<PAGE>
COMMERCIAL LABOR MANAGEMENT, INC.
208 MIRA MAR AVENUE, SUITE ONE
LONG BEACH, CALIFORNIA 90803
NOTICE OF ACTION TO BE TAKEN BY
THE SHAREHOLDERS
OCTOBER 14, 1997
To The Shareholders of Commercial Labor Management, Inc.
Edward L. Torres, Mark French, Michael Fresques, Paul Hollingsworth, Mark
Ruskzwicz, Shannon W. Lycick, Russell Mobbs, Philip Vutaggio, Eric Chen, Miguel
Esquitin, Mark J. Richardson and Pre-Loss, Inc., a California corporation
(collectively, the "Majority Shareholders"), are the holders of a total of
10,625,000 shares or approximately 82.6% of the issued and outstanding stock of
Commercial Labor Management, Inc., a Nevada corporation (the "Company"). The
Majority Shareholders intended to adopt the following resolutions by written
consent in lieu of a meeting pursuant to Section 242(a)(1) of the General
Corporation Law of the State of Nevada.
1. Amend the Company's Articles of Incorporation to authorize 20,000,000
shares of common stock, par value $.05 per share.
2. To authorize a reverse split of the outstanding common stock of the
Company so that after the effective date of the reverse split, there
will be one share of common stock outstanding for every 20 shares of
common stock outstanding prior to the effective date of the reverse
stock split.
The Company will file the Certificate of Amendment to its Articles of
Incorporation reflecting the increase in the authorized common stock 20 calendar
days after the mailing of this Information Statement.
Mark French, Secretary
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WE ARE NOT ASKING YOU FOR A CONSENT OR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
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COMMERCIAL LABOR MANAGEMENT, INC.
208 MIRA MAR AVENUE, SUITE ONE
LONG BEACH, CALIFORNIA 90803
OCTOBER 14, 1997
SHAREHOLDERS ACTION
The Majority Shareholders will submit their consents to the shareholder
resolutions described in this Information Statement on or after October 14,
1997, to be effective as of October 14, 1997. As of October 14, 1997, the
Majority Shareholders held of record 10,625,000 shares of the Company's common
stock, par value $.05 per share, or approximately 82.6% of the issued and
outstanding common stock of the Company. The remaining outstanding shares of
common stock are held by several hundred other shareholders.
The Majority Shareholders consist of Edward L. Torres, the President and
Chairman of the Board of Directors of the Company, Mark French, the Secretary of
the Company, Mark J. Richardson, corporate counsel to the Company, who provided
consulting services to the Company, Pre-Loss, Inc., a California corporation
which also consulted for the Company, and Michael Fresques, Paul Hollingsworth,
Mark Ruskzwicz, Eric Chen, Miguel Esquitin, Shannon W. Lycick, Russell Mobbs,
and Philip Vutaggio, who were purchasers of the Company's Series A Convertible
Preferred Stock in May 1995 and who converted all of their Series A Convertible
Preferred Stock into shares of the Company's common stock in April 1997. The
purchasers of the Series A Convertible Preferred Stock are collectively referred
to herein as the "Investors." The Investors contributed $180,000 in capital to
the Company in consideration for the issuance of 180 shares of Series A
Convertible Preferred Stock. The 180 shares of Series A Convertible Preferred
Stock were converted into a total of 7,200,000 shares of the Company's common
stock. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS."
Holders of the common stock of record as of August 15, 1997 are entitled to
submit their consent to the shareholder resolutions described in this
Information Statement, although no shareholder consents other than that of the
Majority Shareholders are required to be submitted in order for the resolution
to be adopted. The Company is not soliciting consents or proxies and
shareholders have no obligation to submit either of them. Whether or not
shareholders submit consents should not affect their rights as shareholders or
the prospects of the proposed shareholder resolutions being adopted. The
Majority Shareholders will consent to all of the shareholder resolutions
described in this Information Statement. Other shareholders who desire to
submit their consents must do so by October 30, 1997, and once submitted will
not be revocable. The affirmative vote of the holders of a majority of the
outstanding common stock of the Company is required to adopt the resolutions
described in this Information Statement. Nevada law does not require that the
proposed transaction be approved by a majority of the disinterested
shareholders. A total of 12,864,085 shares of common stock will be entitled to
vote on the Company's proposed transactions described in this Information
Statement.
