<PAGE> 1
SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
[x] Preliminary information statement [ ] Confidential, for use of the
Commission only (as permitted
by Rule 14c-5(d)(2))
[ ] Definitive information statement
3CI COMPLETE COMPLIANCE CORPORATION
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14-c-5(g) 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: 3CI Complete Compliance Corporation
(4) Date Filed: April 11, 1997
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3CI COMPLETE COMPLIANCE CORPORATION
910 PIERREMONT
SUITE 312
SHREVEPORT, LOUISIANA 71106
APRIL 11, 1997
PRELIMINARY INFORMATION STATEMENT
This Information Statement is being mailed to the stockholders of 3CI
Complete Compliance Corporation (the "Company") commencing on or about April
11, 1997, in connection with the previous approval by the board of directors of
the Company of the corporate actions referred to below and their subsequent
adoption by the majority stockholder of the Company. Accordingly, all
necessary corporate approvals in connection with the matters referred to herein
have been obtained, and this Information Statement is furnished solely for the
purpose of informing stockholders, in the manner required under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of these corporate
actions before they take effect. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
ACTIONS TAKEN
The Company, as authorized by the necessary approvals of the board of
directors and the Company's majority stockholder, has approved the adoption of
an amendment (the "Amendment") to the Company's Certificate of Incorporation,
as amended, to (i) increase the authorized preferred stock, without par value
("Preferred Stock"), of the Company from 1,000 shares to 10,000,000 shares; and
(ii) increase the authorized common stock, par value $.01 per share ("Common
Stock"), of the Company from 15,000,000 shares to 30,000,000 shares. A copy of
the Amendment is attached hereto as Exhibit A. The Amendment was adopted to
facilitate the conversion of $7,000,000 of debt (the "Debt Conversion") owed by
the Company to Waste Systems, Inc. ("WSI"), the Company's largest stockholder,
in exchange for 7,000,000 shares of the Company's Series A Convertible
Preferred Stock (the "Series A Preferred Stock"). A copy of the Certificate of
Designation of the Series A Preferred Stock is attached hereto as Exhibit B.
The majority stockholder consent with respect to the Amendment, and the Debt
Conversion, will take effect 20 days after the mailing of this Information
Statement or on such other date as may be specified by the board of directors.
A complete summary of each of these matters is set forth herein.
NO DISSENTERS' RIGHTS
None of the corporate actions described in this Information Statement
will afford to stockholders the opportunity to dissent from the actions
described herein and to receive an agreed or judicially appraised value for
their shares.
<PAGE> 3
THE AMENDMENT
PURPOSE OF THE AMENDMENT AND THE DEBT CONVERSION
The Company has adopted the Amendment to increase its authorized capital
stock from 1,000 shares of Preferred Stock to 1,000,000 shares and to increase
its authorized Common Stock from 15,000,000 shares to 30,000,000 shares. The
Amendment was adopted in connection with the Debt Conversion. The increase in
authorized Common Stock will provide the Company sufficient Common Stock for
issuance upon conversion of the Series A Preferred Stock, and for issuance in
connection with any future financing activities or corporate acquisition using
the Company's Common Stock. In addition, the Debt Conversion will enable the
Company to remain in compliance with the continued listing requirements of the
Nasdaq Small-Cap Market, which is the principal market upon which the Common
Stock is traded.
A company listed on the Nasdaq Small-Cap Market must maintain a capital
surplus of at least $1,000,000 (the "Capital Surplus Requirement"). In
addition, the common stock of a Nasdaq Small-Cap Market company must maintain a
minimum bid price of at least $1.00 (the "Minimum Bid Price Requirement"), or
as an alternative, maintain capital surplus of $2,000,000 and a market value of
the company's public float of at least $1,000,000 (the "Alternate Bid Price
Requirement"). On January 24, 1997, the Nasdaq Stock Market informed the
Company that as of the Company's fiscal year ended September 30, 1996, the
Company's capital and surplus was less than $1,000,000. The Nasdaq Stock
Market informed the Company that the Company's Common Stock would be subject to
de-listing effective on the close of business on February 7, 1997, unless the
Company could provide information demonstrating that the Company currently
meets and can maintain compliance with the Capital Surplus Requirement. On
January 29, 1997, the Nasdaq Stock Market informed the Company that the Company
was not in compliance with the Minimum Bid Price Requirement or the Alternate
Bid Price Requirement. The Nasdaq Stock Market informed the Company that the
Common Stock would be de-listed unless the Company could demonstrate compliance
on or before the end of the 90 day period ended April 29, 1997.
By letter dated February 7, 1997, the Company submitted a written plan
to come into compliance with the Capital Surplus Requirement. By letter dated
February 13, 1997, the Nasdaq Stock Market informed the Company that it had
determined that the Company should be removed from listing because the
Company's plan failed to demonstrate its ability to achieve and sustain
compliance with the Capital Surplus Requirement. By letter dated February 19,
1997, the Company requested an oral hearing before the Nasdaq Stock Market
regarding the de-listing of its Common Stock.
On March 13, 1997, the Company attended an oral hearing before a panel
of the Nasdaq Stock Market with respect to the Company's ability to comply with
and sustain the Capital Surplus Requirement. At that hearing, the Company
informed the Nasdaq Stock Market that WSI had agreed to convert $6,000,000 of
the debt owed to WSI by the Company into 6,000,000 shares of the Company's
Series A Preferred Stock. After such debt conversion, the Company would have a
positive capital surplus of approximately $1.5 million, and therefore, the
Company would be in compliance with the Capital Surplus Requirement. The
Nasdaq panel noted that although the issue
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was not technically before the panel, the Company also had failed to maintain
the Minimum Bid Price Requirement for continued listing, but that the Company
could meet the Alternate Bid Price Requirement by converting an additional
amount of WSI debt into Series A Preferred Stock and maintaining a $1,000,000
public float.
