<PAGE>
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)
1983 MARCUS AVENUE
LAKE SUCCESS, NEW YORK 11042-7011
(516) 358-1000
11-2650500
(I.R.S. Employer
Identification No.)
(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. / /
- --------------------------------------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Proposed
Proposed Maximum
Title of Amount Aggregate Amount of
Securities to be Aggregate Price Offering Registration
to be Registered Registered Per Unit(2) Price(3) Fee
- --------------------------------------------------------------------------------
Underwriter's 150,496 .001 150.50 (4)
Warrants
Units, each 150,496 9.90 1,489,910.40 $513.76
consisting of Four
shares of Class A
Common Stock, par
value $.01 per
share
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended
(the "Securities Act"), this Registration Statement also covers such
additional indeterminate number of shares as may be issuable with
respect to such shares pursuant to the anti-dilution provisions of the
Warrants.
(2) The proposed maximum aggregate offering price, estimated solely for
the purpose of calculating the registration fee, has been computed
pursuant to Rule 457(g) promulgated under the Securities Act and is
based on the offering price of $9.90 per unit.
(3) Previously, Staff Builders, Inc. filed a Registration Statement on
Form S-1 (Registration No. 33-43728) by which warrants to purchase
200,000 units were registered (the "Prior Registration Statement").
A registration fee of $412.50 was previously paid with respect to the
Prior Registration Statement. At the time of the filing of this
Registration Statement, warrants to purchase 150,496 Units consisting
of 601,984 shares of Class A Common Stock remained outstanding and subject
to the 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 $310.40. Therefore, the balance
of the fee due is $203.36.
(4) No fee pursuant to Rule 457(g).
<PAGE>
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 RO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 1995
PROSPECTUS
STAFF BUILDERS, INC.
1,001,984 SHARES OF CLASS A COMMON STOCK
This Prospectus relates to up to 1,001,984 shares (the "Shares") of the
Class A common stock (the "Class A Common Stock") of Staff Builders, Inc. (the
"Company"), 601,984 of which underlie the warrants (the "Underwriter's
Warrants") issued to Whale Securities Co., L.P. ("Whale") and its designees
in connection with the Company's public offering made on January 31, 1992
(the "1992 Public Offering") and 400,000 of which underlie the warrants (the
"Other Warrants") issued in consideration for certain services rendered to
the Company. See "Description of Securities."
The Class A Common Stock is traded in the over-the-counter market and is
quoted on the 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 Shares issuable upon exercise of the Underwriter's Warrants and the
Other Warrants may be sold from time to time by the holders thereof (the
"Selling Stockholders") or by their transferees. At the date of this
Prospectus, to the best of the Company's knowledge, no underwriting
arrangements have been entered into by the Selling Stockholders. The
distribution of the Shares by the Selling Stockholders may be effected in one
or more transactions that may take place on NASDAQ/NM or such other market on
which the Company's securities may from time to time be trading. Such
transactions may include ordinary broker's transactions or sales to one or
more dealers for resale as principals, at market prices prevailing at the
time of sale or at prices determined in privately negotiated transactions.
Usual and customary or specifically negotiated brokerage fees or commissions
may be paid by the Selling Stockholders in connection with such sales of the
Shares. See "Plan of Distribution."
The price to the public of the Shares to be sold by the Selling
Stockholders cannot presently be determined.
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.
<PAGE>
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 of the Company, 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.
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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 STOCKHOLDERS
The following table sets forth certain information with respect to the
Class A Common Stock owned beneficially by each of the Selling Stockholders
as of December 20, 1995. Information with respect to the Selling Stockholders
other than holders of the Underwriter's Warrants was furnished to the Company
by such Selling Stockholders. Information with respect to holders of the
Underwriter's Warrants was furnished to the Company by Whale.
<TABLE>
<CAPTION>
Number of
Shares to Shares Owned
Number of Shares be Sold in After the
Name of Beneficial Owner Currently Owned the Offering Offering
- ------------------------ --------------- ------------ --------
<S> <C> <C> <C>
Whale Securities Co., L.P. 334,220(1)(2) 334,220 0
William G. Walters 252,908(3) 118,508 134,400
Elliot J. Smith 150,504(4) 118,504 0
Nicholas Anari 18,752(1) 18,752 0
James D. Whitten 9,320(1) 9.320 0
Cynthia Buckwalter 2,680(1) 2,680 0
Strategic Growth International, Inc. 400,000(5) 400,000 0
---------- --------- -------
Total: 1,168,384 1,001,984 134,400
--------- --------- -------
--------- --------- -------
</TABLE>
_________________
(1) Consists of Shares issuable upon exercise of the Underwriter's
Warrants issued to Whale and its designees and transferees in
connection with the 1992 Public Offering.
