-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HHin3OuZCQFZIKjXsWlFULuT7AxfLvna/DYETJu8M9NCG6KbO8wx6qgIeMwxOBe6 8CV3zQsnOdK5U9Iq1TbUIg== 0000912057-95-011531.txt : 19951227 0000912057-95-011531.hdr.sgml : 19951227 ACCESSION NUMBER: 0000912057-95-011531 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19951222 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: STAFF BUILDERS INC /DE/ CENTRAL INDEX KEY: 0000720480 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 112650500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-65375 FILM NUMBER: 95604216 BUSINESS ADDRESS: STREET 1: 1983 MARCUS AVE STREET 2: STE C115 CITY: LAKE SUCCESS STATE: NY ZIP: 11042 BUSINESS PHONE: 9082338899 MAIL ADDRESS: STREET 1: 425 NORTH AVE EAST STREET 2: STE C115 CITY: WESTFIELD STATE: NJ ZIP: 07090 FORMER COMPANY: FORMER CONFORMED NAME: TENDER LOVING CARE HEALTH CARE SERVICES INC DATE OF NAME CHANGE: 19880404 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on December 22, 1995 Registration No. 33- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 STAFF BUILDERS, INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 11-2650500 (I.R.S. Employer Identification No.) 1983 MARCUS AVENUE LAKE SUCCESS, NEW YORK 11042-7011 (516) 358-1000 (Address, including ZIP Code, and telephone number, including area code, of registrant's principal executive offices) STEPHEN SAVITSKY CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER STAFF BUILDERS, INC. 1983 MARCUS AVENUE LAKE SUCCESS, NEW YORK 11042-7011 (516) 358-1000 (Name, address, including ZIP Code, and telephone number, including area code, of agent for service) COPIES TO: Floyd I. Wittlin, Esq. Richards & O'Neil, LLP 885 Third Avenue New York, New York 10022-4802 Telephone: (212) 207-1766 Facsimile: (212) 750-9022 Approximate date of commencement of proposed sale to the public: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / X / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / _______________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / _____________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / - --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE ========================================================================================================= Title of Proposed Maximum Proposed Class of Securities Amount to Offering Price Maximum Amount of to be Registered(1) be Registered Per Share(2) Aggregate Registration Fee Offering Price(3) - --------------------------------------------------------------------------------------------------------- Class A Common Stock, 196,386 $2.75 $540,061.50 $186.23 par value $0.01 per share =========================================================================================================
(1) This registration statement covers the resale by Selling Shareholders of 196,386 shares of Class A Common Stock previously acquired by such Selling Shareholders. (2) The proposed maximum aggregate offering price, estimated solely for the purpose of calculating the registration fee, has been computed pursuant to Rule 457(c) promulgated under the Securities Act and is based on the offering price of $2.75 per share which is the average of the high and low prices of Staff Builders, Inc.'s Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), on December 18, 1995, as quoted on the National Association of Securities Dealers Automated Quotation National Market System. (3) Previously, Staff Builders, Inc. filed a Registration Statement on Form S-1 (Registration No. 33-83588) by which 2,545,388 shares of common stock were registered (the "Prior Registration Statement"). A registration fee of $2,742.89 was previously paid with respect to the Prior Registration Statement. At the time of the filing of this Registration Statement, 196,386 shares registered in the Prior Registration Statement remained outstanding and subject to such Prior Registration Statement. Pursuant to Rule 429 of the Securities Act, Staff Builders, Inc. has applied the applicable percentage of the previously paid fee to the amount of this registration fee. The applicable percentage of the previously paid fee is $122.64 resulting in a balance due of $63.59. However, pursuant to Section 6(b) of the Securities Act of 1933, as amended, a fee of $100.00 is the minimum amount that shall be paid with the filing of any registration statement. Therefore, a fee of $100.00 has been paid with the filing of this Registration Statement. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED DECEMBER 22, 1995 PROSPECTUS STAFF BUILDERS, INC. 196,386 SHARES OF CLASS A COMMON STOCK This Prospectus relates to an offering by certain shareholders (the "Selling Shareholders") of up to 196,386 shares (the "Shares") of Class A common stock (the "Class A Common Stock") of Staff Builders, Inc., a Delaware corporation (the "Company"). The Class A Common Stock is traded in the over-the-counter market and is quoted on the National Association of Securities Dealers Automated Quotation ("NASDAQ") National Market ("NASDAQ/NM") under the symbol "SBLI". On December 18, 1995, the closing price of the Class A Common Stock was $2.75, as reported by NASDAQ. The sale of Shares by the Selling Shareholders may be effected from time to time in transactions (which may include block transactions) on