<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
NORTHSTAR HEALTH SERVICES, INC.
(Name of Issuer)
Common Stock, $0.01 Par Value
(Title of Class of Securities)
666903109
(CUSIP Number)
Thomas W. Zaucha
100 Lafayette Street
Indiana, PA 15701
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 5, 1997
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|.** (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
Continued on following page(s)
Page 1 of 13 Pages
Exhibit Index: Page 10
- ------------------------
* Initial filing with respect to Commonwealth Associates, L.P.
** A filing fee is not being paid with this statement pursuant to SEC
Release No. 33-7331 whereby the filing fee has been eliminated for
Schedule 13D.
<PAGE>2
SCHEDULE 13D
CUSIP No. 666903109
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Thomas W. Zaucha
2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |X|
3 SEC Use Only
4 Source of Funds*
PF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e). |_|
6 Citizenship or Place of Organization
United Stated of America
7 Sole Voting Power
Number of 75,000
Shares
Beneficially 8 Shared Voting Power
Owned By 667,201 (with Alice L. Zaucha as
Each Tenants by the Entirety)
Reporting
Person 207,757 (as co-general partner
With Zaucha Family Limited Partnership)
9 Sole Dispositive Power
75,000
10 Shared Dispositive Power
667,201 (with Alice L. Zaucha as
Tenants by the Entirety)
207,757 (as co-general partner
Zaucha Family Limited Partnership)
11 Aggregate Amount Beneficially Owned by Each Reporting Person
949,958
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
|_|
13 Percent of Class Represented By Amount in Row (11)
15.25%
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>3
SCHEDULE 13D
CUSIP No. 666903109
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Commonwealth Associates, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |X|
3 SEC Use Only
4 Source of Funds*
WC
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e). |_|
6 Citizenship or Place of Organization
New York limited partnership
7 Sole Voting Power
Number of 21,497
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 21,497
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
21,497
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
|_|
13 Percent of Class Represented By Amount in Row (11)
0.35%
14 Type of Reporting Person*
BK
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>4
Item 1.
Item 1 of the Initial Statement (as defined below) is hereby amended
and restated in its entirety as follows.
This Amendment No. 1 to Schedule 13D relates to shares of common stock,
$0.01 par value per share (the "Common Stock"), of Northstar Health Services,
Inc., a Delaware corporation (the "Issuer" or the "Company"), with principal
executive offices located at The Atrium, 665 Philadelphia Street, Indiana, PA
15701. This Amendment No. 1 supplements and amends the initial statement on
Schedule 13D dated November 27, 1995 (the "Initial Statement") filed by Thomas
W. Zaucha, one of the Reporting Persons (as defined herein). The
Initial Statement is supplementally amended as follows.
Item 2. Identity and Background.
The list of reporting persons in Item 2 of the Initial Statement is
hereby amended and restated in its entirety as follows.
This statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
i) Thomas W. Zaucha ("Mr. Zaucha"), and
ii) Commonwealth Associates, L.P. ("Commonwealth").
Mr. Zaucha
The principal occupation of Thomas W. Zaucha, a United States citizen, is
his position as Chief Executive Officer and Chairman of the Board of
Directors of the Issuer. The Issuer's principal business is a provider of
rehabilitation therapy, mobile diagnostics, subacute contracted care and
related services at outpatient rehabilitation clinics and mobile stations and
by contract to other health care facilities in Pennsylvania, Ohio and West
Virginia. The principal address of the Issuer is The Atrium, 665 Philadelphia
Street, Indiana, PA 15701. Mr. Zaucha's address is 100 Lafayette Circle,
Indiana, PA 15701.
Commonwealth
The principal business of Commonwealth Associates, L.P., a New York
limited partnership, is acting as a registered broker-dealer providing
investment banking and brokerage services. The address of its principal office
and business is 733 Third Avenue, New York, NY 10017.
During the past five years, neither of the Reporting Persons, the
general partner of any such limited partnership nor any executive officer or
director of such general partner ultimately in control of such limited
partnership, to the knowledge of the Reporting Persons, has been (a)
convicted in a criminal proceeding, or (b) a party to any civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of which 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 violation with
respect to such laws.
Item 3. Sources and Amounts of Funds or Other Consideration.
