<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
AMENDMENT NO. 1
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended May 31, 1996 or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period from
__________ to __________ Commission file number 0-5751
COMPREHENSIVE CARE CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 95-2594724
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 Bayside Drive
Corona del Mar, California 92625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 222-2273
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of each exchange on
Title of each class which registered
Common Stock, Par Value $.01 per share New York Stock Exchange, Inc.
Common Share Purchase Rights New York Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
7 1/2% Convertible Subordinated Debentures due 2010 Over-the-Counter
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of the
Registrant at August 26, 1996, was $23,633,115 based on the closing sale price
of the Common Stock on August 26, 1996 as reported on the New York Stock
Exchange composite tape.
At August 26, 1996, the Registrant had 2,864,620 shares of Common Stock
outstanding.
<PAGE> 2
PART III
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Previously reported on Form 8-K dated May 22, 1995, Form 8-K/A dated
May 22, 1995 and Form 8-K dated July 5, 1995 incorporated herein by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
Executive Officers of Comprehensive Care Corporation and principal
subsidiaries are listed on page 15 of this Form 10-K.
During fiscal 1996, the number of members that comprised the entire
Board of Directors was five members. On September 3, 1996, the number of
directors comprising the Board of Directors was reduced to four members, by
reason of the resignation of Mr. Rudy Miller who resigned in November 1995 as a
Class II director. The number of directors comprising Class II directors was
reduced to one. Accordingly, the entire Board of Directors is currently
comprised of four directors of which two are Class I directors; one is a Class
II director and one is a Class III director. The three classes serve staggered
three year terms. Directors for each class are elected at the Annual Meeting of
Stockholders held in the year in which the term for such class expires and
serves for three years. Mr. Chriss W. Street is a Class II director. The term of
Mr. Street will expire at the 1996 Annual Meeting. Messrs. William H. Boucher
and J. Marvin Feigenbaum are Class I directors. The terms of William H. Boucher
and J. Marvin Feigenbaum will expire at the 1997 Annual Meeting. Mr. W. James
Nicol is a Class III director. The term of W. James Nicol will expire at the
1998 Annual Meeting. Directors who are employees of the Company do not receive
any compensation for serving on the Board of Directors of the Company.
Mr. Street has been renominated to continue as a Class II director for
a term expiring at the 1999 Annual Meeting of Stockholders. Under the terms of
his employment agreement, the Company is obligated to use its best efforts for
Mr. Street to continue to be elected as a Class II director of the Company, and
to be further elected as Chairman of its Board of Directors.
The Directors of the Company and their business experience during the
past five years are as follows:
Chriss W. Street (Age 46)
Mr. Street has been employed by the Company since May 1994. Mr. Street was named
Interim Chief Executive Officer on May 4, 1994 and in June 1994, he was
appointed Chief Executive Officer of the Company. In August 1994, Mr. Street was
also appointed President of the Company. Mr. Street is founder and principal of
Chriss Street & Company, a corporation specializing in investment banking,
financial advisory services, securities trading and factoring. Mr. Street
commenced operations of Chriss Street & Company in February 1992 and was
Managing Director for Seider-Amdec Securities, Inc. from 1988 to 1992. In March
1995, Mr. Street was elected as a director for StreamLogic Corp., formerly known
as Micropolis Corporation, where he also serves as chairman of the compensation
committee. In addition, in August 1995, Mr. Street was elected as a director of
Nu-Tech Bio Med, Inc. where he also serves on the stock option committee (see
"Compensation Committee Interlocks and Insider Participation"). In January 1996,
he joined the Orange County Retirement Board and in June 1996, joined the board
of directors of Fruehauf Corporation. Mr. Street also serves as Chairman of the
Board of Directors of the Company and has been a director since November 1993.
William H. Boucher (Age 64)
Mr. Boucher is a Class I director whose term expires at the 1997 Annual Meeting.
