SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
(Name of Registrant as Specified In Its Charter): CFI Mortgage, Inc.
------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant):
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
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[ ] 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:
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(3) Filing Party:
(4) Date Filed:
CFI MORTGAGE, INC.
601 Cleveland Street, Suite 500
Clearwater, Florida 33755
, 2001
- -------------------
DEAR CFI MORTGAGE SHAREHOLDER:
You are cordially invited to participate in the solicitation of written consents
in place of the 2001 Annual Meeting of Stockholders of CFI Mortgage, Inc. In
order to limit the expenses which would be incurred by holding an annual meeting
for the election of directors and approving other business, your board of
directors has authorized a solicitation of written consents instead of holding
the annual meeting.
Details of the business the stockholders are being asked to approve are
described in the attached Consent Solicitation Statement and Consent Card.
Please complete, sign, date, and return the enclosed Consent Card in the
accompanying reply envelope. If you wish to change or cancel your consent, you
may do so by submitting a later dated consent specifying the change or
cancellation you wish to make and your change or cancellation will be counted,
provided CFI has not previously received a sufficient number of consents
(including your earlier consent) to approve the election of directors and other
business prior to receiving your change or cancellation.
Thank you for your cooperation in this solicitation of consents.
/s/ Stephen E. Williams
Stephen E. Williams
President and Chief Executive Officer
YOUR CONSENT IS IMPORTANT
In order to assure your views are expressed by your consent, which is equivalent
to a vote at the Annual Meeting, CFI's board of directors is requesting you to
complete, sign and date the enclosed Consent Card as promptly as possible and
return it in the enclosed pre-addressed and pre-stamped envelope.
<page>
CFI MORTGAGE, INC.
601 Cleveland Street, Suite 500
Clearwater, Florida 33755
NOTICE OF SOLICITATION OF CONSENTS IN LIEU OF THE 2001 ANNUAL MEETING OF
STOCKHOLDERS
The Board of Directors of CFI Mortgage, Inc. has approved a solicitation of
written consents from stockholders instead of holding an annual meeting. CFI's
Bylaws and Delaware Law authorize the use of written consents as an alternative
to holding any stockholders' meeting and taking votes on any matter stockholders
are entitled to vote on. The purpose of this solicitation of written consents
is:
1. To elect five members of the Board of Directors to serve staggered three
years terms of office, subject to an amendment of CFI's Delaware Charter as
provided in Proposal 3, until the next Annual Meeting of Stockholders, or
solicitation of written consents in place of the annual meeting, at which each
such term expires and until their successors have been elected and qualified;
2. To ratify the selection of Weinick, Sanders, Leventhal & Co. LLP as CFI's
independent accountants for the fiscal year ending December 31, 2001;
3. To approve a change in the classification of the board of directors to three
year terms from two year terms.
4. To approve an amendment to CFI's Articles of Incorporation, as amended,
increasing the authorized number of shares of common stock CFI is authorized to
issue to 100,000,000 shares from 35,000,000 shares; and
5. To approve a change in CFI's name to Lender Business Resources, Inc.
The reasons CFI is asking the stockholders for approval of these proposals is
fully described in the Consent Solicitation Statement accompanying this Notice.
CFI's board of directors has set the close of business on , 2001 as the date for
determining those stockholders who are entitled to receive this notice and give
consents in place of voting at an annual meeting. CFI will not close its stock
transfer books. CFI has available for inspection upon request at its office the
names and other information about the stockholders who are eligible to give
their consents in lieu of voting at a 2001 annual meeting of stockholders.
It is of extreme importance that you complete, sign, date and return the
enclosed Consent Card promptly in the accompanying reply envelope. Instructions
are provided on the enclosed Consent Card. You may revoke or change your consent
at any time prior to the time CFI receives a sufficient number of consents
(including your earlier consent) in favor of each of the proposals listed above.
BY ORDER OF THE BOARD OF DIRECTORS
Marlene L. Noren
Secretary
, 2001
- -------------------
<page>
CFI MORTGAGE, INC.
