<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
SUNSTAR HEALTHCARE, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SUNSTAR HEALTHCARE, INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11*:
(4) Proposed maximum aggregate value of transaction:
- --------------------
*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
SUNSTAR HEALTHCARE, INC.
-------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 1996
-------------------
TO THE SHAREHOLDERS OF SUNSTAR HEALTHCARE, INC.
Notice is hereby given that the Annual Meeting of Shareholders of
SunStar Healthcare, Inc., a Delaware corporation (the "Company"), will be held
at the the Hyatt Regency Orlando International located at 9300 Airport
Boulevard, Orlando, Florida on December 16, 1996 at 10:00 a.m. (EST), to
consider and vote upon the following proposals, all of which are more completely
set forth in the accompanying Proxy Statement:
1. To elect seven (7) directors to serve for a one year term.
2. To ratify the selection of KPMG Peat Marwick LLP, independent
certified public accountants, as auditors for the fiscal year
ending July 31, 1997.
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on November 14, 1996, are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By order of the Board of Directors,
/s/ David A. Jesse
David Jesse, Executive Vice President
Orlando, Florida
Date: November 18, 1996
A FORM OF PROXY AND THE ANNUAL REPORT OF THE COMPANY FOR THE FISCAL YEAR ENDED
JULY 31, 1996, ARE ENCLOSED. IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL
MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSE
ENVELOPE, WHICH DOES NOT REQUIRE POSTAGE IN THE UNITED STATES.
<PAGE>
SUNSTAR HEALTHCARE, INC.
-------------------
PROXY STATEMENT
for
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 1996
-------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of SunStar Healthcare, Inc., a Delaware corporation (the
"Company"), of proxies from the holders of the Company's Common Stock, par value
$.01 per share (the "Common Stock") for use at the 1996 Meeting of Shareholders
of the Company to be held at 10:00 a.m. (EST), on Monday, December 16, 1996, or
at any adjournment(s) or postponement(s) thereof (the "Annual Meeting"),
pursuant to the foregoing Notice of Annual Meeting of Shareholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to Shareholders is November 18, 1996. Shareholders
should review the information provided herein in conjunction with the Company's
1996 Annual Report, which accompanies this Proxy Statement. The Company's
principal executive offices are located at 521 East State Road 434, Longwood,
Florida, 32750, and its telephone number is (407) 339-4997.
PURPOSES OF THE MEETING
At the Annual Meeting the Company's Shareholders will consider and vote
upon the following matters:
(1) The election of seven members to the Company's Board of Directors to
serve until their successors are duly elected and qualified;
(2) The ratification of KPMG Peat Marwick, LLP, as the Company's
independent auditors for the fiscal year ending July 31, 1996; and
(3) Such other business as may properly come before the Annual Meeting,
including any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth below)
will be voted (a) FOR the election of the seven nominees for directors named
below; and (b) FOR the ratification of the appointment of KPMG Peat Marwick LLP,
as the Company's independent auditors. In the event a shareholder specifies a
different choice by means of the enclosed proxy, his or her shares will be voted
in accordance with the specification so made. The Board does not know of any
other matters that may be brought before the Annual Meeting nor does it foresee
or have reason to believe that proxy holders will have to vote for substitute or
alternate nominees. In the event that any other matter should come before the
Annual Meeting or any nominee is not available for election, the persons named
in the enclosed proxy will have discretionary authority to vote all proxies not
marked to the contrary with respect to such matters in accordance with their
best judgment.
-2-
<PAGE>
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on November 14, 1996
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, there were 2,395,000 shares of Common Stock issued and outstanding,
all of which are entitled to be voted at the Annual Meeting. Each share of
Common Stock is entitled to one vote on each matter submitted to shareholders
for approval at the Annual Meeting. Shareholders do not have the right to
cumulate their votes for directors.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by a plurality of
the votes cast by the shares of Common Stock represented in person or by proxy
at the Annual Meeting. The affirmative vote of a majority of the shares of
Common Stock present and voting at the Annual Meeting is required to ratify the
appointment of KPMG Peat Marwick LLP as the Company's independent auditors. If
less than a majority of outstanding shares entitled to vote are represented at
the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more inspectors
of election for the meeting. Such inspector(s) shall determine the number of
shares of Common Stock represented at the meeting, the existence of a quorum and
the validity and effect of proxies, and shall receive, count and tabulate
ballots and votes and determine the results thereof.