After the Nasdaq hearing, WSI agreed to convert an aggregate of
$7,000,000 of its debt from the Company into Series A Preferred Stock pursuant
to the Debt Conversion. As a result, the Company will be in continued
compliance with both the Capital Surplus Requirement and the Alternate Bid
Price Requirement.
The Debt Conversion cannot be completed until the Amendment has been
filed with the Delaware Secretary of State. The Company has taken all action
required under Delaware law to approve the Amendment, however, since
stockholder approval of the Amendment was obtained by written consent rather
than at a stockholders' meeting, the Exchange Act will not permit such filing
until the expiration of 20 calendar days from the date hereof. Upon the
expiration of such 20 day period, the Company will file the Amendment and the
Certificate of Designation of the Series A Preferred Stock with the Delaware
Secretary of State, and the Debt Conversion will be consummated.
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FINANCIAL EFFECTS OF DEBT CONVERSION
Set forth below in the consolidated balance sheet of the Company for the
fiscal quarter ended December 31, 1996 and pro forma as of December 31, 1996
giving effect to the Debt Conversion as if the Debt Conversion had occurred on
such date.
<TABLE>
<CAPTION>
Actual Pro forma
December 31, December 31,
1996 Conversion Conversion 1996
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets $ $
Cash and cash equivalents -- --
Restricted cash 130,000 130,000
Accounts receivable, less allowances of 5,148,725 5,148,725
$1,003,441 at December 31, 1996 and
December 31, 1996, respectively
Inventory 95,985 95,985
Other current assets 88,442 88,442
------------- --------------
Total current assets 5,463,152 5,463,152
------------- --------------
Property, plant and equipment, at cost 11,538,509 11,538,509
Accumulated depreciation (3,192,618) (3,192,618)
------------- --------------
Net property, plant and equipment 8,345,891 8,345,891
------------- --------------
Excess of cost over net assets acquired, net of 380,993 380,993
accumulated amortization of $56,238 at
December 31, 1996
Other intangible assets, net of accumulated 331,012 331,012
amortization of $93,190 at December 31, 1996
------------- --------------
Total assets $ 14,521,048 $ 14,521,048
============= ==============
LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
Current Liabilities:
Bank overdrafts $ 422,077 $ 422,077
Notes payable 67,479 67,479
Current portion of long-term debt, 1,055,263 1,055,263
unaffiliated lenders
Accounts payable 2,266,587 2,266,587
Accounts payable, affiliated companies 337,156 337,156
Accrued liabilities 2,200,108 2,200,108
Note payable majority shareholder 10,134,497 (7,000,000) 10,134,497
------------- --------------
Total current liabilities 16,483,167 16,483,167
------------- --------------
Long-term debt unaffiliated lenders, net of 700,900 700,900
current portion
Long-term debt majority shareholder, -- --
net of current portion
------------- --------------
Total liabilities 17,184,157 17,184,157
------------- --------------
Accrued stock put option 1,696,500 1,696,500
Shareholders' Equity (deficit):
Preferred Stock, no par value, authorized
1,000,000 and 10,000,000 shares; issued and 7,000,000 7,000,000
outstanding none and 7,000,000 shares
Common Stock, $.01 per value, authorized
15,000,000 and 20,000,000 shares; issued and
outstanding 9,900,311 and 9,900,311 shares at 99,004 99,004
December 31, 1996 and September 30, 1996,
respectively
Additional Paid-In Capital 20,108,745 20,108,745
Accumulated deficit (24,567,358) (24,567,358)
------------- --------------
Total Shareholders' equity (deficit) (4,359,609) 2,640,391
------------- --------------
Total liabilities and shareholders' equity (deficit) $ 14,521,048 $ 14,521,048
============= ==============
</TABLE>
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STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
The Company has 9,900,311 issued and outstanding shares of Common Stock,
each of which is entitled to one vote on any matter brought to a vote of the
Company's stockholders. WSI owns 5,104,448 shares, or 51.6%, of all issued and
authorized shares of the Company's Common Stock. By written consent dated
March 12, 1997, WSI approved the adoption and implementation of the Amendment,
such consent to take effect 20 days following the mailing of this Information
Statement or on such other date as may be specified by the board of directors.
Such action is sufficient to satisfy the applicable requirements of Delaware
law that such actions be approved by stockholders. Accordingly, stockholders
will not be asked to take further action on the Amendment at any future
meeting. Stockholder approval is not required for the issuance of the Series A
Preferred Stock.
SERIES A PREFERRED STOCK
Effective 20 days after the date of this Information Statement, the
Company's Certificate of Incorporation will be amended to authorize the
issuance of up to 10,000,000 shares of Preferred Stock. The Board of Directors
has designated 7,000,000 shares of the Preferred Stock as Series A Convertible
Preferred Stock with the designations, rights, preferences, privileges and
voting powers set forth below:
DIVIDENDS. For so long as any shares of Series A Preferred Stock are
outstanding, the Company shall not (i) purchase or redeem any shares of its
Common Stock or (ii) declare, pay or set apart for any payment any dividend on
its Common Stock. The holders of the Series A Preferred Stock shall be entitled
to receive, when, and if declared by the Company's Board of Directors out of
assets of the Company legally available for such payment, cumulative dividends
from the second anniversary of the original issuance date of the Series A
Preferred Stock, at the rate of $.0825 per share per annum, payable quarterly
commencing with a payment on April 15, 1999. Such dividends are cumulative
from the second anniversary of the original issuance date of the Series A
Preferred Stock. Accruals of dividends do not bear interest.
