<PAGE>
PREC 14A/A
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SECTION 14(A) INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a party other than the Registrant /X/
Check the appropriate box:
/X/ Preliminary proxy statement
/ / Definitive proxy statement
CHOICES ENTERTAINMENT CORPORATION
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
COMMITTEE FOR CHANGE AT CHOICES
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to the Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(1).
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
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/ / 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 No.: PREC 14A/A
-----------------------------------------------------------------------
(3) Filing party: Committee for Change at Choices
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(4) Date filed: February 11, 1998
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
------------------------
NOTICE OF SOLICITATION OF CONSENTS
---------------------
TO OUR FELLOW STOCKHOLDERS:
This solicitation of the stockholders of the common and preferred stock of
Choices Entertainment Corporation (the "Company") is being made by a group of
stockholders organized under the name Committee for Change at Choices (the
"Committee"). The purpose of this solicitation is to acquire sufficient written
consents in favor of the following proposed stockholder actions:
(1) To remove Ronald Martignoni and Fred Portner (the "Named Directors") as
directors of the Company; and
(2) To elect a slate of new directors consisting of Thomas Renna and George D.
Pursglove.
This solicitation of the stockholders of the Company (the "Stockholders") is
made by the persons and for the purposes stated herein. This Solicitation
Statement should be read carefully. This Solicitation Statement is being
distributed to persons or entities known by the Committee to be Stockholders.
The record date for the purpose of this solicitation is the close of business on
the date of delivery to the Company of the first signed written consent (the
"Record Date"). The period within which Stockholders may sign and submit written
consents to the actions proposed herein shall commence on the date of this
Solicitation Statement and continue for a period of sixty (60) days (the
"Solicitation Period").
Committee for Change at Choices
Thomas Renna, Co-Chairman
George D. Pursglove Co-Chairman
Coral Springs, Florida
February , 1998
- - - --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN THE ATTACHED WRITTEN CONSENT AND MAIL IT PROMPTLY
IN THE ENCLOSED ENVELOPE TO ASSURE REPRESENTATION OF YOUR SHARES. ANY
STOCKHOLDER GIVING A WRITTEN CONSENT MAY NOT REVOKE IT. ALL WRITTEN CONSENTS
SHALL EXPIRE UPON THE LAPSE OF THE SOLICITATION PERIOD.
- - - --------------------------------------------------------------------------------
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
SOLICITATION STATEMENT
INFORMATION CONCERNING SOLICITATION AND WRITTEN CONSENTS
GENERAL
The enclosed form of written consent is solicited by the Committee for
Change at Choices (the "Committee") to take certain action as more fully set
forth herein. The Committee's address is 10770 Wiles Road, Coral Springs,
Florida 33076-4681. Copies of these solicitation materials were first mailed to
certain Stockholders on or about February , 1998.
RECORD DATE; OUTSTANDING SHARES; QUORUM
Only persons believed by the Committee to be holders of shares of the
Company's common stock, par value $.01 (the "Common Stock") and Series C
Preferred Stock, par value $.01 (the "Preferred Stock") (together the Common
Stock and Preferred Stock are referred to herein as the "Voting Stock"), will be
provided the Solicitation Statement. Only written consents received at or prior
to the close of business on the date of delivery to the Company of the first
signed written consent (the "Record Date") have been provided these solicitation
materials and are entitled to execute the form of written consent attached
hereto (the "Written Consent"). As of November 12, 1997 22,004,395 shares of
Common Stock and 109 shares of Preferred Stock were issued and outstanding. Each
share of Preferred stock is entitled to vote the equivalent of 40,000 shares of
Common Stock. The Common and Preferred Stock vote as a single class and
therefore represent total votes of 26,364,395. There are no other voting
securities of the Company outstanding. In accordance with Delaware General
Corporation Law ("DGCL") and the Company's Bylaws (as amended), the written
consents of a majority of all shares outstanding and entitled to vote for the
election of directors of the Company are required to remove directors of the
Company. The election of directors of the Company by written consent requires
written consents having not less than the minimum number of votes that would be
necessary to elect directors at a meeting at which all shares entitled to vote
thereon were present and voted. A quorum is a majority of all Stockholders
represented in person or by proxy at a meeting. The Committee believes that the
written consent of a majority of all Stockholders of record is sufficient to
elect the slate of new directors set forth below.