(2) These securities are held in Whale's name for the account of certain
equity owners of Whale. Does not include an indeterminate number of
shares of Class A Common Stock held in Whale's trading account.
-6-
<PAGE>
(3) Includes 118,508 Shares issuable upon exercise of the Underwriter's
Warrants issued to Whale and its designees and transferees in
connection with the 1992 Public Offering. Does not include 10,000
shares of Class A Common Stock held by Mr. Walters' wife as to which
he disclaims beneficial ownership.
(4) Includes 118,504 Shares issuable upon exercise of the Underwriter's
Warrants issued to Whale and its designees and transferees in
connection with the 1992 Public Offering.
(5) Consists of the Shares issuable upon exercise of the Other Warrants
issued in consideration for certain services rendered to the Company.
None of the Selling Stockholders has held any offices or maintained any
material relationships with the Company or any of its predecessors during the
past three years other than Whale providing financial consulting services to
the Company, and designating a representative to observe meetings of the
Company's Board of Directors; and Strategic Growth International, Inc.
providing financial public relations services to the Company. Messrs. Walters,
Anari and Whitten and Ms. Buckwalter are either principals of, or employed by,
Whale or its general partner and each of them disclaims beneficial ownership
of the 334,220 shares beneficially owned by Whale.
PLAN OF DISTRIBUTION
The Shares received by the Selling Stockholders upon exercise of the
Underwriter's Warrants and Other Warrants may be sold from time to time as
market conditions permit on NASDAQ/NM, or otherwise, at prices and on terms
then prevailing or at prices related to the then-current market price, or in
negotiated transactions. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by the Selling Stockholders in
connection with such sales. The Shares offered hereby may be sold by one or
more of the following methods, without limitation: (a) a block trade in
which a broker or dealer so engaged will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker or dealer as principal and resale
by such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (d) face-to-face transactions between sellers and purchasers
without a broker-dealer; and (e) underwritten offerings of the Class A Common
Stock. In effecting sales, brokers or dealers engaged by the Selling
Stockholders or their respective transferees may arrange for other brokers or
dealers to participate. At the date of this Prospectus, to the best of the
Company's knowledge, no underwriting arrangements have been entered into by
any of the Selling
-7-
<PAGE>
Stockholders with respect to resales of the Shares. The Selling Stockholders
and intermediaries through whom the Shares are sold may be deemed "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities offered.
The holders of the Underwriter's Warrants will comply with Rule 10b-6
promulgated under the Exchange Act in connection with all resales of the
Shares issuable upon exercise of the Underwriter's Warrants. The Company has
agreed to indemnify certain of the Selling Stockholders and certain of the
Selling Stockholders have agreed to indemnify the Company against certain
civil liabilities, including liabilities under the Securities Act.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
sold by the Selling Stockholders. The Company will receive proceeds of
$2,177,910.40 if all of the Underwriter's Warrants and Other Warrants are
exercised. The Company has received no firm commitments with respect to the
exercise of such warrants and, therefore, there can be no assurance that any
such warrants will be exercised or that the Company will receive any such
proceeds.
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 holders 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 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
-8-
<PAGE>
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.
-9-
<PAGE>
UNDERWRITER'S WARRANTS
In connection with the Company's 1992 Public Offering, the Company sold
to Whale and its designees, for an aggregate of $200.00, the Underwriter's
Warrants, which give the holders thereof the right to purchase an aggregate
of up to 200,000 units at an exercise price of $9.90 per unit through January
31, 1997. Each unit consists of four shares of Class A Common Stock. During
the exercise period for the Underwriter's Warrants, the holders are given, at
a nominal cost, the opportunity to profit from a rise in the market price of
the Class A Common Stock. To the extent that the Underwriter's Warrants are
exercised, dilution to the interests of the Company's stockholders will
occur. Further, the terms upon which the Company will be able to obtain
additional equity capital may be adversely affected since the holders of the
Underwriter's Warrants can be expected to exercise them at a time when the
Company would, in all likelihood, be able to obtain any needed capital on
terms more favorable to the Company than those provided in the Underwriter's
Warrants. Subject to certain limitations and exclusions, the Company has
agreed, at the request of the holders of a majority of the Underwriter's
Warrants, at the Company's expense, to register the Underwriter's Warrants
and the underlying Shares under the Securities Act on one occasion during the
exercise period for the Underwriter's Warrants and to include such
Underwriter's Warrants and shares in any appropriate registration statement
which is filed by the Company through January 31, 1999.