Before any dividends on, or any distribution in respect of, any class or
classes of stock of the Company ranking junior to the Series A Preferred Stock
as to dividends or upon liquidation, shall be declared or paid or set apart for
payment, and before any purchase or redemption of any such stock, the holders
of Series A Preferred Stock shall have received payment in full of all
dividends, if any, in arrears on the Series A Preferred Stock. No dividend
shall be declared on any series of preferred stock ranking on a parity with the
Series A Preferred Stock as to dividends unless there shall likewise be or have
been declared a dividend on the Series A Preferred Stock.
REDEMPTION. The Series A Preferred Stock may be redeemed at any time
on or after the second anniversary of the original issuance date of the Series
A Preferred Stock at the option of the Company in whole or, from time to time,
in part, at a per share redemption price equal to $3.00, plus accrued
dividends, if any. In case of redemption of only a part of the Series A
Preferred Stock at the time outstanding, the shares to be redeemed shall be
selected by lot.
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Any shares of the Series A Preferred Stock redeemed, purchased or
otherwise acquired by the Company, or converted into Common Stock, shall be
deemed retired and shall be canceled, and may not under any circumstances
thereafter be reissued or otherwise disposed of by the Company.
CONVERSION. The Series A Preferred Stock may be converted, at any time
on or after the second anniversary of the original issuance thereof, into full
shares of Common Stock based on a conversion ratio (the "Conversion Ratio") of
Series A Preferred Stock to Common Stock based on a fraction, the numerator of
which is equal to the Market Price (defined below) of the Common Stock on the
date of the related Conversion Notice (defined below) minus $1.00, and the
denominator of which is one, subject to such adjustments, if any, of the
Conversion Ratio and the securities or other property issuable upon such
conversion (the conversion ratio from time to time in effect being hereinafter
referred to as the "Conversion Ratio"); provided, however, that if the Market
Price of the Common Stock is less than $1.00, holders of the Series A Preferred
Stock will not be entitled to a refund of the negative difference.
To convert Series A Preferred Stock into Common Stock, a holder of
Series A Preferred Stock must send to the Secretary of the Company a dated
notice (a "Conversion Notice") setting forth the number of shares of Series A
Preferred Stock to be converted, along with the certificate representing the
Series A Preferred Stock to be converted. Upon receipt of a Conversion Notice
and the surrendered certificate, the Company shall cause a certificate
representing the Common Stock issued pursuant to such conversion to be
delivered to the converting holder, along with a certificate representing any
shares of Series A Preferred Stock that were not converted into Common Stock.
All shares of Series A Preferred Stock that have not been redeemed or
converted into Common Stock on or before the fifth anniversary of the original
issuance of the Series A Preferred Stock, shall, without further action of the
Company or any holder of Series A Preferred Stock, be automatically converted
into Common Stock based on the Conversion Ratio then in effect.
"Market Price" means (i) the closing sale price on the date of a
Conversion Notice of a share of Common Stock as reported on the principal
securities exchange on which the shares of Common Stock are then listed or
admitted to trading or (ii) if not so listed, the average of the closing bid
and ask prices for a share of Common Stock on that date as quoted on the Nasdaq
National Market System or Nasdaq Small-Cap Market or (iii) if not quoted on
Nasdaq, the average of closing bid and ask prices for a share of Common Stock
as quoted by the National Quotations Bureau's pink sheets or the National
Association of Securities Dealer's OTC Bulletin Board System. If the price of
a share of Common Stock shall not be so quoted, "Market Price" shall mean the
fair market value of a share of Common Stock as the holders of the Series A
Preferred Stock and the Company shall mutually agree or, in the absence of such
an agreement, as determined by an investment banking firm, with expertise in
the Company's area of business, selected by the holders of the Series A
Preferred Stock and approved by the Company, such approval not to be
unreasonably withheld.
The Conversion Ratio shall be subject to the following adjustments:
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(i) While any shares of Series A Preferred Stock are outstanding, in
case the Company shall subdivide the outstanding shares of Common Stock into a
greater number of shares of Common Stock or combine the outstanding shares of
Common Stock into a smaller number of shares of Common Stock, the Conversion
Ratio in effect immediately before such subdivision or combination, as the case
may be, shall be proportionately increased or decreased (adjusted to the
nearest, or if there shall be no nearest, then to the next lower, thousandth of
a share of Common Stock), as the case may require, such increase or decrease,
as the case may be, to become effective at the opening of business on the day
following the day upon which such subdivision or combination becomes effective.
(ii) No adjustment of the Conversion Ratio shall be made by reason of
the issuance of shares of Common Stock in exchange for cash, property, or
services.
(iii) In case of any reclassification or change of outstanding shares
of Common Stock, or in case of any consolidation or merger of the Company with
or into another corporation, or in case of any sale or conveyance to another
corporation of all or substantially all of the property of the Company, each
holder of shares of the Series A Preferred Stock then outstanding shall have
the right thereafter, so long as his conversion right hereunder shall exist, to
convert such shares into the kind and number or amount of shares of stock and
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance, by a holder of the number of shares
of Common Stock of the Company into which such shares of the Series A Preferred
Stock might have been converted immediately before such reclassification,
change, consolidation, merger, sale, or conveyance; provided, that effective
provision shall be made, in the articles or certificate of incorporation of the
resulting or surviving corporation or otherwise, so that the provisions set
forth herein for the protection of the conversion rights of the Series A
Preferred Stock shall thereafter be applicable, as nearly as reasonably may be,
to any such other shares of stock and other securities and property deliverable
upon conversion of the Series A Preferred Stock remaining outstanding or other
convertible preferred stock received by the holders in place thereof; and
provided, further, that any such resulting or surviving corporation shall
expressly assume the obligation to deliver, upon the exercise of the conversion
privilege, such shares, securities or property as the holders of the Series A
Preferred Stock remaining outstanding, or other convertible preferred stock
received by the holders in place thereof, shall be entitled to receive pursuant
to the provisions hereof, and to make provisions for the protection of the
conversion right as above provided. The subdivision or combination of shares
of Common Stock at any time outstanding into a greater or lesser number of
shares of Common Stock (whether with or without par value) shall not be deemed
to be a reclassification of the shares of Common Stock of the Company.
