Gold 375,000(4) 09/11/86 67,000
</TABLE>
The Company, pursuant to split-dollar agreements, has purchased life
insurance on the lives of certain officers (including named persons in
the Summary Compensation Table) and key employees on a "split-dollar"
basis. The program is designed so that advances of premium payments
(the "advances") the Company makes on behalf of each insured are
collateralized by assignment of the related life insurance policy
(i.e., the accumulated policy cash value and the policy death benefit).
The insured person owns the policy and, with the consent of the
Company, is permitted to borrow from the cash surrender value of the
policy.
Under the "split-dollar" agreements, the Company upon death or other
separation from service of the insured receives the return of the
advances from the death benefits or cash surrender value, if any , of
the policy, as the case may be.
The Company has represented its intention and obligation to maintain
the policies. The individuals have pledged a portion of their common
stock ownership in the Company as collateral for the payment of future
premiums on the split dollar policies.
----------
(1) See footnote to the Summary Compensation Table for information
respecting Company premium payments for the fiscal year ended
December 31, 1997.
(2) The beneficiaries of all policies are the spouses of the
insured.
(3) The policy is an increasing death benefit policy (through use
of dividends) and has replaced a previous universal life
policy.
(4) The policy is of the universal life nature, whereby the cash
value is added to the face value at all times, including
death.
(5) Represents monies advanced by the Company in excess of cash
value available in the policies.
8
<PAGE> 11
Compensation of Directors. Non-employee Directors of the Company
receive $650 for each meeting of the Board of Directors of the Company
which they attend and such Directors are also reimbursed for any
expenses incurred. In addition, beginning January 1, 1995 all
non-employee directors are compensated $500 per month for serving as
director of the Company. No additional amounts are paid for committee
participation.
In addition, Non-Employee Directors have been granted stock options
under the Plan (see "Item 11. Executive Compensation - Stock Option
Plan") to purchase shares of Common Stock of the Company. Non-Employee
Directors are defined in the Plan as Directors of the Company who are
not also employees of the Company, who have served as Directors for
twelve consecutive full months, and who at the end of such period are
continuing to serve as Directors. Dr. Gerald M. Penn was elected as a
director in February, 1995 and was granted options on February 1, 1995
to purchase up to an aggregate of 10,000 shares, subject to
anti-dilution provisions, at a price of $.375 per share. The Plan also
provides for a grant of additional stock options to each Director who
received an option ("initial option") as hereinbefore described, each
of such additional options to provide for the purchase of an aggregate
maximum of 1,000 shares of Common Stock of the Company at a price per
share equal to the fair market value of the Common Stock of the Company
on the date of grant, subject to anti-dilution provisions, one of such
additional options to be granted on each successive anniversary of the
date of grant of the initial option, provided that such Director
continues on such anniversary to be a Non-Employee Director. Pursuant
to this provision of the Plan, Mr. Levine received on July 11, 1993,
options to purchase an aggregate of 1,000 shares of the Common Stock of
the Company at a price of $1.0625 per share, subject to anti-dilution
provisions; received on July 11, 1994, options to purchase an aggregate
of 1,000 shares of the Common Stock of the Company at a price of $.6875
per share, subject to anti-dilution provisions; he received on July 11,
1995, options to purchase an aggregate of 1,000 shares of the Common
Stock of the Company at a price of $.4375 per share, subject to
anti-dilution provisions; he received July 11, 1996, options to
purchase an aggregate of 1,000 shares of common stock of the Company at
a price of $.875 per share, subject to anti-dilution provisions and he
received on July 11, 1997, options to purchase an aggregate of 1,000
shares of common stock of the Company at a price of $1.1875 per share
subject to anti-dilution provisions. Dr. Penn received on February 1,
1996, options to purchase an aggregate of 1,000 shares of common stock
of the Company at a price of $.375 per share, subject to anti-dilution
provisions and he received on February 1, 1997, options to purchase an
aggregate of 1,000 shares of common stock of the Company at a price of
$1.435, subject to anti-dilution provisions. Each of the stock options
referred to in this paragraph are exercisable commencing on the date of
grant and ending on the fifth anniversary of such date. None of the
options referred to in this paragraph have been exercised.