NASDAQ/NM or on such other exchange or market in which the Class A Common Stock may from time to time be trading, in negotiated transactions, or a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. The Selling Shareholders may effect such transactions by selling Shares directly to purchasers or to or through broker-dealers which may act as agents or principals. Such broker-dealers may receive compensation in the form of discounts, concessions, or commissions from the Selling Shareholders and/or the purchasers of Shares for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). Any such broker or dealer may be deemed to be an "underwriter" within the meaning of Section 2 (11) of the Securities Act of 1933, as amended (the "Act"), and any commissions received by any such broker or dealer in connection with such sales and any profits received by any such broker or dealer on the resale of any Shares acquired as principal may be deemed to be underwriting compensation. See "Plan of Distribution." The Company will not receive any part of the proceeds from the sale of the Shares by the Selling Shareholders. The Company has agreed to bear all of the expenses incurred by it in connection with the registration of the Shares. Each of the Selling Shareholders has agreed to pay his or her own expenses, including any brokerage commissions, personal legal fees or similar expenses relating to the offer or sale of such Selling Shareholder's Shares. The Company has agreed to indemnify the Selling Shareholders against certain liabilities, including liabilities under the Act. FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "INVESTMENT CONSIDERATIONS." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. _______________________________________ The date of this Prospectus is December __, 1995. AVAILABLE INFORMATION A Registration Statement on Form S-3 relating to the Shares (the "Registration Statement") has been filed with the Securities and Exchange Commission (the "Commission") under the Act. As permitted by the rules and regulations of the Commission, this Prospectus omits certain information contained in the Registration Statement. For further information pertaining to the Shares, reference is made to the Registration Statement, including the exhibits filed as a part thereof. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Commission. Reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: Chicago Regional Office, Room 1204, 219 South Dearborn Street, Chicago, Illinois 60604; and New York Regional Office, 75 Park Place, New York, New York 10007. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Company's Class A Common Stock is presently quoted on the NASDAQ/NM and all reports, proxy statements, information statements and other information concerning the Company can be inspected at the public reference facilities of the National Association of Securities Dealers maintained at 1735 K Street, N.W., Washington, D.C. 20006. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby incorporates by reference into this Prospectus the documents listed in paragraphs (a) through (f) below, as well as, from the date of their filing, all documents filed by it with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made hereby: (a) The Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1995, as amended; (b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended May 31, 1995 and August 31, 1995, respectively; (c) The Company's Current Report on Form 8-K, dated October 26, 1995; (d) The Company's Current Report on Form 8-K, dated November 30, 1995; (e) The Company's Current Report on Form 8-K, dated December 12, 1995; and (f) The description of the Class A Common Stock, par value $.01 per share, contained in the Company's Registration Statement on Form 8-A, as amended by Amendment No. 1 to the Registration Statement on Form 8-A which was filed under the Exchange Act and declared effective on October 26, 1995. Any statement contained herein or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OR ALL OF THE INFORMATION INCORPORATED BY REFERENCE HEREIN (NOT INCLUDING EXHIBITS TO SUCH INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH INFORMATION). WRITTEN REQUESTS SHOULD BE ADDRESSED TO: STAFF BUILDERS, INC., 1983 MARCUS AVENUE, LAKE SUCCESS, NEW YORK 11042, ATTENTION: CHIEF FINANCIAL OFFICER. TELEPHONE REQUESTS MAY BE DIRECTED TO THE CHIEF FINANCIAL OFFICER AT (516) 358-1000. THE COMPANY Staff Builders, Inc. is a leading national provider of home health care. These services are provided through a pool of approximately 30,000 caregivers operating within a network of 211 offices located in 37 states and the District of Columbia. Of these offices, 32 are directly owned by the Company, 179 are owned by 86 franchisees. The Company's services are rendered by licensed and registered nurses, therapists and medical social workers, who provide skilled care such as intravenous therapy, pain management, ventilator care, changing of dressings, injections, administration of medication and other nursing procedures. In addition, unskilled care is provided by home health aides and other unlicensed personnel who assist patients with their daily activities. During the past few years, substantial changes in Federal and state health care