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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 6, 1998
Community Care Services, Inc.
(Exact name of registrant as specified in its charter)
New York 333-1700 13-3677548
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
18 Sargent Place, Mount Vernon, New York 10550
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 665-9050
N/A
(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant.
At the annual meeting of shareholders of Community Care Services, Inc.
(the "Company") held on April 8, 1999 (the "Shareholders Meeting"), a slate of
nominees for election as Directors proposed by LTTR Home Care, LLC, a New York
limited liability company ("LTTR"), comprised of Alan J. Landauer, Thomas C.
Blum and Gary J. Spirgel, were elected to the Company's Board of Directors. Dean
L. Sloane and Louis Rocco, incumbent Directors, were re-elected. At a meeting of
the Board of Directors immediately held immediately after the annual meeting of
shareholders, Mr. Landauer was elected Chairman of the Board of the Company.
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LTTR and Mr. Landauer filed a Schedule 13D on February 12, 1999 (the
"13D") to report LTTR's acquisition of 2,126,250 shares of the Company's common
stock (the "Sheinwald Stock") from Alan T. Sheinwald ("Sheinwald"), constituting
29.68% of the issued and outstanding stock of the Company. Mr. Landauer, who is
the sole member and Managing Director of LTTR, reported beneficial ownership of
2,138,250 shares, constituting 29.85% of the issued and outstanding stock of the
Company, including 12,000 shares he owned of record personally. The purchase
price for the Sheinwald Stock was $1,500,000, subject to adjustment. According
to the 13D, an initial payment of $600,000 of the purchase price was paid with
funds from a 90 day term loan with the Union State Bank located in Orangeburg,
New York, with interest payable at the prime rate as reported in the Wall Street
Journal. The loan is secured by other assets owned by Mr. Landauer. It was also
reported in the 13D that other affiliates of LTTR have adequate resources to pay
the loan as it becomes due or to refinance the loan, and have guaranteed LTTR's
obligations to pay the balance of the purchase price to Sheinwald. Sheinwald
granted Mr. Landauer an irrevocable proxy to vote the Sheinwald Shares,
including at the annual meeting of shareholders of the Company, until the record
ownership of the Sheinwald Shares transferred to LTTR and at all meetings of the
Company's shareholders having a record date set prior to such transfer.
Mr. Landauer personally acquired 12,000 shares of the Company's common
stock in open market purchases that were paid for with personal funds.
Mr. Landauer filed an amended Schedule 13D on March 18, 1999 reporting
his purchase of an additional 50,000 shares of the Company's common stock from
Alan Goldfeder for a purchase price of $50,000, the source of which was personal
funds, thereby increasing the number of shares beneficially owned by him to
2,188,250. Mr. Landauer also reported the execution of a Shareholders Agreement
among himself, Donald Fargnoli, Alan Goldfeder, Louis Rocco, Saverio Burdi and
Wade Wilson (the "Shareholders") dated as of March 12, 1999 pursuant to which
each of the Shareholders agreed to (i) vote his shares in accordance with
decisions of Mr. Landauer with respect to the election and removal of directors
of the Company and (ii) grant an irrevocable proxy to Mr. Landauer to secure
such undertaking. Each of the Shareholders granted an irrevocable proxy to Mr.
Landauer to vote all shares of Common Stock owned by such Shareholder at any
annual or special meeting of shareholders of the Company at which a proposal to
elect or remove one or more directors of the Company is presented or at any
adjournment thereof. In addition, pursuant to the Shareholders Agreement, the
Shareholders agreed that they would cause the Company to have a board of
directors consisting of five (5) directors, at least three (3) of whom shall be
persons selected by Mr. Landauer. Mr. Landauer reported that the proxies
delivered to him by Messrs. Fargnoli, Goldfeder, Rocco, Burdi and Wilson
increased the number of shares of the Company to which he had voting rights by
865,549 to 3,053,799 shares, constituting 42.63% of the issued and outstanding
common stock. The Shareholders Agreement expires on March 12, 2000, or, with
respect to each individual Shareholder, at such earlier time as he ceases to be
a shareholder of the Company.
On March 12, 1999, Mr. Landauer sent a letter to the Chairman of the
Board of the Company giving notice of his intention to nominate three
individuals for election to the Board of Directors of the Company at the annual
meeting of shareholders, which was scheduled for March
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23, 1999. Mr. Landauer stated in the letter that when taking into consideration
the proxies or other commitments to vote of several other shareholders of the
Company, he believed he had sufficient votes to elect his nominees to the Board
of Directors of the Company.
Item 5. Other Events
The Company executed a non-binding letter of intent, effective April 6,
1999, with LTTR, under which LTTR, or one of its affiliates, will acquire the
Company by way of merger (the "Merger"). Under the terms of the letter of
intent, each shareholder of the Company would receive $1.20 per share in cash
from LTTR. The consummation of the proposed transaction is subject to the
negotiation and execution of definitive agreements and approval of the Company's
shareholders. The Company intends to solicit shareholder approval for the
acquisition as soon as is practicable, and expects a closing of the transaction
to occur by the end of the second quarter of 1999.
The Company has granted to LTTR the exclusive right to negotiate for
the acquisition of the Company through at least May 18, 1999 and thereafter
until either party delivers written notice that negotiations toward a definitive
agreement have terminated. Furthermore, once a definitive agreement is signed,
the Company would be required to pay a break up fee if it fails to complete the
transaction for any reason, other than failure to obtain shareholder approval.
Upon the execution of a definitive agreement for the Merger, Dean L.
Sloane, a director of the Company, Craig V. Sloane, a former director of the
Company, and certain of Dean L. Sloane's affiliates would enter into an
agreement with the Buyer pursuant to which each of them would agree to vote all
of the Company's shares owned by them in favor of the Merger and would grant the
Buyer irrevocable proxies for a period of six months from the date of the
execution of a definitive agreement on the Merger for the purpose of voting
their shares at any meeting of shareholders or in response to any solicitation
of proxies regarding the Merger or any other proposed transaction.
In connection with the Merger, Dean L. Sloane and Craig V. Sloane would
each enter into a three year consulting agreement, including a covenant not to
compete, for payments of $110,000 per year and $26,000 per year, respectively.
These obligations would accelerate upon a change in control of the Buyer and be
guaranteed by Alan J. Landauer.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Community Care Services, Inc
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(Registrant)
Date: April 20, 1999
/s/ Elia C. Guarneri
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Elia C. Guarneri
Chief Financial Officer and Principal
Financial & Accounting Officer