9
<PAGE> 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below presents as of February 28, 1998, certain information
(1) with respect to any person (including any "group" as the term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) who is known to the Company to be the beneficial owner of more
than five percent of any class of the Company's voting securities and
(2) as to each class of equity securities of the Company or any of its
parents or subsidiaries, other than directors' qualifying shares,
beneficially owned by each director and executive officer of the
Company and by all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE AND PERCENT
TITLE OF CLASS NAME BENEFICIAL OWNERSHIP (1) OF CLASS (2)
- -------------- ---- ------------------------ ------------
<S> <C> <C> <C>
Common Stock Marvin D. Kantor 871,420 13.79%
Two Nationwide Plaza
Suite 760
Columbus, Ohio 43215
Common Stock Harold T. Kantor 247,475 (3) 3.92%
Common Stock Sheldon A. Gold 106,375 (4) 1.68%
Common Stock Reed A. Martin 40,351 (5) --
Common Stock Paul H. Levine 5,500 (6) --
Common Stock Dr. Gerald M. Penn 16,000 (7) --
Common Stock Clemente Del Ponte 655,200 (8) 10.37%
Dollard House
Wellington Quay
Dublin 2 Ireland
Common Stock All Directors and 1,942,321 (9) 30.74%
Executive Officers
As a Group
(6 persons)
Common Stock Gerald F. Schroer 389,800 6.17%
25109 Detroit Road
Westlake, Ohio 44145
</TABLE>
----------
(1) The individuals named have direct ownership and sole voting
and investment power, except as otherwise indicated.
(2) Percent of class shown net of treasury shares (see (9) below).
Except otherwise indicated, shares owned by the individuals
named represent less than 1% of the outstanding shares of
Common Stock of the Company.
10
----------
(Footnotes continued on following page)
<PAGE> 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MHK Corp., of which Marvin D. Kantor and Harold T. Kantor are the sole
shareholders, has incurred indebtedness to the Company. The largest
amount of such indebtedness outstanding in 1997 was $799,718; 1996 was
$809,435; 1995 was $773,638;. On February 28, 1998, the amount of such
indebtedness, exclusive of interest, outstanding was $729,158. Interest
at 9% totaling $68,328 and $61,823 has been charged, through December
31, 1997 and 1996 respectively. (See Form 10K Note 11B.)
Effective January 1, 1995, the Company sold the operating assets of a
subsidiary's retail liquor store and two lounges in Florida to MHK
Corp. The purchase price was equivalent to the net book value of the
net assets which totaled $574,949 as adjusted for certain 1995
transactions. A promissory note bears interest at 9%. Additional
advances were made in 1995 and 1996. (See Form 10K Note 11B)
The President and CEO of the Company has incurred indebtedness to the
Company. The largest amount of such indebtedness outstanding in 1997
was $243,412; 1996 was $243,412; 1995 was $204,975;. On February 28,
1998, the amount of such indebtedness was $204,300. No interest is paid
or charged on such indebtedness. The President/CEO has granted
collateral to the Company to enhance the realization of the
indebtedness, which is evidenced by a promissory note providing for
minimum annual payments of $25,000. (See Form 10K Note 11C).
Pursuant to a ten-year lease entered into in 1985, the Company leased a
warehouse facility from the Kantors. Effective May 1, 1992, a renewal
option was exercised on the leased warehouse facility extending its
term to 2005. During the extension, the annual rent of $66,000
continued to be payable by the Company; however, approximately $24,000
of the amount due annually applied against the amount due the Company
from MHK Corp. The Company also collected annually approximately
$18,500, through 1995, from a sub-tenant of part of the premises. In
May 1992, the Company received a second mortgage on the warehouse
facility as collateral for the amount remaining due from MHK Corp. In
January 1996, the officers sold a portion of the property and
terminated the lease with the Company. The remaining parcel is pledged
as additional collateral toward a note due the Company from the sale of
liquor operations (see Form 10K Note 11B).
Certain executive officers and directors of the Company were limited
partners owning less than an aggregate 10% interest in Wendt-Bristol
Diagnostics Company L.P. A subsidiary of W-B is the general partner of
Wendt-Bristol Diagnostics Company L.P. which owns and operates an
outpatient medical diagnostic imaging center in Columbus, Ohio.
See also Form 10K Note 11 of the Notes to Consolidated Financial
Statements.
----------
(Footnotes continued form previous Page)
(3) Includes 25,000 shares which Mr. Kantor may acquire by
exercising options granted to him under the Company's Stock
Option Plan.
(4) Includes 13,750 shares of Common Stock which Mr. Gold may
acquire by exercising Warrants and 50,000 shares of common
stock which Mr. Gold may acquire by exercising options granted
to him under the Company's Stock Option Plan.
----------
(Footnotes continued on following page)
11
<PAGE> 14
----------
(Footnotes continued from previous page)
(5) Includes 1,100 shares of Common Stock which Mr. Martin may
acquire by exercising Warrants and 35,000 shares of Common
Stock which he may acquire by exercising options granted to
him under the Company's Stock Option Plan.
