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):
October 21, 1994
COMPREHENSIVE CARE CORPORATION
(Exact name of registrant as specified in Charter)
Delaware 0-5751 95-2594724
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
16305 Swingley Ridge Drive, Suite 100, Chesterfield, Missouri 63017
(Address of principal executive offices)
(zip code)
(314) 537-1288
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal
year, if changed, since last report)
<PAGE>
Item 5. Other Events
ELECTIONS OF THE BOARD
Management's 5 nominees were elected to the Board of Directors, they
are Chriss W. Street, J. Marvin Feigenbaum, William H. Boucher, W.
James Nicol, Rudy R. Miller.
RELOCATION OF PRINCIPAL EXECUTIVE OFFICE
The Registrant announced that the principal executive office of the
Registrant would be relocated to Costa Mesa, California. Such
relocation is estimated to be completed in January, 1995. The
Registrant's principal executive office located at 16305 Swingley
Ridge Drive, Suite 100, Chesterfield, Missouri 63017 will be closed.
The purpose of the relocation is reducing general and administrative
expenses.
NEW MEMBER OF EXECUTIVE MANAGEMENT
As of November 14, 1994, Mr. Drew Q. Miller was appointed by the Board
of Directors to the office of Vice President of Acquisitions and
Development and Interim Chief Financial Officer. Mr. Miller is the
President and sole shareholder of Alternative Psychiatric Centers,
Inc., a contract management company headquartered in Huntington Beach,
California. Mr. Miller has over 12 years of experience in the health
care industry. Mr. Miller fills a vacancy in executive management
which will be created by the resignation of Mr. Fred C. Follmer.
REVERSE STOCK SPLIT
Recently, effective at 5:00 p.m., New York City time on October 21,
1994 (the "Effective Time"), the Registrant adopted a Restated
Certificate of Incorporation, attached hereto as an Exhibit. (Please
see the Exhibit Index under Item 7 hereof.) The Restated Certificate
of Incorporation included amendments to the Certificate of
Incorporation that resulted in a reclassification (the
"Reclassification") of the Registrant's Common Stock comprised of (i)
a one-for-ten reverse stock split of the Registrant's Common Stock;
(ii) a change in the number of authorized shares of Common Stock from
30,000,000 to 12,500,000 (equivalent on a pre-reverse-stock split
basis to an increase to 125,000,000 pre-reverse split shares compared
with the prior 30,000,000 authorized pre-reverse-split shares of
Common Stock); and (iii) a decrease in the par value per share of the
Registrant's Common Stock from $0.10 to $0.01 per share. The
reclassified shares of the Registrant's Common Stock have CUSIP No.
204 620 207 and are traded on the New York Stock Exchange under the
ticker symbol CMP.
CLASSIFIED BOARD OF DIRECTORS
The stockholders at the annual meeting on November 14, 1994 approved
the classification of the Registrant's Board of Directors into three
classes. The amendment will be effected pursuant to an amendment of
the Certificate of Incorporation.
COMMON STOCK PURCHASE RIGHTS
Pursuant to the Rights Agreement dated April 19, 1988 between the
Registrant and the Rights Agent therein and the Stock Purchase Rights
thereunder, the Reclassification resulted in an adjustment of the
Purchase Price from $30 per share of original Common Stock to $300 per
share of reclassified Common Stock, and each one Right entitling the
registered holder thereof to purchase one share of Old Common Stock
became one-tenth (1/10th) of one Right to purchase one share of
reclassified Common Stock. Continental Stock Transfer & Trust
Company, 2 Broadway, 19th Floor, New York, New York 10004 (Tel: (212)
509-4000) became the Rights Agent pursuant to a restated Rights
Agreement. (Please see the Exhibit Index under Item 7 hereof.)
<PAGE>
Item 5. Other Events (continued)
7 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
The Company did not make the payment of interest on its 7 1/2%
Convertible Subordinated Debentures (the "Debentures") when such
payment was otherwise scheduled to be made (October 17, 1994).