CONSENT SOLICITATION STATEMENT
TABLE OF CONTENTS
PAGE
----
PURPOSE OF THE MEETING
VOTING RIGHTS AND SOLICITATION OF WRITTEN CONSENTS.........
Voting....................................................
Importance of your Consents...............................
Solicitation of Written Consents .........................
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS....................
General...................................................
Business Experience of Directors..........................
Board Committees and Meetings.............................
Director Compensation.....................................
Recommendation of the Board of Directors..................
PROPOSAL NO. 2 -- RATIFICATION OF INDEPENDENT ACCOUNTANTS..
General...................................................
Recommendation of the Board of Directors..................
PROPOSAL NO. 3 - CHANGE IN CLASSIFICATION OF THE TERMS
OF OFFICE OF THE DIRECTORS...............................
Purpose of the Amendment.................................
Recommendation of the Board of Directors.................
PROPOSAL NO. 4 - INCREASE IN AUTHORIZED SHARES OF
COMMON STOCK..............................................
Purpose of the Amendment..................................
Recommendation of the Board of Directors..................
PROPOSAL NO. 5 - CHANGE OF CORPORATE NAME..................
Discussion................................................
Recommendation of the Board of Directors..................
OWNERSHIP OF SECURITIES....................................
Compliance with SEC Reporting Requirements................
EXECUTIVE COMPENSATION AND RELATED INFORMATION.............
Summary of Cash and Certain Other Compensation............
Employment Contracts, Termination of Employment, and
Change in Control Agreements..............................
SHAREHOLDER PROPOSALS FOR 2002 PROXY STATEMENT.............
FORM 10-K REPORT...........................................
CFI MORTGAGE, INC.
SUITE 500, 601 CLEVELAND STREET
CLEARWATER, FLORIDA 33755
CONSENT SOLICITATION STATEMENT
THIS SOLICITATION OF WRITTEN CONSENTS IS BEING MADE INSTEAD OF HOLDING THE 2001
ANNUAL MEETING OF SHAREHOLDERS
CFI Mortgage, Inc., a Delaware corporation, is sending these consent
solicitation materials to stockholders of record on , 2001, instead
of holding the 2001 Annual Meeting of the Shareholders. On or about
, 2001, CFI first mailed these consent solicitation materials to all
stockholders who would be entitled to vote at the 2001 Annual Meeting because
they held CFI stock on the record date.
PURPOSE OF MEETING
CFI has summarized the specific proposals to be considered and acted upon by the
stockholders in the accompanying Notice of Solicitation of Written Consents. CFI
has described and explained each proposal in more detail in this Consent
Solicitation Statement.
VOTING RIGHTS AND SOLICITATION OF WRITTEN CONSENTS
VOTING
Holders of both CFI's Common Stock and certain shares of CFI's Preferred Stock,
Series 2 and Series 4, are the only CFI securities entitled to give consents at
this time. (CFI is not admitting the validity of the Series 4 Preferred Stock or
the number of votes to which it would be entitled by allowing the holder of the
Series 4 Preferred Stock to consent as provided in this solicitation.)
Stockholders giving their consent are voting their shares as authorized by CFI's
Bylaws and Delaware Corporate Law. On , 2001, the record date set by
the board of directors for identifying the stockholders who are entitled to give
consents of lieu of votes at the annual meeting, CFI had shares of
Common Stock and two shares of each of the Series 2 and Series 4 preferred stock
with a right to cast an aggregate of votes on the record date.