(6) Includes 5,000 shares of Common Stock which Mr. Levine may
acquire by exercising options granted under the Company's
Stock Option Plan.
(7) Includes 13,000 shares of Common Stock which Dr. Penn may
acquire by exercising options granted under the Company's
Stock Option Plan.
(8) All of the shares are in the record name of McBridge Advisory,
Ltd. of which Mr. Del Ponte is the sole owner of said company.
(9) Includes 14,850 shares of Common Stock which may be acquired
by exercise of Warrants and 128,000 shares which may be
acquired by exercise of options granted under the Company's
Stock Option Plan.
----------
12
<PAGE> 15
PERFORMANCE GRAPHS
This chart graphs the Company's performance in the form of cumulative total
return to shareholders from December 31, 1992 until December 31, 1997 in
comparison to Standard and Poor's 500 and Standard and Poor's 500 Healthcare
Composite index.
TOTAL SHAREHOLDER RETURNS
-------------------------
(DIVIDENDS REINVESTED)
<TABLE>
<CAPTION>
ANNUAL RETURNS PERCENTAGE
YEARS ENDING
COMPANY/INDEX DEC93 DEC94 DEC95 DEC96 DEC97
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
WENDT-BRISTOL HEALTH SVC CP -25.00 -41.73 28.60 166.90 -16.67
HEALTH CARE-500 -8.40 13.12 57.85 20.75 43.72
S&P 500 INDEX 10.08 1.32 37.58 22.96 33.36
</TABLE>
<TABLE>
<CAPTION>
INDEXED RETURNS
BASE YEARS ENDING
PERIOD
COMPANY/INDEX DEC92 DEC93 DEC94 DEC95 DEC96 DEC97
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WENDT-BRISTOL HEALTH SVC CP 100 75.00 43.70 56.20 150.00 125.00
HEALTH CARE-500 100 91.60 103.61 163.55 197.49 283.82
S&P 500 INDEX 100 110.08 111.53 153.45 188.68 251.63
</TABLE>
13
<PAGE> 16
SELECTION OF AUDITORS
The firm of Hausser + Taylor has been the independent auditors since
1992 based upon the recommendation of the Audit Committee. A representative of
Hausser + Taylor will be present at the Annual Meeting of Stockholders, will
have an opportunity to make a statement, if he or she desires to do so, and will
be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any proposals of shareholders which are intended to be presented at the
next annual meeting of shareholders must be received by the Company at its
principal executive offices by January 15, 1999. Such proposals may be included
in next year's proxy statement if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
OTHER MATTERS
The Board knows of no other matters to be presented at the Annual
Meeting. If any other matter is properly brought before the Annual Meeting, it
is the intention of the persons named in the proxy to vote in their discretion
upon such matters in accordance with their judgement.
You are urged to sign, date and return the enclosed proxy in the
envelope provided. No postage is required if the envelope is mailed from within
the United States. If you subsequently decide to attend the Annual Meeting and
wish to vote your shares in person, you may do so. Your cooperation in giving
this matter your prompt attention is appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
Sandra W. Weber, Secretary
Columbus, Ohio
June 29, 1998
14
<PAGE> 17
EXHIBIT A
<PAGE> 18
SECOND AMENDMENT TO
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION EMPLOYEE
STOCK OPTION PLAN
The Wendt-Bristol Health Services Corporation ("Wendt-Bristol"), a
Delaware Corporation, hereby amends The Wendt-Bristol Health Services
Corporation Stock Option Plan (the "Plan") (as amended effective July 25, 1991),
as provided herein.
1. The Plan currently provides that the aggregate number of shares
which may be the subject of options granted pursuant to the Plan is 250,000,
which amount Wendt-Bristol desires to increase to 500,000. Therefore, Paragraph
2 of the Plan is hereby deleted in its entirety and the following is adopted in
its place and stead:
"2. Amount and Source of Stock. The aggregate number and class
of shares which may be the subject of options granted pursuant
to the Plan are 500,000 shares of Common Stock, par value $.01
per share, of the Company (the "Shares"), subject to
adjustment as provided in paragraph 10. Such shares may be
reserved or made available from the Company's authorized and
unissued Shares or from Shares reacquired and held in the
Company's treasury. In the event that any option granted
hereunder shall terminate prior to its exercise in full, for
any reason, including, without limitation, an option exchange
pursuant to paragraph 13 thereof, then the Shares subject to
the option which have not been acquired but the holder of the
option shall be added to the Shares otherwise available for
issuance pursuant to the exercise of options under the Plan."
