SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 17, 1997
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(Date of Earliest Event Reported)
COMMAND SECURITY CORPORATION
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(Exact name of Registrant as Specified in its Charter)
New York
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(State of Incorporation)
0-18684
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(Commission File Number)
14-1626307
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(IRS Employer Identification No.)
Lexington Park, Lagrangeville, New York 12540
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(Address of Principal Executive Offices)
(914) 454-3703
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(Registrant's Telephone Number)
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Item 1-Item 4 Not Applicable.
Item 5 Other Events. On or about December 4, 1997, Command Security Corporation
was served with a complaint naming the Company, among others, as a defendant in
a lawsuit characterized as a derivative action. The plaintiffs are named as
Robert J. Rosan, a shareholder, and four members of the Company's Board of
Directors, Steven B. Sands, Lloyd Saunders, III, Peter T. Kikis and Thomas P.
Kikis. The action has been filed in the Supreme Court of the State of New York
in the County of New York (Index No. 606166/97). In addition to naming the
Company as a defendant, Board of Director members William C. Vassell, Gordon
Robinett, Peter J. Nekos and Gregory J. Miller are named along with its outside
corporate and securities counsel, David J. Pollitzer.
The factual basis alleged to underlie the proceeding is described below.
The Company and the individual defendants believe the complaint is entirely
without merit. They intend to vigorously defend against each and every claim and
are giving serious consideration to counterclaims against all or some of the
plaintiffs. In general terms, the plaintiffs allege that Mr. Vassell: engaged in
a scheme to keep Command within his control culminating in an alleged breach of
fiduciary duty; concealed information from the plaintiff-directors regarding the
financial condition of the Company which resulted in a restatement of the
Company's earnings; lacked power to enter into an employment agreement on behalf
of the Company with Mr. Robinett (Mr. Robinett was rehired temporarily to
provide assistance to the Company pending the location of a permanent
replacement for H. Richard Dickinson, the Company's former Chief Financial
Officer); together with the defendant-directors, concealed information from the
plaintiff-directors; and entered into service contracts with financially
unstable companies without performing due diligence. The complaint further
alleges that Command has failed to appoint a replacement to the office of
president and that the directors have entered into a shareholder agreement which
is violative of public policy. Plaintiffs seek the award of money damages in an
amount which is "not less than" $11 million from the individual defendants, a
declaratory judgment that the shareholder agreement is void, an order for an
accounting, certain other injunctive relief and attorneys' fees and
disbursements.
The Company's Certificate of Incorporation and the Business Corporation
Law of New York provide for indemnification of officers and directors with
respect to damages and legal fees incurred in connection with lawsuits
against them arising by reason of serving the corporation. Due to the fact that
the plaintiff-directors have participated in this lawsuit as plaintiffs, the
Company may not have coverage under its officers and directors liability policy.
The defendant-directors intend to seek indemnification, as well as the
advancement of legal fees incurred in connection with their defense, from the
Company. It is too early in the litigation to reasonably estimate the potential
legal fees in connection with the defense of the Company and its
defendant-directors.
The Company's management does not anticipate any change in the day-to-day
operation of the Company or in the operation of its Board of Directors. It is
expected that all matters brought before the Board of Directors will be
evaluated based on the best interests of the Company without regard to the
ongoing litigation.
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Item 6 Not Applicable.
Item 7 Financial Statements and Exhibits.
(a),(b),(c) Not Applicable.
Item 8. Not applicable.
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.
Date: December 17, 1997 COMMAND SECURITY CORPORATION
By: /s/ William C. Vassell
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William C. Vassell
Chairman of the Board of Directors