REVOCABILITY OF WRITTEN CONSENT
Any stockholder giving a written consent may not revoke it during the
pendency of the Solicitation Period. The written consent as tendered will either
be in the majority and therefore effective in taking the proposed action or it
will expire by its terms at the end of the Solicitation Period if an
insufficient number of written consents are obtained. The Committee will notify
Stockholders, within forty-five (45) days, in writing, of the success of the
solicitation or the lapse of the Solicitation Period.
VOTING AND SOLICITATION
When the enclosed form of consent is properly executed and returned, the
shares of the Voting Stock it represents will be counted IN FAVOR of (i)
removing the Named Directors of the Company, and (ii) electing the slate of
directors as set forth in this Solicitation Statement. Stockholders will be
entitled to one vote for each share of Common Stock and 40,000 votes for each
share of Preferred Stock held on the Record Date.
2
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMPANY
The following table sets forth certain information regarding ownership of
the Company's Common Stock, as of April 15, 1997, as contained in a Form 10KSB,
as amended, filed by the Company with the SEC on or about April 29, 1997, by:
(i) each person who is known by the Company to own beneficially more than five
percent (5%) of the combined number of votes attributable to all shares of
Common and Preferred Stock outstanding on that date, (ii) each director (Messrs.
Sink, Martignoni and Portner), (iii) the Chief Executive Officer (Ronald W.
Martignoni) and (iv) all executive officers and directors as a group. The
Committee assumes no responsibility for the accuracy of the information
contained in the table below at the date of this Solicitation Statement.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED,
INCLUDING PERCENTAGE(1)
-------------------------
NAME AND ADDRESS
- - - -------------------------------------------------------------------
<S> <C> <C>
Attel & Cie, S.A................................................... 2,601,112 (11.8%)
Via Nassa 58
6901 Lugano, Switzerland
John Maioriello.................................................... 1,826,000(2) (7.8%)
3416 The Strand
Manhattan Beach, CA 90266
John A. Boylan..................................................... 1,442,000(3) (6.2%)
509 Kinsale Road
Timonium, MD 21093
Ronald W. Martignoni............................................... 1,425,000(4) (6.1%)
6 Chadwick Court
Voorhees, NJ 08043
James D. Sink...................................................... 1,041,650 (4.7%)
800 Federal Boulevard
Carteret, NJ 07008
Fred E. Portner.................................................... 190,000(5) *
121 Montgomery Place
Alexandria, VA 22314
All executive officers and directors as a Group (four persons)..... 2,931,650 (11.5%)
</TABLE>
- - - ------------------------
* Less than 1%.
(1) Beneficial Ownership is determined in accordance with the rules of the
Securities Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock or Preferred Stock
subject to options or warrants currently exercisable or exercisable within
60 days are deemed outstanding for purposes of computing the percentage
ownership of the person holding such option or warrant but are not deemed
outstanding for purposes of computing the percentage ownership of any other
person. Except as may be indicated otherwise, and subject to community
property laws where applicable, the persons named in the table above have
sole voting and
3
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
investment power with respect to all shares of Common and Preferred Stock
shown as beneficially owned by them.
(2) Includes 1,500,000 shares of Common Stock issuable upon exercise of
fully-vested nonqualified stock options.
(3) Includes 1,000,000 shares of Common Stock issuable upon exercise of
fully-vested 1991 Management Options and 375,000 shares of Common Stock
issuable upon exercise of fully-vested 1994 Management Options.
(4) Includes 1,050,000 shares of Common Stock issuable upon exercise of
fully-vested 1991 Management Options and 375,000 shares of Common Stock
issuable upon exercise of fully-vested 1994 Management Options.
(5) Represents 100,000 shares of Common Stock issuable upon exercise of
fully-vested nonqualified stock options and 90,000 shares of Common Stock
issuable upon exercise of fully-vested 1994 Management Options.