Item 3 of the Initial Statement is hereby supplemented by adding the
following to the end thereof:
Mr. Zaucha. Mr. Zaucha expended approximately $107,000 of his personal funds
to purchase the Common Stock which is reported in Item 5(c) as having
been purchased for his account during the past 60 days.
<PAGE>5
Commonwealth. Commonwealth expended approximately $2.04 per share of
Common Stock purchased in connection with their market making activity in
the Common Stock which is reported in Item (c) as having been purchased for
its accounts during the past 60 days. These funds were expended from
Commonwealth's working capital. Commonwealth's directors and officers have
expended approximately $153,550 of their personal funds to purchase the
Common Stock which is reported in Item (c) as having been purchased for their
accounts during the past 60 days.
Item 4. Purpose of Transaction.
Item 4 of the Initial Statement is hereby supplemented by adding the
following to the end thereof:
As more fully described below, the Reporting Persons intend
to solicit consents from the Company's stockholders in order to change the
present board of directors and management of the Company, change the number
and term of directors, fill vacancies on the board and make changes in the
Company's by-laws in furtherance of the foregoing.
Specifically, the Reporting Persons intend to initiate
and support shareholder action by written consent in lieu of a meeting, if
legally valid, that would:
(1) Increase the number of directors on the Board of
Directors to eleven, eliminate the classification of the Board of
Directors and fix the number of directors entitled to serve on the
Board of Directors of the Company by amending Article III, Section
1 of the By-laws to read in its entirety as follows:
"The business of the Corporation shall be managed
by its Board of Directors, which may exercise all powers of
the Corporation and perform all acts that are not by law, the
Certificate of Incorporation, or these Bylaws directed or required to
be exercised or performed by the stockholders. The Board of
Directors shall be comprised of eleven (11) directors. Each
director shall serve for a term of one year and shall hold office
until such director's successor is elected and qualified or until
such director's earlier resignation or removal. Directors may be
removed without cause by the holders of a majority of the shares
entitled to vote. Directors need not be stockholders.";
(2) Elect the five persons listed on Schedule A hereto
to fill the newly created directorships.
(3) Remove from office each member of the Board of
Directors of the Company, other than Mr. Zaucha, such other members
consisting of Steven N. Brody, Robert J. Smallacombe, Charles B.
Jarrett, Timothy L. Pesci and David D. Watson, and any other person
or persons (other than those listed in (2) above) elected or
appointed to the Board of Directors of the Company prior to the
effective date of this resolution in addition to or in lieu of any of
the aforenamed individuals to fill any newly created directorship or
vacancy on the Board of Directors of the Company, or otherwise.
Mr. Zaucha intends to solicit the consent of other
shareholders in accordance with the Securities Exchange Act of 1934, as
amended, and applicable Delaware law sufficient to make the foregoing consent
effective. The Reporting Persons believe that these resolutions will be
effective if consented to by holders of a majority of the shares of common
stock outstanding as of February 5, 1997. However, the Board of Directors
of the Company, without the concurrence of Mr. Zaucha, adopted amendments
to the Company's by-laws in January 1997, purporting, among other
things, to eliminate the right of stockholders to act by written consent or
at a special meeting, and to provide that Directors may only be removed
by vote of a two-thirds majority of outstanding shares, and then only for
cause. Mr. Zaucha intends to seek promptly a judicial determination of the
validity and effect of these amendments.
<PAGE>6
As stated in the prior filing on Schedule 13D, as a result
of the merger with Keystone Rehabilitation Systems, a private company
controlled by Mr. Zaucha into a subsidiary of the Company, Mr. Zaucha, Alice
L. Zaucha ("Mrs. Zaucha") and the Zaucha Family Limited Partnership hold
two Term Notes, approximately $5,000,000 in aggregate original principal
amount and certain earn-out rights. The Zaucha Family Limited Partnership, of
which Mr. Zaucha and Mrs. Zaucha are the general partners, leases certain
real property to the Company (including the Company's headquarters and 41%
of its total occupied space) under lease agreements negotiated at arm's
length in connection with the merger. Since the effective date of the
merger, a total of approximately $1,300,000 in Note, earn-out and lease
payments have accrued, of which approximately $550,000 has been paid.