Pursuant to Delaware law, abstentions and broker non-votes are counted as
present for purposes of determining the presence of a quorum. However,
abstentions are treated as present and entitled to vote and thus have the effect
of a vote against a matter. A broker non-vote on a matter is considered not
entitled to vote on that matter and thus is not counted in determining whether a
matter requiring the approval of a majority of the shares present and entitled
to vote has been voted.
A list of shareholders entitled to vote at the Annual Meeting will be
available at the Company's offices 521 East State Road 434, Longwood, Florida
32750 for a period of ten days prior to the Annual Meeting and at the Annual
Meeting itself for examination by any shareholder.
A SHAREHOLDER WHO SUBMITS A PROXY ON THE ACCOMPANYING FORM HAS THE POWER TO
REVOKE IT AT ANY TIME PRIOR TO ITS USE BY DELIVERING A WRITTEN NOTICE TO THE
SECRETARY OF THE COMPANY AT ITS OFFICES, BY EXECUTING A LATER-DATED PROXY OR BY
ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON. UNLESS AUTHORITY IS
WITHHELD, PROXIES THAT ARE PROPERLY EXECUTED WILL BE VOTED FOR THE PURPOSES SET
FORTH THEREON.
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<PAGE>
MANAGEMENT
The Company currently has seven directors serving on its Board. The
directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Warren D. Stowell 44 President, Chief Executive Officer & Chairman
of Board of Directors
David Jesse 47 Exec. Vice President, Chief Operating Officer
& Director
Frederick H. Fialkow 65 Director
Steven Fialkow 37 Director
Bernard Levine, M.D. 67 Director
Dean L. Sloane 50 Director
Richard Seidelman, M.D. 38 Director
</TABLE>
Warren D. Stowell has been President and Chief Executive Officer of
-----------------
the Company since December 1995, Chairman of the Board of Directors of the
Company since March 1996, and President and Chief Executive Officer of each of
the Company's subsidiaries, Brevard Medical Centers, Inc. ("Brevard"), First
Health, Inc. ("First Health" and SunStar Health Plan, Inc. (formerly known as
Boro Medical Corp.) since November 1, 1995. From July 1993 through November
1995, Mr. Stowell served as Chief Operating Officer, Insurance Division, for
Ramsay HMO, Inc., an HMO operating in the State of Florida. From June 1991
until July 1993, Mr. Stowell was President and Chief Executive Officer of Care
Florida, Inc. From May 1988 to May 1991, Mr. Stowell served as President and
Chief Executive Officer of H.I.P. Network of Florida.
David Jesse has been Executive Vice President, Chief Operating Officer
-----------
and a director of the Company since January 1996. Prior to his association with
the Company, Mr. Jesse had been a principal of Masters & Jesse Co., LPA, a legal
professional association, commencing in March 1993. From May 1992 to February
1993, he was Vice President and General Counsel of Care Florida, Inc., a health
maintenance organization based in Miami, Florida. From 1988 to 1992, Mr. Jesse
was an associate with the law firm of Climaco, Climaco, Seminiatore, Lefkowitz &
Garafoli in its health care law department. Prior thereto, from 1984 to 1987,
Mr. Jesse was the Vice President and General Counsel of HealthAmerica
Corporation of Ohio, a health maintenance organization based in Cleveland, Ohio.
Frederick H. Fialkow has been a director of the Company since December
--------------------
of 1995. Since February 1988, Mr. Fialkow has been Chairman of the Board,
President and Chief Executive Officer of National Home Health Care Corp., a
publicly held Delaware corporation ("National") and a principal shareholder of
the Company. Mr. Fialkow is the father of Steven Fialkow.
Steven Fialkow has been a director of the Company since December 1995.
--------------
Mr. Fialkow has served as Secretary of National since September 1995, as
Executive Vice President of New England Home Care, Inc. since August 1995 and as
a director of National since December 1991. Prior thereto he served as
Executive Vice President of Health Acquisition Corp. from May 1994 to August
1995. He has served as President of National HMO (New York), Inc. from April
1989 to April 1994 and Vice President of National HMO (New York) Inc. from
August 1984 to March 1989. Steven Fialkow is a certified public accountant. He
is the son of Frederick H. Fialkow.
