<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
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 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
NOT APPLICABLE
2) Aggregate number of securities to which transaction applies:
NOT APPLICABLE
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: NOT APPLICABLE
4) Proposed maximum aggregate value of transaction: NOT APPLICABLE
5) Total fee paid: NOT APPLICABLE
[ ] 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: NOT APPLICABLE
2) Form, Schedule or Registration Statement No.: NOT APPLICABLE
3) Filing Party: NOT APPLICABLE
4) Date Filed: NOT APPLICABLE
<PAGE> 2
================================================================================
3CI COMPLETE COMPLIANCE CORPORATION
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
(318)869-0440
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on March 12, 1998
Notice is hereby given that the annual meeting of stockholders of 3CI
Complete Compliance Corporation, a Delaware corporation (the "Company"), will be
held at 10:00 a.m., Shreveport time, on Thursday, March 12, 1998, at the
Sheraton Shreveport Hotel, 1419 East 70th, Shreveport, Louisiana, for the
following purposes:
1. To elect a Board of six Directors to serve for the ensuing
year, and
2. To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
A record of stockholders has been taken as of the close of business on
February 23, 1998, and only those stockholders of record on that date will be
entitled to notice of and to vote at the meeting or any adjournment thereof. All
stockholders of the Company are invited to attend the meeting. The Board of
Directors, however, requests that you promptly sign, date and mail the enclosed
proxy, even if you plan to be present at the meeting. If you attend the meeting,
you can either vote in person or by your proxy. Please return your proxy in the
enclosed, postage-paid envelope.
By Order of the Board of Directors
/s/ WERNER KOOK
------------------------
DR. WERNER KOOK
Chairman of the Board of Directors
February 26, 1998
================================================================================
<PAGE> 3
3CI COMPLETE COMPLIANCE CORPORATION
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
(318)869-0440
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are being mailed to
stockholders of 3CI Complete Compliance Corporation, a Delaware corporation (the
"Company"), commencing on or about March 2, 1998. The Company's Board of
Directors (the "Board") is soliciting proxies to be voted at the Company's
annual meeting of stockholders to be held in Shreveport, Louisiana on Thursday,
March 12, 1998 and at any adjournment thereof, for the purposes set forth in the
accompanying notice. The shares covered by a proxy, if such is properly executed
and received prior to the meeting, will be voted in accordance with the
directions specified thereon regarding election of directors, and with respect
to any other matters which may properly come before the meeting, in accordance
with the judgment of the persons designated as proxies. A proxy may be revoked
at any time before it is exercised by giving written notice to, or filing a duly
executed proxy bearing a later date with, the Secretary of the Company, or by
voting in person at the meeting. Management expects that the only matter to be
presented for action at the meeting will be the election of directors.
At the close of business on February 23, 1998, the record date for
determining the stockholders entitled to notice of and to vote at the meeting,
there were outstanding and entitled to vote 9,714,311 shares of the Company's
common stock, par value $.01 per share ("Common Stock"). Each share of Common
Stock entitles the holder to one vote on all matters presented at the meeting.
The Company will bear the costs of soliciting proxies in the
accompanying form.
ELECTION OF DIRECTORS
NOMINEES
At the meeting, six nominees are to be elected to the Company's Board
of Directors, each Director to hold office until the next annual meeting of
stockholders and until his successor is elected and qualified. Unless your proxy
specifies otherwise or withholds authority to vote for one or more nominees
named thereon and described below, it is intended that the shares represented by
your proxy will be voted for the election of these six nominees. Proxies cannot
be voted for a greater number of persons than the number of nominees named. If
any nominee should become unavailable for election, your proxy may be voted for
a substitute nominee selected by the Board, or the Board may be reduced
accordingly. The Board is unaware of any circumstances likely to render any
nominee unavailable.
DR. WERNER KOOK (age 45) 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 seven years. Rethmann Kreislaufwirtschaft GmbH & Co. KG and Rethmann GmbH &
Co. Verwaltungs- und Beteiligungs-KG are leading waste management services
companies in Europe and Australia controlled by the Rethmann family in Germany.
Members of the Rethmann family and their affiliates own 50% of the outstanding
shares of capital stock of Waste Systems, Inc. ("WSI") which owns 52.5% of the
issued and outstanding Common Stock of the Company.