Mr. Zaucha has voluntarily deferred payment of the remaining $750,000 to
the senior lender as an accommodation to the Company. Monthly payments under
the leases are currently $39,197. The Term Notes are convertible, following
approval by the Company's shareholders, at the option of the holder into
shares of Company Common Stock based on the Fair Market Value at the time
of the merger (as defined therein, $5.93 per share or 843,170 shares in the
aggregate). Mr. Zaucha has from time to time had discussions with other
members of the Board of Directors concerning the terms upon which he would be
prepared to convert the Term Notes into equity securities of the Company and
amend the terms of the leases, as a means of facilitating ongoing
negotiations with the Company's senior lender and to facilitate future
financings by the Company. Any such transaction, if and when agreed, would
be subject to approval by a majority of disinterested directors, and, if
material to the Company, would be subject to receipt of the opinion of an
independent financial advisor that the transaction is fair to the
Company and its shareholders from a financial point of view.
From time to time, the Company has received expressions
of interest from third parties interested in a potential acquisition of
the Company, but the Reporting Persons have no present plans or proposals to
accept, negotiate or solicit any such proposals.
The Company's auditor was unable to complete its audit of
the Company's 1995 financial statements because of its questions about the
integrity of the Company's prior management and related party transactions
between the Company and former members of management. As a result, the Company
has not filed reports pursuant to the Securities Exchange Act of 1934 since
September 30, 1995 and the Company's Common Stock was delisted by the Nasdaq
National Market in May 1996.
Item 5. Interest in Securities of the Issuer.
Item 5 of the Initial Statement is hereby amended and restated in its
entirety as follows.
(a) (i) On the date of this Statement, the Reporting Persons
may be deemed collectively to beneficially own 971,455 shares of Common
Stock, or 15.59%.
(ii) On the date of this Statement, the aggregate number of
shares of Common Stock of which Mr. Zaucha may be deemed a beneficial owner is
949,958 shares (approximately 15.25% of the Common Stock outstanding). Of
the 949,958 shares, 667,201 shares are held by Mr. Zaucha in Tenancy by the
Entirety with his spouse, 207,757 shares are held by the Zaucha Family
Limited Partnership whose sole general and limited partners are currently Mr.
Zaucha, his spouse and their four children, and 75,000 shares are held by Mr.
Zaucha as sole beneficial owner.
(iii) On the date of this Statement, Commonwealth may be deemed
to be a beneficial owner of 21,497 shares of Common Stock or 0.35% of the
Common Stock outstanding. Commonwealth disclaims beneficial ownership with
respect to any of the shares of Common Stock reported as owned by Mr. Zaucha
and his spouse or the Zaucha Family Limited Partnership. In addition,
Commonwealth holds 1,257,785 shares of Common Stock for the account of its
customers as described in Item 5(b)(iv) below.
<PAGE>7
(b)(i) By virtue of their position as co-general partners of
the Zaucha Family Limited Partnership, Mr. and Mrs. Zaucha may be deemed to
share the power to direct the voting and to direct the disposition of the
207,757 shares of Common Stock held for the account of Zaucha Family
Limited Partnership. The address of Mrs. Zaucha and the Zaucha Family
Limited Partnership is 100 Lafayette Circle, Indiana, PA 15701. Neither Mrs.
Zaucha nor the Zaucha Family Limited Partnership has been convicted during
the last five years in any criminal proceeding or been a party to any civil
proceeding or administrative actions under federal or state securities laws.
Mrs. Zaucha is a citizen of the United States of America and the
Zaucha Family Limited Partnership is a Pennsylvania limited partnership.
(ii) By virtue of his position as a Tenant by the Entirety
with his spouse, Mr. Zaucha may be deemed to share the power to direct the
voting and the disposition of 667,201 shares of Common Stock with Mrs. Zaucha.
(iii) Mr. Zaucha may be deemed to have sole voting power
and dispositive power over 75,000 shares of Common Stock.
(iv) As of the date of this Statement, Commonwealth
holds 1,257,785 shares of Company Common Stock, constituting approximately
20.19% of the outstanding shares, for the account of its customers,
including 21,497 shares held for its own account as of the close of business
on February 5, 1997 in connection with its market-making activity in the
Common Stock and 55,000 shares held in the accounts of Commonwealth's
officers and directors. Such customers have sole voting and dispositive
power over such shares, and Commonwealth disclaims any beneficial ownership
thereof, although it intends to recommend to its customers that they support
the changes described in Item 4.
