<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)
11-2650500
(I.R.S. Employer Identification No.)
1983 MARCUS AVENUE
LAKE SUCCESS, NEW YORK 11042-7011
(516) 358-1000
(Address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
STEPHEN SAVITSKY
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
STAFF BUILDERS, INC.
1983 MARCUS AVENUE
LAKE SUCCESS, NEW YORK 11042-7011
(516) 358-1000
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
COPIES TO:
Floyd I. Wittlin, Esq.
Richards & O'Neil, LLP
885 Third Avenue
New York, New York 10022-4802
Telephone: (212) 207-1766
Facsimile: (212) 750-9022
Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / X /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================
Title of Proposed Maximum Proposed
Class of Securities Amount to Offering Price Maximum Amount of
to be Registered(1) be Registered Per Share(2) Aggregate Registration Fee
Offering Price(3)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, 196,386 $2.75 $540,061.50 $186.23
par value $0.01 per share
=========================================================================================================
</TABLE>
(1) This registration statement covers the resale by Selling Shareholders of
196,386 shares of Class A Common Stock previously acquired by such Selling
Shareholders.
(2) The proposed maximum aggregate offering price, estimated solely for the
purpose of calculating the registration fee, has been computed pursuant
to Rule 457(c) promulgated under the Securities Act and is based on the
offering price of $2.75 per share which is the average of the high and
low prices of Staff Builders, Inc.'s Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), on December 18, 1995, as quoted
on the National Association of Securities Dealers Automated Quotation
National Market System.
(3) Previously, Staff Builders, Inc. filed a Registration Statement on Form
S-1 (Registration No. 33-83588) by which 2,545,388 shares of common stock
were registered (the "Prior Registration Statement"). A registration fee
of $2,742.89 was previously paid with respect to the Prior Registration
Statement. At the time of the filing of this Registration Statement,
196,386 shares registered in the Prior Registration Statement remained
outstanding and subject to such Prior Registration Statement. Pursuant to
Rule 429 of the Securities Act, Staff Builders, Inc. has applied the
applicable percentage of the previously paid fee to the amount of this
registration fee. The applicable percentage of the previously paid fee is
$122.64 resulting in a balance due of $63.59. However, pursuant to
Section 6(b) of the Securities Act of 1933, as amended, a fee of $100.00
is the minimum amount that shall be paid with the filing of any
registration statement. Therefore, a fee of $100.00 has been paid with
the filing of this Registration Statement.
<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 TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 1995
PROSPECTUS
STAFF BUILDERS, INC.
196,386 SHARES OF CLASS A COMMON STOCK
This Prospectus relates to an offering by certain shareholders (the
"Selling Shareholders") of up to 196,386 shares (the "Shares") of Class A
common stock (the "Class A Common Stock") of Staff Builders, Inc., a Delaware
corporation (the "Company").
The Class A Common Stock is traded in the over-the-counter market and is
quoted on the National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market ("NASDAQ/NM") under the symbol "SBLI". On
December 18, 1995, the closing price of the Class A Common Stock was $2.75,
as reported by NASDAQ.
The sale of Shares by the Selling Shareholders may be effected from time to
time in transactions (which may include block transactions) on NASDAQ/NM or
on such other exchange or market in which the Class A Common Stock may from
time to time be trading, in negotiated transactions, or a combination of such
methods of sale, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The Selling Shareholders may effect such
transactions by selling Shares directly to purchasers or to or through
broker-dealers which may act as agents or principals. Such broker-dealers may
receive compensation in the form of discounts, concessions, or commissions
from the Selling Shareholders and/or the purchasers of Shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). Any such broker or dealer may be deemed to be an
"underwriter" within the meaning of Section 2 (11) of the Securities Act of
1933, as amended (the "Act"), and any commissions received by any such broker
or dealer in connection with such sales and any profits received by any such
broker or dealer on the resale of any Shares acquired as principal may be
deemed to be underwriting compensation. See "Plan of Distribution."
The Company will not receive any part of the proceeds from the sale of the
Shares by the Selling Shareholders. The Company has agreed to bear all of the
expenses incurred by it in connection with the registration of the Shares. Each
of the Selling Shareholders has agreed to pay his or her own expenses, including
any brokerage commissions, personal legal fees or similar expenses relating to
the offer or sale of such Selling Shareholder's Shares. The Company has agreed
to indemnify the Selling Shareholders against certain liabilities, including
liabilities under the Act.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "INVESTMENT CONSIDERATIONS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________________________________
The date of this Prospectus is December __, 1995.