Bernard Levine, M.D. has been a director of the Company since December
-------------------
1995. Dr. Levine as a private investor, primarily in the healthcare industry.
Since 1962, he has been a Professor of Internal Medicine at New York University
School of Medicine with a sub-specialty in allergy and immunology. Dr. Levine
also serves as a director of National and was a director of Cypros
Pharmaceutical Corp. until October 22, 1996.
-4-
<PAGE>
Dean L. Sloane has been a director of the Company since February 1996.
--------------
Mr. Sloane has served as Chairman of the Board, President, Chief Executive
Officer and a director of Community Medical Transport, Inc. since December 1988.
From 1973 to 1988, Mr. Sloane served as Chief Executive Officer of Prime Medical
Services Inc. (formerly known as C.P. Rehab Corp.), a public specialty medical
management service company. Mr. Sloane co-founded and served as Chairman of the
Board of National from 1983 to 1986. Mr. Sloane also served as a director of
EPIC Health Group, Inc., a public mail order pharmaceutical company, from 1984
to 1986.
Richard Seidelman, M.D. has been a director of the Company since
----------------------
February 1996. Since June 1989, Dr. Seidelman has been a pulmonary care
physician in private practice in South Florida. Dr. Seidelman is a graduate of
the University of Pennsylvania and received his M.D. degree from Hahnemann
University. He completed his residency in internal medicine at Georgetown
University/VA Medical Center and his fellowship in pulmonary medicine at George
Washington University.
Election of Directors and Officers
All directors of the Company hold office until the next annual meeting
of the stockholders or until their successors have been elected and qualified.
The officers of the Company are elected by the Board of Directors at the first
meeting after each annual meeting of the Company's stockholders, and hold office
until their death, resignation or removal from office.
Committees and Meetings of the Board of Directors
During the fiscal year ended July 31, 1996, the Board of Directors
held one meeting, which was attended by all Board Members, and took action three
additional times by unanimous written consent.
The Board of Directors plans to establish an audit committee and a
compensation committee during its current fiscal year. The Company does not
have a nominating committee.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
(10) percent of the Company's Common Stock, to file with the SEC and NASDAQ
initial reports of beneficial ownership and reports of changes in beneficial
ownership of Common Stock of the Company. Such persons are also required by SEC
regulations to furnish the Company with copies of all such Section 16(a) forms
they file. Based solely on a review of the copies of such reports furnished to
the Company, the initial reports of beneficial ownership for National and
Messrs. Jesse, Stowell, Seidelman, Sloane, Levine, S. Fialkow and F. Fialkow
were inadvertently filed late.
-5-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
No executive officer of the Company received compensation in excess of
$100,000 during fiscal 1995 or 1996 in connection with services rendered to or
on behalf of the Company. Except as set forth in the table below, no bonuses or
other compensation was paid during the fiscal year ended July 31, 1996. The
summary compensation for the Company's Chief Executive Officers is as follows:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Comp. Long Term Comp.
------------ ---------------
Restricted
Fiscal Other Stock
Year Annual Awards Options/ LTIP
Name and Position Ended Salary Bonus Comp. ($) SARs (#) Payouts
- ----------------- ----- ------ ----- ----- --- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Warren D. Stowell 1996 $95,193. $ -- $ -- $ -- 250,000(3) $ --
President, CEO (1)
1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
Gerald Kline 1996 $49,140. -- -- -- -- --
President, CEO (2)
1995 $98,280. -- -- -- -- --
1994 $93,600. -- -- -- -- --
</TABLE>
- --------------
(1) Mr. Stowell is President and CEO of SunStar Healthcare, Inc., and its
subsidiaries, Brevard Medical Centers, Inc., First Health, Inc., and
SunStar Health Plan, Inc.
(2) Mr. Kline received such compensation as the President and CEO of Brevard
and First Health. He resigned from those offices in October 1995.
(3) Granted pursuant to Mr. Stowell's employment agreement. One-fourth of the
options are exercisable immediately, and shall be exercisable as to one-
fourth of the remaining shares thereby on each of three (3) successive
anniversaries of the date of grant, subject to Mr. Stowell's employment by
the Company.