SECURITY OWNERSHIP OF THE COMMITTEE
The following table sets forth certain information regarding the ownership
of shares of the Voting Stock of the Committee as of February 9, 1998.
<TABLE>
<CAPTION>
NAME AMOUNT
AND ADDRESS(1) AND NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
OWNER OWNERSHIP(2) OF CLASS(3)
- - - --------------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Thomas Renna (co-Chair)........................................ 165,500(4) *
George Pursglove (co-Chair)....................................
Cary Palulis................................................... 268,000(5) 1.0%
Harold Hamburg................................................. 490,000(6) 1.8
William M. Goatley............................................. 1,073,500(7) 4.4
Mark and Barbara Raifman....................................... 1,154,900(8) 4.6
Carl Shaifer................................................... 2,037,000(9) 8.2
Frank H. Harvey................................................ 401,000(10) 1.6
P.L. Anderson, Jr.............................................. 405,000(11) 1.6
Gail A. Ramey.................................................. 644,000(12) 2.5
Kenneth Hiniker................................................ 1,064,500(13) 4.0
Leon Barnard................................................... 108,300 *
Alberta Tabony................................................. 44,000 *
Margaret Stone................................................. 134,000 *
Franklin A. Stone.............................................. 399,450 1.5
Maurice and Susan Matson....................................... 250,000 *
Gary Welchman.................................................. 193,000 *
Max Scheuerer.................................................. 362,000 1.4
David Beckman.................................................. 245,100 *
Coleman Goldberg............................................... 77,200 *
D.J. Stone..................................................... 111,250 *
</TABLE>
4
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
<TABLE>
<CAPTION>
NAME AMOUNT
AND ADDRESS(1) AND NATURE OF
OF BENEFICIAL BENEFICIAL PERCENT
OWNER OWNERSHIP(2) OF CLASS(3)
- - - --------------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Philip Mumford................................................. 159,872 *
Jerome Neidfelt................................................ 400,000 1.5
Beverly L. Fader............................................... 202,000 *
Gerald Bing.................................................... 80,000 *
Wendell and Grazina Standridge................................. 90,000 *
Fred and Sandy Borke........................................... 39,500 *
Robert E. Lapides.............................................. 84,200 *
Peter Renna.................................................... 20,000 *
Gail Raifman................................................... 166,800 *
Thomas Povinelli and Anna Saras................................ 106,123 *
Al Riccardi.................................................... 655,170 2.5
Madeline Esposito.............................................. 57,534 *
Kenneth Stilger................................................ 506,500 1.9
George Cannan.................................................. 350,000 1.3
Anna Tolson.................................................... 20,000 *
Carmen Malagisi................................................ 41,000 *
George Cannan, Jr.............................................. 85,000 *
Carlos Diaz.................................................... 11,000 *
Nancy Renna.................................................... 6,000 *
R. Neil and Gale F. Lively..................................... 47,500 *
Kathy Travis................................................... 1,833 *
Michael Desaye................................................. 86,000 *
Stacy Cannan................................................... 54,100 *
Caroline P. Costante........................................... 33,287 *
Rudy and Carlene Kreutzjans.................................... 99,000 *
Joseph and Fullenkamp.......................................... 40,000 *
H. Bryan Lewis................................................. 60,000 *
Jonathan Votel................................................. 70,000 *
Larry Feeney................................................... 200,000 *
---------------- -----
Totals......................................................... 13,756,119 51.25%
---------------- -----
---------------- -----
</TABLE>
- - - ------------------------
* Represents beneficial ownership of less than 1% of the outstanding
shares of the Voting Stock.
(1) Unless otherwise indicated, the address of the beneficial owner is c/o
the Committee, 10770 Wiles Road, Coral Springs, Florida 33076-4681.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Voting stock subject to stock
options and warrants currently exercisable or exercisable within 60 days are
deemed to be outstanding for calculating the percentage ownership of the person
holding such options and the percentage ownership of any group of which the
holder is a member, but are not deemed outstanding for calculating the
percentage of any other person. Except as indicated by footnote, and except for
voting or
5
<PAGE>
COMMITTEE FOR CHANGE AT CHOICES
10770 WILES ROAD
CORAL SPRINGS, FLORIDA 33076-4681
TELEPHONE: (954) 752-4289
investment power held jointly with a person's spouse, the persons named in the
table have sole voting and investment power with respect to all shares of
capital stock shown beneficially owned by them.