CHARLES D. CROCHET (age 39) has served as President and a Director of
the Company since February 1994. Mr. Crochet founded and served as president of
a predecessor to the Company and has worked in the medical waste business since
1988. Prior to 1988, Mr. Crochet was employed for over 10 years in senior
positions with two national companies engaged in the business of hazardous waste
management.
JUERGEN THOMAS (age 51) 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
1
<PAGE> 4
Germany, which controls leading waste management companies in Europe, and was a
director of WSI from 1988 until 1995.
DR. CLEMENS PUES (age 33) 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, where he has been
responsible for gypsum recycling. Prior to 1994, Dr. Pues was employed at the
University of Muenster as assistant professor in international management for
four years.
VALERIE L. BANNER (age 42) has served as a Director of the Company
since February 1998. Ms. Banner has been a self employed corporate/securities
lawyer since April 1996. From 1993 to 1996 she was Vice President, General
Counsel and Secretary for Team, Inc., a professional full service provider of
industrial services, and from 1990 to 1993 she was General Counsel for Team,
Inc. Ms. Banner served as a securities lawyer with Browning-Ferris Industries,
Inc., a waste management company, from 1984 to 1990. Ms. Banner began her career
in 1979 at the Houston, Texas, law firm of Andrews & Kurth L.L.P.
DAVID J. SCHOONMAKER (age 53) has served as a Director of the Company
since February 1998. Mr. Schoonmaker has served as President and Chief Executive
Officer of RxThermal, Inc., a company that was formed to permit, design, build
and operate medical waste treatment facilities, since 1989 and as President and
Chief Executive Officer of BMWNC, Inc., a commercial incinerator of medical
waste, since 1995.
WSI, which owns 52.5% of the Common Stock of the Company, intends to
vote its shares in favor of the nominees.
BOARD AND COMMITTEE ACTIVITY, STRUCTURE AND COMPENSATION
The business of the Company is managed by or under the direction of the
Board and its committees. The Board establishes corporate policies, approves
major business decisions and monitors the performance of the Company's
management. The day-to-day management functions and operating activities of the
Company are performed by the Company's full-time officers and executive
employees. The Board met four times in fiscal 1997 and all directors attended
75% or more of the aggregate number of meetings of the Board.
During the fiscal year ended September 30, 1997, the entire Board
performed the audit committee, nominating committee and compensation committee
functions. When performing audit committee functions, the Board recommends the
selection of and confers with the Company's independent accountants regarding
the scope and adequacy of annual audits, reviews reports from the independent
accountants and meets with the independent accountants and with the Company's
financial personnel to review the adequacy of the Company's accounting
principles, financial controls and policies. When performing nominating
committee functions, the Board's duties include developing a policy on the size
and composition of the Board and criteria relating to candidate selection, and
identifying candidates for Board membership. When performing compensation
committee functions, the Board reviews the Company's compensation philosophy and
programs, exercises authority with respect to the payment of direct salaries and
incentive compensation to officers of the Company and administers the Company's
1992 Stock Option Plan (the "Option Plan").
In February 1998, the Board established an Audit Committee and
appointed Juergen Thomas, David J. Schoonmaker and Valerie L. Banner as
members of the committee. The Audit Committee performs the same functions
formerly performed by the Board when acting in such capacity.
Directors who are officers or employees of the Company receive no
additional compensation for their services as members of the Board. Directors
who are not officers or employees of the Company do not currently receive any
compensation for such services but may, in the future, receive such compensation
for their services as the Board may from time to time determine.
2
<PAGE> 5
MANAGEMENT
EXECUTIVE OFFICERS
The following is a list of the executive officers of the Company as of
February 26, 1998, their ages, positions and offices with the Company, and
periods during which they have served in such positions and offices:
<TABLE>
<CAPTION>
NAME AGE POSITION OFFICER SINCE
---- --- -------- -------------
<S> <C> <C> <C>
Dr. Werner Kook................ 45 Chairman of the Board and Director October 1995
Charles D. Crochet............. 39 President and Director February 1994
Curtis W. Crane................ 38 Chief Financial Officer, Secretary and September 1995
Treasurer
Dr. Clemens Pues............... 33 Vice President and Director October 1995
</TABLE>
The executive officers of the Company serve at the pleasure of the
Board and are subject to annual appointment by the Board. There are no
arrangements or understandings with respect to the selection of officers and
directors and there are no family relationships between any of such persons.