Fractional shares of Common Stock shall be settled in cash based on the
Market Price of a full share of Common Stock determined in good faith by the
board of directors of the Company.
DISSOLUTION. In the event of the dissolution, liquidation or winding up
of the affairs of the Company, whether voluntary or involuntary, or in the
event of its insolvency, there shall be paid to the holders of the Series A
Preferred Stock an amount equal to that which would have been payable if the
Series A Preferred Stock had been redeemed on the date of such payment before
any distribution of assets or payment shall be made to the holders of any other
class of capital stock of
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the Company. If the assets of the Company available for distribution to the
holders of Series A Preferred Stock shall be insufficient to permit payment to
the holders of the Series A Preferred Stock of the full amount or amounts
aforesaid, then the entire assets of the Corporation shall be distributed
ratably among the holders of the Series A Preferred Stock then outstanding
according to the number of shares held by each. After the amounts provided
above have been paid or distributed, any assets remaining shall be paid to or
distributed among the holders of Common Stock pro rata on a per-share basis.
VOTING RIGHTS. Except as otherwise required by law or expressly
provided for below, the holders of Series A Preferred Stock shall have no
voting rights. If and when the Company shall be in default in the payment of
dividends on the Series A Preferred Stock, and such default continues for a
period of two fiscal quarters, then the holders of the outstanding shares of
Series A Preferred Stock, voting separately as a single class, shall become
entitled to elect two directors of the Company, such additional directors to
serve in addition to the directors then in office. Such right to elect
additional directors may be exercised (i) by action taken by the written
consent of the holders of a majority of the shares of Series A Preferred Stock
then outstanding, (ii) at any annual meeting of stockholders or (iii) within
the limitations hereinafter provided, at a special meeting of stockholders held
for such purpose. Such additional directors shall serve until the next annual
meeting and until their successors shall be duly elected and qualified, unless
their term shall sooner terminate pursuant to the provisions of the Series A
Preferred Stock. If a vacancy shall occur in the board of directors by reason
of the death, resignation, or inability to act of any such additional director,
such vacancy shall be filled only by vote of the holders of the outstanding
shares of Series A Preferred Stock, voting separately as a single class.
Whenever a default in the Company's obligations to pay dividends on the Series
A Preferred Stock has been cured, then the right of the holders of the Series A
Preferred Stock to elect directors shall thereupon cease, and, if any such
additional directors were elected by the holders of shares of Series A
Preferred Stock, the term of such directors shall then terminate, and the
number of directors constituting the whole board of directors shall be reduced
by the number of such terminated directors. The above provisions for the
vesting of such voting rights in the holders of Series A Preferred Stock shall
apply, however, in case of any subsequent default under this subparagraph.
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OTHER INFORMATION
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning any person who was
the beneficial owner of five percent or more of the Company's outstanding
Common Stock as of March 15, 1997. The table also shows information concerning
beneficial ownership by all directors, by each of the executive officers of the
Company and by all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Beneficial Ownership* of Class
-------------------- --------
<S> <C> <C>
Waste Systems, Inc.(1) . . . . . . . . . . . . . . . 5,104,448(2) 51.6(2)
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
River Bay Corporation . . . . . . . . . . . . . . . . 865,500(3) 8.7%
P.O. Box 13313
Jackson, Mississippi 39236
American Medical Technologies, Inc. . . . . . . . . . 680,818(3) 6.9%
5847 San Felipe, Suite 900
Houston, Texas 77057
Patrick Grafton . . . . . . . . . . . . . . . . . . . 235,916(3) 2.4%
120 Tradd Street
Charleston, South Carolina 29401
Charles D. Crochet(4) . . . . . . . . . . . . . . . . 110,709 1.1%
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
Dr. Werner Kook . . . . . . . . . . . . . . . . . . . 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
Dr. Clemens Pues . . . . . . . . . . . . . . . . . . 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
Jurgen Thomas . . . . . . . . . . . . . . . . . . . . 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
Curtis W. Crane . . . . . . . . . . . . . . . . . . . 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
All directors and executives as a group (5 persons) . 110,709 1.1%
</TABLE>
- --------------------
* The number of shares beneficially owned by each director or executive
officer is determined under rules of the Securities and Exchange
Commission (the "Commission"), and the information is not necessarily
indicative of beneficial ownership for any other purpose.
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Under such rules, beneficial ownership includes any shares as to which
the individual has the sole or shared voting power or investment power
and also any shares which the individual has the right to acquire within
60 days of the date hereof through the exercise of any stock option or
other right. Unless otherwise indicated, each person has the sole
investment and voting power (or shares such powers with his or her
spouse) with respect to the shares set forth in the table.
(1) A schedule 13D dated April 17, 1995, reflects that Waste Systems, Inc.