Management intended to seek to restructure several of its obligations
and commitments in order to satisfy its payment obligations under the
Indenture for the Debentures before expiration of the applicable grace
period for non-payment and the declaration of an event of default
thereunder. Under the terms of the Indenture, an event of default
occurs if the Company defaults in the payment of interest on the
Debentures when the same becomes due and payable and the default
continues for a period of 30 days. Management was unable to complete
the restructuring of the debentures during the cure period. If an
event of default occurs and is continuing, the Trustee (by notice to
the Company), or the Holders of at least 25% in principal amount of
the $9.6 million outstanding Debentures may declare the principal of
and accrued interest on all the Debentures to be due and payable. To
date, the Company has not received a notice of default from the
Trustee or bondholders.
On November 21, 1994, the Company recognized an ad hoc committee of
bondholders. who represent a significant percentage of the Company's
$9.6 million of 7 1/2% Convertible Subordinated Debentures due April 15,
2010 as an integral part of the overall restructure of CompCare. The
bondholders have retained Mr. Morris Weiss of the Miami office of the
law firm of Weil Gotshal & Manges to represent their interests. The
Company has retained Mr. Robin Phelan of the Dallas office of the law
firm of Haynes & Boone to represent its interest.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description Sequential Page Number
3.1.1 Restated Certificate of Incorporation __
November 14, 1994
4.1 Rights Agreement between the Registrant
and Continental Stock Transfer & Trust Company dated
April 19, 1988 restated and amended October 21,
1994 __
Press Release dated November 21, 1994 __
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.
COMPREHENSIVE CARE CORPORATION
(Registrant)
By:
-------------------------------------------
Kerri Ruppert
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
EXHIBIT 3.1.1
RESTATED CERTIFICATE OF INCORPORATION
OF
COMPREHENSIVE CARE CORPORATION
(Originally incorporated under the name Neuro-Psychiatric & Health
Services, Inc.)
(Original Certificate of Incorporation filed January 28, 1969)
COMPREHENSIVE CARE CORPORATION, a corporation duly organized and
existing under the General Corporation Law of Delaware (the
"corporation"), does hereby certify as follows:
1. The following provisions of the Restated Certificate of
Incorporation of the corporation, shall be and become the certificate
of incorporation of the corporation effective at 5:00 o'clock p.m. New
York City time on Friday, October 21, 1994 (the "Effective Time"), and
shall be amended and restated to read in its entirety as follows:
FIRST. The name of the corporation (the "corporation") is
COMPREHENSIVE CARE CORPORATION
SECOND. Its registered office in the State of Delaware is located at
32 Loockerman Square, Suite L-100, in the City of Dover, County of
Kent. The name and address of its registered agent are The Prentice-
Hall Corporation System, Inc., 32 Loockerman Square, Suite L-100,
Dover, Delaware 19901.
THIRD. The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH. The corporation shall have authority to issue two classes of
shares of stock to be designated, respectively, "Preferred Stock" and
"Common Stock." The total number of shares which the corporation
shall have authority to issue is twelve million five hundred sixty
thousand (12,560,000). The total number of shares of Preferred Stock
which the corporation shall have authority to issue shall be sixty
thousand (60,000); and each such share shall have a par value of fifty
dollars ($50.00); and the total number of shares of Common Stock which
the corporation shall have authority to issue shall be twelve million
five hundred thousand (12,500,000); and each such share shall have a
par value of one cent ($.01).