Mr. Boucher is currently a self-employed consultant providing services to the
dental, behavioral medicine and pharmaceutical industries. From February 1994 to
September 1994, he served as Vice President - Sales for Foundation Health
Pharmaceutical Services, a Health Maintenance Organization ("HMO"), and was Vice
President - Sales for Diagnostek, Inc., a mail-order pharmacy company, from June
1991 to January 1994. Mr. Boucher was also Vice President - sales for Qual-Med,
an HMO from May 1990 to June 1991 and was Vice President - Sales and Marketing
for PCS, Inc., a pharmacy processing company, from April 1980 to September 1989.
Mr. Boucher has served as a director of the Company since January 1994.
2
<PAGE> 3
J. Marvin Feigenbaum (Age 46)
Mr. Feigenbaum is a Class I director whose term expires at the 1997 Annual
Meeting. Mr. Feigenbaum has served as the Chairman and Chief Executive Officer
of Nu-Tech Bio Med, Inc. (formerly known as Applied DNA Systems, Inc.), a
chemo-sensitivity testing company, since June 1994. For the prior five years
thereto, Mr. Feigenbaum acted as an independent consultant in the medical and
health care industry generally. Mr. Feigenbaum has over 20 years experience in
the health care industry. Prior to being an independent consultant, Mr.
Feigenbaum served as Chairman and Chief Executive Officer of Temco Home Health
Care Products, Inc. Mr. Feigenbaum is a member of the Entrepreneurship Advisory
Council Small Business Research Institute at the University of Albany's School
of Business.
W. James Nicol (Age 53)
Mr. Nicol is a Class III director whose term expires at the 1998 Annual Meeting.
Mr. Nicol has served since May 1996 as director, president and chief executive
officer of Health Management, Inc. Prior to his employment with Health
Management, Inc., Mr. Nicol served from May 1995 to October 1995 as Senior Vice
President/Chief Financial Officer of CareLine, Inc. From October 1990 to March
1995, Mr. Nicol served as Senior Vice President/Chief Financial Officer and
Treasurer of Quantum Health Resources, Inc., a provider of long-term therapies
and support services for chronic disorders. From October 1989 until August 1990,
he served as President of the Company, and he served as an Executive Vice
President of the Company and in other positions from 1973 through June 1989. Mr.
Nicol has served as a director of the Company since 1988 and also served as a
director from 1985 to 1987.
During fiscal 1996, non-employee directors were compensated at the rate
of $1,000 per month of service, with committee chairmen receiving an additional
$500 per month. Directors are required to attend at least three of the five
regular Board meetings, and are not compensated for attendance at committee
meetings or meetings conducted telephonically. In April 1995, Mr. Feigenbaum was
appointed Vice Chairman and was paid an additional $1,500 per month. On the date
of the 1994 Annual Meeting, directors also received options to purchase shares
of the Company's Common Stock under the Directors' Stock Option Plan. Under the
original Directors' Stock Option Plan, each non-employee director was granted a
stock option to purchase 10,000 shares of the Company's Common Stock ("Initial
Grant"). Initial Grants vest annually in 25% increments beginning on the first
anniversary of the date of grant, provided the individual is still a director on
those dates. In addition, each non-employee director who at each annual meeting
of the Company's stockholders remains a non-employee director, receives an
option to purchase 2,500 shares of the Company's Common Stock ("Annual Grant").
Annual Grants become 100% vested as of the first annual meeting of the Company's
stockholders following the date of grant, provided the individual is still a
director as of that date.
Effective as of the date of the 1995 Annual Meeting, directors who are
not employees receive an initial stock option grant of 10,000 shares and options
to purchase 5,000 shares on each anniversary of the initial grant. In addition,
the Vice Chairman is granted with each annual grant, options to purchase 3,333
shares of the Company's Common Stock. Each chairman of a committee of the Board
of Directors is granted with each annual grant, options to purchase 8,333 shares
of the Company's Common Stock. Each non-employee director (other than the
chairman) who serves on a committee of the Board of Directors is granted with
each annual grant, options to purchase 2,500 shares of the Company's Common
Stock.
ITEM 11. EXECUTIVE COMPENSATION
This section discloses the compensation earned by the Company's Chief
Executive Officer and its other executive officers whose total salary and bonus
for fiscal 1996 exceeded $100,000 (together, these persons are sometimes
referred to as the "named executives").