Dr. Pues is a senior officer of WSI, which beneficially owns 52.5% of the
outstanding shares of the Company, and Dr. Kook and Dr. Pues are employed by
certain waste management companies controlled by the Rethmann families and
Edelhoff families, respectively, who collectively own 100% of WSI.
DR. WERNER KOOK'S business experience is set forth above under
"Election of Directors--Nominees."
CHARLES D. CROCHET'S business experience is set forth above under
"Election of Directors--Nominees."
CURTIS W. CRANE has served as Chief Financial Officer of the Company
since September 1995. Prior to his affiliation with the Company, Mr.
Crane held senior financial positions including Chief Financial Officer
for NDE Environmental Corporation and Director of Finance and Tax for
Lone Star Steel Company.
DR. CLEMENS PUES' business experience is set forth above under
"Election of Directors--Nominees."
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of February 23, 1998 the number of
shares of the Company's Common Stock owned by each Director and Director nominee
of the Company, executive officer named in the Summary Compensation Table below,
and all of the Company's Directors and executive officers as a group. Unless
otherwise indicated, each holder has sole voting and investment power (or shares
such powers with his or her spouse) with respect to the shares of Common Stock
owned by such holder.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------- -------------------- ----------------
<S> <C> <C>
Waste Systems, Inc.(1)........................... 5,104,448 52.5%
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
River Bay Corporation(2)......................... 565,500 5.8%
P. O. Box 13313
Jackson, Mississippi 39236
American Medical Technologies, Inc. (3).......... 680,818 7.0%
5847 San Felipe, Suite 900
Houston, Texas 77057
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------- -------------------- ----------------
<S> <C> <C>
Charles D. Crochet(4)............................ 158,209 1.6%
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
Juergen Thomas................................... 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
Valerie L. Banner................................ 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
David J. Schoonmaker............................. 0 0
910 Pierremont, Suite 312
Shreveport, Louisiana 71106
All Executive Officers and Directors as a
Group (7 persons)................................ 158,209 1.6%
</TABLE>
- ---------------
(1) A Schedule 13D dated April 17, 1995, reflects that 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) A Schedule 13D dated October 20, 1994, reflects that River Bay
Corporation, a Mississippi corporation, is the beneficial owner of
865,500 shares and has sole voting and dispositive power with
respect to such shares. The Company repurchased 300,000 shares from
River Bay Corporation in October 1997.
(3) The information sets forth, to the best of the Company's knowledge,
American Medical Technologies, Inc.'s beneficial ownership.
(4) Includes 6,500 shares held in the name of Mr. Crochet's son, Chase
Crochet. Also included are 112,500 shares which Mr. Crochet has the
right to acquire pursuant to the Option Plan.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to all forms of
compensation awarded to, earned by or paid to Charles D. Crochet for the fiscal
years ended September 30, 1995, September 30, 1996 and September 30, 1997. No
other executive officer received bonus and salary which exceeded $100,000 in
1995, 1996 or 1997.
4
<PAGE> 7
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
AWARDS PAYOUTS
------------------------ -------
ANNUAL COMPENSATION SECURITIES
------------------------------- RESTRICTED UNDERLYING ALL
OTHER ANNUAL STOCK OPTIONS/ LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS($) SARS(#) PAYOUTS COMPENSATION
- --------------------------- ---- -------- ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles D. Crochet 1997 $145,000 -- -- -- -- -- --
President 1996 $130,000 -- -- -- -- -- --
1995 $115,000 -- -- -- 90,000 (1) -- --
</TABLE>
- ---------------
(1) In February 1994, Mr. Crochet received an option to purchase 90,000
shares of the Company's Common Stock at $3.00 per share vesting over a
three year period at 1/36 per month on a cumulative basis. Of these
shares, 32,500 have vested and the remaining shares have been
terminated pursuant to the terms of the new employment agreement
executed between Mr. Crochet and the Company in August 1995. Pursuant
to the terms of the August 1995 employment agreement, Mr. Crochet was
granted an option to purchase 90,000 shares of Common Stock at $2.00
per share, which vests over a three year period at 1/36 per month on a
cumulative basis.