Option Grants to Executive Officers During the Fiscal Year
The following table sets forth information concerning options granted
during the fiscal year ended July 31, 1996 to those persons named in the
preceding Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% of
Total
Options
Numbers of Granted
Securities to Exercise
Underlying Employees Price
Options in Fiscal ($ per Expiration
Name Granted Year share) Date
---- ------- --------- -------- ----------
<S> <C> <C> <C> <C>
Warren D. Stowell 250,000 (1) 71.43% $.25 None (2)
</TABLE>
-6-
<PAGE>
- ----------------
(1) This represents a non-qualified stock option granted exclusive of the
Company's 1996 Stock Option Plan granted pursuant to Mr. Stowell's
employment agreement. One-fourth of the options are exercisable
immediately, and shall be exercisable as to one-fourth of the remaining
shares thereby on each of three (3) successive anniversaries of the date of
grant, subject to Mr. Stowell's employment by the Company.
(2) Subject to conditions of employment with the Company.
Aggregated Option Exercises and Fiscal Year End Option Value Table
The following table sets forth information concerning the value of
unexercised stock options at July 31, 1996 for those persons named in the
Summary Compensation Table:
AGGREGATED OPTIONS IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at Fiscal Year End at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- -------------------------- ----------------------------
<S> <C> <C>
Warren D. Stowell 62,500/187,500 $278,320/$834,961(1)
</TABLE>
- -------------------------
(1) The dollar values were calculated by determining the difference between the
fair market value at fiscal year-end of the Common Stock underlying the
options and the exercise price of the options. The last sale price of a
share of the Company's Common Stock on July 31, 1996 as reported by Nasdaq
was $4 45/64.
Employment Agreements
The Company entered into an employment agreement, effective as of May 15,
1996, with Warren D. Stowell pursuant to which he is employed full-time as the
Company's President and Chief Executive Officer. The agreement expires on the
second anniversary of the date of May 15, 1996, provided that the agreement may
be renewed for successive one (1) year periods unless, thirty (30) days prior to
the expiration of the agreement, either party notifies the other of its election
not to renew the agreement. The agreement also provides that for so long as Mr.
Stowell remains employed by the Company, he shall serve as a member of the
Company's Board of Directors and shall have the right to designate one (1)
additional member to the Board of Directors. David Jesse is Mr. Stowell's
current designee. The agreement provides for an annual salary of $125,000,
payable commencing May 15, 1996, increasing to $150,000 per annum on May 15,
1997. Mr. Stowell's employment agreement contains a confidentiality provision
and a covenant not to compete with the Company for a period of six (6) months
following termination of employment.
In addition, the Company granted to Mr. Stowell options to purchase an
aggregate of 250,000 shares of Common Stock at an exercise price equal to $.25
per share. The options are currently exercisable as to one-fourth of the shares
covered thereby and shall be exercisable as to an additional one-fourth of the
shares covered thereby on each of the first, second and third anniversaries of
January 28, 1996, provided that Mr. Stowell is employed by the Company on such
dates. Commencing two (2) years after May 15, 1996, the Company has agreed to
use its best efforts to file a registration statement under the Securities Act
to register the shares of Common Stock issuable to Mr. Stowell pursuant to the
exercise of such options. No options have been exercised as of July 31, 1996.
-7-
<PAGE>
The Company entered into an employment agreement, effective as of May 15,
1996, with David Jesse pursuant to which he is employed full-time as the
Company's Executive Vice President and Chief Operating Officer. The agreement
expires on May 15, 1998, provided that the agreement may be renewed for
successive one (1) year periods unless, at least thirty (30) days prior to the
expiration of the agreement, either party notifies the other of its election not
to renew the agreement. The agreement provides for an annual salary of
$100,000, payable commencing on May 15, 1996, increasing to $135,000 per annum
on May 15, 1997. Mr. Jesse's employment agreement contains a confidentiality
provision and a covenant not to compete with the Company for a period of six (6)
months following termination of employment.
In addition, the Company granted to Mr. Jesse options to purchase an
aggregate 75,000 shares of Common Stock. Options to purchase 25,000 shares of
Common Stock, at an exercise price of $.25 per share are currently exercisable.
The remaining 50,000 options, which have been granted pursuant to the Company's
1996 Stock Option Plan and which have an exercise price of $5.00 per share,
shall be exercisable as to one-fourth of the shares covered thereby on each of
the first four (4) anniversaries of the date of May 15, 1996, provided that Mr.
Jesse is employed by the Company on such dates. Commencing two (2) years after
May 15, 1996, the Company has agreed to use its best efforts to file a
registration statement under the Securities Act to register the Common Stock
issuable to Mr. Jesse pursuant to the exercise of such options. No options have
been exercised as of July 31, 1996.
