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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): December 12, 1997
FINE HOST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-28590 06-1156070
(State of other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
3 Greenwich Office Park, Greenwich, CT 06831
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (203) 629-4320
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Item 5. Other Events
On December 12, 1997, the Company issued a press release announcing that
the Audit Committee of its Board of Directors had instructed the Company's
auditors to conduct an inquiry into certain accounting practices, including the
capitalization of certain expenses, and that the auditors advised the Audit
Committee on December 12, 1997, based upon their preliminary inquiry, that
certain expenses incurred during 1997 were incorrectly capitalized rather than
expensed in the period in which they were incurred. The Company stated that it
believed the amounts will be material and that earnings for each of the first
three quarters of 1997 will need to be restated. A copy of the December 12, 1997
press release is filed as an exhibit to this Form 8-K.
Also on December 12, 1997, the Company's Common Stock was placed under a
trading halt by The NASDAQ Stock Market, Inc. ("NASDAQ"). NASDAQ has informed
the Company that the trading halt will remain in effect pending the
clarification of certain issues regarding the restatement of financials. The
Company cannot determine when such issues will be clarified so as to permit
trading of the Common Stock.
On December 15, 1997, the Company issued a press release announcing that
preliminary indications are that the accounting problems are not limited to the
incorrect capitalization of expenses and that periods prior to 1997 will also
need to be restated. The Company also stated that the outside directors of the
Company's Board of Directors (the "Outside Directors") had terminated the
employment of Richard E. Kerley, Chairman of the Board and Chief Executive
Officer, and Nelson A. Barber, Senior Vice President and Treasurer, and that the
Board of Directors expected to retain a crisis management firm and a separate
forensic accounting firm to review past accounting practices. A copy of the
December 15, 1997 press release is filed as an exhibit to this Form 8-K.
On December 15, 1997, the Board of Directors ratified the management
terminations made by the Outside Directors. The Board of Directors also approved
the retention of a crisis management firm.
On December 16, 1997, the Company retained Buccino & Associates, Inc., a
crisis management firm. On that same date, counsel to the Outside Directors
retained Price Waterhouse LLP to conduct a forensic review of the Company's
accounting practices.
Between December 15 and December 18, 1997, four lawsuits were filed in the
United States District Court for the District of Connecticut against the
Company, and certain of its officers and/or directors: Bernard Indart, on behalf
of himself and all others similarly situated vs. Fine Host Corporation, Richard
E. Kerley, Catherine B. James, Cynthia J. Robbins and Nelson A. Barber; Doreen
Stellke Levine, on behalf of herself and all others similarly situated vs.
Richard E. Kerley, Nelson A. Barber, Cynthia J. Robbins and Fine Host
Corporation; Mark Zinn, on behalf of himself and all others similarly situated
v. Fine Host Corporation, Richard E. Kerley, Nelson A.
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Barber, Catherine B. James, Ronald E. Blaylock, Jack H. Nusbaum and Joshua A.
Polan; and Roland Burke, individually and on behalf of all others similarly
situated vs. Fine Host Corporation, Richard Kerley E. and Nelson A. Barber. The
Company has not yet been served with the complaints in connection with these
lawsuits and other lawsuits may have been filed.
On December 18, 1997, Neal F. Finnegan resigned as a director of the
Company.
On December 19, 1997, the Board of Directors held a special meeting and
appointed a Special Committee (the "Special Committee") comprised of the Outside
Directors. The Special Committee is authorized to conduct an inquiry with
respect to all financial, transactional and other matters as it deems necessary
or appropriate, to retain professionals and to otherwise exercise all of the
powers of the Board of Directors in the management of the business and affairs
of the Company, subject to Delaware General Corporation Law. The Special
Committee also ratified the retention of Schulte Roth & Zabel LLP as special
counsel to the Special Committee.
As of December 19, 1997, the Company had cash and marketable securities of
approximately $100 million.
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Item 7. Financial Statements and Exhibits
(c) Exhibits:
The following Exhibits are filed as part of this report.
Exhibit 99.1 Press Release of Fine Host Corporation, dated December
12, 1997.
