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OMB APPROVAL
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OMB Number:
3235-0145
Expires: Dec. 31,
1997
Estimated
average burden
Hours per form 14.90
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
News Communications, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
652484601
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(CUSIP Number)
Paul J. Pollock, Esq.
Piper & Marbury L.L.P.
1251 Avenue of the Americas
New York, New York 10020-1104
(212) 835-6280
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
July 28, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 7 pages)
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1The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SEC 1746 (12-91)
<PAGE>
SCHEDULE 13D
CUSIP No. 652484601 Page 2 of 7 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Steven Farbman
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 250,000
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 250,000
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WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1
250,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |X|1
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.7%
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14 TYPE OF REPORTING PERSON
IN
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1 Excludes 4,185,629 shares owned by other parties to a certain stockholders'
agreement of which Mr. Farbman disclaims beneficial ownership. See Item 6 for
a description of the stockholders' agreement.
*SEE INSTRUCTIONS BEFORE FILLING OUT
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1--7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
<PAGE>
Item 1.Security and Issuer.
This statement relates to the common stock, $.01 par value, of News
Communications, Inc., a Nevada corporation. The address of News Communications'
principal executive office is 174-15 Horace Harding Expressway, Fresh Meadows,
New York 11365.
Item 2.Identity and Background.
(a) This statement is being filed on behalf of Steven Farbman.
(b) Mr. Farbman's business address is 174-15 Horace Harding
Expressway, Fresh Meadows, New York 11365.
(c) Mr. Farbman is the President and Chief Executive Officer of the
Issuer.
(d-e)During the last five years, Mr. Farbman has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors)and was not a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violations with respect to such laws.
Item 3.Source and Amount of Funds or Other Consideration.
Mr. Farbman acquired the shares pursuant to the terms of a Restricted Stock
Agreement in consideration for his future services as President and Chief
Executive Officer of the Issuer. See Item 6.
Item 4.Purpose of Transaction.
All securities reported hereunder have been acquired by Mr. Farbman
in order to obtain an equity position in the Issuer for investment purposes.
Depending upon market conditions and other factors that Mr. Farbman may deem
material to his investment decisions, he may acquire additional securities of
the Issuer in the open market, in private transactions or by any other
permissible means, although, except for the Stock Option Agreement described in
Item 6, he has no present intention to do so.
The acquisition by Mr. Farbman was not made for the purposes of
acquiring control of the Issuer. However, under the terms of the Stockholders'
Agreement described in Item 6, Mr. Farbman has agreed to vote his so as to elect
nominees constituting the entire Board of Directors for as long as he is the
President and Chief Executive Officer of the Issuer and, in certain
circumstances, has agreed to sell his shares in an agreed upon manner which may,
in the future, result in a change in control of the Issuer.
Page 3 of 7
<PAGE>
By virtue of the ownership of the Stockholders identified in Item
6, Mr. Farbman and the other Stockholders will control the election of all of
the members of the Board of Directors of the Issuer. See Item 6. Except as set
forth above, Mr. Farbman has no present plans or intentions which would result
in or relate to any of the transactions described in subparagraphs (a) through
(j) of Item 4 of Schedule 13D.
Item 5.Interest in Securities of the Issuer.
(a-b)As of August 1, 1999, Mr. Farbman beneficially owned 250,000
shares, or 3.7% of the Issuer's common stock outstanding based on the number of
shares outstanding as reported in the Issuer's Form 10-QSB for the quarter ended
May 31, 1999 plus the 250,000 shares of common stock issued to Mr. Farbman on
July 28, 1999. Mr. Farbman has sole voting and dispositive power over all
250,000 shares.
By virtue of having entered into the Stockholders' Agreement, Mr. Farbman
may be deemed under Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act
to be a member of a group with the Stockholders described in Item 6. However,
under the Stockholders' Agreement, Mr. Farbman retains sole voting power with
respect to such shares. Accordingly, pursuant to Rule 13d-4 promulgated under
the Exchange Act, Mr. Farbman expressly disclaims beneficial ownership of the
shares beneficially owned by the other Stockholders and that the filing of this
Statement on Schedule 13D shall not be construed as an admission that Mr.
Farbman is the beneficial owner, under Section 13(d) or 13(g) of the Exchange
Act, of the shares beneficially owned by the other Stockholders.
(c) Mr. Farbman has not effected any other transaction in shares of
News Communications' common stock during the past 60 days, except (i) the
acquisition of the 250,000 shares reported in this schedule and the grant by the
Issuer to Mr. Farbman of Options to purchase shares of the Issuer's common
stock. See Item 6.
(d) Not applicable.
(e) Not applicable
Item 6.Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the
Issuer.
On July 28, 1999, Mr. Farbman entered into a certain Stockholders'
Agreement (the "Stockholders' Agreement") by and among the Issuer, Jerry
Finkelstein, the Finkelstein Foundation, Inc. and Shirley Finkelstein
(collectively, the "Finkelstein Group"); Wilbur L. Ross, Jr. ("Ross"); Melvyn I.