reimbursement policies have resulted in earlier discharge of patients from health care institutions and an increase in demand for home health care. Consistent with these trends, over the past several years, demand for the Company's home health care services has increased and demand for its supplemental staffing services has decreased. For the fiscal years ended February 28, 1993, February 28, 1994 and February 28, 1995, 89%, 95% and 91%, respectively, of the Company's total revenues were attributable to home health care personnel operations and approximately 10%, 5% and 9%, respectively, were attributable to supplemental staffing operations. Despite these trends, management of the Company believes that reductions in permanent staff by hospitals and other medical facilities will lead to an increased demand for temporary nurses and other medical personnel. With this in mind, the Company has sought to strengthen its supplemental staffing business through the acquisition in July 1994 of ATC Services Incorporated ("ATC"), a provider of temporary and contractual staffing services to health care institutions and organizations through 13 offices located in seven states and the acquisition by ATC in November 1994 of seven additional offices in five states. The Company intends to pursue a strategy of aggressive growth by establishing new franchised offices and converting independently-owned agencies and its existing Company-owned offices into franchised offices. Staff Builders, Inc. is a Delaware corporation which was incorporated in New York in 1978 and reincorporated in Delaware in May 1983. Unless the context otherwise requires, all references to the "Company" include the Company's predecessor, its subsidiaries and joint ventures in which it maintains management control. -2- The Company's principal executive offices are located at 1983 Marcus Avenue, Lake Success, New York 11042 and its telephone number is (516) 358-1000. INVESTMENT CONSIDERATIONS Each prospective investor should carefully consider the following before making an investment decision. 1. DEPENDENCE ON MEDICARE AND MEDICAID REIMBURSEMENTS. A vast majority of the Company's revenues are attributable to Medicare, Medicaid and other government reimbursement programs. Currently, Medicare reimburses the Company for covered services at the lowest of the Company's cost, as determined by Medicare, cost limits established by the Health Care Finance Administration or the amount charged by the Company. State Medicaid and other government programs also may provide for cost reimbursement for covered services. 2. PROPOSED HEALTH CARE LEGISLATION. Recently, Congress passed a budget reconciliation bill which contains provisions for significant changes in Medicare law. Those changes include converting the current cost reimbursement system for home health services covered under Medicare to a prospective payment system beginning in October 1996. The prospective payment system contained in the bill provides for prospectively established per visit payments to be made for all covered services, which are then subject to an annual aggregate per episode limit at the end of the year. Home health agencies that are able to keep their total per visit payments during the year below their per episode annual limits will be able to retain 50% of the difference up to 5% of total per visit payments. The President has vetoed the budget reconciliation bill which has passed Congress. Accordingly, there can be no assurance that a budget reconciliation bill containing changes similar to those discussed above or any changes in Medicare law will be enacted. Although it is not possible to predict the effect that any change in the current reimbursement system would have on the Company, it is likely that the Company will be affected in some fashion, and any such change might have a material and adverse effect on the Company. The reduction of home health care services that are eligible for reimbursement, or a reduction in the fees that may be charged for such services, could adversely affect the Company's operations. In addition, the implementation of government spending reductions could impair the Company's ability to collect from Medicare, Medicaid and other government insurance programs. 3. OPERATION RESTORE TRUST. In May 1995, the Office of the Inspector General of the Department of Health and Human Services announced "Operation Restore Trust," which is a collaborative effort by 14 federal agencies to detect fraud and abuse by home health agencies, durable medical equipment suppliers, and skilled nursing facilities. The initiative includes audits, surveys, and inspections of targeted facilities in five states -- California, Florida, Illinois, New York, and Texas -- over a 24-month period. The initiative also includes plans by the Office of the Inspector General to issue "fraud alerts" specifying suspect conduct and by the Health Care Financing Administration to issue clarifying regulations correcting areas in Medicare and Medicaid programs that are vulnerable to abuse. The Company has operations in the five states which are subject to the Operation Restore Trust initiative. -3- 4. TWO CLASSES OF COMMON STOCK. The Company's Restated Certificate of Incorporation authorizes for issuance 50,000,000 shares of