Director Compensation
Directors who are employees of the Company do not receive compensation for
serving as directors. Each director who is not an employee of the Company will
receive a fee of $2,500 for attendance at each Board of Directors meeting. All
directors will be reimbursed for their reasonable out-of-pocket expenses
incurred in connection with attending meetings of the Board of Directors and for
other expenses incurred in their capacity as directors of the Company.
In accordance with the Company's 1996 Stock Options Plan, each non-employee
director of the Company has been granted non-qualified stock options to purchase
7,500 shares of Common Stock exercisable at a price equal to the fair market
value of the Common Stock on the date of grant.
THE COMPANY'S STOCK OPTION PLAN
In February 1996, the Board of Directors of the Company adopted, and
National (the Company's sole stockholder at that time) approved, the Company's
1996 Stock Option Plan (the "Option Plan") pursuant to which 200,000 shares of
Common Stock currently are reserved for issuance upon the exercise of options
designated as either (i) options intended to constitute incentive stock options
("ISO's") under the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) non-qualified options. ISOs may be granted under the Option Plan to
employees and officers of the Company. Non-qualified options may be granted to
consultants, directors (whether or not they are employees), employees or
officers of the Company.
The Option Plan is intended to qualify under the Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and is
administered by a committee of the Board of Directors, provided that the full
Board of Directors currently is administering the Option Plan. The Board of
Directors or the committee, as the case may be, within the limitations of the
Option Plan, determines the persons to whom options will be granted, the number
of shares to be covered by each option, whether the options granted are intended
to be ISOs, the duration and rate of exercise of each option, the exercise price
per share and the manner of exercise and the time, manner and form of payment
upon exercise of an option. Unless sooner terminated, the Option Plan will
expire on February 13, 2006.
The aggregate fair market value of shares for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all stock option plans of the Company) may not exceed $100,000 and
options to purchase no more than 50,000 shares may be granted under the Option
Plan to any single
-8-
<PAGE>
optionee in any calendar year. Non-qualified options granted under the Option
Plan may not be granted at a price less than 90% of the fair market value of the
Common Stock on the date of grant. Options granted under the Option Plan will
expire not more than ten (10) years from the date of grant (five [5] years in
the case of ISOs granted to persons holding 10% or more of the voting stock of
the Company). All options granted under the Option Plan are not transferable
during an optionee's lifetime but are transferable at death by will or by the
laws of descent and distribution. In general, upon termination of employment of
an optionee, all options granted to such person which are not exercisable on the
date of such termination immediately terminate, and any options that are
exercisable terminate ninety (90) days following the termination of employment.
The Option Plan contains anti-dilution provisions authorizing appropriate
adjustments in certain circumstances. Shares of Common Stock subject to options
which expire without being exercised or which are canceled as a result of
cessation of employment are available for further grants. No shares of Common
Stock may be issued to any optionee until the full exercise price has been paid.
The Board of Common Stock may be issued to any optionee until the full exercise
price has been paid. The Board of Directors or the committee, as the case may
be, may grant individual options under the Option Plan with more stringent
provisions than those specified in the Option Plan.
The Option Plan provides that each non-employee director automatically
receives, upon first becoming a non-employee director, a grant of an option to
purchase 7,500 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock. Each non-employee director option expires
five (5) years from the date of grant.
The Company has granted options to purchase an aggregate of 75,000 shares
under the Option Plan, exclusive of non-employee director options to purchase an
additional 37,500 shares granted as of May 15, 1996, none of which options has
been exercised.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30,
1996, regarding beneficial ownership of the Company's Common Stock by: (i) each
director and executive officer of the Company, (ii) all directors and executive
officers as a group, and (iii) all persons known by the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock. Unless
otherwise noted, all persons named in the table have the sole voting and
dispositive power with respect to Common Stock beneficially owned.
<TABLE>
<CAPTION>
Percentage of
Name and Address of Amount and Nature of Outstanding Shares
Beneficial Owners(1) Beneficial Ownership Owned
-------------------- -------------------- ------------------
<S> <C> <C>
National Home Health Care 900,000 37.6%
Corp.