Each share of common stock is entitled to one vote on each matter presented to
the stockholders for consideration, including each nominee for a directorship,
provided that CFI's Delaware states that directors shall be elected by a
plurality. The number of votes the preferred stockholders are entitled to cast
is determined based on the number of shares of common stock into which the
preferred stock is convertible on the record date, unless an earlier notice of
conversion has been submitted. The common stock and the preferred stock vote
together. A majority of votes by the common stockholders and preferred
stockholders must be in favor of each nominee as a director, to ratify the
appointment of the independent auditors, to increase the authorized number of
shares of common stock and to change CFI's name. A majority is more than
one-half of all votes or consents, which could be given, both by common stock
and preferred stock. All consents will be tabulated by the inspector of election
appointed for the purpose, who will separately tabulate affirmative and negative
consents and will compare the results to the total number of votes or consents
the common stockholders and preferred stockholders are entitled give. Cumulative
voting for directors is not authorized or permitted.
IMPORTANCE OF YOUR CONSENT
The board of directors is urging you to submit your consent. Your consent will
be counted as you direct on your Consent Card, when properly completed. In the
event you do not give instruction on your consent card as to how your consent
should be counted, your consent will be counted FOR the nominees of the Board of
Directors (proposal 1), FOR proposal 2, FOR proposal 3 and FOR proposal 4. You
may revoke or change your consent at any time before CFI has received a
sufficient number of consents (including your previous consent) in favor of the
election of directors and in favor of the proposals. To revoke or change your
consent, you must send a written notice of revocation or another signed Consent
Card with a later date to CFI's Secretary, Marlene Noren, Suite 500, 601
Cleveland Street, Clearwater, Florida 33755. Your revocation or change must be
received before CFI receives a sufficient number of approving consents with
respect to a director or proposal on which you desire to change your vote or
consent. Once a favorable vote or consent on the election of each nominee and
each proposal is received (including your previous consent), the election or
approval will be final and no revocations or changes will be accepted with
respect to that election or proposal.
SOLICITATION OF WRITTEN CONSENTS
CFI's board of directors is making this solicitation of written consents on
behalf of CFI, primarily by use of the mails. CFI will bear the entire cost of
solicitation, including the preparation, assembly, printing, and mailing of this
Consent Solicitation Statement, the Consent Card, return postage and any
additional solicitation material furnished to stockholders. CFI will furnish
copies of these solicitation materials to brokerage houses, fiduciaries, and
custodians whose customers hold CFI shares so that they may forward this
solicitation material to their customers. CFI may supplement the original
solicitation of written consents by mail or by a solicitation by telephone,
facsimile, telegram, Internet or other means and the supplemental solicitation
may involve CFI's directors, officers, or employees. CFI will not pay any
additional compensation to these individuals for their soliciting services.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The names of the five persons nominated by the board of directors for election
as directors and their positions and offices with CFI are set forth in the table
below. The board of directors requests that all stockholders submit their
consents marked in favor of the election of all the nominees. In the event any
nominee is unable or declines to serve as a director upon election, the consent
will be deemed to be given for any nominee who may be designated by the present
board of directors to fill the vacancy. As of the date of this Consent
Solicitation Statement, the Board of Directors is not aware of any nominee who
is unable or will decline to serve as a director. Each nominee for director will
be voted on separately. Each nominee who receives an affirmative vote of a
majority of all votes entitled to be cast, including the common stock and
preferred stock, will be elected as a director of CFI, to serve until the next
annual meeting and until his successor has been elected and qualified.
Shareholders may not cumulate votes in the election of directors.
TERM WILL EXPIRE
---------------------------
POSITIONS AND OFFICES WITH WITHOUT
NOMINEES HELD WITH CFI AMENDMENT AMENDMENT
- -------- --------------------- ---------- ---------
Stephen E. Williams Director & Chief
Executive Officer 2004 2003
Daniel M. Brown Director & Chief
Financial Officer 2003 2002
James T. Kowalczyk Director 2004 2003
Jim R. Wickham Director 2003 2002
Richard Price Director 2003 2002
If Proposal 3 is approved by stockholders to increase the classification of
directors to three year terms of office from two year terms, the terms of
directors will expire as set forth in the "With Amendment" column. If Proposal 3
is not approved by stockholders, the terms of directors will expire as set forth
in the "Without Amendment" column. Messrs. Williams, Brown and Kowalczyk are
currently directors of CFI. Messrs. Wickham and Price are not currently
directors of CFI.