2. Paragraph 12 of the Plan is hereby amended by deleting subparagraph
(c) of Paragraph 12 in its entirety and the following is adopted in its place
and stead:
"(c) There is hereby granted to Paul H. Levine, a
non-incentive stock option upon the same terms and conditions
as those provided with respect to the options contemplated by
subparagraph 12(b) as though repeated here ipsissimis verbis,
except that the date of the Grant shall be August 1, 1998, and
the exercise price shall be 100% of the fair market value per
share of the shares on such date."
3. Paragraph 12 of the Plan is hereby amended by deleting subparagraph
(d) of Paragraph 12 in its entirety and the following is adopted in its place
and stead:
"(d) The Board or, if so designated, the Committee, shall
grant additional non-incentive stock options annually to each
of the Directors of the Company who is entitled to receive or
has received an option (the "initial option") pursuant to the
provisions of either subparagraph 12(b) or, in the case of
Paul H. Levine, 12(c) provided that such Director continues to
be a Director of the Company on the relevant Date of Grant
hereinafter referred to. Each of such additional non-incentive
stock options shall be granted upon the same terms and
conditions as those provided with respect to the options
contemplated by subparagraph 12(b) as though repeated here
ipsissimis verbis, except that the Date of the Grant of the
initial option to such Director and the number of Shares
subject to each of such additional stock options shall be
1,000, except upon the fifth anniversary of the Date of Grant
of the initial option, and each fifth anniversary date
thereafter, the number of Shares subject to each of such
additional stock options shall be 10,000.
<PAGE> 19
The foregoing shall become effective as of the day of June, 1998,
provided that the shareholders of Wendt-Bristol approve this Second Amendment at
its 1998 Annual Meeting of Stockholders.
NOW, THEREFORE, this Second Amendment to the Plan is adopted by order
of the Board of Directors this day of June, 1998.
THE WENDT-BRISTOL HEALTH SERVICES
CORPORATION
By:
---------------------------------------
Marvin D. Kantor, Chairman of the Board
<PAGE> 20
PROXY
THE WENDT-BRISTOL HEALTH SERVICES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the 1997 Annual Report on
Form 10-K and the Notice of Annual Meeting of Stockholders of The Wendt-Bristol
Health Services Corporation (the "Company") to be held at Suite 760, Two
Nationwide Plaza, 280 North High Street, Columbus, Ohio 43215 on July 30, 1998
beginning at 11:00 a.m., Columbus time, and the Proxy Statement in connection
therewith; and (2) appoints Marvin D. Kantor and Sheldon A. Gold, and each of
them, his proxies with full power of substitution for and in the name, place and
stead of the undersigned, to vote upon and act with respect to all of the shares
of Common Stock of the Company standing in the name of the undersigned, or with
respect to which the undersigned is entitled to vote and act, at the meeting and
at any adjournment thereof.
<TABLE>
<S> <C> <C>
The undersigned directs that his proxy be voted as
follows:
1. ELECTION OF DIRECTORS:
[ ] AUTHORITY to vote for all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all the nominees listed
(except as marked to the contrary below) below.
NOMINEES: Marvin D. Kantor, Harold T. Kantor, Sheldon A. Gold, Reed A. Martin, Paul H. Levine, Gerald M. Penn,
Clemente Del Ponte, and David E. Fernie
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the line
provided below.)
----------------------------------------------------------------------------------------------------------------
2. APPROVAL OF THE SECOND AMENDMENT TO THE WENDT-BRISTOL HEALTH SERVICES CORPORATION EMPLOYEE STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(Continued and to be signed on reverse side)
(Continued from other side)
<TABLE>
<S> <C> <C>
3. IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
This proxy will be voted as specified above. If no specification is made, this proxy will be voted FOR the
election of Director nominees named in item 1 above and FOR approval of the amendment in Item 2. above.
</TABLE>
The undersigned hereby revokes any proxy or proxies heretofore given to vote
or act with respect to the Common Stock of the Company and hereby ratifies and
confirms all that the proxies, their substitutes, or any of them, may lawfully
do by virtue hereof.
If more than one of the proxies named shall be present in person or by
substitute at the meeting or at any adjournment thereof, both of the proxies so
present and voting, either in person or by substitute, shall together exercise
all of the powers hereby given.
Please date, sign, and mail this proxy in the enclosed envelope. No postage
is required.
Dated: __________________________ ,
199__
-----------------------------
Signature of Stockholder
-----------------------------
Signature of Stockholder
Please date this proxy and
sign your name exactly as it
appears at the left. Where
there is more than one owner,
each should sign. When
signing as an attorney,
administrator, executor,
guardian or agent, please add
your title as such. If
executed by a corporation,
the proxy should be signed by
a duly authorized officer.