("WSI") is the beneficial owner of 5,104,448 shares. Such Schedule 13D
reflects that WSI is owned 50% by Rethmann V & B GmbH & Co., a German
corporation controlled by members of the Rethmann family in Germany, and
50% by Gustav Dieter Edelhoff, Gustav Edelhoff, Heike Edelhoff-Kirchhoff
and Heidemarie Edelhoff, members of the Edelhoff family in Germany. The
Rethmann Family and the Edelhoff Family share voting and dispositive
power with respect to the shares beneficially owned by WSI. The Company
has been advised that the interests in WSI owned by the members of the
Edelhoff family have been transferred to Lobbe Holding GmbH & Co., a
German corporation controlled by members of the Edelhoff family.
(2) Does not include up to 7,000,000 shares of Common Stock issuable upon
conversion of the Series A Preferred Stock.
(3) Beneficial ownership determined based solely on filings made under the
Exchange Act.
(4) Includes 6,500 shares held in the name of Mr. Crochet's son, Chase
Crochet. Also included are 65,000 shares which Mr. Crochet has the
right to acquire pursuant to the stock options.
CERTAIN TRANSACTIONS
Set forth below is information concerning the direct and indirect
interests in the transactions discussed in this Information Statement by each
person who was a director or officer of the Company at any time since the
beginning of the Company's last fiscal year.
Dr. Werner Kook has served as chairman of the board of the Company since
October 1995. Dr. Kook has served as a senior officer of various waste
management companies controlled by the Rethmann family in Europe for the past
five years. Members of the Rethmann family and its affiliates own 50% of the
outstanding shares of capital stock of WSI.
Jurgen Thomas has served as a director of the Company since February
1994. Mr. Thomas has served for over 15 years as chief financial officer of
various companies associated with the Edelhoff family in Germany. The Edelhoff
family and its affiliates own 50% of the outstanding capital stock of WSI.
Dr. Clemens Pues has served as a director and vice president of the
Company since October 1995. Dr. Pues has been working with the AIR Lippewerk
Recycling GmbH, a wholly-owned subsidiary of the Rethmann Kreislaufwirtschaft
GmbH & Co. KG, since September 1994.
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MATERIAL INCORPORATED BY REFERENCE
The audited balance sheets of the Company as of September 30, 1996, 1995
and 1994 and the related statements of operations, shareholders' equity
(deficit) and cash flows for the three years ended September 30, 1996, are
incorporated herein by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1996. The Company's unaudited
consolidated balance sheets as of December 31 and September 30, 1996, and the
related consolidated statements of operations and stockholder's equity
(deficit) and cash flows for each of the three month periods ended December 31,
1996 and December 31, 1995, are incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 1996.
OTHER MATTERS
The annual report to stockholders covering the year ending September 30,
1996 has been mailed to each stockholder or accompanies this Information
Statement.
By Order of the Board of Directors
/s/ CURTIS W. CRANE
CURTIS W. CRANE
April 11, 1997
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EXHIBIT A
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
3CI COMPLETE COMPLIANCE CORPORATION
3CI Complete Compliance Corporation (the "Corporation"), a corporation
organized and existing under and by virtue of the Delaware General Corporation
Law (the "DGCL"), does hereby certify:
First: That the Board of Directors of the Corporation, by unanimous
written consent pursuant to Section 141(f) of the DGCL, duly adopted
resolutions setting forth a proposed amendment to the Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation"),
declaring such amendment to be advisable and calling a meeting of the
shareholders of the Corporation for consideration thereof. The amendment
adopted provides as follows:
That Article 4 of the Certificate of Incorporation shall be amended to
read in its entirety as follows:
"4. The total number of shares of stock which the corporation shall
have authority to issue is 40,000,000 shares, of which 30,000,000
shares shall be common stock, par value $.01 per share, and 10,000,000
of which shares shall be preferred stock, without par value. The
designations, rights, preferences, privileges and voting powers of the
preferred stock, and any restrictions and qualifications thereof, shall
be determined by the Board of Directors."
Second: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
Third: This Certificate of Amendment shall become effective upon the
filing hereof in the Office of the Secretary of State of the State of Delaware.
In Witness Whereof, the Corporation has caused this Certificate of
Amendment to be duly executed by its President and attested to by its Secretary
as of April 10, 1997.
ATTEST: 3CI COMPLETE COMPLIANCE CORPORATION
By: /s/ Curtis W. Crane By: /s/ Charles D. Crochet
----------------------------- ----------------------------------
Name: Curtis W. Crane Name: Charles D. Crochet
Secretary President
<PAGE> 14
EXHIBIT B
3CI COMPLETE COMPLIANCE CORPORATION
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PREFERRED STOCK
We, Charles D. Crochet and Curtis W. Crane, the President and
Secretary, respectively, of 3CI Complete Compliance Corporation, a Delaware
Corporation (the "Corporation") do hereby certify that the following resolution
of the Board of Directors of the Corporation has been duly adopted in
accordance with authority expressly accorded to the Board of Directors by
Article 4 of the Certificate of Incorporation, as amended, of the Corporation
(the "Certificate of Incorporation"), and in accordance with the provisions of
Section 151 of the Delaware General Corporation Law:
Resolved, that the Board of Directors of the Corporation, pursuant to
authority expressly vested in it by the provisions of the Certificate of
Incorporation of the Corporation, hereby establishes a series of preferred
stock of the Corporation, authorizes the issuance thereof, and hereby fixes the
designations, rights, preferences, privileges and voting powers, in addition to
those set forth in the Certificate of Incorporation, as follows:
1. Designation of Series. Seven million shares of the preferred
stock, without par value, of the Corporation shall constitute a series of
preferred stock designated as Series A Preferred Stock (the "Series A Preferred
Stock") with the designations, rights, preferences, privileges and voting
powers set forth below:
2. Dividends.
(a) The holders of Series A Preferred Stock shall not be
entitled to receive any fixed dividends and shall be entitled to
receive such cash dividends as may be declared from time to time by the
Board of Directors in its discretion, from any assets legally available
for the payment of dividends; however, for so long as any shares of
Series A Preferred Stock shall be outstanding, the Corporation shall
not (i) purchase or redeem any shares of its common stock, par value
$.01 per share ("Common Stock"), or (ii) declare, pay or set apart for
any payment any dividend on its Common Stock. Notwithstanding the
foregoing, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, and if declared by the Corporation's Board
of Directors out of assets of the Corporation legally available for
such payment, cumulative dividends from the second anniversary of the
original issuance date of the Series A Preferred Stock, at the rate of
$.0825 per share per annum, and no more, payable quarterly on the 15th
day of May, August, November and February of each year, commencing with
a payment on May 15, 1999, of dividends accrued from the second
anniversary of the original issuance date of the Series A Preferred
Stock. Such dividends
<PAGE> 15
shall be cumulative from the second anniversary of the original
issuance date of the Series A Preferred Stock. Accruals of dividends
shall not bear interest.
(b) Before any dividends (other than dividends payable in
capital stock ranking junior to the Series A Preferred Stock both as to
dividends and upon liquidation) on, or any distribution in respect of,
any class or classes of stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends or upon liquidation, shall be
declared or paid or set apart for payment, and before any purchase or
redemption of any such stock, the holders of Series A Preferred Stock
shall have received payment in full of all dividends, if any, in
arrears on the Series A Preferred Stock. No dividend shall be declared
on any series of preferred stock ranking on a parity with the Series A
Preferred Stock as to dividends unless there shall likewise be or have
been declared on the shares of Series A Preferred Stock at the time
outstanding a dividend of like kind for all dividends periods
coinciding with or ending before such dividend period, ratably in
proportion to the respective annual dividend rates per annum fixed
therefor as herein or in the Certificate of Incorporation provided.
3. Redemption. The Series A Preferred Stock shall be subject to
redemption by the Corporation as follows:
(a) The shares of Series A Preferred Stock may be redeemed
at any time on or after the second anniversary of the original issuance
date of the Series A Preferred Stock at the option of the Corporation
in whole or, from time to time, in part, in any such case at a per
share redemption price equal to $3.00, plus accrued dividends, if any.
(b) Notice of every redemption of Series A Preferred Stock
shall be given by mailing notice not less than 30 days before the date
fixed for such redemption to each holder of record of shares of Series
A Preferred Stock so to be redeemed, and shall be sufficiently given if
the Corporation shall cause a copy thereof to be mailed to such holders
of record at their respective addresses as the same shall appear on the
books of the Corporation, by first class mail, postage prepaid;
provided, however, that the failure to mail such notice to one or more
of such holders shall not affect the validity of such redemption as to
the other holders.
(c) In case of redemption of only a part of the Series A
Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected by lot.
(d) If any notice of redemption shall have been duly given
or if the Corporation shall have granted to a bank or trust company
irrevocable written authorization promptly to give or complete such
notice, and if, on or before the redemption date specified therein, all
funds necessary for such redemption shall have been deposited by the
Corporation with the bank or trust company designated in such notice,
in trust for the pro rata benefit of the holders of the shares so
called for redemption, then, notwithstanding that any certificate for
shares so called for redemption shall not have been surrendered for
cancellation, from and after the time of such deposit (or from and
after the redemption date if such notice shall fail to state that the
holders of the shares so called for redemption may receive their
redemption price at any time after such deposit) all shares with
respect to which such deposit shall have
2
<PAGE> 16
been made shall no longer be deemed to be outstanding, and all rights
with respect to such shares forthwith shall cease and terminate, except
only the right of the holders of the certificates therefor, upon
surrender thereof, to receive the redemption price thereof out of the
funds so deposited, without interest, and the right to exercise, on or
before the close of business on the date fixed for redemption, any
privileges of conversion applicable to the Series A Preferred Stock.
Any interest accrued on such funds shall be paid to the Corporation
from time to time.
(e) All funds so set aside or deposited, as the case may
be, and unclaimed at the end of one year from such redemption date
shall be released or repaid to the Corporation, after which the holders
of the shares so called for redemption shall look only to the
Corporation for the payment thereof; provided, however, that any funds
set aside or deposited which shall not be required for redemption
because of the exercise of any privilege of conversion after the date
of setting aside or deposit, as the case may be, shall be released or
repaid to the Corporation immediately after such exercise.
(f) Any shares of the Series A Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation, or converted into
Common Stock shall be deemed retired and shall be canceled and may not
under any circumstances thereafter be reissued or otherwise disposed of
by the Corporation, and the Corporation shall from time to time and at
least once each year cause all such shares to be retired in the manner
provided by law.
4. Conversion of Series A Preferred Stock.
(a) The Series A Preferred Stock shall be convertible at
the option of the record holder thereof, at any time after the second
anniversary of the original issuance thereof, in whole, or from time to
time in part, in the manner hereinafter provided, into Common Stock.
Except as otherwise specifically provided herein, no payment or
adjustment shall be made upon such conversion for dividends on any
shares of Series A Preferred Stock which shall be converted or for the
declaration or payment of any dividend on or other distribution in
respect of any shares of Common Stock issuable upon such conversion.
(b) The Series A Preferred Stock may be converted at any
time on or after the second anniversary of the original issuance
thereof, so long as the Market Price (defined below) equals or exceeds
$1.25 per share, into full shares of Common Stock of the Corporation
based on a Conversion Ratio (defined below) of Series A Preferred Stock
to Common Stock based on a fraction, the numerator of which is equal to
the Market Price (defined below) of the Common Stock on the date of the
related Conversion Notice (defined below) minus $1.00, and the
denominator of which is one, (the conversion ratio from time to time in
effect being hereinafter referred to as the "Conversion Ratio");
provided, however, that the Conversion Ratio of Series A Preferred
Stock to Common Stock shall never be greater than 3 to 1, subject to
such adjustments, if any, of the Conversion Ratio and the securities or
other property issuable upon such conversion pursuant to the provisions
of subparagraph (f) hereof.