3
<PAGE> 4
TABLE I - SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
Securities
Other Restricted Underlying Long-Term All
Annual Stock Option Incentive Other
Fiscal Salary Bonus Compensation Awards SARs Payouts Compensation
Name and Position Year ($) ($) ($) ($) (#) ($) ($)
- ----------------- ------ ------ ----- ------------ ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Chriss W. Street(1) 1996 207,324(2) 0 9,225 47,438 100,000 0 1,495(7)
Chairman and Chief 1995 153,711 0 0 0 150,000 0 0
Executive Officer 1994 10,424 0 0
Ronald G. Hersch(3) 1996 141,000 0 30,639(4) 46,750 20,000 0 928(7)
Vice President-Strategic 1995 102,635 0 0 0 21,500 0 0
Planning & Development
Drew Q. Miller(5) 1996 141,491 7,946 0 0 20,000 0 1,003(7)
Senior Vice President 1995 68,999(6) 0 0 0 20,000 0 0
and Chief Operating
Officer
Kerri Ruppert 1996 116,554 26,453 0 0 17,500 0 837(7)
Senior Vice President, 1995 122,493 0 0 0 19,000 0 970(7)
Chief Financial Officer 1994 116,273 0 0 0 0 0 549(7)
and Secretary/Treasurer
</TABLE>
(1) Mr. Street was named interim Chief Executive Officer of the Company
effective May 10, 1994 following the resignation of his predecessor,
and was appointed Chief Executive Officer of the Company on June 21,
1994. Accordingly, amounts shown for fiscal 1994 for Mr. Street only
reflect compensation that he earned from May 6, 1994 through the end of
fiscal 1994.
(2) Does not include car allowances of $5,500 paid by the Company and in
accordance with Mr. Street's employment agreement.
(3) Dr. Hersch was employed by the Company on August 17, 1995.
Accordingly, amounts shown for Dr. Hersch only reflect compensation
that he earned from his date of hire through the end of fiscal 1995.
(4) Represents amounts paid by the Company to Dr. Hersch pertaining to his
relocation to Tampa, Florida.
(5) Mr. Miller was employed on November 1, 1994 as Chief Financial Officer
following the resignation of his predecessor. Accordingly, amounts
shown for fiscal 1995 for Mr. Miller only reflect compensation that he
earned from November 1, 1994 to the end of fiscal 1995.
(6) Does not include amounts paid by the Company for the purchase of
certain assets of Alternative Psychiatric Centers, Inc. ("APC") from
Mr. Miller, President and sole shareholder of APC. Such purchase price
was $50,000 and included the assumption by the Company of certain
operating leases.
(7) Represents amounts contributed by the Company to the indicated person's
401(k) Plan account.
EMPLOYMENT AGREEMENTS
The Company is party to an amended and restated employment agreement
with Mr. Street that has an initial term through December 31, 1998. Mr. Street's
employment agreement provides for a salary at the rate of $150,000 per annum. In
addition, Mr. Street is provided with health insurance and other benefits and a
policy of life insurance. He also receives an auto allowance of $500 per month
and reimbursement for expenses incurred on behalf of the Company and in
connection with the performance of his duties. The agreement obligates the
Company to use its best efforts to cause Mr. Street to continue to be elected as
a Class II director, and as Chairman of its Board of Directors. The agreement
provides that the Company procure Directors and Officers Liability Insurance in
an amount not less than $1.0 million. Mr. Street's employment agreement provides
that in the event of a change of control of the Company as defined, Mr. Street
will be paid for the remainder of the unexpired term of his agreement plus two
times the sum of Mr. Street's then prevailing base salary.
In September 1995, the Board of Directors granted and issued to its
President, Mr. Chriss W. Street, 100,000 restricted shares of its Common Stock,
$.01 par value (the "Restricted Shares"). Such grant of Restricted Shares was
ratified by the stockholders at the 1995 Annual Meeting. The Restricted Shares
are subject to vesting at the rate of 5,000 shares per year (the "Annual Vested
Shares") over a 20-year period commencing December 31, 1995 and continuing at
the rate of 5,000 Annual Vested Shares per year on December 31 of each
successive year for 19 years thereafter. The vesting of the Restricted Shares is
subject to acceleration upon the occurrence of certain events of acceleration as
described below. With respect to all Restricted Shares which may become vested,
the Company is to pay to Mr. Street, a bonus equivalent to the amount of the
combined federal and applicable state and city income taxes associated with the
Restricted Shares that have become vested.