700 White Plains Rd.,
Scarsdale, NY 10583
Bernard Levine, M.D. 188,600 (3) 7.9%
Frederick H. Fialkow 42,500 (4) 1.8%
Warren D. Stowell 62,500 (2) 2.6%
David Jesse 25,000 (2) 1.0%
Dean Sloane 27,500 (4) 1.1%
Steven Fialkow 7,500 (2) *
Richard Seidelman, M.D. 12,500 (5) *
All directors and 366,100 (2)-(5) 15.3%
executive officers as a
group (7 persons)
Underwriters 130,000 (6) 5.4%
</TABLE>
- -------------
* Less than 1%
-9-
<PAGE>
(1) Unless otherwise indicated, the address of each of these persons is SunStar
Healthcare, Inc., 521 East State Road 434 Longwood, Florida, 32750
(2) Consists of shares issuable under immediately-exercisable options.
(3) Includes 7,500 shares of Common Stock issuable pursuant to immediately
exercisable stock options.
(4) Includes 7,500 shares of Common Stock issuable pursuant to immediately
exercisable stock options.
(5) Includes 7,500 shares of Common Stock issuable pursuant to immediately
exercisable stock options.
(6) Represents Common Stock issuable pursuant to currently exercisable
warrants.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 29, 1996, National made a capital contribution to the Company of
all of its shares of capital stock of Brevard and First Health, constituting all
of the issued and outstanding capital stock of each of Brevard and First Health.
Upon consummation of the initial public offering on May 15, 1996, National
continued to own 37.6% of the outstanding Common Stock of the Company. Certain
directors of the Company are also officers, directors and/or principal
stockholders of National and, consequently, may be able, through National, to
direct the election of the Company's directors, effect significant corporate
events and generally direct the affairs of the Company. The Company does not
intend to enter into any transactions with National or its affiliates by a
majority of the independent and disinterested members of the Board of Directors
and, to the extent deemed necessary or appropriate by the Board of Directors,
the Company will obtain a fairness opinion and stockholder approval in
connection with any such transaction.
The Company has granted to Warren D. Stowell (the President, Chief
Executive Officer and a director of the Company and David Jesse (the Executive
Vice President, Chief Operating Officer and a director of the Company options to
purchase 250,000 and 25,000 shares, respectively, of Common Stock at an exercise
price per share of $.25 in connection with their respective employment by the
Company. Mr. Stowell's options are currently exercisable as to one-fourth of
the shares covered thereby and shall be exercisable as to one-fourth of the
shares covered thereby on each of the first, second and third anniversaries of
January 28, 1996, provided that Mr. Stowell is employed by the Company on such
dates. Mr. Jesse's options are currently exercisable. Commencing two years
after May 15, 1996, the Company has agreed to use its best efforts to file a
registration statement under the Securities Act to register the shares of Common
Stock issuable to Mr. Stowell and Mr. Jesse pursuant to exercise of such
options.
The Company has agreed to use its best efforts to include 83,000 shares of
Common Stock held by National in a registration statement to be filed under the
Securities Act two years after May 15, 1996.
PROPOSALS TO THE SHAREHOLDERS
The Board of Directors unanimously approved each of the following proposals
effective November 7, 1996 for presentation to the Company's shareholders.
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<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
It is intended that the votes will be cast pursuant to the accompanying
proxy for the nominees named below, unless otherwise directed. The Board has no
reason to believe that the nominees will become unavailable. However, in the
event that a nominee should be unavailable, proxies solicited by the Board will
be voted for the election of a substitute nominee designated by the Board.
The Board is presently comprised of seven (7) directors and each director
serves until the next annual meeting of stockholders or until their respective
successors are elected and qualified.
Set forth below are the nominees. For biographical information regarding
the nominees, see "MANAGEMENT."
NOMINEES
--------
Warren D. Stowell
David Jesse
Frederick Fialkow
Bernard Levine, M.D.
Dean L. Sloane
Richard Seidelman, M.D.
Steven Fialkow
Proxies cannot be voted for a greater number of persons than the seven (7)
nominees named above. The Directors will be elected by a plurality of the votes
cast, either in person or by proxy, at the Annual Meeting
The Board recommends a vote in favor of the proposed nominees for election
to the Board.