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted to executives officers during the fiscal
year ended September 30, 1997.
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth information regarding unexercised
options to purchase shares of Common Stock granted by the Company to Charles D.
Crochet. No executives exercised any Common Stock options during the fiscal
year ended September 30, 1997.
<TABLE>
<CAPTION>
NAME NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-YEAR(#) AT FISCAL YEAR-YEAR(1)
--------------------------------- -----------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Charles D. Crochet 95,000 27,500 -- --
</TABLE>
- --------------
(1) The "value" of any option set forth in the table above is determined by
subtracting the amount which must be paid upon exercise of the options
from the market value of the underlying Common Stock as of September
30, 1997 (based on the closing sales price as reported by the Nasdaq
Small-Cap Market). 32,500 options have an exercise price of $3.00 and
90,000 options have an exercise price of $2.00. The exercise price for
all options exceeded the market value of the underlying Common Stock as
of September 30, 1997. Therefore, no options were in-the-money at
fiscal year-end.
TEN-YEAR OPTION REPRICINGS
The following table sets forth certain information with respect to
stock options cancelled and new options granted at the new exercise price during
the last ten years to executive officers of the Company.
<TABLE>
<CAPTION>
NUMBER OF MARKET PRICE EXERCISE LENGTH OF
OPTIONS OF STOCK AT PRICE AT TIME ORIGINAL OPTION
REPRICED OR TIME OF OF REPRICING TERM REMAINING
AMENDED REPRICING OR OR NEW EXERCISE AT REPRICING
NAME DATE (#) AMENDMENT AMENDMENT PRICE OF AMENDMENT
---- ---- --- --------- --------- ----- ------------
<S> <C> <C> <C> <C> <C> <C>
Charles D. Crochet (1) 8/31/95 57,500 $1.25 $3.00 $2.00 23 months
</TABLE>
- ----------------
(1) In August 1995, Mr. Crochet entered into a new employment agreement
with the Company whereby Mr. Crochet received an option to purchase an
additional 90,000 shares of the Company's Common Stock at
5
<PAGE> 8
$2.00 per share vesting over a three-year period at 1/36 per month on
a cumulative basis. Mr. Crochet retained options to purchase 32,500
shares which were vested under the terms of his previous employment
agreement.
BOARD OF DIRECTORS REPORT ON REPRICING OF OPTIONS
In August 1995, the Board of Directors authorized the exchange and
repricing of certain outstanding stock options (the "Old Options") held by Mr.
Crochet, the President of the Company, whereby Mr. Crochet could voluntarily
surrender certain existing stock options and receive new stock options (the "New
Options") on the terms described below. The Board of Directors noted that the
overall purpose of the Company's Option Plan is to attract and retain the
services of the Company's employees and to provide incentives to such person to
exert maximum efforts for the Company's success. The Board of Directors
concluded that the decline in the market value of the Company's Common Stock had
frustrated these purposes and diminished the value of the Company's stock option
program as an element of the Company's compensation arrangements. Accordingly,
the Board of Directors adopted a repricing program with the elements described
below.
In connection with the repricing, Mr. Crochet exchanged an aggregate of
57,500 shares subject to Old Options for 57,500 shares of New Options. Mr.
Crochet also received options to purchase an additional 32,500 shares at $2.00
per share at the time of the repricing. At the time of the repricing, the
exercise price of the Old Options was $3.00 per share. The exercise price of all
New Options is $2.00 per share. The New Options vest at the rate of 1/36 per
month over a three-year period. The Old Options exchanged by Mr. Crochet had a
remaining term of eight years and one month.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
In accordance with the executive compensation rules established by the
SEC, the following report regarding executive compensation is provided by the
Board of Directors.
Since the end of fiscal 1995 the Company has had no formal compensation
policies with respect to executive officers. Because there are no formal
compensation policies in place, the compensation of any executive officer hired
after the end of fiscal 1995 was determined based generally on the
qualifications and prior experience of the executive officer. The following
paragraph sets forth the basis of the compensation paid to Charles D. Crochet in
the fiscal year ended September 30, 1997.