The terms of both incumbent classes of directors have expired, as a result of
CFI not holding annual meeting and electing the respective class of directors
within the last two years. Therefore, election of the nominees for the
respective terms provided will restart the staggered terms of the director
classes.
BUSINESS EXPERIENCE OF DIRECTORS
Stephen E. Williams, age 60, has been a member of the Board of Directors and
President since 1999 and was elected chairman in 2000. Mr. Williams arranged the
debenture and other funding for the Company during its reorganization. From 1997
to 1999, Mr. Williams was the Chairman and Chief Executive Officer of First
Mortgage Securities, Inc., a national mortgage banking company. From 1995 to
1997, Mr. Williams was the President and Chief Executive Officer of Systems
Communications, Inc., a publicly traded company engaged in telecommunication and
medical cost containment and which subsequent to Mr. Williams' departure
terminated these businesses and merged with a privately held company engaged in
the E-commerce business. From 1991 to 1994, he was the Chief Operating Officer
of Televoice, Inc., focusing on researching real estate applications of
relational data base integration with telephony technology. From 1976 to 1990,
Mr. Williams career centered on residential and commercial, national and
international real estate development, as an owner, major shareholder or a
member of senior management of various corporations. Throughout his career, Mr.
Williams has gained extensive experience in turnarounds, mergers, acquisitions,
start-ups and divestitures, as well as experience with the varied requirements
of the complex capital markets. Mr. Williams earned a B.S. degree in business
administration from Indiana University in 1968. He also attended the New York
Institute of Finance and received NYSE certification.
Daniel M. Brown, age 46, has been a member of the Board of Directors since
March, 2001 and the Company's Chief Financial Officer, Treasurer and a Vice
President since July 2000. He is a Certified Public Accountant with over twenty
years of accounting experience. Before joining CFI in July 2000, he was employed
by Pender, Newkirk & Company, CPAs in Tampa, Florida. Prior to that, he was
employed by DDK & Co, CPA's in New York from September 1995 to August 1998. He
is familiar with SEC regulations, having performed in supervisory roles on SEC
engagements, audits and reviews at leading accounting firms. His experience with
SEC filings and corporate tax issues provides a valuable expertise to the
Company's financial operations. Mr. Brown earned a B.S. degree in accounting
from The State University of New York College at Old Westbury, NY in 1991.
James T. Kowalczyk, age 61, has been a member of the Board of Directors since
September 2000. From 1997 to March 1999, Mr. Kowalczyk was President of Systems
Communications, Inc., a publicly traded company then engaged in
telecommunication and medical cost containment and which toward the end of his
tenure terminated these businesses and merged with a privately held company
engaged in an Internet business. From March 1999 to September 2000, he was the
CEO of International Healthcare Solutions, a former subsidiary of Systems
Communications, Inc., which was engaged in an attempt to acquire a company
engaged in processing of health insurance claims. For the past thirty years
prior to joining Systems Communications, Inc., Mr. Kowalczyk was a co-founder,
director and franchiser in Pittsburgh, Pennsylvania with Budget Marketing, Inc.
and was a co- founder and senior officer of 2001/VIP Clubs of America. Mr.
Kowalczyk attended Indiana University and the University of Tampa.
Jim R. Wickham, age 31, has been the President of Lender Ltd., a Mortgage
Company located in Michigan since August 1996. From February of 1995 to August
of 1996, he was the Branch Manager for an office, which he opened and operated
for Pioneer Mortgage. From April 1990 to February 1995, he was the
Vice-President responsible for the day-to-day operations and all trading
responsibilities for the secondary marketing department of Republic Bancorp
Mortgages, Inc. Mr. Wickham has been an active member with the Mortgage Bankers
Association of Michigan throughout his career. He has chaired or served as a
member of both the Secondary Marketing and Technology Committees for the
association throughout the past 5 years. Mr. Wickham is also working towards
becoming a Certified Mortgage Banker, the highest designation the industry
offers. His CMB certification is expected in the fall of 2002. Mr. Wickham also
served as an Intelligence Specialist in the United States Navy from June 1988 to
April 1990.