<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
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
<PAGE>
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, A
COPY OF ANY OR ALL OF THE INFORMATION INCORPORATED BY REFERENCE HEREIN (NOT
INCLUDING EXHIBITS TO SUCH INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH INFORMATION). WRITTEN REQUESTS SHOULD BE
ADDRESSED TO: STAFF BUILDERS, INC., 1983 MARCUS AVENUE, LAKE SUCCESS, NEW YORK
11042, ATTENTION: CHIEF FINANCIAL OFFICER. TELEPHONE REQUESTS MAY BE DIRECTED
TO THE CHIEF FINANCIAL OFFICER AT (516) 358-1000.
THE COMPANY
Staff Builders, Inc. is a leading national provider of home health care.
These services are provided through a pool of approximately 30,000 caregivers
operating within a network of 211 offices located in 37 states and the
District of Columbia. Of these offices, 32 are directly owned by the
Company, 179 are owned by 86 franchisees. The Company's services are rendered
by licensed and registered nurses, therapists and medical social workers, who
provide skilled care such as intravenous therapy, pain management, ventilator
care, changing of dressings, injections, administration of medication and
other nursing procedures. In addition, unskilled care is provided by home
health aides and other unlicensed personnel who assist patients with their
daily activities.
During the past few years, substantial changes in Federal and state health
care reimbursement policies have resulted in earlier discharge of patients from
health care institutions and an increase in demand for home health care.
Consistent with these trends, over the past several years, demand for the
Company's home health care services has increased and demand for its
supplemental staffing services has decreased. For the fiscal years ended
February 28, 1993, February 28, 1994 and February 28, 1995, 89%, 95% and
91%, respectively, of the Company's total revenues were attributable to home
health care personnel operations and approximately 10%, 5% and 9%,
respectively, were attributable to supplemental staffing operations. Despite
these trends, management of the Company believes that reductions in permanent
staff by hospitals and other medical facilities will lead to an increased
demand for temporary nurses and other medical personnel. With this in mind,
the Company has sought to strengthen its supplemental staffing business
through the acquisition in July 1994 of ATC Services Incorporated ("ATC"), a
provider of temporary and contractual staffing services to health care
institutions and organizations through 13 offices located in seven
states and the acquisition by ATC in November 1994 of seven additional offices
in five states.
The Company intends to pursue a strategy of aggressive growth by
establishing new franchised offices and converting independently-owned agencies
and its existing Company-owned offices into franchised offices.
Staff Builders, Inc. is a Delaware corporation which was incorporated in
New York in 1978 and reincorporated in Delaware in May 1983. Unless the context
otherwise requires, all references to the "Company" include the Company's
predecessor, its subsidiaries and joint ventures in which it maintains
management control.
-2-
<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 SHAREHOLDERS
The Selling Shareholders received their Shares pursuant to a merger in July
1994 between ATC and a wholly-owned subsidiary of the Company. The Selling
Shareholders owned outstanding shares of ATC common stock. Those shares of
ATC common stock were converted into Shares in the merger. As a result of the
merger, ATC became a wholly-owned subsidiary of the Company.
The following table sets forth certain information with respect to the Class A
Common Stock owned by each of the Selling Shareholders as of December 20, 1995.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
NUMBER OF NUMBER OF CLASS A
SHARES SHARES OF COMMON STOCK
OF CLASS A CLASS A OWNED
COMMON STOCK COMMON STOCK AFTER
NAME OWNED OFFERED OFFERING(1)
- -------------------- ----------- ------------ -----------
<S> <C> <C> <C>
Carolyn C. Spiceland 65,631 65,631 0
Sally Leduc 254 15,254 0
Wanda P. Cole 62,574 62,574 0
Robert W. Harman, III 37,239 32,239 5,000
Kimberly Horton 3,922 3,922 0
James P. Kirtland 3,922 3,922 0
Thomas C. Kirtland 3,922 3,922 0
John Kirtland 3,922 3,922 0
---------- ------------ -----------
Total 196,386 191,386 5,000
</TABLE>
- -------------------
(1) Assumes that the Selling Shareholders dispose of all of the Shares covered
in this Prospectus and do not acquire any additional shares of Class A
Common Stock.