(3) Percentage is calculated based upon 26,364,395 shares of Voting Stock
outstanding on November 12, 1997.
(4) Includes warrants to acquire 1.8 shares of Series C Preferred Stock
("Preferred Stock").
(5) Includes 3.2 shares of Preferred Stock and warrants to acquire .3
shares of Preferred Stock.
(6) Includes 9.6 shares of Preferred Stock and warrants to acquire .9
shares of Preferred Stock.
(7) Includes 24 shares of Preferred Stock and warrants to acquire 2.25
shares of Preferred Stock.
(8) Includes 16 shares of Preferred Stock and warrants to acquire 1.5
shares of Preferred Stock.
(9) Includes 36.8 shares of Preferred Stock and warrants to acquire 3.45
shares of Preferred Stock.
(10) Includes 6.4 shares of Preferred Stock and warrants to acquire .6
shares of Preferred Stock.
(11) Includes 4.8 shares of Preferred Stock and warrants to acquire .45 half
shares of Preferred Stock.
(12) Includes 6.4 shares of Preferred Stock and warrants to acquire .6
shares of Preferred Stock.
6
<PAGE>
REMOVAL AND ELECTION OF DIRECTORS
The Company's Articles of Incorporation and Bylaws provide that directors
shall serve for a period of one year(s) and until the election and qualification
of their successors. Director's currently elected at the last Stockholders
Meeting have held their positions for more than one year. Newly elected
directors will each serve for a term of one year and until the election and
qualification of their successors, and it is intended that properly executed
consents will be counted FOR the nominees named below. If any nominee is unable
or declines to serve as a director at the effective time of the actions proposed
to be taken herein, the remaining directors may appoint a person to fill the
vacancy or leave the vacancy unfilled at their discretion but in no event does
the written consent confer the ability or authority to any individuals to
exercise any discretion to vote for any substitute proposed by the Board of
Directors or otherwise. It is not anticipated that any nominee listed below will
be unable or will decline to serve as a director.
NOMINEES FOR DIRECTOR
The names of the nominees, their ages, and certain biographical information
is set forth below.
THOMAS RENNA, 33, is employed by Consolidated Merchandising Services, Inc.
("CMSI") as a Vice President of Sales and has occupied that position since
February 1, 1998. CMSI is a company which provides "in-store" merchandising and
product assembly and sales services primarily on behalf of branded product
manufacturers or retail companies. CMSI is a company controlled by George D.
Pursglove. Prior to that, Mr. Renna was Vice President of Sales of SSNN, Inc.
and held that position since October 28, 1997. SSNN, Inc. is a start-up company
providing an internet website which offers company and stock information on
small and micro-cap companies. Mr. Renna was employed as a Vice President,
Investments at Texas Capital Securities from February 1995 to October 1997. From
February 1992 to January 1995, Mr. Renna was a Vice President of Investments at
Berkeley Securities.
GEORGE D. PURSGLOVE, 47, has served as the Chairman, President and Chief
Executive Officer of Consolidated Merchandising Services, Inc. since the
Company's incorporation in January 1997. Prior to that, Mr. Pursglove was
President of Consolidated Business Group, Inc., a business management company
offering consulting services for closely held consumer product companies. From
March 1993 through November of 1995, Mr. Pursglove served in the position of
Director of Merchandising for Office Depot's contract/commercial division and as
Senior Divisional Merchandise Manager. From April of 1992 through March of 1993,
Mr. Pursglove held the position of Divisional Merchandise Manager for the Price
Company. From August of 1991 through April of 1992, Mr. Pursglove was a business
consultant functioning in the role of merchandising/marketing liaison reporting
directly to the Presidents/CEO or owner. From August of 1988 through August of
1991, Mr. Pursglove was Senior Vice President General Merchandise Manager and
co-founder of HQ Office Supply Warehouse, Inc. From August of 1983 through
August of 1988, Mr. Pursglove held the position of merchandise manager and was
one of the original group of key management personnel who were instrumental in
the start-up of Home Club (now called Home Base), a chain of home improvement
warehouse stores. Prior to 1983, Mr. Pursglove held various positions of
increasing responsibilities with NAVRESO, FedMart and the Two Guys
organizations. Mr. Pursglove serves as a company director and adviser for
Achiever Shredders and Office Product Company, Inc. and Sims Communications,
Inc.