PROPOSAL 2. SELECTION OF AUDITORS
Richard A. Eisner & Company, LLP ("Eisner"), was previously the principal
accountant for the Company. On August 27, 1996, that firm's appointment as
principal accountant was terminated and KPMG Peat Marwick, LLP, was engaged as
the Company's independent accountants. The decision to change accountants was
approved by the Board of Directors. In connection with the audits of the two
fiscal years ended July 31, 1994 and July 31, 1995, and the subsequent interim
period through August 27, 1996, there were no disagreements with Eisner on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to its
satisfaction would have caused it to make reference in connection with its
opinion to the subject matter of the disagreement. The audit report of Eisner
on the consolidated financial statements of the Company and subsidiaries as of
and for the years ended July 31, 1995 and 1994, did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles. Representatives of KPMG
Peat Marwick, LLP are expected to be present at the Annual Meeting and will be
available to respond to appropriate questions. They will be given the
opportunity to make a statement if they desire to do so.
While ratification by shareholders of this appointment is required by law
or the Company's Certificate of Incorporation or Bylaws, management of the
Company believes that such ratification is desirable. In the event this
appointment is not ratified by an affirmative vote of shareholders holding a
majority of the Company's issued an outstanding Common Stock, in attendance at
the meeting, either in person or by proxy, the Board of Directors of the Company
will consider that fact when it appoints independent public accountants for the
next fiscal year.
The Board recommends a vote in favor of this proposal.
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<PAGE>
OTHER MATTERS
The Board of Directors knows of no business which will be presented for
action at the Annual Meeting other than as set forth in this Proxy Statement,
but if any matters properly come before the meeting, it is the intention of the
persons named in the accompanying proxy to vote on such matters in accordance
with their best judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual Meeting
of Shareholders of the Company must be received by the Company not later than
July 18, 1997, at its principal executive offices, located at 521 East State
Road, Longwood, Florida 32750, Attention: David Jesse, Executive Vice President
for the inclusion in the proxy statement and proxy relating to the 1997 Annual
Meeting of Shareholders.
COST OF SOLICITATION
The entire cost of solicitation of proxies by the Board of Directors will
be borne by the Company. In addition to the use of the mails, proxies may be
solicited by personal interview, facsimile, telephone and telegram by directors,
officers and employees of the Company. The Company expects to reimburse brokers
or other persons for their reasonable out-of-pocket expenses in forwarding proxy
material to beneficial owners.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David A. Jesse
DAVID JESSE, Executive Vice President
Orlando, Florida
November 18, 1996
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<PAGE>
SHAREHOLDER PROXY
SUNSTAR HEALTHCARE, INC.
THIS SHAREHOLDER PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS DECEMBER 16, 1996
The undersigned hereby appoints Warren D. Stowell and David Jesse, or
either of them, as proxies, each with the power to appoint his substitute, to
represent, and vote all shares of Common Stock of and on behalf of the
undersigned as designated on the reverse side at the Annual Meeting of
Shareholders of SUNSTAR HEALTHCARE, INC. to be held December 16, 1996, and any
adjournments thereof, with all powers the undersigned would possess if
personally present and voting at such meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE [X]
1. ELECTION OF DIRECTORS Warren D. Stowell, David Jesse, Frederick H. Fialkow,
Steven Fialkow, Bernard Levine, M.D., Dean L. Sloane, Richard Seidelman,
M.D.
[_] FOR nominees listed [_] WITHHOLD AUTHORITY
above (except as to vote for
marked to the
contrary below)
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE SELECTION OF KPMG PEAT MARWICK LLP AS AUDITORS
[_] FOR [_] AGAINST [_] ABSTAIN
3. OTHER BUSINESS: The proxies are authorized to vote in their discretion on
such other business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder.
If no direction is indicated, the Proxy will be voted FOR Proposals 1
and 2.
PLEASE MARK ON THIS SIDE; THEN SIGN, DATE
AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
(Continued from other side)
This Proxy, when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is indicated, the Proxy
will be voted FOR Proposals 1 and 2.
SUNSTAR HEALTHCARE, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE
ANNUAL MEETING BOARD OF DIRECTORS
to be held at: Date: _____________________________ , 1996
Hyatt Regency Orlando International __________________________________________
9300 Airport Boulevard Signature
Orlando, Florida
__________________________________________
December 16, 1996 Signature if held jointly
10:00 A.M., Local Time
PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. If shares are held in the name of
two or more persons, all must sign. when
signing as attorney, executor,
administrator, personal representative,
trustee, or guardian, give full title as
such. if signer is a corporation, sign
full corporate name by duly authorized
officer.