Richard A. Price, age 68, is currently the President and CEO of Nationwide
Bureau of Investigations located in St. Petersburg, Florida; a private
investigation business Mr. Price started in 1962 that provides investigative
services throughout the United States, Europe, Central America and South
America. Mr. Price is a member of the British Association of Investigators and
ordained "Knight Commander" of the world renowned "Knights of Malta". Mr. Price
served two terms in the Florida House of Representatives from 1972 - 1976, and
served a four-year term as a constitutional law enforcement official in Pinellas
County, Florida. Mr. Price also served in the United States Army as a member of
a military intelligence unit.
BOARD MEETINGS AND COMMITTEE
During the fiscal year that ended on December 31, 2000, the Board of Directors
held six meetings. During that period, all of the directors attended or
participated in all of the meetings of the board of directors.
The Board of Directors does not have any standing committees.
DIRECTOR COMPENSATION
Mr. Kowalczyk is the only director currently serving who is not an officer of
CFI or one of its subsidiaries. CFI paid Mr. Kowalczyk approximately $3,600
annually for his services as a director. Mr. Kowalczyk also renders consulting
services to CFI in addition to his services as a director. For these consulting
services, CFI issued Mr. Kowalczyk 640,625 shares of CFI's common stock valued
at $.16 per share. CFI does not pay its directors who are CFI's officers any
additional compensation for serving as directors.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you give your consent FOR the election of
the nominees listed herein.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
GENERAL
CFI is asking its stockholders to ratify the board of directors' selection of
Weinick, Sanders, Leventhal & Co. LLP, Certified Public Accountants in New York,
New York as CFI's independent accountants for the fiscal year ending December
31, 2001. Weinick, Sanders, Leventhal & Co. LLP must receive the affirmative
consent of a majority of all votes, including the common stock and preferred
stock, to be ratified as CFI's independent accountants for the current year.
In the event the stockholders fail to ratify the appointment, the board of
directors will reconsider its selection. Even if the selection is ratified, the
board of directors, in its discretion, may direct the appointment of a different
independent accounting firm at any time during the year if the board of
directors determines that such a change would be in CFI and its stockholders'
best interests.
Weinick, Sanders, Leventhal & Co., LLP audited CFI's financial statements for
the 2000 fiscal year.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The board of directors recommends that you give your consent FOR the
ratification of the selection of Weinick, Sanders, Leventhal & Co., LLP to serve
as CFI's independent accountants for the fiscal year ending December 31, 2001.
PROPOSAL NO. 3.
INCREASE THE TERM OF DIRECTORS TO THREE YEARS FROM TWO YEARS AND THE NUMBER OF
CLASSES OF DIRECTORS TO THREE.
The board of directors is asking the stockholders to approve the following
resolution:
Resolved, that Article Seventh, Section 1, of the Corporation's Delaware
Charter, as amended, be, and it hereby is, amended to delete the references to
1998 and 1999, to change the classification of the board of directors to three
classes from two classes, to apportion the directors as equally as possible
among the three classes so created and to begin the classification after this
amendment by electing approximately one-third of the directors to terms expiring
in each of one year, in two years and in three years.
PURPOSE OF THE AMENDMENT
CFI presently has two classes of directors, each serving two year terms. As a
result, the entire board of directors could be replaced in two years. CFI's
current board of directors, who have been nominated for reelection, nominees who
are not currently directors, have a business plan which they believe they are
well suited to complete. In the event these persons were to be replaced within a
two year period by other persons who do not ascribe to this business plan or who
are less well suited to guide CFI in achieving the benefits of the business
plan, CFI's management believes that CFI's stockholders would be harmed. CFI's
management believes that three year classifications of the directors would make
CFI less attractive for a takeover by persons who do not ascribe to the business
plan or who are less well suited to achieve its benefits.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you give your consent FOR the amendment
of the Articles of Incorporation, as amended, to increase the classification of
directors to three years from two years.