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THE COMPANY AND THE TRANSACTION
The Company has its executive offices at 208 Mira Mar Avenue, Suite One,
Long Beach, California 90803, and its telephone number is (562) 987-5443. As
described in the accompanying NOTICE OF ACTION TO BE TAKEN BY THE SHAREHOLDERS,
the Company proposes to amend its Articles of Incorporation to increase the
authorized number of shares of common stock, par value $.05 per share, from
15,000,000 to 20,000,000, and to implement a one for 20 reverse split of the
outstanding shares of the Company's common stock. After the reverse split of
the common stock is effective, there will be a total of 643,204 shares of common
stock issued and outstanding, 531,250 of which will be owned by the Majority
Shareholders, as compared to 12,864,085 shares of common stock currently issued
and outstanding, 10,625,000 of which are presently owned by the Majority
Shareholders. There are no shares of the Company's preferred stock currently
issued or outstanding. In the reverse stock split, fractional shares will be
rounded to the nearest whole share.
The Board of Directors of the Company voted unanimously to approve the
proposed amendment to the Company's Articles of Incorporation and the reverse
split of its issued and outstanding common stock. The Board of Directors
believe that the proposed amendment to the Articles of Incorporation and the
reverse split of the issued and outstanding common stock are fair to all
shareholders and affect them on a pro rata equivalent basis. The transactions
are being implemented to better position the Company for a merger or other
business combination in the future by having more authorized shares available,
if necessary, to be issued in connection with such an acquisition.
The amendment and reverse split will not result in the realization of
taxable income or loss to the Company or to its shareholders. The Company has
no dividends in arrears and is not in default on any of its securities. The
transactions will not affect the amount of assets or liabilities of the Company,
nor will it affect the Company's statement of operations. Accordingly, the
transactions will not effect the revenues, expenses, absence of dividends or
operating costs of the Company, other than the expenses incurred by the Company
in connection with this Information Statement, which are estimated to be
approximately $10,000. The book value per share and earnings or loss per share
of the Company will be affected to the extent that there will be less shares of
the Company's common stock issued and outstanding after the reverse stock split.
The Company and the Majority Shareholders need not comply with any federal or
state regulatory requirements in connection with consummating the proposed
transactions, other than recording the Amendment to the Articles of
Incorporation with the Nevada Secretary of State.
Additional information regarding the Company, its business, its stock, and
its financial condition are included in the Company's Form 10-K annual reports
and its Form 10-Q quarterly reports. Copies of the Company's Form 10-K for its
fiscal year ending December 31, 1996 and its quarterly report on the Form 10-Q
for the quarter ending June 30, 1997 are included with this Information
Statement, and the information in said reports is incorporated by reference into
this Information Statement.
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The Company intends to acquire a new business in the future by either a
merger, the issuance of shares for assets, or the issuance of shares for stock
of another company. The Company has not yet identified a new business for
acquisition, but contemplates that it will be a private company with a
successful operating history, or a company with significant assets and the
potential for profitable operations. There is no assurance as to if or when the
Company will be able to acquire another business on terms acceptable to it, or
whether that business will be profitable. The Company will notify its
shareholders as soon as a business acquisition has been identified by the
Company's management.
MANAGEMENT
The following table lists the names and ages of the executive officers and
directors of the Company. The directors were elected on July 30, 1995 and will
continue to serve until the next annual shareholders meeting or until their
successors are elected and qualified. All officers serve at the discretion of
the Board of Directors.
Name Age Position
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Edward L. Torres 40 President, Chief Financial
Officer and Chairman of
the Board of Directors
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Mark French 33 Secretary, Director
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Edward L. Torres has been the President, Chief Financial Officer and
Chairman of the Board of Directors of the Company since July 30, 1995, and was
the President of the Company from March 21, 1995 until June 1, 1995. Mr. Torres
was also the President and principal shareholder of Commercial Labor Management,
Ltd. from its inception in 1992 until July 30, 1995, when it ceased to conduct
business. Commercial Labor Management, Ltd. was engaged in the business of
leasing employees to a variety of businesses, primarily in California. Since
the cessation of business by Commercial Labor Management, Ltd., Mr. Torres has
been an independent marketing consultant for other employee leasing companies.
Mr. Torres has a Bachelors in Business Administration from South Bay University.
Mark French has been the Secretary and a director of the Company since July
30, 1995 and March 21, 1995, respectively, and was the President of the Company
from June 1, 1995 until July 30, 1995. Mr. French began his career in
investments and securities in London, England, where he was an institutional
options and bond trader for Barclays De Zoete Wedd, an investment banking firm.
From 1990 to 1994, Mr. French was a registered representative with the National
Association of Securities Dealers, Inc. holding Series 7, 24 and 63 licenses.