Class A Common Stock and 1,554,936 shares of Class B Common Stock, $.01 par value per share (the "Class B Common Stock", Class A Common Stock and Class B Common Stock collectively referred to herein as "Common Stock"). As of December 19, 1995, there were outstanding approximately 22,772,893 shares of Class A Common Stock and 1,527,260 shares of Class B Common Stock. A holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder as of the record date for a meeting of the Company's stockholders. A holder of Class B Common Stock is entitled to ten votes for each share of Class B Common Stock held of record by such holder as of the record date for a meeting of the Company's stockholders, with certain limited exceptions. Except as otherwise required by the Delaware General Corporation Law, shares of Class A Common Stock and Class B Common Stock vote as a single class on all matters submitted to a vote by the stockholders. Accordingly, holders of Class B Common Stock will have a disproportionate impact on the outcome of the vote on all matters to be voted on by the Company's stockholders. See "Description of Securities." 5. CONTROL BY MANAGEMENT. As at December 19, 1995, Mr. Stephen Savitsky, the Company's Chairman, President and Chief Executive Officer, and Mr. David Savitsky, the Company's Executive Vice President, Chief Operating Officer, Secretary and Treasurer, collectively own, or have the right to vote, approximately 1% of the outstanding shares of Class A Common Stock and 47% of the outstanding shares of Class B Common Stock and, due to their stockholdings and their positions as executive officers, directors and members of the Executive Committee of the Board of Directors, Messrs. Stephen Savitsky and David Savitsky may have the ability to elect the entire Board of Directors, dissolve, merge or sell the assets of the Company and, generally, direct the affairs of the Company. 6. ANTI-TAKEOVER PROVISION. The Restated Certificate of Incorporation and By-laws of the Company contain various provisions which may have the effect of discouraging future takeover attempts which the Company's stockholders may deem to be in their best interests and perpetuating the Company's existing management. Among other things, such provisions: (i) provide the Board of Directors with broad discretion to issue preferred stock; (ii) provide for three year terms for the directors of the Company and the election of such directors on a staggered basis; (iii) prohibit certain business combinations without the affirmative vote of the holders of at least 80% of the then outstanding -4- shares of Common Stock and at least 66% of each series of preferred stock then outstanding; and (iv) require the approval of two-thirds of all shares eligible to vote for any proposed amendment to the Certificate of Incorporation or By-laws that seeks to modify or remove the forgoing provisions. In addition, in certain circumstances, Delaware law requires the approval of two-thirds of all shares eligible to vote for certain business combinations involving a stockholder owning 15% or more of the Company's voting securities, excluding the voting power held by such stockholder. The employment agreements between the Company and each of Messrs. Gary Tighe, the Company's Senior Vice President, Finance and Chief Financial Officer, Stephen Savitsky and David Savitsky also provide that if a change of control of the Company were to occur and the employment of such individuals were terminated (other than by reason of conviction of a felony), they would be entitled to receive a lump sum severance payment equal to 2.99 times their average annual compensation during the five calendar years prior to termination. The employment agreement between the Company and Sharon Hamilton, Senior Vice President, Health Care Operations of a principal subsidiary of the Company, provides that if a change of control were to occur and Ms. Hamilton resigned or her employment were terminated involuntarily (other than for cause) she would be entitled to receive a lump sum severance payment equal to 12 months of her annual base salary then in effect. The employment agreement between the Company and Edward Teixeira, Senior Vice President, Franchising of a principal subsidiary of the Company, provides that if a change of control were to occur and the employment of Mr. Teixeira were terminated (other than for commission of a felony or the perpetration of a fraud against the Company) within 90 days thereafter, he would be entitled to receive a lump sum severance payment equal to six months of his annual base salary then in effect. In addition to the potential impact on future takeover attempts and the possible perpetuation of management, the existence of all of the above provisions could have an adverse effect on the market price of the securities offered hereby. See "Description of Securities." 7. NO DIVIDENDS ON COMMON STOCK. To date, the Company has not paid any dividends on its Common Stock and does not expect to declare or pay any dividends in the foreseeable future. Instead, it intends to retain all earnings for use in the Company's business operations. Moreover, the Company's loan agreement with its bank prohibits the payment of dividends or other distributions on its Common Stock. 