PROPOSAL NO. 4
INCREASE THE AUTHORIZED SHARES OF COMMON STOCK
The board of directors is asking the stockholders to approve the following
resolution:
Resolved, that Article Fourth, Section 1, of the Corporation's Delaware Charter,
as amended, be, and it hereby is, amended to increase the number of shares of
common stock which the Corporation is authorized to issued to 100,000,000 from
35,000,000 and the par value thereof shall be unchanged.
PURPOSE OF THE AMENDMENT
At the date of this Consent Solicitation Statement, CFI had 35,000,000 shares of
its Common Stock issued and outstanding. This is the entire number of shares
authorized by CFI's Delaware Charter. CFI cannot issue any more shares of common
stock without an amendment to its Delaware Charter increasing the number of
authorized common shares. Furthermore, CFI has Series 2 and Series 4 Preferred
Stock and debentures issued and outstanding, both of which obligate CFI to
issue, upon the election of the respective holders to convert to common stock,
approximately additional shares of its common stock. CFI has been compensating
its executives, making acquisitions and financing its operations through the
sale of the convertible preferred stock and debentures. In order for CFI to meet
its obligations under convertible securities now outstanding and to continue to
compensate its executives with stock incentives, make acquisitions and raise
investment capital to sustain and expand operations, CFI will require additional
authorized shares of common stock. Accordingly, the board of directors deems it
prudent and appropriate at this time to recommend an increase in the authorized
shares of common stock to 100,000,000 from the presently authorized 35,000,000.
The board of directors believes the increase in the number of authorized shares
of common stock is essential to CFI's future viability.
This proposal must receive the affirmative consent of a majority of all votes,
including the common stock and preferred stock, to be approved.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you give your consent FOR the amendment
of the Articles of Incorporation, as amended, to increase the number of
authorized shares of common stock to 100,000,000 from 35,000,000.
PROPOSAL NO. 5
CHANGE OF CORPORATE NAME
CFI's board of directors believes that a change in its corporate name to Lender
Business Resources, Inc. will better reflect its current and proposed business
resulting from a planned acquisition of a mortgage banking company and software
developer for the mortgage and its business as a developer of software for the
transportation industries. Furthermore, CFI has emerged from reorganization
under Chapter 11 of the Bankruptcy Code, which is reflected in its business
reputation under the CFI name.
This proposal must receive the affirmative consent of a majority of all votes,
including the common stock and preferred stock, to be approved.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that you give your consent FOR the amendment
of the Articles of Incorporation, as amended, to change the name of CFI to
Lender Business Resources, Inc.
OWNERSHIP OF SECURITIES
The following table sets forth the names, addresses and stock ownership of all
persons CFI knew to be the owners at September 30, 2001 of five percent or more
of its common stock, each director, nominee for a directorship, each executive
officer of CFI and all directors, nominees and officers, as a group. Unless
otherwise indicated, all ownership is both legal and beneficial, including both
sole investment and voting power.
NUMBER
OF SHARES
BENEFICIALLY PERCENT
NAME OWNED OWNED
- --------- -------------- -------
Stephen E. Williams 5,326,244 16%
James T. Kowalczyk 1,176,339 3%
Daniel M. Brown 615,711 2%
J. Steven Furniss 1,639,848 5%
James Furniss 1,639,848 5%
All executive officers
or directors as a group
(5 persons) 7,118,294 31%
Frank LaForgia 1,759,000 5%
Rodger W. Stubbs 1,556,375 5%
The address of the directors, nominees and officers is the address of CFI. Mr.
J. Steven Furniss, and Mr. James Furniss own one share of Series 2 Preferred
Stock which is immediately convertible into the number of shares of common stock
set forth above, but which cannot be converted because CFI does not have a
sufficient number of unissued shares of common stock available for this purpose.