During that period he held positions with Chatfield Dean & Associates and
Financial West Group. Since 1994 Mr. French has been an independent financial
consultant for different companies seeking to raise capital.
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Under Nevada Corporation Law and the Company's Articles of Incorporation,
the Company's directors will have no personal liability to the Company or its
stockholders for monetary damages incurred as the result of the breach or
alleged breach by a director of his "duty of care." This provision does not
apply to the directors' (i) breach of their duty of loyalty, (ii) acts or
omissions not in good faith or involving intentional violations of law, (iii)
illegal payment of dividends, stock repurchases, or stock redemptions, and (iv)
approval of any transaction from which a director derives an improper personal
benefit. Directors may be responsible to the Company's shareholders for damages
suffered by the Company or its shareholders as a result of a breach of their
fiduciary duty.
Insofar as an indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted for directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission each
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
EXECUTIVE OFFICERS' COMPENSATION
The following table sets forth cash compensation paid for services rendered
to the Company by the Company's executive officers during its last fiscal year
ended December 31, 1996. During the last fiscal year no executive officer
received cash compensation from the Company that exceeded $60,000. No cash
bonuses were paid by the Company nor was any such compensation deferred during
the last fiscal year.
Name Position Cash Compensation
- ---- -------- -----------------
Edward Torres(1) President, Chief Financial $0
Officer
Mark French(2) Secretary, Director $0
All executive officers $0
as a group (2 persons).
- -------------------------------------------------
(1) On April 15, 1997, Mr. Torres was issued 125,000 shares of the Company's
common stock for services performed by him as an officer and director of
the Company since July 30, 1995. See "SECURITY OWNERSHIP OF DIRECTORS AND
OFFICERS."
(2) On April 15, 1997, Mr. French was issued 2,000,000 shares of the Company's
common stock for services performed by him as an officer and director of
the Company since March 21, 1995. See "SECURITY OWNERSHIP OF DIRECTORS AND
OFFICERS."
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SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth as of October 14, 1997 the security
ownership of each director and officer of the Company, and the directors and
officers of the Company as a group, including common stock and warrants to
purchase common stock. In this regard, only common stock is currently issued
and outstanding and the Company is not aware of any outstanding stock options,
warrants, preferred stock, or other securities or convertible securities.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER(1) BENEFICIALLY OWNED PERCENTAGE OF OWNERSHIP(4)
- ------------------- ------------------- --------------------------
<S> <C> <C>
Edward Torres 125,000(2) 0.97%
208 Mira Mar Avenue, Suite One
Long Beach, California 90803
Mark French 2,000,000(3) 15.5%
947 Scottland Drive
Mt. Pleasant, South Carolina 29464
All officers and directors as
a group (two persons) 2,125,000 16.47%
</TABLE>
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(1) See "MANAGEMENT" for a description of the positions with the Company held
by the persons listed in this table.
(2) Issued on April 15, 1997 in consideration for services rendered to the
Company since July 30, 1995.
(3) Mr. French is also providing consulting services to the Company in
connection with its search for and evaluation of operating businesses for
potential acquisition. Mr. French may receive compensation in the form of
cash and stock in the Company in connection with a business acquisition by
the Company, if made.
(4) The Company presently has a total of 12,864,085 shares of common stock
issued and outstanding.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the names and addresses of all persons known
by the Company to beneficially own 5% or more of the issued and outstanding
common stock of the Company, as well as the name, address and number of shares
owned by each Majority Shareholder.
<TABLE>
<CAPTION>
% OF OUTSTANDING
NUMBER OF SHARES BENEFICIALLY OWNED SHARES BENEFICIALLY
NAME & ADDRESS OF SHAREHOLDER BEFORE REVERSE SPLIT AFTER REVERSE SPLIT OWNED(6)
- ----------------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C>
Edward L. Torres(1)
208 Mia Mar Avenue
Suite One
Long Beach, California 90803 125,000(1) 6,250 0.97%
Mark French(2)
967 Scottland Drive
Mt. Pleasant, South Carolina 29464
Long Beach, California 90803 2,000,000(2) 100,000 15.5%
Pre-Loss, Inc.