CERTAIN INTERESTS OF THE DIRECTOR NOMINEES
If sufficient written consents are obtained by the Committee then the
director nominees will become members of and may control the Board of Directors
of the Company. Although the director nominees have represented that they will
serve the Company without compensation there is no assurance that once in
control of the Board of Directors they will not vote to grant themselves stock
options, restricted stock, director fees and other forms of remuneration.
Accordingly, it may be considered by Stockholders that the director nominees
have an interest in the results of this solicitation of written consents.
6
<PAGE>
VOTE REQUIRED
The Named Directors will be removed and the director nominees will be
elected when and if written consents representing a majority of all shares of
Voting Stock issued and outstanding are received indicating consent to removal
of the Named Directors and election of the director nominees. Shares of Voting
Stock held by persons who abstain from granting written consent will not be
counted in the results of this solicitation.
BOARD MEETINGS AND COMMITTEES
Immediately following the receipt of sufficient written consents to remove
the Named Directors and elect the director nominees, the newly elected directors
intend to hold a meeting at which they will validate and confirm the results of
the written consent solicitation and conduct such further business as is
required to effect the objectives of the Committee as set forth herein.
COMPENSATION OF DIRECTORS
The newly elected directors intend to serve the Company without compensation
until such time as the objectives of the Committee as set forth herein are
achieved. The newly elected directors may be reimbursed for reasonable travel
and out-of-pocket expenses incurred in connection with their activities on
behalf of the Company.
REASONS FOR THIS EXTRAORDINARY STOCKHOLDER ACTION
The Committee for Change at Choices is seeking removal and replacement of
certain members of the Board of Directors based on their concern that if Messrs.
Martignoni and Portner remain in control of the Company, then all of the
remaining assets of the Company will be dissipated and current stockholders will
have nothing left of value represented by their shares of Voting Stock in the
Company.
According to section 141(k) of the DGCL, any director or all of them may be
removed from office, with or without cause. Therefore, the Committee and the
Stockholders are not required, as a matter of state law, to specify the reasons
why they seek to remove the Named Directors.
The Committee would, however, like its fellow Stockholders to consider the
following:
- Since inception, the Company has not operated profitably and has
accumulated a deficit of $21,622,376;
- All of the Company's assets have been sold in a transaction
approved by the Stockholders pursuant to a proxy statement which did not
contain a fairness opinion by an objective third party that the
transaction was fair to the Stockholders; and, the Committee believes
that the transaction was not covered by such an opinion.
- The proceeds from the sale of the assets of the Company has been
used by current management primarily to pay notes and accounts payable,
accrued expenses, accrued salaries, accrued professional fees, and the
costs of the transaction which they have incurred, in the opinion of the
Committee, to protect their own entrenched position;
- Management has until very recently continued to pay or otherwise
accrue their own salaries, even when there is substantially nothing left
of the operating business of the Company.
The Committee is aware that Mr. Martignoni has taken a job with another
unrelated company but has entered into a consulting agreement providing for the
payment to him of $5,000 per month until April 30, 1998, unless extended by the
Company. Pursuant to the agreement, Mr. Martignoni will remain as President,
Chief Executive Officer and Chairman of the Board of Directors.
7
<PAGE>
THE COMMITTEE'S PLAN FOR CHANGE
The Committee believes that the record is clear that the business affairs of
the Company have been badly mismanaged and to the benefit of certain entrenched
management. If this situation continues, there will be little left of the
Company to salvage or resurrect in the form of a forward or reverse merger or
other business combination with another company needing a publicly traded
corporate entity as a means to achieve such company's financial objectives.