Approval of proposal 3 by the stockholders will enable Mr. J. Steven Furniss,
and Mr. James Furniss to convert their preferred stock. Mr. Fioretti owns one
share of Series 4 Preferred Stock, a portion of which he has elected to convert
at a time when CFI had a sufficient number of unissued shares of common stock to
effect the conversion. CFI disputes the stated value of preferred share Mr.
Fioretti owns, which affects the number of shares into which it would be
convertible and the number of votes to which it would be entitled, even though
CFI is allowing Mr. Fioretti to vote his share of preferred stock for the
election of directors and the proposals set forth herein as if there were no
dispute as the stated value.
COMPLIANCE WITH SEC REPORTING REQUIREMENTS
Under the securities laws of the United States, CFI's directors, executive
officers, and any persons holding more than ten percent of CFI's common stock
are required to report their initial ownership of CFI's common stock and any
subsequent changes in their ownership to the Securities and Exchange Commission
("SEC"). The SEC has set specific due dates for these reports, and CFI is
required to disclose in this Statement any failure to file by those dates. Based
upon the copies of Section 16(a) reports CFI has received from such persons for
their 2000 fiscal year transactions and the written representations received
from one or more of such persons, CFI believes that there has been compliance
with all reporting requirements applicable to such officers, directors, and
ten-percent beneficial owners for such fiscal year, except that the following
individuals failed to file timely reports for such fiscal year:
Section 16(a) Beneficial Ownership Reporting Compliance. Until August, 2000, the
Company's directors, officers and owners of more than ten percent of the
Company's common stock were not aware of the requirement to file and submit to
the Company reports of beneficial ownership on Forms 3, 4 and 5, and no such
reports were filed prior to that time. Beginning at that time, the following
persons filed and submitted to the Company Forms 3 at the dates indicated below.
These filings were late for the reasons indicated.
Name Date Form 3 Filed
---- -----------------
Vincent Castoro August 18, 2000
Stephen E. Williams September 22, 2000
Gregory Cutuli September 22, 2000
Forms 3 were not submitted to CFI by Christopher Castoro, Gary Fioretti, Gregory
Cutuli and James Kowalczyk. CFI is not able to ascertain from a search of the
Commission's EDGAR Form Pick Web site that these persons filed Forms 3, and
simply failed to submit copies to CFI. Each of these individuals were
stockholders of CFI required to filed such reports and submit copies to the
Company. Furthermore, the Company believes that Messrs. Castoro, Cutuli and
Williams have made sales of the CFI's common stock pursuant to Rule 144, which
should have been reported on form 4. Vincent Castoro is deceased and CFI is not
aware of matters related to the disposition of his estate, including CFI's stock
held therein. No CFI director or officer has filed a form 5, annual report of
beneficial ownership.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned, by CFI's Chief Executive
Officer and the four other highest-paid executive officers, for services
rendered in all capacities to CFI and its subsidiaries for each of the last
three fiscal years. No executive officer who would have otherwise been
includable in such table on the basis of salary and bonus earned for the 2000
fiscal year has been excluded by reason of his or her termination of employment
or change in executive status during that fiscal year. The individuals included
in the table will be collectively referred to as the "Named Officers."
Name & Title Year Salary Paid Salary Accrued Total Compensation
------------- ---- ----------- -------------- ------------------
Stephen E. Williams 2000 $187,500 $30,000 $217,500
President & CEO 1999 $ 30,000 $56,875 $ 86,875
Christopher Castoro 2000 $114,000 $27,500 $141,500
V.P. & CEO (1) 1999 $ 30,000 $56,875 $ 86,875
1998 $ 91,666 N/A $ 91,666
Rodger Stubbs 2000 $ 92,000 $22,500 $114,500
Vice President (2) 1999 $ 57,000 $93,204 $150,204
1998 $ 73,070 N/A $ 73,070
Greg Cutuli (3) 2000 $114,000 $27,500 $141,500
Vice President 1999 $ 52,500 $68,321 $102,821
1998 $104,500 N/A $104,500
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE IN CONTROL
AGREEMENTS
Christopher Castoro, Gregory Cutuli and Rodger Stubbs were terminated as
officers, and resigned as directors subsequent to December 31, 2000.