Simultaneously with the Effective Time, each share of the
corporation's Common Stock, par value $0.10 per share, issued and
outstanding immediately prior to the Effective Time (the "Old Common
Stock") shall automatically and without any action on the part of the
holder thereof be reclassified as and changed into one-tenth (1/10th)
of a share of the corporation's Common Stock, par value $.01 per share
(the "New Common Stock"), subject to the treatment of fractional share
interests as described below. Each holder of a certificate or
certificates which immediately prior to the Effective Time represented
shares outstanding of Old Common Stock (the "Old Certificates,"
whether one or more) shall be entitled to receive upon surrender of
such Old Certificates to the corporation's Transfer Agent for
cancellation, a certificate or certificates (the "New Certificates,"
whether one or more) representing the number of whole shares of the
New Common Stock into which and for which the shares of the Old Common
Stock formerly represented by such Old Certificates so surrendered,
are reclassified under the terms hereof. From and after the Effective
Time, Old Certificates shall represent only the right to receive New
Certificates (and, where applicable, cash in lieu of fractional
shares, as provided below) pursuant to the provisions hereof. No
certificates or scrip representing fractional share interests in New
Common Stock will be issued, and no such fractional share interest
will entitle the holder thereof to vote, or to any rights of a
stockholder of the corporation. A holder of Old Certificates shall
receive, in lieu of any fraction of a share of New Common Stock to
which the holder would otherwise be entitled, a cash payment therefor
on the basis of the closing price of the Old Common Stock on the New
York Stock Exchange immediately prior to the Effective Time, as
reported on the composite tape of the New York Stock Exchange, Inc.
(or in the event the corporation's Common Stock is not so traded on
the date on which occurs the Effective Time, such closing price on the
next preceding day on which such stock was traded on the New York
Stock Exchange). If more than one Old Certificate shall be
surrendered at one time for the account of the same Stockholder, the
number of full shares of New Common Stock for which New Certificates
shall be issued shall be computed on the basis of the aggregate number
of shares represented by the Old Certificates so surrendered. In the
event that the corporation's Transfer Agent determines that a holder
of Old Certificates has not tendered all his certificates for
exchange, the Transfer Agent shall carry forward any fractional share
until all certificates of that holder have been presented for exchange
such that payment for fractional shares to any one person shall not
exceed the value of one share. If any New Certificate is to be issued
in a name other than that in which the Old Certificates surrendered
for exchange are issued, the Old Certificates so surrendered shall be
properly endorsed and otherwise in proper form for transfer, and the
person or persons requesting such exchange shall affix any requisite
stock transfer tax stamps to the Old Certificates surrendered, or
provide funds for their purchase, or establish to the satisfaction of
the Transfer Agent that such taxes are not payable. From and after
the Effective Time the amount of capital represented by the shares of
the New Common Stock into which and for which the shares of the Old
Common Stock are reclassified under the terms hereof shall be the same
as the amount of capital represented by the shares of Old Common Stock
so reclassified, until thereafter reduced or increased in accordance
with applicable law.
Each share of Common Stock shall be entitled to one vote at all
meetings of Stockholders of the corporation and, subject to the rights
of the holders of Preferred Stock, shall be entitled to receive
dividends, when and as declared by the Board of Directors of the
corporation.
The following is a statement of the powers, preferences and
rights, and the qualifications, limitations or restrictions thereof,
of the respective classes of stock, and a statement of the authority
vested in the Board of Directors of the corporation to adopt a
resolution or resolutions from time to time providing for the issue of
such stock and making provision for such matters:
1. Except as otherwise provided in the resolution or resolutions
of the Board of Directors adopted pursuant to paragraphs (4) and (5)
of this Article FOURTH, each share of Common Stock shall entitle the
holder thereof to one vote, provided that at all elections of
directors of the corporation each stockholder shall be entitled to as
many votes as shall equal the number of votes which (except for this
provision) he would be entitled to cast for the election of directors
with respect to his shares of stock multiplied by the number of
directors to be elected, and he may cast all of such votes for a
single director or may distribute them among the number to be voted
for, or any two or more of them, as he may see fit.
2. Subject to any preferential dividend rights of the holders of
Preferred Stock determined as provided in paragraph (6) of this
Article FOURTH, the holders of Common Stock shall be entitled to
receive dividends out of any funds of the corporation legally
available therefor, when and as declared by the Board of Directors.
3. In the event of any dissolution of, or upon any distribution of
the assets of, the corporation, subject to all of the preferential
rights, if any, of the holders of Preferred Stock, the holders of the
Common Stock shall be entitled to receive, ratably and without
distinction as to class, all of the remaining assets of the
corporation.