Upon their election to the Company's Board of Directors, Messrs. Renna and
Pursglove intend on taking numerous steps to protect and enhance Stockhholder
value. Stockholders being solicited to grant written consent to the Committee's
proposals are cautioned that there is no assurance that any one of the following
steps or all of them will be undertaken or that, if undertaken, such step or
steps will be successful in enhancing Stockholder value. Further, Stockholders
should be aware that the Named Directors the Committee is seeking to remove may
also have the same or similar plans for the Company to enhance Stockholder
value. The Committee believes, however, that based on the past experience of the
Company with present management, little confidence should be placed in present
management that they can achieve any significant increase or enhancement of
stockholder value. The Committee's plan includes, but is not limited to, the
following:
1. Immediately begin the process of finding a viable merger or acquisition
candidate for the Company. Although no particular candidate or target has been
identified, the Committee believes that an appropriate candidate would be a
small profitable private company which is too small to offer stock to the public
by making an initial public offering ("IPO"). An ideal situation would be a well
managed regional service business in a highly fragmented industry which could be
expanded to a national business by making acquisitions. A regional service
business has been targeted by the Committee because typically such businesses
experience high levels of positive cash flow.
2. Begin negotiations with the Company's remaining creditors to either
settle debts for a fraction of the amount owed or implement a long term program
for the Company to pay off debt. Such negotiations, if successful, would make
the Company more attractive to a merger or acquisition candidate.
3. Immediately dismiss the Company's present Chief Executive Officer and
any other full time or part time employees in order to conserve cash. Since the
Company does not have an operating business there is no need to employ any full
time or part time employees.
4. Eliminate all employee benefit programs other than employee benefit
plans subject to the Employee Retirement Income Security Act ("ERISA"), if any,
as soon as possible. This would include unfunded benefits which are being paid
to all present and past employees including but not limited to Mr. Martignoni.
5. Immediately dismiss all consultants who presently perform services for
the Company.
6. Discontinue retainers which are presently being paid to law firms which
represent the Company.
7. Hire a consultant at a rate of less than $6,000 per year to prepare all
of the Company's financial statements and Securities and Exchange Commission
("SEC") filed documents.
8. Open to competitive bid the preparation of the Company's annual audited
financial statements.
9. Consider the cancellation of Mr. Martignoni's severance or consulting
agreement pursuant to which he is paid $5,000 per month until April 1998.
10. Consider the cancellation all of the current outstanding stock options
owned by Mr. Martignoni, Mr. Boylan, Mr. Portner, and Ms. Cannon and any other
stock options which were granted to any other of the Company's senior managers
and Directors.
11. Close down any offices maintained by the Company.
8
<PAGE>
12. Cease the payment of any rents.
13. Disconnect all telephones, telephone credit cards and cellular
telephones and notify the SEC that the Company can be contacted at Mr. Renna's
or Mr. Pursglove's personal or business telephone number.
The Committee believes that by implementing these and other measures it may
be possible to yet make the Company a viable business enterprise. Stockholders
being asked to grant written consents should be aware that several of the steps
set forth above may involve the purposeful denial of certain legal obligations
of the Company which, when denied, may lead to litigation and ultimately to
increased rather than decreased Company liabilities. Further, there is no
assurance, even if the Company has valid legal claims or legal or equitable
defenses to otherwise valid legal claims asserted against it, that there would
be sufficient or any corporate funds to pay for litigation or to assert such
claims and defenses. Finally, Stockholders should consider that the mere actions
of removing the Named Directors and installing the director nominees would
effect a change in control of the Company and, as such, possibly violate the
terms of various agreements and contracts to which the Company may be a party.
This change of control may lead to additional liabilities to the Company.
OTHER MATTERS
STOCKHOLDER ACTION BY WRITTEN CONSENT
In connection with the actions proposed by the Committee to be taken it has
been determined by the Committee that a solicitation of stockholders for written
consent to take the actions set forth in this Solicitation Statement without a
Special Stockholder's Meeting is the most effective and efficient means by which
to accomplish the objectives of the Committee as more fully stated elsewhere in
this Solicitation Statement. The purpose of this solicitation is to obtain
written consents from Stockholders with sufficient Shares of Voting Stock to
remove the Named Directors and to elect or install the director nominees set
forth above.