8. DEPENDENCE UPON KEY MANAGEMENT PERSONNEL. The success of the Company is largely dependent on the personal efforts of Stephen Savitsky and David Savitsky and other key personnel of the Company. Although the Company has entered into five year employment agreements with Stephen Savitsky and David Savitsky, the loss of the services of either of them or of certain other key employees would constitute an event of default under the Company's loan agreement with its bank and would have a material adverse effect on the Company's business and prospects. 9. AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS. A substantial portion of the purchase price of several acquisitions made by the Company has been attributable to goodwill in which the value of the assets acquired was significantly lower than the purchase price and related costs therefor. The amortization of this goodwill and other intangible assets, including customer lists, increased the Company's expenses by $884,000 and $1,237,000 for the fiscal years ended February 28, 1994 and February 28, 1995, respectively. At February 28, 1995, approximately $30.1 -5- million remained to be amortized as goodwill and other intangible assets over a maximum remaining period of 40 years. Amortization of goodwill and other intangible assets has the effect of increasing costs and expenses of the Company and, therefore, decreasing earnings or increasing losses, as the case may be. Amortization does not affect cash flow. THE SELLING SHAREHOLDERS The Selling Shareholders received their Shares pursuant to a merger in July 1994 between ATC and a wholly-owned subsidiary of the Company. The Selling Shareholders owned outstanding shares of ATC common stock. Those shares of ATC common stock were converted into Shares in the merger. As a result of the merger, ATC became a wholly-owned subsidiary of the Company. The following table sets forth certain information with respect to the Class A Common Stock owned by each of the Selling Shareholders as of December 20, 1995.
NUMBER OF SHARES OF NUMBER OF NUMBER OF CLASS A SHARES SHARES OF COMMON STOCK OF CLASS A CLASS A OWNED COMMON STOCK COMMON STOCK AFTER NAME OWNED OFFERED OFFERING(1) - -------------------- ----------- ------------ ----------- Carolyn C. Spiceland 65,631 65,631 0 Sally Leduc 254 15,254 0 Wanda P. Cole 62,574 62,574 0 Robert W. Harman, III 37,239 32,239 5,000 Kimberly Horton 3,922 3,922 0 James P. Kirtland 3,922 3,922 0 Thomas C. Kirtland 3,922 3,922 0 John Kirtland 3,922 3,922 0 ---------- ------------ ----------- Total 196,386 191,386 5,000
- ------------------- (1) Assumes that the Selling Shareholders dispose of all of the Shares covered in this Prospectus and do not acquire any additional shares of Class A Common Stock. -6- PLAN OF DISTRIBUTION The sale of the Shares by the Selling Shareholders may be effected from time to time in transactions (which may include block transactions) on NASDAQ/NM or on such other exchange or market in which the Class A Common Stock may from time to time be trading, in negotiated transactions, or a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. The Selling Shareholders may effect such transactions by selling Shares directly to purchasers or to or through broker-dealers which may act as agents or principals. Such broker-dealers may receive compensation in the form of discounts, concessions, or commissions from the Selling Shareholders and/or the purchasers of Shares for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). Any such broker or dealer may be deemed to be an "underwriter" within the meaning of Section 2(11) of the Act, and any commissions received by any such broker or dealer in connection with such sales and any profits received by any such broker or dealer on the resale of any Shares acquired as principal may be deemed to be underwriting compensation. The Company has agreed to bear all of the expenses incurred by it in connection with the registration of the Shares. Each of the Selling Shareholders has agreed to pay his or her own expenses, including any brokerage commissions, personal legal fees or similar expenses relating to the offer or sale of such Selling Shareholder's Shares. The Company has agreed to indemnify the Selling Shareholders against certain liabilities, including liabilities under the Act. USE OF PROCEEDS The Company will not realize any proceeds from the sale of the Shares by the Selling Shareholders. DESCRIPTION OF SECURITIES GENERAL The Company is authorized to issue 50,000,000 shares of Class A Common Stock, par value $.01 per share, 1,554,936 shares of Class B Common Stock, par value $.01 per share, and 10,000 shares of preferred stock, par value $1.00 per share. The shares of Class A Common Stock, Class B Common Stock and preferred stock presently outstanding are validly issued, fully paid and nonassessable. COMMON STOCK The rights of the holders of the Class A Common Stock and the Class B Common Stock are identical except that (i) a holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder as of the record date for a meeting of stockholders, whereas a holder of Class B Common Stock is entitled to ten votes (except with respect to certain amendments to the Company's Restated Certificate of Incorporation) for each share of Class B Common Stock held of record by such