In February 1994, the Board of Directors elected Mr. Crochet as
President of the Company. At that time, in February 1994, the Board of Directors
established Mr. Crochet's salary at $6,250 per month for February and March
of 1994, $7,500 per month for April through September 1994, and $9,583 per month
for October 1994 through September 1995, as part of an employment agreement
commencing February 1994 and ending September 1995. This employment agreement
was renewed on August 31, 1995, increasing Mr. Crochet's salary to $10,833 per
month commencing October 1, 1995 through September 30, 1996, to $12,083 per
month from October 1, 1996 through September 30, 1997, and to $13,333 per month
from October 1, 1997 through May 31, 1998. In February 1994, Mr. Crochet also
received an option to purchase 90,000 shares of the Company's Common Stock at
$3.00 per share which vested over a three year period at 1/36 per month on a
cumulative basis. According to the terms of the renewal of Mr. Crochet's
employment agreement, the remaining unvested options under the former employment
agreement were terminated and Mr. Crochet was granted an option to purchase
90,000 shares of the Company's Common Stock at $2.00 per share, which also vests
over a three year period at 1/36 per month on a cumulative bases. The Board of
Directors set Mr. Crochet's compensation package based on the key role he was to
hold within the Company and in view of competitive compensation packages offered
to his peer group in the industry. The stock option was granted to provide a
long-term incentive to Mr. Crochet.
THE BOARD OF DIRECTORS
Dr. Werner Kook
Mr. Juergen Thomas
Dr. Clemens Pues
Mr. Charles Crochet
6
<PAGE> 9
COMMON STOCK PERFORMANCE GRAPH
The following performance graph compares the performance of the Common
Stock to the S&P 500 Stock Index and to a Peer Group of other public companies.
The information was provided by the Center for Research in Security Prices
(CRSP) of The University of Chicago Graduate School of Business. The Peer Group
Index is comprised of New York Stock Exchange, American Stock Exchange and
Nasdaq-listed companies having the standard industry classification codes
4950-4959. The graph assumes that the value of the investment in the Common
Stock and each Index was 100 at September 30, 1992, and that all dividends were
reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG 3CI COMPLETE COMPLIANCE CORPORATION, S&P 500 STOCK INDEX, PEER GROUP INDEX
[GRAPH]
<TABLE>
<CAPTION>
9/30/92 9/30/93 9/30/94 9/29/95 9/30/96 9/30/97
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3CI Complete Compliance 100.0 66.2 58.8 11.8 30.9 19.1
- ------------------------------------------------------------------------------------------------------------
S&P 500 Stock Index 100.0 112.9 117.1 152.2 183.3 257.9
- ------------------------------------------------------------------------------------------------------------
Peer Group Index 100.0 82.5 84.9 90.3 108.9 132.9
- ------------------------------------------------------------------------------------------------------------
</TABLE>
EMPLOYMENT AGREEMENTS
Charles D. Crochet serves as President of the Company pursuant to an
employment agreement commencing in February 1994 and ending in September 1995.
Mr. Crochet was entitled to a salary of $6,250 per month in February and March
1994, $7,500 per month from April through September 1994, and increasing to
$9,583 per month from October 1994 through September 1995. This employment
agreement was renewed on August 31, 1995, increasing Mr. Crochet's salary to
$10,833 per month commencing October 1, 1995 through September 30, 1996, to
$12,083 per month from October 1, 1996 through September 30, 1997, and to
$13,333 per month from October 1, 1997 through May 31, 1998. As an additional
incentive to Mr. Crochet under the new employment agreement, Mr. Crochet is
eligible for an annual bonus based on Fiscal Year Pre-Tax Profits as a
percentage of Revenues. The amount of such annual bonus is based on a percentage
between 6% and 10% of an amount determined by the Board of Directors from an
approved bonus plan, such actual percentage depending upon the Company's Pre-Tax
Profits as a percentage of Revenue.
7
<PAGE> 10
Other than as set forth above, there are no compensatory plans or
arrangement with respect to any individual named in the Summary Compensation
Table above or otherwise which would result from the resignation, retirement or
other termination of such individual's employment with the Company or a change
in control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of the Company performs, among other functions,
the functions normally performed by a compensation committee. During the fiscal
year ended September 30, 1997, the following persons served on the Board of
Directors and participated in the deliberations concerning executive officer
compensation: Dr. Werner Kook, Charles D. Crochet, Dr. Clemens Pues and Juergen
Thomas. Mr. Crochet also served as the President of the Company and Dr. Pues
also served as Vice President of the Company during the fiscal year ended
September 30, 1997.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In February, March, April, May and July 1995, WSI, which beneficially
owns 52.5% of the outstanding shares of Common Stock, made non-interest bearing
cash advances totaling $4,100,000 to the Company. In June 1995, the Company
executed a $6,000,000 revolving promissory note, to be funded at the discretion
of WSI, which was utilized to repay the advances not converted to Common Stock.