7257 Bright Avenue
Whittier, California 90602 300,000(5) 15,000 2.0%
Michael Fresques
27350 S. Corral Hollow Rd.
Tracy, California 95376 3,200,000(3) 160,000 21.5%
Paul Hollingsworth
3825 Crestwood Terrace
Fort Worth, Texas 76116 2,400,000(3) 120,000 16.1%
Mark J. Richardson
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401 1,000,000(4) 50,000 20.1%
Mark Raskzwicz
6817 Danwich Way
Alexandria, Virginia 22315 200,000(3) 10,000 1.3%
Shannon W. Lycick
37468 Bankside Drive
Cathedral City, California 92234 400,000(3) 20,000 2.6%
Russell Mobbs
1416 Daniel Drive
Bedford, Texas 78002 200,000(3) 10,000 1.3%
Philip Vutaggio
4013 W. Chandler Boulevard
Burbank, California 91505 400,000(3) 20,000 2.6%
Miguel Esquitin
3617 Pennn Mar, Suite 206
El Monte, California 91732 200,000(5) 10,000 1.3%
Eric Chen
17899 Castelton Street, Suite 192
City of Industry, California 91748 200,000(5) 10,000 1.3%
</TABLE>
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(1) Mr. Torres is the President and Chairman of the Board of Directors of the
Company. These shares were issued for services rendered since July 30,
1995. See "MANAGEMENT" and "SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS."
(2) Mr. French is the corporate Secretary and a director of the Company. These
shares were issued for services rendered since March 21, 1995. See
"MANAGEMENT" and "SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS."
(3) These shares were issued upon the conversion of all issued and outstanding
shares of Series A Convertible Preferred Stock in April 1997.
(4) These shares were issued for legal services rendered since January 1, 1997.
(5) These shares were issued for consulting services performed by this company
and these individuals for the Company in 1996 and 1997.
(6) The Company currently has a total of 12,864,085 shares issued and
outstanding prior to the one for 20 reverse stock split, and will have a
total of 643,204 shares issued and outstanding after the effective date of
the reverse stock split.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 31, 1996, the Company wrote off a note receivable in the amount
of $180,000 payable by Edward L. Torres, the President and Chairman of the Board
of Directors of the Company, to the Company. The note was written off because
(i) Mr. Torres does not have the personal liquid funds to repay the loan nor the
prospect of having such funds, and (ii) Mr. Torres has made an extraordinary
effort since July 30, 1995 to implement the recission agreement with Commercial
Labor Management, Ltd., to update the Company's public reports and financial
statements, to implement the conversion of the Series A Convertible Preferred
Stock in April 1997, to work to confer value on the Investors' shareholdings in
the Company, and to assist Mark French in seeking a business acquisition for the
Company. In light of these services by Mr. Torres, the Company also issued
125,000 shares of its common stock to Mr. Torres on April 15, 1997. See
"SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS."
Effective April 30, 1997, the Investors converted 180 shares of the
Company's outstanding Series A Convertible Preferred Stock into a total of
7,200,000 shares of common stock in the Company. See "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS."
The Company has not formalized a compensation agreement with Mark French,
its corporate Secretary and a director. On April 15, 1997, Mr. French was
issued 2,000,000 shares of the Company's common stock in consideration for his
services as an officer and director of the Company since March 21, 1995. Mr.
French may earn additional compensation in the form of cash and stock if and
when the Company makes a business acquisition which is approved by the Company's
Board of Directors and, if required, its shareholders, and which is achieved
through Mr. French's efforts. See "SECURITY OWNERSHIP OF DIRECTORS AND
OFFICERS."
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INDEPENDENT AUDITORS
The Board of Directors appointed Armando Ibarra, independent certified
public accountant, as auditor of the Company's financial statements for the
fiscal years ending December 31, 1996, 1995 and 1994.
SHAREHOLDER PROPOSALS AND NOMINATING PROCEDURES
Any proposal that a shareholder intends to present at the Company's 1998
Annual Meeting (scheduled for October 2, 1998) must be received at the Company's
principal executive office not later than May 18, 1998. Any such proposal must
comply with Rule 14a-8 of Regulation 14A of the proxy rules of the Securities
and Exchange Commission. Shareholder proposals should be addressed to the
Secretary of the Company.
Nominations for directors to be elected at the 1998 Annual Meeting, other
than those made by the Board of Directors, must be submitted to the Secretary of
the Company no later than May 18, 1998. The nomination should include the full
name of the nominee and a description of the nominee's background in compliance
with Regulation S-K of the reporting rules of the Securities and Exchange
Commission.
OTHER MATTERS
The Board of Directors of the Company is not aware that any matter other
than those described in this Information Statement is to be presented for the
consent of the shareholders.
UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO MARK FRENCH, SECRETARY OF THE
COMPANY, AT COMMERCIAL LABOR MANAGEMENT, INC., 208 MIRA MAR AVENUE, SUITE ONE,
LONG BEACH, CALIFORNIA 90803, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
WILL BE PROVIDED WITHOUT CHARGE.
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