holder as of the record date for a meeting of stockholders, and (ii) each share of Class B Common Stock is convertible, at the option of the holder, into one share of Class A Common Stock, and will automatically convert into one share of Class A Common Stock upon any transfer (subject to limited exceptions). Holders of shares of the Class A Common Stock and the Class B Common Stock vote as a single class on all matters submitted to a vote of the Company's stockholders. The Company's Restated Certificate of Incorporation, as amended, provides that the affirmative vote of the holders of at least 80% of the voting power of the outstanding Common Stock (each share of Common Stock being entitled to one vote) and at least 66% of the outstanding shares of each series of preferred stock (each series voting separately) is required to approve certain mergers, asset sales, securities transactions, liquidations, reclassifications and other similar transactions involving an "interested stockholder" of the Company unless the business combination has received the prior approval of a majority of the Company's "continuing directors." An "interested stockholder" is a stockholder who beneficially owns more than 10% of the Company's outstanding voting power, or who is an affiliate of the Company who owned more than 10% of the Company's outstanding voting power at any time within the prior two-year period, or who acquired shares of the Company's voting stock from another interested stockholder at any time within the prior two-year period in a transaction not involving a public offering. A "continuing director" is generally any director of the Company who is unaffiliated with the interested stockholder and who was a member of the Company's Board of Directors prior to the interested stockholder becoming an interested stockholder. The existence of this provision (the "Interested Stockholder Provision") could have the effect of delaying, deferring or preventing a change in control of the Company. The Company's Board of Directors is divided into three classes. One class is elected each year by a majority of the votes cast by holders of Common Stock at the Company's annual meeting to hold office for a three-year term and until their successors -7- are elected and qualified. Holders of shares of Common Stock do not have cumulative voting rights with respect to the election of directors. Under the Company's Restated Certificate of Incorporation, as amended, the affirmative vote of the holders of at least 80% of the voting power of the outstanding Common Stock is required to remove any director from office (which may be done only for cause). In addition, the affirmative vote of the holders of at least 80% of the voting power of the outstanding Common Stock (each share of Common Stock being entitled to one vote) is required to amend, repeal or adopt any provision inconsistent with the Interested Stockholder Provision or those provisions of the Company's Restated Certificate of Incorporation providing for a classified board of directors and regulating the removal of directors. Under both the Company's Restated Certificate of Incorporation, as amended, and the Delaware General Corporation Law, the affirmative vote of the holders of a majority of the outstanding shares of the Class A Common Stock and the Class B Common Stock, voting separately, is required to approve any amendment to the Company's Restated Certificate of Incorporation that would increase or decrease the aggregate number of authorized shares of either class, increase or decrease the par value of the shares of either class, or modify or change the powers, preferences or special rights of the shares of either class so as to affect either class adversely. The holders of shares of Common Stock are entitled to receive dividends when, as and if declared by the Company's Board of Directors out of funds legally available therefor. In the event of the liquidation, dissolution or winding up of the Company, the holders of shares of Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision has been made for each class of stock, if any, having preference over the Common Stock. Holders of shares of Common Stock, as such, have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the Common Stock. -8- TRANSFER AGENT The transfer agent for the Class A Common Stock is American Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005. LEGAL MATTERS The legality of the securities offered hereby will be passed upon for the Company by Richards & O'Neil, LLP, New York, New York. EXPERTS The financial statements and the related financial statement schedules incorporated in this Prospectus and Registration Statement by reference from the Company's Annual Report on Form 10-K/A for the fiscal year ended February 28, 1995 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein and in the Registration Statement by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. ADDITIONAL INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-3, (the "Registration Statement"), under the Act with respect to the Shares. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information with respect to the Company and this offering, reference is made to the Registration Statement, including the exhibits filed therewith, which may be inspected without charge at the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of the Registration Statement may be obtained from the Commission at its principal office upon payment of prescribed fees. Statements contained in this Prospectus as to the contents of any contract or other document are not necessarily complete and, where the contract or other -9- document has been filed as an exhibit to the Registration Statement, each such statement is qualified in all respects by reference to the applicable document filed with the Commission. -10- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the expenses expected to be incurred in connection with the issuance and distribution of the securities being registered.(1) SEC Registration Fee .................................... $ 186.23(2) Legal Fees and Expenses ................................. 10,000.00 Accounting Fees and Expenses ............................ 5,000.00 Transfer Agents Fees and Expenses ....................... 1,000.00 Printing Expenses........................................ 5,000.00 --------- Total ................................................. $ 21,186.23 --------- --------- - ------------------------- (1) All of these expenses will be paid by the Company. The Selling Shareholders will pay the expenses of their counsel. (2) Does not reflect credit applied pursuant to Rule 429 of the Securities Act.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Certificate of Incorporation of Staff Builders, Inc., a Delaware corporation (the "Company") provides that (i) the Company shall, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law ("Section 145"), indemnify all persons whom it may indemnify pursuant thereto and (ii) the personal liability of the directors of the Company is eliminated to the fullest extent permitted by Section 102(b)(7) of the Delaware General Corporation Law ("Section 102(b)(7)"). The Company has entered into separate indemnification agreements with certain of its officers to the same effect. Section 145 permits the Company to indemnify any person who was or is a party or is threatened to be made a party to a threatened, pending or completed administrative, investigative, civil or criminal action, suit or proceeding (other than an action by or in the right of the registrant in question) by reason of the fact that he is or was a director, officer, employee or agent of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another company, partnership, joint venture, trust or "other enterprise" against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement he actually and reasonably incurred in connection with such an action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of such registrant (and, in the case of a criminal action or proceeding, had no reason to believe his conduct was unlawful). In the case of an action by or in the right of the Company he may not be indemnified in respect of any claim, issue or matter as to which he was adjudged liable to the Company unless and only to the extent that the court determines that he is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. Payment may be made in advance of the final disposition of a criminal action or proceeding if the officer or director agrees to repay to the Company such an amount in the event it is determined that he was not entitled to it. Indemnification against expenses (including attorney's fees) actually II-1 and reasonably incurred must be given under Section 145 to the extent an officer, director, employee or agent is successful in an action described above. In addition, Section 145 permits the Company to purchase and maintain insurance on behalf of any officer, director, employee and agent of the Company or any person serving at the request of the Company as an officer, director, employee or agent of another corporation serving as described above whether or not the Company would have the power to indemnify him under Section 145. The Company maintains directors and officers liability insurance for all duly elected or appointed officers and directors of the Company. Section 102(b)(7) permits the Company to eliminate or limit the personal liability of a director to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation, (iii) under Section 174 of the General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company, pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. See Item 17. "Undertakings." II-2 ITEM 16. EXHIBITS Exhibit No. in Document Sequentially Incorporated by Exhibit No. Exhibit Numbered Page Reference ----------- ------- ------------- --------------- 2 Agreement of Merger among Staff 2 Builders, Inc., ATC Acquisition Corp., ATC Services Incorporated, Terrance L. Bauer and the Shareholders of ATC Services Incorporated, dated July 22, 1994. (A) 4.1 Specimen Class A Common Stock Certificate (B) 4.1 5 Opinion of Richards & O'Neil, LLP (C) 23.1 Consent of Deloitte & Touche LLP (C) 23.2 Consent of Richards & O'Neil, LLP (included in Exhibit 5) 24 Power of Attorney (included as part of signature page) (C) ----------------------------- (A) Incorporated by reference to the Company's Current Report on Form 8-K, dated July 22, 1994. (B) Incorporated by reference to the Company's Registration Statement on Form 8-A, as amended by Amendment