4. The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized to fix or
alter the dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices and the liquidation
preferences of any wholly unissued series of Preferred Stock, and the
number of shares constituting any such series and the designation
thereof, or any of them.
5. The holders of the Preferred Stock or any series thereof shall
be entitled to such voting powers, full or limited, as shall be stated
and expressed in the resolution or resolutions providing for the issue
of such stock adopted by the Board of Directors. The Board of
Directors may issue one or more series of Preferred Stock without any
voting power.
6. The holders of Preferred Stock or any series thereof shall be
entitled to receive dividends at such rates, on such conditions and at
such times as shall be stated and expressed in the resolution or
resolutions providing for the issue of such stock adopted by the Board
of Directors, payable in preference to, or in relation to, the
dividends payable on any other class or classes of stock, or series
thereof and cumulative as shall be so stated and expressed.
7. The holders of the Preferred Stock or any series thereof shall
be entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the corporation as shall be stated and
expressed in the resolution or resolutions providing for the issue of
such stock adopted by the Board of Directors.
8. The Preferred Stock may be subject to redemption at such time
or times and at such price or prices and may be issued in such series,
with such designations, preferences and relative participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof as shall be stated and expressed in the
resolution or resolutions of the Board of Directors providing for the
issue of the Preferred Stock. Without in any manner limiting the
foregoing, the Board of Directors may, but is not required to,
establish and provide for a sinking fund in connection with any such
redemptions, providing for such payments, at such time and otherwise
upon such terms and conditions, as may be established in any such
resolution or resolutions of the Board of Directors.
9. The Preferred Stock or any series thereof may be made
convertible into other classes or series of stock upon such terms and
conditions as are stated and expressed in the resolution or
resolutions of the Board of Directors providing for the issue of such
series of Preferred Stock.
FIFTH: In the furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized
to make, alter, amend or repeal the by-laws of the corporation.
SIXTH. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken for or in connection with any
corporate action, the meeting and vote may be dispensed with on the
written consent of the holders of a majority of the stock entitled to
vote upon such corporate action; provided that in no case shall the
written consent be by the holders of stock having less than the
minimum percentage of the vote required by statute for the proposed
corporate action, and provided that prompt notice be given to all
stockholders of the taking of corporate action without a meeting and
by less than unanimous written consent.
SEVENTH. Election of directors need not be by ballot unless the by-
laws of the corporation shall so provide.
EIGHTH. To the fullest extent permitted by Delaware General
Corporation Law as the same exists or may hereafter be amended, a
director of the corporation shall not be liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as
a director.
2. The Board of Directors of the corporation duly adopted
resolutions that set forth the foregoing Restated Certificate of
Incorporation (which restates and integrates and also further amends
the corporation's certificate of incorporation, as heretofore amended
or supplemented), declared the proposed amendment and restatement to
be advisable, and directed that the amendment and restatement be
submitted to the corporation's stockholders for adoption by written
consent.
3. The Restated Certificate of Incorporation was duly adopted
by the a majority of the holders of all shares outstanding of Common
Stock, being the holders of all shares outstanding of capital stock
entitled to vote thereon, by written consent in accordance with the
applicable provisions of Sections 228, 242 and 245 of the General
Corporation Law of Delaware and notice has been given as provided in
Section 228 of the General Corporation Law of Delaware.
IN WITNESS WHEREOF, the corporation has caused this instrument is
executed as of the 11th day of October, 1994, and each of the
signatories to this instrument acknowledges or affirms under penalties
of perjury that this instrument is the act and deed of the corporation
and that the matters set forth in this instrument are true.