SHAREHOLDER PROPOSALS FOR 2002 PROXY STATEMENT
Proposals which any stockholder intends to be presented at CFI's 2002 Annual
Meeting of Shareholders, or in a written consent solicitation in place thereof,
must be received by CFI no later than February 28, 2002 in order to be
considered for inclusion in the proxy or written consent solicitation statement
and related materials. Please send any such proposals to CFI Mortgage, Inc.,
Suite 500, 601 Cleveland Street, Clearwater, Florida 33755, Attn: Investor
Relations.
Any proxy solicited by the board of directors for the 2002 Annual Meeting of
Shareholders, or solicitation of written consents in place thereof, will confer
discretionary authority to vote on any shareholder proposal presented at that
meeting, unless CFI is provided with notice of such proposal no later than
February 28, 2002.
FORM 10-K REPORT
CFI will mail without charge, upon written request, a copy of its annual report
on Form 10-K for the fiscal year ended December 31, 2000, including the
financial statements, schedules and list of exhibits. Requests should be sent to
CFI Mortgage, Inc., Suite 500, 601 Cleveland Street, Clearwater, Florida 33755,
Attn: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Marlene L. Noren
Marlene L. Noren
Secretary
Dated: , 2001
[FORM OF - OBVERSE - CONSENT CARD]
SOLICITATION OF WRITTEN CONSENTS INSTEAD OF THE 2001 ANNUAL MEETING OF
SHAREHOLDERS THIS WRITTEN CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CFI MORTGAGE, INC.
CFI MORTGAGE, INC.
Suite 500, 601 Cleveland Street
Clearwater, Florida 33755
The undersigned revokes all previous proxies and consents, acknowledges receipt
of the Notice of Written Consent Solicitation and the Consent Solicitation
Statement of CFI Mortgage, Inc. and hereby gives consent with respect to all
shares of CFI which the undersigned is entitled to vote, either on his or her
own behalf or on behalf of an entity or entities, in lieu of CFI's 2001 Annual
Meeting of Shareholders. The shares represented by this written consent are as
of , 2001, and shall be voted in the manner set forth on the reverse side.
SEE REVERSE SIDE CONTINUED AND TO BE SIGNED SEE REVERSE SIDE
ON REVERSE SIDE
[FORM OF - REVERSE - CONSENT CARD]
PLEASE MARK [X] CONSENT, AS IN THIS EXAMPLE.
1. To elect five members of the Board of Directors to serve staggered three year
terms for terms ending as set forth in the Consent Solicitation Statement and
until the appropriate next Annual Meeting and their respective successors have
been elected and qualified;
NOMINEES: (01) Stephen E. Williams, (02) Daniel M. Brown,
(03) Jim R. Wickham, (04) James T. Kowalczyk,
(05) Richard Price
[ ] FOR ALL NOMINEES
[ ] WITHHELD FROM ALL NOMINEES
[ ] For all nominees except as named below:
-------------------------------------------------------------
2. To ratify the selection of Weinick, Sanders, Leventhal & Co. LLP, CPAs, as
CFI's independent accountants for the fiscal year ending December 31, 2001;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to CFI's Delaware Charter changing the classification
of the board of directors to three years from two years.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve an amendment to CFI's Delaware Charter increasing CFI's authorized
shares of common stock to 100,000,000 shares from 35,000,000 shares without
changing the par value thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To approve an amendment to CFI's Delaware Charter changing its name to Lender
Business Resources, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign your name exactly as it appears hereon. If acting as attorney,
executor, trustee, or in other representative capacity, sign name and title. A
consent signed by one joint owner will be accepted unless the other joint owner
objects or votes against a proposal.
Signature: Date: , 2001
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