No. 1 to the Registration Statement on Form 8-A of the Company, which was filed under the Exchange Act and declared effective on October 26, 1995. (C) Filed herewith. ITEM 17. UNDERTAKINGS. (a) The undersigned Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act"); II-3 (ii) To reflect in the prospectus any facts or event arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Company hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the 1934 Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (c) Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Company, pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. See Item 15. "Indemnification of Directors and Officers." II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Lake Success, New York on December 22, 1995. STAFF BUILDERS, INC. By: /s/ Stephen Savitsky ---------------------------- Stephen Savitsky Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below hereby constitutes Stephen Savitsky and David Savitsky and each of them singly, his or her true and lawful attorneys-in-fact with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, to execute in the name of such person, in the capacities stated below, and to file, such one or more amendments to this Registration Statement as the Registrant deems appropriate, and generally to do all such things in the name and on behalf of such person, in the capacities stated below, to enable the Registrant to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission thereunder, hereby ratifying and confirming the signature of such person as may be signed by said attorneys-in-fact, or any one of them to any and all amendments to this Registration Statement. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE --------- ----- ---- /s/ Stephen Savitsky Chairman of the Board, December 22, 1995 - ---------------------------- President and Chief Stephen Savitsky Executive Officer (Principal Executive Officer) and Director /s/ David Savitsky Executive Vice President, December 22, 1995 - ---------------------------- Chief Operating Officer, David Savitsky Secretary, Treasurer and Director /s/ Gary Tighe Senior Vice President, December 22, 1995 - ---------------------------- Finance and Chief Financial Gary Tighe Officer (Principal Financial and Accounting Officer) /s/ Bernard J. Firestone - ---------------------------- Bernard J. Firestone, Ph.D. Director December 22, 1995 /s/ Jonathan Halpert - ---------------------------- Jonathan Halpert, Ph.D. Director December 22, 1995 /s/ Donald Meyers - ---------------------------- Donald Meyers Director December 22, 1995 EX-5 2 EXHIBIT 5 [RICHARDS & O'NEIL, LLP LETTERHEAD] December 22, 1995 Staff Builders, Inc. 1983 Marcus Avenue Lake Success, New York 11042 Dear Sirs: We have acted as counsel to Staff Builders, Inc. a Delaware corporation (the "Company"), in connection with the proposed sale of 196,386 shares of the Company's Class A common stock par value $.01 per share (the "Class A Common Stock"), issued by the Company to former shareholders of ATC Services Incorporated, a Georgia corporation and currently a wholly-owned subsidiary of the Company, pursuant to a Registration Statement on Form S-3 (the "Registration Statement") filed by the Company with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. As counsel to the Company, we have reviewed the various corporate proceedings taken by the Company in connection with the authorization and issuance of the shares of Class A Common Stock. In connection therewith, we have examined originals or copies certified or otherwise identified to our satisfaction, of such corporate records of the Company and other instruments and documents as we have deemed necessary as a basis for the opinions hereinafter expressed. We also have assumed that all meetings, the minutes or certified extracts of which have been submitted to us, were properly convened and held and that all resolutions voted upon at such meetings were properly proposed and passed. For purposes of this opinion, we have assumed, without any independent investigation or verification of any kind the genuineness of all signatures on, and the authenticity and Staff Builders, Inc. December 22, 1995 Page 2 completeness of, all documents submitted to us as originals and the conformity to original documents and completeness of all documents submitted to us as certified, conformed or photostatic copies. Based upon and subject to the foregoing, we are of the opinion that the shares of Class A Common Stock have been duly authorized and are validly issued, fully paid and non-assessable. We consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this firm under the caption "Legal Matters" in the prospectus contained therein. Very truly yours, /s/ RICHARDS & O'NEIL, LLP EX-23.1 3 EXHIBIT 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in the Registration Statement on Form S-3, of Staff Builders, Inc. of the report of Deloitte & Touche LLP dated April 13, 1995, appearing in the Annual Report on Form 10-K/A of Staff Builders, Inc. for the year ended February 28, 1995, and to the reference to us under the heading "Experts" in the Prospectus which is part of such Registration Statement. /s/ Deloitte & Touche LLP Jericho, New York December 14, 1995 -----END PRIVACY-ENHANCED MESSAGE-----