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
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.
<PAGE>
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
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