Weiss and the M&B Weiss Family Partnership (the "Weiss Group"); and J. Morton
Davis, D.H. Blair Investment Banking Corp., Rivkalex Corporation and Rosalind
Davidowitz (collectively, the "Davis Group") (each member of the Finkelstein
Group, Ross, the Davis Group and the Weiss Group and Mr. Farbman, individually,
a "Stockholder" and collectively the "Stockholders"). The Stockholders'
Agreement is listed as Exhibit 1 to Item 7 and the terms thereof are
incorporated herein by reference.
Page 4 of 7
<PAGE>
Under the terms of the Stockholders' Agreement, for so long as Mr.
Farbman is President and Chief Executive Officer of the Issuer, the Stockholders
have agreed to act to reduce the size of the Issuer's Board of Directors to, and
to maintain the size of the Board at, 9 members. The Stockholders have also
agreed to vote their Shares so as to elect as directors of the Issuer (i)
Finkelstein; (ii) two persons designated by Ross, one of whom shall initially be
Ross and the other of whom shall initially be Robert Nederlander; (iii) three
persons designated by Mr. Farbman, one of whom shall be Mr. Farbman, one of whom
shall initially be Steven Price and one of whom shall initially be Michael
Schenkler; (iv) one person to be designated by the Weiss Group who shall
initially be Gary Weiss; (v) one person to be designated by the Davis Group who
shall initially be Martin A. Bell; and (vi) one person to be designated by the
Davis Group, the Weiss Group and the Finkelstein Group acting jointly who shall
initially be Martin Mendelson. As a result of the Stockholders' Agreement and
the collective ownership by the Stockholders of more than 66% of the Issuer's
Common Stock, upon the receipt of resignations from the existing Board members
who are not being designated for election as directors of the Issuer as
described above, the Stockholders will control the election of the members of
the entire Board of Directors.
In addition, the Stockholders' Agreement provides for the
disposition of shares of the Issuer's Common Stock under certain circumstances
in a specified manner. No Stockholder, individually or with any other
Stockholder, may sell, other than in open market transactions, 20% or more of
the Issuer's Common Stock on a fully diluted basis unless the shares are first
offered to Mr. Farbman. Conversely, subject to Mr. Farbman's first refusal
right, if any Stockholders seek to sell shares representing 50% or more of the
Issuer's outstanding common stock on a fully diluted basis, such Stockholders
may force Mr. Farbman to sell some or all of his shares in the disposition.
Pursuant to a Restricted Stock Agreement dated July 28, 1999 by and
between the Issuer and Mr. Farbman, in consideration for his employment as
President and Chief Executive Officer, the Issuer issued to Mr. Farbman the
250,000 shares of common stock reported in this statement. The shares shall vest
as to 50% on July 28, 2000 and 50% on July 28, 2001, so long as Mr. Farbman
remains an employee of the Issuer on such dates, and subject to accelerated
vesting under certain circumstances.
Finally, pursuant to a stock option agreement dated July 28, 1999
by and between the Issuer and Mr. Farbman, the Issuer granted Mr. Farbman
options to purchase 830,000 shares of its common stock at an exercise price of
$1.8125 per share. The options shall vest in four equal installments of 207,500
shares commencing on July 28, 2000 and occurring on July 28 of the following
three years until all of the options have vested, subject to accelerated vesting
under certain circumstances.
Except as set forth above in this Item 6, Mr. Farbman has not entered
into any contracts, arrangements, understandings or relationships (legal or
otherwise) with any person with respect to any securities of the Issuer.
The foregoing description of each of the agreements incorporated by
reference into this Item 6 are qualified by reference to the actual agreement
attached as an exhibit to this Schedule.
Page 5 of 7
<PAGE>
Item 7.Material to be Filed as Exhibits.
The following are filed herewith as Exhibits:
Exhibit Description
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1 Stockholders' Agreement dated July 28, 1999
by and among News Communications, Inc., Jerry
Finkelstein, The Finkelstein Foundation,
Inc., Shirley Finkelstein, Wilbur L. Ross,
Jr.; Melvyn I. Weiss, M&B Weiss Family
Partnership, J. Morton Davis, D.H. Blair
Investment Banking Corp., Rivkalex
Corporation, Rosalind Davidowitz, and Steven
Farbman. (1)
2 Restricted Stock Agreement dated July 28,
1999 by and between News Communications, Inc.
and Steven Farbman. (1)
3 Stock Option Agreement dated July 28, 1999 by
and between News Communications, Inc. and
Steven Farbman. (1)
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(1) Incorporated by reference from the Issuer's Current Report on Form
8-K filed with the Securities and Exchange Commission on August 9,
1999.
Page 6 of 7
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: August 6, 1999
/s/ Steven Farbman
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Steven Farbman