3
<PAGE> 17
(c) To convert Series A Preferred Stock into Common Stock,
a holder of Series A Preferred Stock shall send to the Secretary of the
Company a dated notice (a "Conversion Notice") setting for the number
of shares of Series A Preferred Stock to be converted, along with the
certificate representing the Series A Preferred Stock to be converted.
Upon receipt of a Conversion Notice and the surrendered certificate
representing the Series A Preferred Stock to be converted into Common
Stock, the Corporation shall cause a certificate representing the
Common Stock issued pursuant to such conversion to be delivered to the
converting holder, along with a certificate representing any shares of
Series A Preferred Stock that were not converted into Common Stock.
(d) All shares of Series A Preferred Stock that have not
been redeemed or converted into Common Stock on or before the fifth
anniversary of the original issuance of the Series A Preferred Stock
shall automatically, without further action of the Company or any
holder of Series A Preferred Stock, automatically be converted into
Common Stock based on the Conversion Ratio then in effect. Upon such
automatic conversion, the Company shall send a notice to each record
holder of Series A Preferred Stock that such shares of Series A
Preferred Stock have been converted into Common Stock, along with
appropriate instructions for the surrender of certificates representing
Series A Preferred Stock in exchange for certificates representing the
Common Stock into which such Series A Preferred Stock has been
converted. Upon automatic conversion of Series A Preferred Stock
pursuant to this paragraph, the shares of Series A Preferred Stock
shall no longer be considered outstanding, and the certificates
representing such Series A Preferred Stock shall be void for all
purposes except for the purpose of surrender to the Company in exchange
for the certificates representing the Common Stock into which such
Series A Preferred Stock was converted.
(e) Market Price means (i) the closing sale price on the
date of a Conversion Notice of a share of Common Stock as reported on
the principal securities exchange on which the shares of Common Stock
are then listed or admitted to trading or (ii) if not so listed, the
average of the closing bid and ask prices for a share of Common Stock
on that date as quoted on the Nasdaq National Market System or Nasdaq
Small-Cap Market or (iii) if not quoted on Nasdaq, the average of
closing bid and ask prices for a share of Common Stock as quoted by the
National Quotations Bureau's pink sheets or the National Association of
Securities Dealer's OTC Bulletin Board System. If the price of a share
of Common Stock shall not be so quoted, "Market Price" shall mean the
fair market value of a share of Common Stock as the holders of the
Series A Preferred Stock of the Corporation shall mutually agree or, in
the absence of such an agreement, as determined by an investment
banking firm, with expertise in the Corporation's area of business,
selected by the holders of the Series A Preferred Stock and approved by
the Corporation, such approval not to be unreasonably withheld.
(f) The Conversion Ratio shall be subject to the following
adjustments:
(i) While any shares of Series A Preferred Stock
are outstanding, in case the Corporation shall subdivide the
outstanding shares of Common Stock into a
4
<PAGE> 18
greater number of shares of Common Stock or combine the
outstanding shares of Common Stock into a smaller number of
shares of Common Stock, the Conversion Ratio in effect
immediately before such subdivision or combination, as the case
may be, shall be proportionately increased or decreased
(adjusted to the nearest, or if there shall be no nearest, then
to the next lower, thousandth of a share of Common Stock), as
the case may require, such increase or decrease, as the case
may be, to become effective at the opening of business on the
day following the day upon which such subdivision or
combination becomes effective.
(ii) No adjustment of the Conversion Ratio shall be
made by reason of the issuance of shares of Common Stock in
exchange for cash, property, or services.
(iii) In case of any reclassification or change of
outstanding shares of Common Stock, or in case of any
consolidation or merger of the Corporation with or into another
corporation, or in case of any sale or conveyance to another
corporation of all or substantially all of the property of the
Corporation, each holder of shares of the Series A Preferred
Stock then outstanding shall have the right thereafter, so long
as his conversion right hereunder shall exist, to convert such
shares into the kind and number or amount of shares of stock
and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or
conveyance, by a holder of the number of shares of Common Stock
of the Corporation into which such shares of the Series A
Preferred Stock might have been converted immediately before
such reclassification, change, consolidation, merger, sale, or
conveyance, and shall have no other conversion rights under
these provisions; provided, that effective provision shall be
made, in the articles or certificate of incorporation of the
resulting or surviving corporation or otherwise, so that the
provisions set forth herein for the protection of the
conversion rights of the Series A Preferred Stock shall
thereafter be applicable, as nearly as reasonably may be, to
any such other shares of stock and other securities and
property deliverable upon conversion of the Series A Preferred
Stock remaining outstanding or other convertible preferred
stock received by the holders in place thereof; and provided,
further, that any such resulting or surviving corporation shall
expressly assume the obligation to deliver, upon the exercise
of the conversion privilege, such shares, securities or
property as the holders of the Series A Preferred Stock
remaining outstanding, or other convertible preferred stock
received by the holders in place thereof, shall be entitled to
receive pursuant to the provisions hereof, and to make
provisions for the protection of the conversion right as above
provided. The subdivision or combination of shares of Common
Stock at any time outstanding into a greater or lesser number
of shares of Common Stock (whether with or without par value)
shall not be deemed to be a reclassification of the shares of
Common Stock of the Corporation for the purposes of this
subparagraph (c).