While the Restricted Shares have been issued and Mr. Street is entitled
to vote said shares, all Restricted Shares are held in escrow until their
vesting and said shares may not be sold, assigned, transferred or hypothecated
until the time they have become vested.
In addition to the vesting of the Annual Vested Shares, an additional
number of Restricted Shares vest as follows: (i) for each fiscal year of the
Company, 1,000 additional Restricted Shares vest for each $1,000,000 of net
pre-tax profit of the Company as reported for that year; (ii) in the event the
Company effects a merger, acquisition, corporate combination or purchase of
assets (an "Acquisition Event") 1,000 additional Restricted Shares vest for each
$1,000,000 of Acquisition Event value paid for the Company; and (iii) as of
December 31st of each year, for each 1% of increase of market value of the
Company's voting securities above 110% of the market value as of December 31st
of the preceding year, 1,000 additional Restricted Shares vest.
4
<PAGE> 5
Provision is made for the acceleration of the vesting of the Restricted
Shares upon the occurrence of (a) the approval by the stockholders of the
Company of an Approved Transaction, as defined; (b) a Control Purchase, as
defined; (c) a Board change; or (d) the failure by the Company to renew Mr.
Street's employment agreement on the conclusion of its term on December 31, 1996
or any subsequent or renewed term, on terms identical to those in the employment
agreement then prevailing. Upon the death or total disability of Mr. Street
prior to the complete vesting of the Restricted Shares, all Restricted Shares
not theretofore vested shall become vested.
The Company has entered into indemnification agreements with its
executive officers and directors, (Messrs. Street, Feigenbaum, Boucher, Nicol
and Ms. Ruppert, as well as three former directors and two former executive
officers). In furtherance of such indemnification agreements, on February 27,
1995 the Company established the Directors and Officers Trust Agreement (the
"Trust Agreement") which provides for the establishment of a trust (the "Trust")
with a minimum three-year term to provide a source for certain payments required
to be made under the indemnification agreements (each an "Indemnification
Agreement"), between the Company and certain of its Officers and members of the
Board of Directors of the Company (each an "Indemnitee") granted for the purpose
of indemnifying them to the maximum extent permitted by law and such
Indemnification Agreements from and against any investigation, claim, action,
suit or proceeding against them or involving them relating to or arising from
acts taken or refrained from being taken in any capacity on behalf of the
Company or while serving in an official capacity.
The Company considers it desirable to provide each Indemnitee with
specified assurances that the Company can and will honor the Company's
obligations under the Indemnification Agreements, including a policy of
insurance to provide for directors and officers liability coverage and in
transfer of $250,000 cash to the Trustee in an amount intended to provide for
future insurance deductibles. For the converting of their Insurance Policy or
Policies, which are held by the Company, the Trust Fund is held by a Trustee
separate and apart from other assets of the Company. The Trust is irrevocable by
the Company, but automatically shall terminate when all assets of the Trust Fund
have been distributed. Termination of the Trust shall not relieve the Company of
its remaining liabilities and obligations under each Indemnification Agreement.
The capitalized terms below have the meanings given to them in the Trust
Agreement.
Upon written demand for payment by the person designated in the Trust
Agreement as Beneficiary Representative accompanied by a "Notice of
Qualification" (as defined below), the Trustee shall pay the person designated
in the Trust Agreement to administer the payments to the amounts of Indemnitees
("Underwriter") an amount not greater than the balance, if any, of the specified
bookkeeping account ("Account") recorded by the Trustee for each Indemnitee. A
"Notice of Qualification" is a written statement by the Beneficiary
Representative which (I) states the date and action on which the policyholder is
obligated to Indemnitee(s) under the terms of the Indemnification Agreement,
(ii) certifies that, pursuant to the terms of the Indemnification Agreement, the
Indemnitees are entitled to payment thereunder as a result of the investigation,
claim, action, suit or proceeding, and (iii) states the amount of the payment to
which the Underwriter is entitled. Upon the receipt of a demand pursuant to
subsection (a), above, the Trustee promptly shall inform the Company of such
receipt by courier delivery to the Company of written notice thereof. Subject to
any contrary order issued by a court of competent jurisdiction, a payment made
pursuant to this Section may be made without the approval or direction of the
Company, and shall be made despite any direction to the contrary by the Company.