Exhibit 99.2 Press Release of Fine Host Corporation, dated December
15, 1997.
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SIGNATURES
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.
FINE HOST CORPORATION
Dated: December 19, 1997 By: /s/ Randy B. Spector
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Name: Randy B. Spector
Title: President
Chief Operating Officer
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EXHIBIT INDEX
Exhibit
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99.1 Press Release of Fine Host Corporation, dated December 12, 1997.
99.2 Press Release of Fine Host Corporation, dated December 15, 1997.
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CONTACT: Betsy Brod/Karen Kruza
Media: Stan Froelich
Morgan-Walke Associates, Inc.
(212) 850-5600
FOR IMMEDIATE RELEASE
FINE HOST TO RESTATE 1997 RESULTS
Greenwich, CT, December 12, 1997 -- Fine Host Corporation (NASDAQ): FINE)
announced today that the Audit Committee of its Board of Directors has
instructed the Company's auditors to conduct an inquiry into certain accounting
practices, including the capitalization of certain expenses. The auditors have
advised the Audit Committee today, that based on their preliminary inquiry,
certain expenses incurred during 1997 were incorrectly capitalized rather than
expensed in the period in which they were incurred. The impact of these expenses
on the Company's net income has not been determined, but the Company believes
that the amounts will be material and that earnings for each of the first three
quarters of 1997 will need to be restated.
The Company is currently reviewing the 1996 financial statements to
determine whether these statements are affected by these accounting practices.
No determination has been made at this time as to the 1996 financial statements.
The auditors have been instructed to report their findings directly to the
Audit Committee which will then report to the Board or Directors.
Fine Host Corporation provides food and beverage concession and catering
services to more than 900 facilities, primarily through multi-year contracts in
the following markets: the recreation and leisure market (arenas, stadiums,
amphitheaters, civic centers and other recreational facilities); the convention
center market; the education market (colleges, universities and elementary and
secondary school nutrition programs); the business dining market (corporate
cafeterias, office complexes and manufacturing plants); the health care market
(long-term care facilities and hospitals); and the corrections market (prisons
and jails).
This release contains forward-looking statements pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements are subject to various risks and uncertainties which are described in
the Company's filings with the Securities and Exchange Commission.
# # #
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FOR: Fine Host Corporation
CONTACT: Betsy Brod/Karen Kruza
Media: Stan Froelich
Morgan-Walke Associates, Inc.
(212) 850-5600
FOR IMMEDIATE RELEASE
FINE HOST TO RESTATE PRIOR PERIODS; INDEPENDENT DIRECTORS
TERMINATE CEO AND TREASURER
Greenwich, CT, December 15, 1997 -- Fine Host Corporation (NASDAQ): FINE)
announced on Friday, December 12, 1997 that certain expenses incurred during
1997 were incorrectly capitalized rather than expensed in the period in which
they were incurred and, as a result, the Company will restate each of the first
three quarters of 1997.
Preliminary indications are that the accounting problems are not limited to
the incorrect capitalization of expenses and that periods prior to 1997 will
also need to be restated. Based on the review undertaken to date, the Board
believes that it may take several weeks or more to determine the exact magnitude
of the problems.
The independent directors of the Board of Directors have terminated the
employment of Richard E. Kerley, Chairman of the Board and Chief Executive
Officer, and Nelson A. Barber, Senior Vice President and Treasurer. The Board of
Directors expects to retain a crisis management firm and also expects to retain
a separate forensic accounting firm to review past accounting practices.
Fine Host Corporation provides food and beverage concession and catering
services to more than 900 facilities, primarily through multi-year contracts in
the following markets: the recreation and leisure market (arenas, stadiums,
amphitheaters, civic centers and other recreational facilities); the convention
center market; the education market (colleges, universities and elementary and
secondary school nutrition programs); the business dining market (corporate
cafeterias, office complexes and manufacturing plants); the health care market
(long-term care facilities and hospitals); and the corrections market (prisons
and jails).
This release contains forward-looking statements pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements are subject to various risks and uncertainties which are described in
the Company's filings with the Securities and Exchange Commission. FOR: Fine
Host Corporation