This note was renegotiated in September 1995 increasing the total available to
$8,000,000 including interest with the principal portion not to exceed
$7,400,000 (the "1995 Note"). In February 1996, the Company obtained a waiver
from WSI of certain covenants contained in the 1995 Note related to minimum
quarterly net income requirements for the quarter ended December 31, 1995.
In December 1996, the Company executed a second revolving promissory
note payable to the order of WSI in the amount of $2,700,000, including deferred
interest, with a maturity date of February 28, 1997 (the "1996 Note"). It was
the intent of WSI and the Company that the 1996 Note evidence all sums owed by
the Company to WSI to the extent such sums represented advances of funds to the
Company in excess of the maximum limits fixed under the 1995 Note.
In June 1997, WSI and the Company entered into an agreement pursuant to
which WSI canceled the 1996 Note and reduced the principal amount of the 1995
Note by $7,000,000 minus the principal amount of the 1996 Note as of January 1,
1997. In exchange for the cancelation of the 1996 Note and the reduction of the
1995 Note, the Company designated 1,000,000 shares of Series A Preferred Stock,
with no par value, and issued all 1,000,000 shares to WSI. The preferred shares
have cumulative dividends from the second anniversary of the original issuance
date of the Series A Preferred Stock, at the rate of $.5775 per share per annum,
and no more, payable quarterly on the 15th day of July, October, January and
April of each year, commencing with a payment on July 15, 1999, accrued from the
second anniversary of the original issuance date of the Series A Preferred
Stock. On or after the second anniversary of the original issuance date of the
Series A Preferred Stock, the Company may redeem any portion of the Series A
Preferred Stock at $7.00 per share plus any accrued dividends. Any time after
the second anniversary date of the original issuance of the Series A Preferred
Stock, the record holder thereof may convert the Series A Preferred Stock into
full shares of Common Stock at a conversion rate, subject to adjustment for
subdivisions or combinations of the Common Stock, between 1 to 1 and 1 to 7
based on the market price of a share of Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the certified public accounting firm of Hard,
McElroy & Vestal, LLP to examine the Company's financial statements for the
fiscal year ending September 30, 1998. Hard, McElroy & Vestal, LLP has served as
the Company's independent auditors since October 14, 1996.
Prior to engaging Hard, McElroy & Vestal, LLP, the Company had not
consulted with Hard, McElroy & Vestal, LLP in any matter regarding either the
application of accounting principles to a completed transaction or the type of
audit that might be reached on the Company's financial statements.
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The Company anticipates that representatives of Hard, McElroy & Vestal,
LLP will participate in the annual meeting of stockholders, may make a statement
if they desire to do so, and will be available to respond to appropriate
questions concerning the Company's financial statements.
Arthur Andersen LLP served as the Company's independent auditors from
January 16, 1995, until they resigned on September 13, 1996. The decision to
change accountants was not recommended by the Board.
In connection with the audits of the two fiscal years ended September
30, 1995 and the subsequent interim period through September 13, 1996, there
were no disagreements with Arthur Andersen LLP on any matter of accounting
principles or practices, financial disclosure, or auditing scope or procedures,
which disagreements if not resolved to their satisfaction would have caused them
to make reference in connection with their opinion to the subject matter of the
disagreement.
The audit reports of Arthur Andersen LLP on the consolidated financial
statements of 3CI Complete Compliance Corporation as of and for the years ended
September 30, 1995 and 1994, did not contain any adverse opinion or disclaimer
of opinion; however, the 1995 opinion was modified with respect to (i) an
emphasis of a matter paragraph discussing certain operating and liquidity issues
confronting the Company and (ii) an explanatory paragraph describing an
uncertainty with respect to the outcome of certain litigation filed against the
Company. The 1994 opinion was modified and included an emphasis of a matter
paragraph discussing certain operating and liquidity issues confronting the
Company.