Prior to the time, amounts are to be paid to the Underwriter or his designee
from the Trust Fund as described above, Indemnitees have no preferred claim or
beneficial ownership interest in trust funds, and their rights are merely
unsecured contractual rights.
As soon as practicable after all Accounts have filed a demand for and
received payment in the manner described above, or, if earlier, upon the
expiration of three (3) calendar years from the date the Trust Agreement is
entered into, the Trustee shall pay to the Company all amounts then held in the
Trust Fund; provided that, if any payment from the Trust to the Beneficiary
Representative or the Underwriter or his designee who has filed a demand in the
manner described above is being contested or litigated, and payment from the
Trust is delayed under the terms of this Agreement or at the direction of a
court of competent jurisdiction beyond the expiration of the three (3) year
period specified above, payment to the Company shall be delayed until the proper
disposition of the payment to the Indemnitee has been determined. If the Company
and the Beneficiary Representative each certify to the Trustee that the
Company's obligations to make lump sum payments under the Indemnification
Agreement have been satisfied or are no longer required to be maintained by the
Trust, the Trustee shall repay to the Company all monies then held in the Trust
Fund.
5
<PAGE> 6
EXECUTIVE TERMINATION AGREEMENTS
For information related to the termination benefits for Mr. Street, see
the description of the amended and restated employment agreement and Restricted
Shares with Mr. Street under "Employment Agreements".
TABLE II - OPTIONS HELD AT MAY 31, 1996
The tables below present information regarding the number of
unexercised options held by the Company's named executives at May 31, 1996. None
of the Company's named executives exercised options for any shares of the
Company's Common Stock in fiscal 1996, nor were any stock appreciation rights
granted or held by such persons during fiscal 1996.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR SHARE DATE VALUE(1)
- ---- -------- ------------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Chriss W. Street(2) 100,000 44% $ 8.50 1/1/15 $4.775
Ronald G. Hersch(3) 5,500 2 8.50 11/14/05 5.183
20,000 9 7.875 7/17/05 5.248
Drew Q. Miller(4) 20,000 9 7.875 7/17/05 5.248
Kerri Ruppert(5) 12,500 5 7.875 7/17/05 5.248
5,000 2 7.875 5/01/06 5.248
163,000
</TABLE>
(1) Black-Scholes option pricing method has been used to calculate present
value as of date of grant. The present value as of the date of grant,
calculated using the Black-Scholes method, is based on assumptions
about future interest rates, stock price volatility and dividend yield.
There is no assurance that these assumptions will prove to be true in
the future. The actual value, if any, that may be realized by each
individual will depend upon the market price of the common stock on the
date of exercise.
(2) Includes 100,000 options under a restricted stock grant under the 1995
Incentive Plan (the "1995 Plan").
(3) Includes 5,500 options granted under a restricted stock grant in the
1995 Plan and 20,000 options granted under the 1988 Incentive Stock
Option Plan ("ISO Plan") and Non-statutory Plan ("NSO Plan").
(4) Includes 20,000 options granted under the ISO/NSO Plan.
(5) Includes 17,500 options granted under the ISO/NSO Plan.
6
<PAGE> 7
AGGREGATED FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END(1) FISCAL YEAR-END(2)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---- ------------------ ------------------
<S> <C> <C>
Chriss W. Street(3) 65,000/135,000 $148,750/71,250
Ronald G. Hersch 33,667/13,333 48,001/9,996
Drew Q. Miller 40,000/0 80,000/0
Kerri Ruppert 28,000/10,000 45,628/30,000
</TABLE>
(1) The numbers of options granted prior to October 21, 1994 have been
adjusted for the ten-for-one reverse stock split which was effective
October 21, 1994.