COMPREHENSIVE CARE CORPORATION
By: /s/ Chriss W. Street
----------------------------
Chriss W. Street, Chairman
ATTEST:
By: /s/ Kerri Ruppert
----------------------------
Kerri Ruppert, Vice President, Secretary and Chief Accounting Officer
<PAGE>
EXHIBIT 4.1
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT dated as of October 11, 1994 (this
"Amendment") with respect to the Rights Agreement dated as of April
19, 1988 (herein, including all amendments, referred to as the
"Agreement") between Comprehensive Care Corporation, a Delaware
corporation (the "Company"), and Security Pacific National Bank (the
"Rights Agent"), which binds and inures to the benefit of the Rights
Agent's, the successor by merger, as provided by Section 27 of the
Agreement, which is Bank of America NT&SA.
W I T N E S S E T H:
WHEREAS, it is provided in the Agreement that the Board of Directors
of the Company may amend the Agreement to substitute Rights Agents on
terms satisfactory to the Board of Directors;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATIONS, the receipt and
sufficiency of which are hereby acknowledged, the Agreement is hereby
amended as follows:
1. The Rights Agent, as defined in the introductory heading on
page one of the Agreement, and for all purposes under the Agreement,
shall hereafter mean and refer to Continental Stock Transfer and Trust
Company, whose address is 2 Broadway, New York, New York 10004.
2. This Amendment may be rescinded or further amended or restated
hereafter by the Company and the Rights Agent or at the direction of
the Company without approval of holders of Common Stock, subject to
the terms and provisions of Section 26 of the Agreement.
3. Capitalized terms used herein and not defined herein shall have
their defined meanings as set forth in the Agreement.
4. As expressly modified or superseded by this Amendment, the
Agreement shall continue in full force and effect in accordance with
its terms.
5. This Amendment shall be governed by and construed in accordance
with the substantive laws of the State of California.
6. This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together
shall constitute one and the same instrument.
7. The undersigned officer of the Company certifies, as indicated
by his signature below, to the Rights Agent that the Amendment
complies with the terms of Section 26 of the Agreement.
8. A true and correct copy of the Agreement, including exhibits
and attachments thereto, as in effect since the date of adoption
thereof and through the time immediately prior to this Amendment, is
attached and hereby is confirmed and acknowledged as a true and
complete copy of the Agreement, as modified on the terms of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed all as of the day and year first above written.
COMPREHENSIVE CARE CORPORATION
BY: /s/ KERRI RUPPERT
--------------------------------------------
Kerri Ruppert, Secretary
BANK OF AMERICA NT&SA
By:
----------------------------------------------
Its::
AGREED AND ACCEPTED BY THE UNDERSIGNED
AS THE RIGHTS AGENT HEREAFTER:
CONTINENTAL STOCK TRANSFER AND TRUST CO.
By: /s/ WILLIAM F. SEEGRABER
---------------------------------------------
William F. Seegraber, Vice President
<PAGE>
FOR IMMEDIATE RELEASE Contact: Chriss W. Street
Chairman and Chief Executive Officer
(714) 644-9425
COMPREHENSIVE CARE CORP. TO WORK WITH
BONDHOLDER COMMITTEE
Comprehensive Care Corporation (NYSE: CMP) today recognized an ad hoc
committee of bondholders who represent a significant percentage of the
Company's $9.6 million of 7.5% Convertible Subordinated Debentures due
April 15, 2010 as an integral part of the overall restructure of
CompCare. The bondholders have retained Mr. Morris Weiss of the Miami
office of the law firm of Weil Gotshal & Manges to represent their
interests. The Company has retained Mr. Robin Phelan of the Dallas
office of the law firm of Haynes & Boone to represent its interest.
Mr. Chriss W. Street, President and Chief Executive Officer of
CompCare said, "I appreciate the bondholders' rapid and professional
efforts to form a negotiating committee. The Board and management of
Comprehensive Care are endeavoring to complete a global restructuring
of the Company that effectively addresses open issues of the past and
position the Company toward profitability. The reverse split of the
Company's stock, the settlement with the Internal Revenue Service and
the hopeful completion of the convertible debt restructuring will
allow the Company to financially qualify to compete in the emerging
managed health care environment."
Comprehensive Care Corp. is traded on the New York Stock Exchange
under the symbol CMP.
ST. LOUIS, MISSOURI, NOVEMBER 21, 1994