OTHER MATTERS
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Management anticipates that the Company's 1999 annual stockholders
meeting will be held during March 1999. Any stockholder who wishes to submit a
proposal for action to be included in the proxy statement and form of proxy
relating to the Company's 1999 annual stockholders meeting must submit the
proposal to the Company on or before November 2, 1998. Any such proposals should
be timely sent by certified mail, return receipt requested, to the Secretary of
the Company, 910 Pierremont, Suite 312, Shreveport, Louisiana 71106.
REQUIRED VOTE
Only holders of Common Stock as of February 23, 1998, will be entitled
to vote in person or by proxy at the meeting. A majority of issued and
outstanding shares of Common Stock as of February 23, 1998, represented at the
meeting in person or by proxy will constitute a quorum for the transaction of
business. Abstentions and broker nonvotes will be counted for purposes of
determining the presence or absence of a quorum. Provided that a quorum is
present at the meeting, the six director nominees who receive the greatest
number of votes cast for election by stockholders entitled to vote therefor will
be elected directors. Votes withheld in connection with the election of one or
more director nominees will not be counted as votes cast for such individuals.
Votes will be tabulated and the results will be certified by the inspector of
elections who is required to resolve impartially any interpretive questions as
to the conduct of the vote. In tabulating votes, a record will be made of the
number of shares voted for each nominee and the number of shares with respect to
which authority to vote for each nominee has been withheld. Under Delaware law,
stockholders will have no appraisal or similar dissenters' rights with respect
to any matters expected to be presented for action at the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Exchange Act, directors, certain officers,
and beneficial owners of 10% or more of any class of the Company's stock
("Reporting Persons") are required from time to time to file with the Securities
and Exchange Commission and the Nasdaq SmallCap Market reports of ownership and
changes of ownership. Reporting Persons are required to furnish the Company with
copies of all Section 16(a) reports they file. Based solely on its review of
forms and written representations received from Reporting Persons by it with
respect to the fiscal year ended
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September 30, 1997, the Company believes that all filing requirements applicable
to the Company's officers, directors and greater than 10% stockholders have been
met.
AVAILABILITY OF ANNUAL REPORT
The Company's annual report on Form 10-K for the fiscal year ended
September 30, 1997, has already been furnished to stockholders of record on
February 23, 1998, or is being furnished with this Proxy Statement and has been
filed with the securities and Exchange Commission in Washington, D.C.
By Order of the Board of Directors
/s/ DR. WERNER KOOK
--------------------------
DR. WERNER KOOK
Chairman of the Board of Directors
Dated: February 26, 1998
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3CI COMPLETE COMPLIANCE CORPORATION
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MARCH 12, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please mark, sign, date and return in the enclosed envelope.
The undersigned stockholder of 3CI Complete Compliance Corporation (the
"Company") hereby appoints Charles D. Crochet and Dr. Clemens Pues, or either of
them, proxies of the undersigned with full power of substitution to vote at the
Annual Meeting of Stockholders of the Company to be held on Thursday, March 12,
1998, at 10:00 a.m., Shreveport time, at the Sheraton Shreveport Hotel,
1419 East 70th, Shreveport, Louisiana, and at any adjournment thereof, the
number of votes which the undersigned would be entitled to cast if personally
present:
(1) ELECTION OF DIRECTORS
FOR / / WITHHOLD AUTHORITY / /
all nominees listed below to vote for all nominees
(except as marked below) listed below
<TABLE>
<S> <C> <C> <C> <C> <C>
Dr. Werner Kook Dr. Clemens Pues Charles D. Crochet Juergen Thomas Valerie L. Banner David J. Schooner
</TABLE>
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
DRAW A LINE THROUGH OR STRIKE OUT THAT NOMINEE'S NAME AS SET
FORTH ABOVE.
(Continued on next side)
(2) To consider and act upon any other matter which may properly come
before the meeting or any adjournment thereof; all as more particularly
described in the Proxy Statement dated February 26, 1998, relating to
such meeting, receipt of which is hereby acknowledged.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the nominees listed in Election of Directors.
-----------------------------------
-----------------------------------
Signature of Stockholder(s)
Please sign your name exactly as it
appears hereon. Joint owners must
each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
your full title as it appears
hereon.
Dated ____, 1998.
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