(2) Calculated on the basis of the closing sale price per share for the
Company's Common Stock on the New York Stock Exchange of $9.25 on May
31, 1996. Value was calculated on the basis of the difference between
the option exercise price and $9.25 multiplied by the number of shares
of common stock underlying the respective options.
(3) Exercisable options includes options for 40,000 and 20,000 shares
granted in the Company's 1988 Incentive Stock Option and Non-statutory
Plan at $6.25 and $8.00 per share, respectively. Such options vest on
March 7, 1995 and 1996, respectively. Exercisable options also includes
5,000 shares issued under a restricted stock grant in the 1995
Incentive Plan at $8.50 per share. Unexercisable options includes
options for 20,000 shares in the Company's 1988 Incentive Stock Option
Plan at $10.00 per share and vesting on March 7, 1997. Unexercisable
options also includes 95,000 shares issued under a restricted stock
grant in the 1995 Incentive Plan at $8.50 per share and vesting over
the next nineteen years.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information concerning the beneficial
ownership of Common Stock by the directors of the Company, the executive
officers named in the Summary Compensation Table included elsewhere herein and
all directors and executive officers as a group. Such information is given as of
September 25, 1996. A total of 2,928,682 shares of Common Stock were
outstanding. According to rules adopted by the Securities and Exchange
Commission, a person is the "beneficial owner" of securities if he or she has,
or shares, the power to vote them or to direct their investment. Except as
otherwise noted, the indicated owners have sole voting and investment power with
respect to shares beneficially owned. An asterisk in the percent of class column
indicates beneficial ownership of less than 1% of the outstanding Common Stock.
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
---------------- -------------------- --------
<S> <C> <C>
William H. Boucher 12,500 (1) *
J. Marvin Feigenbaum 24,166 (2) *
Stuart J. Ghertner, Ph.D. 5,000 (3) *
Lindner Funds (4) 586,700 20.0%
Ronald G. Hersch, Ph.D. 48,667 (5) 1.7
Drew Q. Miller 0 (6) *
W. James Nicol 12,612 (7) *
Kerri Ruppert 42,250 (8) 1.4
Chriss W. Street 179,060 (9) 6.1
All executive officers and
directors as a group (8 persons) 324,255(10) 11.1%
</TABLE>
(1) Includes 12,500 shares subject to options that are presently
exercisable or exercisable within 60 days of the date of this filing.
(2) Includes 24,166 shares subject to options that are presently
exercisable or exercisable within 60 days of the date of this filing.
(3) Includes 5,000 shares subject to options that are presently exercisable
or exercisable within 60 days of the date of this filing. Dr. Ghertner
was appointed Interim Chief Operating Officer of the Company on August
15, 1996; and on September 3, 1996, was named Interim President of the
Company's majority owned subsidiary, Comprehensive Behavioral Care,
Inc.
7
<PAGE> 8
(4) The mailing address of Lindner Funds is c/o Ryback Management
Corporation, 7711 Carondelet Avenue, Suite 700, St. Louis, Missouri
63105. Includes approximately 336,700 shares currently reserved for
issuance upon conversion of a Secured Convertible Note dated January 9,
1995 and 250,000 shares sold under an Amended Common Stock Purchase
Agreement dated June 29, 1995 that are issuable upon approval of
listing on the NYSE and completion of administerial matters. Lindner
Funds, as described in its Schedule 13G, holds the shares and
convertible debt in more than one fund.
(5) Includes 8,334 shares held directly and 40,333 shares subject to
options that are presently exercisable or exercisable within 60 days of
the date of this filing. On September 3, 1996, Dr. Hersch was named
Vice President - Strategic Planning & Development for the Company.
(6) Mr. Drew Miller was an executive officer of the Company until August
14, 1996; at which time he resigned as Senior Vice President and Chief
Operating Officer. Inclusion of Mr. Miller on this table is only by
reason of inclusion in the summary compensation table.
(7) Includes 56 shares held by Mr. Nicol's spouse as custodian for his
three minor children, all of whom reside with Mr. Nicol, and 12,556
shares subject to options that are presently exercisable or exercisable
within 60 days of the date of this filing.