As a result of the lapse of sixteen months since the Issuer's
last filing with the SEC, the Reporting Persons have reason to be believe
that the information filed in the most recently available filing is not
current. Therefore the percentages used herein are calculated based upon
the 6,229,717 shares of Common Stock believed by the Reporting Persons to
be issued and outstanding as of September 9, 1996, based on the most current
analysis of the ownership of the Common Stock known to the Reporting Persons,
a Certificate of Continental Stock Transfer & Trust Company, the Company's
transfer agent.
(c) Except as disclosed in the transactions listed on Exhibit
A hereto, or as otherwise described in this Item 5(c), none of the persons
named in response to paragraph (a) has engaged in any transactions with respect
to the shares of Common Stock of the Issuer within the past sixty (60) days.
During the last 60 days, Commonwealth has acted as the sole market maker in
the Common Stock. Consequently it has, and continues to, buy and sell the
Common Stock both for its own account and for the account of its customers on a
regular basis.
(d) To the knowledge of the Reporting Persons other persons
are known to have the right or the power to direct the receipt of dividends
from, or the proceeds from the sale of, the Common Stock. To the
knowledge of the Reporting Persons, except as identified in this Item 5, the
only other persons with an interest in more than five percent of the Common
Stock are J.P. Morgan & Co. Incorporated, The Dreyfus Corporation, Mellon Bank
Corporation, Mellon Bank, N.A. and Premier Capital Growth Fund.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Item 6 of the Initial Statement is supplemented as follows:
(i) See Item 4 above.
(ii) The Nominees, each of whom is not a director, officer or
employee of the Issuer, other than Mr. Zaucha, will not receive any
compensation from the Issuer other than a reasonable stipend for attending
<PAGE>8
meetings of the Board of Directors if elected, and they will be indemnified
and have expenses reimbursed in connection with the consent solicitation.
(iii) On February 6, 1997, the Committee to Protect Northstar
Health Services, Inc. retained Commonwealth to act as its financial
advisor in connection with a consent solicitation. The Committee has
agreed to pay Commonwealth $10,000 in the aggregate in two installments by
February 28, 1997. The Committee has further agreed to pay Commonwealth a
"success fee" of $50,000, plus $.03 per vote successfully solicited from
customers of Commonwealth, if the proposals are approved by an absolute
majority of the Company's issued and outstanding common stock and to pay
Commonwealth's reasonable out-of-pocket expenses. Mr. Zaucha has also
agreed to pledge 75,000 shares of Common Stock beneficially owned by him to
Commonwealth as security for its fees and expenses. The pledge agreement does
not grant Commonwealth prior to default the power to vote or direct the vote
of the pledged securities or the power to dispose or direct the disposition
of the pledged securities.
(iv) Commonwealth lead-managed the Company's last public offering in
May 1995.
(v) Dr. Lawrence Jindra, one of the Nominees to the Board of
Directors, has from time to time been a paid consultant to Commonwealth.
(vi) Mr. Zaucha intends to vote his shares of Common Stock in favor
of the measures required by Item 4 above.
Item 7. Material to Be Filed as Exhibits
Item 7 of the Initial Statement is hereby amended by adding the following to
the end thereof:
1. Joint Filing Agreement, dated February 6, 1997, pursuant to Rule
13d-f(1) between Thomas W. Zaucha and Commonwealth Associates, L.P.
<PAGE>9
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: February 6, 1997 THOMAS W. ZAUCHA
/s/ Thomas W. Zaucha
Thomas W. Zaucha
Date: February 6, 1997 COMMONWEALTH ASSOCIATES, L.P.
By: Commonwealth Associates Management
Company, Inc., its general partner
By: /s/ Basil Asciutto
Name: Basil Asciutto
Title: Chief Operating Officer
By: /s/ Joseph Wynne
Name: Joseph Wynne
Title: Chief Financial Officer
<PAGE>10
EXHIBIT INDEX
Page
A. Recent Transactions in the Common Stock of Northstar Health
Services, Inc.
B. Joint Filing Agreement, dated February 6, 1997, between
Thomas W. Zaucha and Commonwealth Associates, L.P.
<PAGE>12
SCHEDULE A
Nominees To The Board of Directors
The following sets forth information about the Nominees.