(g) No fraction of a share of Common Stock shall be issued
upon any conversion, but, in lieu thereof, there shall be paid, to the
holder of shares of Series A Preferred Stock surrendered for conversion
as soon as practicable after the date such shares of Series A
5
<PAGE> 19
Preferred Stock are surrendered for conversion, an amount in cash equal
to the same fraction of the market value of a full share of Common
Stock as shall be determined, in good faith by the board of directors
of the Corporation.
5. Dissolution. In the event of the dissolution, liquidation or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
or in the event of its insolvency, the assets of the Corporation shall be
distributed among the holders of its capital stock in accordance with the
following schedule of priorities and preferences:
(a) There shall be paid to the holders of the Series A
Preferred Stock an amount equal to that which would have been payable
pursuant to Section 2(a) if the Series A Preferred Stock had been
redeemed on the date of such payment before any distribution of assets
or payment shall be made to the holders of any other class of capital
stock of the Corporation. If the assets of the Corporation available
for distribution to the holders of Series A Preferred Stock shall be
insufficient to permit payment to the holders of the Series A Preferred
Stock of the full amount or amounts aforesaid, then the entire assets
of the Corporation shall be distributed ratably among the holders of
the Series A Preferred Stock then outstanding according to the number
of shares held by each.
(b) After the amounts provided by subparagraph (a) above
have been paid or distributed, any assets remaining shall be paid to or
distributed among the holders of Common Stock pro rata on a per-share
basis.
(c) Neither the consolidation, nor merger of the
Corporation into or with another corporation or corporations, nor the
merger or consolidation of another corporation or corporations with or
into the Corporation, nor a reorganization of the Corporation, nor the
purchase or redemption of all or part of the outstanding shares of any
class or classes of the stock of the Corporation, nor a sale or
transfer of the property and business of the Corporation as, or
substantially as, an entity, shall be deemed a liquidation,
dissolution, or winding up of the affairs of the Corporation, within
the meaning of any of the provisions of this Section 5.
6. Voting Rights.
(a) Generally. Except as otherwise required by law or
expressly provided for herein, the holders of Series A Preferred Stock shall
have no voting rights.
(i) Defaults on Series A Preferred Stock. If and
when the Corporation shall be in default in the payment of dividends on
the Series A Preferred Stock, and such default continues for a period
of two fiscal quarters, then the holders of the outstanding shares of
Series A Preferred Stock, voting separately as a single class, shall
become entitled to elect two directors of the Corporation, such
additional directors to serve in addition to the directors then in
office. Such right to elect additional directors may be exercised (A)
by action taken by the written consent of the holders of a majority of
the shares of Series A Preferred Stock then outstanding, (B) at any
annual meeting of stockholders or (C) within
6
<PAGE> 20
the limitations hereinafter provided, at a special meeting of
stockholders held for such purpose. If such default shall occur more
than two fiscal quarters preceding the date of the next annual meeting
of stockholders as fixed by the Bylaws of the Corporation, then a
special meeting of the holders of the Series A Preferred Stock may, and
upon the written request of the holders of not less than one-fourth of
the number of shares of Series A Preferred Stock then outstanding,
addressed to the Secretary of the Corporation, shall, be called by the
Secretary of the Corporation, such meeting to be held within 60 days
after such call and within 60 days after the delivery to the Secretary
of such request. Such additional directors, whether elected by written
consent or at an annual or a special meeting, shall serve until the
next annual meeting and until their successors shall be duly elected
and qualified, unless their term shall sooner terminate pursuant to the
provisions of this subparagraph. At any meeting for the purpose of
electing such additional directors, the holders of a majority of the
shares of Series A Preferred Stock then outstanding shall constitute a
quorum, and any such meeting shall be valid notwithstanding that a
quorum of the outstanding shares of any other class or classes shall be
present, the number of directors constituting the whole board of
directors shall be deemed to be increased by a number sufficient to
carry out the provisions of this subparagraph. If a vacancy shall
occur in the board of directors by reason of the death, resignation, or
inability to act of any such additional director, such vacancy shall be
filled only by vote of the holders of the outstanding shares of Series
A Preferred Stock, voting separately as a single class, acting by
written consent or at any annual meeting or at a special meeting of the
holders of shares of the Series A Preferred Stock requested, called and
held in the same manner as the special meeting hereinabove referred to.
Whenever a default in the Corporation's obligations to pay dividends on
the Series A Preferred Stock has been cured by the Corporation, then
the right of the holders of the Series A Preferred Stock to elect
directors shall thereupon cease, and, if any such additional directors
were elected by the holders of shares of Series A Preferred Stock,
voting separately as a class, the term of such directors shall then
terminate, and the number of directors constituting the whole board of
directors shall be reduced by the number of such terminated directors.
The above provisions for the vesting of such voting rights in the
holders of Series A Preferred Stock shall apply, however, in case of
any subsequent default under this subparagraph.
7. Exclusion of Other Rights. Except as otherwise required by
law, the shares of Series A Preferred Stock shall not have any preferences or
relative participating, optional or other special rights except as specifically
set forth herein. No shares of any class of the corporation's capital stock
shall have more preemptive or subscription rights.
7
<PAGE> 21
In Witness Whereof, this Certificate of Designation has been signed by
Charles D. Crochet and Curtis W. Crane, the President and the Secretary,
respectively, of the Corporation, as of the 10th day of April, 1997.
3CI COMPLETE COMPLIANCE CORPORATION
By: /s/ Charles D. Crochet
-------------------------------
Charles D. Crochet, President
ATTEST:
/s/ Curtis W. Crane
- -------------------------------
Curtis W. Crane, Secretary
8