REMOVAL OF EXISTING DIRECTORS
The Committee is requesting that Stockholders vote to remove Ronald
Martignoni and Fred Portner, two of the existing three directors of the Company.
The reasons why the Committee is requesting the Stockholders vote in favor of
this action are set forth above.
THE COMMITTEE RECOMMENDS GRANTING WRITTEN CONSENT "FOR" THE REMOVAL OF RONALD
MATIGNONI AND FRED PORTNER AS DIRECTORS OF THE COMPANY.
ELECTION OF NEW DIRECTORS
The Committee is requesting that Stockholders grant written consent to elect
Thomas Renna and George D. Pursglove as Directors of the Company. Each of their
qualifications to serve are set forth above under "Nominees for Director." The
plan or course of action they would implement is set forth above under "The
Committee's Plan for Change."
THE COMMITTEE RECOMMENDS GRANTING WRITTEN CONSENT "FOR" ITS SLATE OF NEW
DIRECTORS.
COST OF SOLICITING WRITTEN CONSENTS
The cost of soliciting written consents will be borne by the Committee
without reimbursement by the Company. In addition to the solicitation of the
written consents proxies by mail, the Committee has engaged the firm of Allen
Nelson & Co., for an estimated cost of $6,000, to assist in soliciting the
written consents when, as and if their services are required. The Committee has
retained the law firm of Monahan & Biagi, PLLC for an initial retainer of
$25,000 to represent the Committee and the Stockholders granting written
consents. The Committee will reimburse brokerage firms and other custodians,
9
<PAGE>
nominees and fiduciaries for their out-of-pocket expenses for forwarding
solicitation materials to beneficial owners and seeking instruction with respect
thereto. The Committee expects the total costs of the solicitation to be less
than $50,000.
The Committee knows of no other matters which should be brought before the
Stockholders at this time.
Committee for Change at Choices
Thomas Renna
Co-Chairman
George Pursglove
Co-Chairman
Coral Springs, Florida
February , 1998
10
<PAGE>
THIS CONSENT IS SOLICITED ON BEHALF OF THE COMMITTEE FOR CHANGE AT CHOICES
The undersigned hereby consents to the following Stockholder actions:
(1) To remove Ronald Martignoni and Fred Portner (the "Named Directors") as
directors of the Company; and,
(2) To elect a slate of new directors consisting of Thomas Renna and George
D. Pursglove.
The undersigned hereby represents and warrants that he is the holder of
record and/or the beneficial owner of the securities of Choices Entertainment
Corporation (the "Company") in the amounts set forth below as of the date of the
execution of this consent.
- - - --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN THIS CONSENT AND MAIL IT PROMPTLY TO THE
COMMITTEE FOR CHANGE AT CHOICES AT THE ADDRESS SET FORTH IN THE SOLICITATION
STATEMENT ACCOMPANYING THIS CONSENT. ANY STOCKHOLDER GIVING A CONSENT MAY NOT
REVOKE IT PRIOR TO THE LAPSE OF SIXTY (60) DAYS FROM THE DATE OF THE
SOLICITATION STATEMENT (THE "SOLICITATION PERIOD"). THIS CONSENT, WHEN PROPERLY
EXECUTED, WILL BE RELIED UPON TO TAKE THE ACTIONS SET FORTH ABOVE. STOCKHOLDERS
SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH IN THE SOLICITATION STATEMENT
BEFORE SIGNING THIS CONSENT.
- - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Dated: --------------------------------, 1998.
--------------------------------------------
Signatures
Print shareholder Name(s) exactly Complete if known:
as it/they appear(s) on your certificate or brokerage
account where they are held:
Certificate No.: ------------------------------
- - - --------------------------------------------
No. of Shares: -------------------------------
Class of Shares: -----------------------------
- - - --------------------------------------------
[Common/Preferred]
</TABLE>