Lawrence F. Jindra, M.D. (38) has served as the Independent
Scientific/Technical Consultant to Biomedical Venture Finance since 1982. Mr.
Jindra has also served as the Assistant Chief of Ophthalmology (Northport
Veterans Affairs Medical Center) and as the Founder and Director of the
Glaucoma Consultation Unit of the United States Department of Veterans Affairs
since 1994 and 1989, respectively. From 1992 to 1993, Mr. Jindra served as a
White House Fellow, Office of Science & Technology Policy and President's Task
Force for National Health Care Reform.
James H. McElwain (50) has served as the Chief Operating Officer of S. W. Jack
Drilling Company since January 1995. Mr. McElwain served as the Vice President
of Finance of Keystone Rehabilitation Systems ("Keystone"), which merged with
the Company in 1995, from September 1988 until December 1994. Mr. McElwain
worked with Thomas W. Zaucha, President of Keystone at that time, during his
tenure there.
Mark G. Mykityshyn has served as a Technical and Financial Consultant
with High Technology Venture Finance since 1995. Mr. Mykityshyn has also
served as a Management and Technology Consultant with Booz Allen & Hamilton,
Inc. since 1993 and was an Adjunct Professor of Aeronautics at The George
Washington University from 1994-1995.
Roger J. Reschini (59) founded the Reschini Agency, Inc., a multiple
line insurance agency, in 1979 and founded TFID, Inc., a real estate
development company, in 1984. Mr. Reschini has also been the recipient of a
Benjamin Rush Award and a Paul Harris Fellowship.
David B. White (41) is a name partner of Burns, White & Hickton
(Pittsburgh, PA). Mr. White was admitted to the practice of law in 1982, and
he is currently a member of the Allegheny County, Pennsylvania and American
Bar Associations; the Hospital Association of Pennsylvania; the National
Order of Barristers; and the Academy of Trial Lawyers. Mr. White's principal
practice areas are personal injury defense law, automobile law, insurance law
and health care law.
<PAGE>
Schedule B
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
NORTHSTAR HEALTH SERVICES, INC.
(Name of Issuer)
Common Stock, $0.01 Par Value
(Title of Class of Securities)
666903109
(CUSIP Number)
Scott C. Penwell, Esq.
305 N. Front Street
Harrisburg, PA 17101
(717) 237-5500
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 15, 1995
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [XX]. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the
class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
sent.
*The 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 after
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).
1
<PAGE>
SCHEDULE 13D
CUSIP No. 666903109
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Thomas W. Zaucha ###-##-####
2 Check the Appropriate Box If a Member of a Group*
a. |X|
b.
3 SEC Use Only
4 Source of Funds*
00
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
No
6 Citizenship or Place of Organization
United Stated of America
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
736,594 with spouse Alice L. Zaucha as Tenants by
the Entirety beginning 1/3/96 pursuant to Merger
Agreement (as defined in Item 3 below) dated
11/15/95. 207,257 as co-general partner with
spouse Alice L. Zaucha of the Zaucha Family
Limited Partnership.
11 Aggregate Amount Beneficially Owned by Each Reporting Person
944,351
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* |_|
No
13 Percent of Class Represented By Amount in Row (11)
16.7%
14 Type of Reporting Person*
IN
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.
2
<PAGE>
Item 1. Security and Issuer
(a) Northstar Health Services, Inc. common stock par value
$.01 per share.
(b) Northstar Health Services, Inc.
Foster Plaza 9
750 Holiday Drive
Pittsburgh, PA 15220
Item 2. Identity and Background
(a) Thomas W. Zaucha
(b) 100 Lafayette Circle
Indiana, PA 15701
(c) Chief Executive Officer
Northstar Health Services, Inc.
(d) Mr. Zaucha has not been convicted during the last five years
in any criminal proceedings.
(e) Mr. Zaucha has not during the last five years been a party to
any civil proceedings or administrative actions under
federal or state securities laws.