OTHER WARRANTS
In consideration for certain services provided by two entities to the
Company, the Company issued 250,000 and 400,000 Other Warrants, respectively,
to such entities, of which 250,000 have subsequently been exercised. The
remaining Other Warrants give the holder thereof the right to purchase an
aggregate of 400,000 shares of Class A Common Stock at exercise prices
ranging from $1.12 to $2.08 per share. During the exercise period for the
Other Warrants, the holder is given the opportunity to profit from a rise
in the market price of the Class A Common Stock. To the extent that the
Other Warrants are exercised, dilution to the interests of the Company's
stockholders will occur. Further, the terms upon which the Company will be
able to obtain additional equity capital may be adversely affected since the
holder of the Other Warrants can be expected to exercise them at a time when
the Company would, in all likelihood, be able to obtain any needed capital on
terms more favorable to the Company than those provided in the Other
Warrants. Subject to certain limitations and exclusions, the Company has
agreed, at the request of the holder of the Other Warrants, at the Company's
expense, to include the shares underlying the Other Warrants in any
appropriate registration statement which is filed by the Company through
October 1996, in the case of 150,000 of the Other Warrants, and through
February 1997, in the case of the remaining Other Warrants.
-10-
<PAGE>
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 Securities Act with respect to the securities offered
by this Prospectus. 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
-11-
<PAGE>
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 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.
-12-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection
with the issuance and distribution of the securities being registered.(1)
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $ 513.76(2)
Legal Fees and Expenses 10,000
Accounting Fees and Expenses 5,000
Transfer Agent, Warrant Agent and Registrar Fees and Expenses 1,000
Printing Expenses 5,000
---------
Total $21,513.76
---------
---------
</TABLE>
- ---------------------------
(1) All or these expenses will be paid by the Company.
The Selling Stockholders 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
II-1
<PAGE>
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 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 coverage
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, (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, as amended (the "Securities Act"), 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
II-2
<PAGE>
as expressed in the Securities Act and is, therefore, unenforceable. See Item
17. "Undertakings."
ITEM 16. EXHIBITS
Exhibit No.
in Document
Sequentially Incorporated by
Exhibit No. Exhibit Numbered Page Reference
----------- ------- ------------- ---------------
1.1 Form of Underwriting Agreement (A) 1.1
4.1 Specimen Class A Common Stock 4.1
Certificate (C)
4.2 Specimen Warrant Certificate (D) 4.2
4.3 Form of Warrant Agreement between 4.3
the Company and Whale Securities
Co., L.P. (A)
4.4 Form of Warrant Agreement among the 4.4
Company, Whale Securities Co., L.P.
and American Stock Transfer & Trust
Company (A)
4.5 Warrant Certificates to Purchase
Units, issued by the Company to Whale
Securities Co., L.P. issued on April
24, 1995 (B) 10.81
5 Opinion of Richards & O'Neil, LLP
(E)
23.1 Consent of Deloitte & Touche LLP (E)
23.2 Consent of Richards & O'Neil, LLP
(included in Exhibit 5)
24 Power of Attorney (included as part of signature page) (E)
---------------------------
(A) Incorporated by reference to the Company's Registration Statement
on Form S-1 (Registration No. 33-70308), as filed with the Securities
and exchange Commission on November 1, 1991.
(B) Incorporated by reference to the Company's Exhibit Booklet to its Form
10-K for the fiscal year ended February 28, 1995.
(C) 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.
(D) Incorporated by reference to Amendment No. 1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-70308).
(E) Filed herewith.
II-3
<PAGE>
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;
(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 value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and 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, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities 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 Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or 15(d) of the Exchange 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
Securities 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 Securities 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,
II-4
<PAGE>
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 Securities
Act and will be governed by the final adjudication of such issue. See Item 15.
"Indemnification of Directors and Officers."
II-5
<PAGE>
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 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.
/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
<PAGE>
[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 issuance and sale
of 601,984 shares of the Company's Class A common stock (the "Class A Common
Stock") underlying warrants (the "Warrants") issued by the Company to Whale
Securities Co., L.P., 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
reservation for issuance of the shares of the Class A Common Stock issuable
upon exercise of such Warrants. 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.
<PAGE>
Staff Builders, Inc.
December 22, 1995
Page 2
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
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 issuable upon exercise
of the Warrants have been duly and validly authorized and reserved
for issuance by the Company upon such exercise and, when
delivered upon exercise of the Warrants against payment therefor
in accordance with the provisions of the Warrants will be legally
and 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
<PAGE>
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