(8) Consists of 42,250 shares subject to options that are presently
exercisable or exercisable within 60 days of the date of this filing.
(9) Includes 6,560 shares held directly and 72,500 shares subject to
options that are presently exercisable or exercisable within 60 days of
the date of this filing. Also includes 5,000 vested shares and 95,000
restricted shares under a restricted stock agreement over which the
holder has the sole voting power, the issuance of which is pending
administerial matters.
(10) Includes a total of 229,255 shares subject to outstanding options that
are presently exercisable or exercisable within 60 days of the date of
this filing, and 95,000 restricted stock shares over which the holder
has sole voting power, the issuance of which is pending administerial
matters.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1996, recommendations and administrative decisions
regarding the compensation of the Company's executives were made by the
Compensation Committee of the Board of Directors, which is currently comprised
entirely of persons who are not officers or employees of the Company. Mr. Nicol,
who served as a director of the Company and a member of the Compensation
Committee during fiscal 1996, served as President of the Company from October
1989 until August 1990 and as an Executive Vice President of the Company and in
other positions from 1973 through June 1989.
Mr. Street is a director of the Company and serves on the stock option
committee of the board of directors of Nu-Tech Bio-Med, Inc. Mr. Feigenbaum, the
Company's Vice-Chairman and also the Chairman of the Compensation Committee, is
also the chairman of Nu-Tech Bio-Med, Inc.
CERTAIN TRANSACTIONS
Mr. Rudy R. Miller served as a director of the Company and Chairman of
the Audit Committee for five and on-half months of fiscal 1996 until his
resignation on November 15, 1995. During such time and through December 31,
1995, the Company had engaged The Miller Group, of which Mr. Rudy Miller was a
principal, to provide investor-relations services at a monthly rate of $5,500
(exclusive of out-of-pocket expenses).
The Company has from time to time engaged and compensated firms for the
purpose of advising, structuring and negotiating the private placement of
securities. During fiscal 1995, the Company's Board of Directors approved the
payment to Chriss Street & Co., an investment banking firm affiliated and
controlled by Chriss W. Street, the Company's Chairman and Chief Executive
Officer, of fees aggregating $100,000 based upon its determination that the
amount of the investment banking fees charged were reasonable and on terms at
least as favorable as the terms available from other professionals rendering
such services. The Audit Committee reviewed the fees submitted by Chriss Street
& Company and the Chairman recommended approval of the fees based upon an
independent investment banking firm's opinion that the fees were standard market
rate for the transaction.
On February 1, 1995, the Company purchased certain assets of
Alternative Psychiatric Centers, Inc. ("APC"), a behavioral medicine contract
management company based in Southern California from Drew O. Miller, who joined
the Company and is currently Chief Financial Officer and Chief Operating
Officer. Such purchase price was $50,000 and included the assumption by the
Company of certain operating leases. APC had two operating locations with three
contract units offering inpatient and partial hospitalization services. The
addition of these APC contracts contributed 11% of CareUnit's total operating
revenues during fiscal 1995 although these contracts were owned by the Company
for only four months during fiscal 1995.
8
<PAGE> 9
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, September 27, 1996.
COMPREHENSIVE CARE CORPORATION
By /s/ CHRISS W. STREET
-------------------------
Chriss W. Street
(Principal Executive Officer)
By /s/ KERRI RUPPERT
------------------------
Kerri Ruppert
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates so indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Chairman,
President and
Chief Executive Officer
/s/ CHRISS W. STREET (Principal Executive Officer) September 27, 1996
- ------------------------------
Chriss W. Street
Senior Vice President, Secretary/
Treasurer and
Chief Financial Officer
(Principal Financial and
/s/ KERRI RUPPERT Accounting Officer) September 27, 1996
- -------------------------------
Kerri Ruppert
/s/ J. MARVIN FEIGENBAUM Vice Chairman September 27, 1996
- ------------------------------
J. Marvin Feigenbaum
/s/ WILLIAM H. BOUCHER Director September 27, 1996
- ------------------------------
William H. Boucher
/s/ W. JAMES NICOL Director September 27, 1996
- ------------------------------
W. James Nicol
</TABLE>
9