(f) United States of America.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to the Merger Agreement dated November 15, 1995 by and among
Thomas W. Zaucha, Alice L. Zaucha, and The Zaucha Family Limited Partnership, as
shareholders, Keystone Rehabilitation Systems, Inc., Northstar Health Services,
Inc., and NSK Merger Corp. (the "Merger Agreement"), Mr. Zaucha, his wife Alice,
and their family limited partnership converted all their shares of their
wholly-owned physical therapy company, Keystone Rehabilitation Systems, Inc. to
$5,600,000 worth of Northstar Health Service, Inc. common stock and other
consideration as more fully set forth in the Merger Agreement Attached as
Exhibit 1 to Item 7.
Item 4. Purpose of Transaction
The Securities were acquired pursuant to the Merger Agreement Attached
as Exhibit 1 to Item 7 and described in Item 3.
(a) Mr. Zaucha currently has no plans to purchase additional securities of
the issuer or dispose of securities of the issuer .
(b) At this time, Mr. Zaucha has no plans or proposals relating to further
extraordinary corporate transactions.
(c) There are no current plans for the sale or transfer of a material
amount of the assets of the issuer or any of its subsidiaries.
(d) Pursuant to the terms of the Merger Agreement, within thirty (30) days
after the execution of the Merger Agreement on November 15, 1995, Thomas W.
Zaucha and Steven N. Brody will be named directors of Northstar Health Services,
Inc.
3
<PAGE>
(e) Except for the shares issued pursuant to the Merger Agreement there is
no material change in the present capitalization or dividend policy of the
issuer.
(f) Currently there are no other plans for material change in the issuer's
business or corporate structure.
(g) Currently there are no changes to the issuer's charter, bylaws, or
other instruments which may impede the acquisition or control of the issuer by
any person.
(h) Currently there is no class of securities of the issuer to be delisted
from a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association.
(i) Currently there is no class of equity securities of the issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities and Exchange Act of 1934.
(j) Currently there are no plans for any other actions similar to those
enumerated above.
Item 5. Interest in Securities of the Issuer
(a) Thomas W. Zaucha currently beneficially owns 944,351 shares to be
issued on January 3, 1995 pursuant to the Merger Agreement. Mr. Zaucha's
beneficial ownership represents 16.7% of the outstanding Northstar common stock,
par value $.01 per share. Of the 944,351 shares, 736,594 shares will be issued
to Mr. Zaucha in Tenancy by the Entireties with his spouse and 207,757 will be
issued to the Zaucha Family Limited Partnership whose sole, general and limited
partners are currently Mr. Zaucha and his spouse.
(b) Mr. Zaucha and his wife Alice L. Zaucha have the shared power to
dispose of the 736,594 shares they beneficially own and will receive on January
3, 1996 pursuant to the terms of the November 15, 1995 Merger Agreement. As
general partners of the Zaucha Family Limited Partnership, Mr. Thomas Zaucha and
Alice Zaucha have shared power to dispose of the 207,757 shares the Zaucha
Family Limited Partnership beneficially owns and will receive on January 3, 1996
pursuant to the terms of the November 15, 1995 Merger Agreement. The address of
Alice L. Zaucha and the Zaucha Family Limited Partnership is 100 Lafayette
Circle, Indiana, PA 15701. Neither Alice Zaucha nor the Zaucha Family Limited
Partnership has been convicted during the last five years in any criminal
proceedings or been a party to any civil proceedings or administrative actions
under federal or state securities laws. Alice Zaucha is a citizen of the United
States of America and the Zaucha Family Limited Partnership is a Pennsylvania
limited partnership.
(c) Pursuant to the Merger Agreement dated November 15, 1995, a copy of
which is attached to Item 7 as Exhibit 1, Thomas W. Zaucha, his wife Alice and
the Zaucha Family Limited Partnership are entitled to receive on January 3, 1995
$5,600,000 shares of common stock of Northstar Health Services, Inc., $.01 par
value per share. Mr. and Mrs. Zaucha will receive $4,368,000 worth of shares as
Tenants by the Entirety and the Zaucha Family Limited Partnership will receive
$1,232,000 worth of shares. Mr. and Mrs. Zaucha are currently the sole general
and limited partners of the Zaucha Family Limited Partnership. Under the pricing
formula set forth in paragraph 2.2 of the Merger Agreement the calculated price
per share on November 15, 1995 was $5.34 per share. Therefore, Mr. and Mrs.
Zaucha will receive 736,594 shares and the Zaucha Family Partnership will
receive 207,757 shares.
(d) Currently Mr. Zaucha is unaware of any other person known to have the
right to receive or the power to direct the receipt of the proceeds from the
sale of Northstar Health Services, Inc. Securities.
(e) Not applicable.
4
<PAGE>
Item 6. Contracts, Arrangements, Understandings, or Relationships with
Respect to Securities of the Issuer
The Zaucha Family Limited Partnership is a Pennsylvania Limited Partnership
whose sole general and limited partners are Thomas w. Zaucha and his wife Alice
L. Zaucha. Pursuant to paragraph 7.3 of the Merger Agreement and the $2,400,000
Term Note dated November 15, 1995 and attached as Exhibits 1 and 4 to Item 7,
Northstar Health Services, Inc. has agreed to submit to its Shareholders a proxy
statement to seek approval of its Shareholders to permit the $2,400,000 Term
Note to be converted into Northstar common stock, par value $.01 per share. The
conversion is to be at the Fair Market Value of the shares as determined on the
conversion date in accordance with the Fair Market Value formula set forth in
Section 2.2 of the Merger Agreement.
Item 7. Material to be Filed as Exhibits
1. Merger Agreement by and among Thomas W. Zaucha, Alice L. Zaucha, and Zaucha
Family Limited Partnership, as shareholders, Keystone Rehabilitation Systems,
Inc., Northstar Health Services, Inc., and NSK Merger Corp. dated November 15,
1995.
a. Exhibit A - Plan of Merger
b. Exhibit B - Time Note
c. Exhibit C - Convertible Note
d. Exhibit C-1 - Three Year Note
e. Exhibit D - Assignment and Assumption Agreement
f. Exhibit E - Registration Rights Agreement
g. Exhibit F - Guaranty Agreement
h. Exhibit G - Investor Agreement
i. Exhibit H - Release Agreement
j. Exhibit J - Employment Agreement of Thomas W. Zaucha
k. Exhibit M - Zaucha Leases
2. Keystone Rehabilitation Systems, Inc. Schedules to the Merger Agreement.
3. Northstar Schedules to the Merger Agreement.
4. Three Year Notes in the aggregate principal amount of $2,400,000 issued by
Northstar in favor of the Shareholders.
5
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
11/24/95 /s/ Thomas W. Zaucha
__________________________ _____________________________
Date Signature
Thomas W. Zaucha
_____________________________
Name/Title
<PAGE>1
<TABLE>
<CAPTION>
EXHIBIT A
RECENT TRANSACTIONS IN THE COMMON STOCK
OF NORTHSTAR HEALTH SERVICES, INC.
BY THE PERSONS NAMED IN ITEM 5(a)
Identity of the Person: Date of Transaction Number of Shares Price Per Share Where and How the
Transaction was
Effected
<S> <C> <C> <C> <C>
Thomas W. Zaucha 12/16/96 10,000 $1.50 Purchase
12/17/96 15,000 $1.50 Purchase
12/20/96 25,000 $1.50 Purchase
12/20/96 25,000 $1.28 Purchase
Basil Asciutto 1/2/97 10,000 $1.375 Purchase
Chief Operating
Officer, Commonwealth
Basil Asciutto, Chief 1/15/97 10,000 $1.75 Purchase
Operating Officer,
Commonwealth
John Robinson, 1/15/97 35,000 $1.75 Sale
Director, Commonwealth
</TABLE>
<PAGE>1
EXHIBIT B
JOINT FILING AGREEMENT
The undersigned hereby agree that Amendment No. 1 to
the statement on Schedule 13D with respect to the shares of Common
Stock of Northstar Health Services, Inc., dated February 6, 1997, and
any further amendments thereto signed by each of the undersigned shall be
filed on behalf of each of them pursuant to and in accordance with the
provisions of Rule 13d-1(f) under the Securities Exchange Act of 1934.
Date: February 6, 1997 THOMAS W. ZAUCHA
/s/ Thomas W. Zaucha
Thomas W. Zaucha
Date: February 6, 1997 COMMONWEALTH ASSOCIATES, L.P.
By: Commonwealth Associates Management
Company, Inc., its general partner
By: /s/ Basil Asciutto
Name: Basil Asciutto
Title: Chief Operating Officer
By: /s/ Joseph Wynne
Name: Joseph Wynne
Title: Chief Financial Officer