-6-
<PAGE>
PLAN OF DISTRIBUTION
The sale of the Shares by the Selling Shareholders may be effected from
time to time in transactions (which may include block transactions) on
NASDAQ/NM or on such other exchange or market in which the Class A Common
Stock may from time to time be trading, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling Shareholders
may effect such transactions by selling Shares directly to purchasers or to
or through broker-dealers which may act as agents or principals. Such
broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Shareholders and/or the
purchasers of Shares for whom such broker-dealers may act as agent or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Any such broker
or dealer may be deemed to be an "underwriter" within the meaning of Section
2(11) of the Act, and any commissions received by any such broker or dealer
in connection with such sales and any profits received by any such broker or
dealer on the resale of any Shares acquired as principal may be deemed to be
underwriting compensation.
The Company has agreed to bear all of the expenses incurred by it in
connection with the registration of the Shares. Each of the Selling Shareholders
has agreed to pay his or her own expenses, including any brokerage commissions,
personal legal fees or similar expenses relating to the offer or sale of such
Selling Shareholder's Shares. The Company has agreed to indemnify the Selling
Shareholders against certain liabilities, including liabilities under the Act.
USE OF PROCEEDS
The Company will not realize any proceeds from the sale of the Shares by
the Selling Shareholders.
DESCRIPTION OF SECURITIES
GENERAL
The Company is authorized to issue 50,000,000 shares of Class A Common
Stock, par value $.01 per share, 1,554,936 shares of Class B Common Stock,
par value $.01 per share, and 10,000 shares of preferred stock, par value
$1.00 per share. The shares of Class A Common Stock, Class B Common Stock
and preferred stock presently outstanding are validly issued, fully paid and
nonassessable.
COMMON STOCK
The rights of the holders of the Class A Common Stock and the Class B
Common Stock are identical except that (i) a holder of Class A Common Stock
is entitled to one vote for each share of Class A Common Stock held of
record by such holder as of the record date for a meeting of stockholders,
whereas a holder of Class B Common Stock is entitled to ten votes (except
with respect to certain amendments to the Company's Restated Certificate
of Incorporation) for each share of Class B Common Stock held of record by
such holder as of the record date for a meeting of stockholders, and (ii)
each share of Class B Common Stock is convertible, at the option of the
holder, into one share of Class A Common Stock, and will automatically
convert into one share of Class A Common Stock upon any transfer (subject
to limited exceptions). Holders of shares of the Class A Common Stock and the
Class B Common Stock vote as a single class on all matters submitted to a
vote of the Company's stockholders.
The Company's Restated Certificate of Incorporation, as amended,
provides that the affirmative vote of the holders of at least 80% of the
voting power of the outstanding Common Stock (each share of Common Stock
being entitled to one vote) and at least 66% of the outstanding shares of
each series of preferred stock (each series voting separately) is required to
approve certain mergers, asset sales, securities transactions, liquidations,
reclassifications and other similar transactions involving an "interested
stockholder" of the Company unless the business combination has received the
prior approval of a majority of the Company's "continuing directors." An
"interested stockholder" is a stockholder who beneficially owns more than 10%
of the Company's outstanding voting power, or who is an affiliate of the
Company who owned more than 10% of the Company's outstanding voting power at
any time within the prior two-year period, or who acquired shares of the
Company's voting stock from another interested stockholder at any time within
the prior two-year period in a transaction not involving a public offering.
A "continuing director" is generally any director of the Company who is
unaffiliated with the interested stockholder and who was a member of the
Company's Board of Directors prior to the interested stockholder becoming an
interested stockholder. The existence of this provision (the "Interested
Stockholder Provision") could have the effect of delaying, deferring or
preventing a change in control of the Company.
The Company's Board of Directors is divided into three classes. One
class is elected each year by a majority of the votes cast by holders of Common
Stock at the Company's annual meeting to hold office for a three-year term and
until their successors
-7-
<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.
-8-
<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 Act with respect to the Shares. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and this
offering, reference is made to the Registration Statement, including the
exhibits filed therewith, which may be inspected without charge at
the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of the Registration Statement may be obtained from the Commission
at its principal office upon payment of prescribed fees. Statements contained
in this Prospectus as to the contents of any contract or other document are not
necessarily complete and, where the contract or other
-9-
<PAGE>
document has been filed as an exhibit to the Registration Statement, each such
statement is qualified in all respects by reference to the applicable document
filed with the Commission.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the securities being
registered.(1)
<TABLE>
<S> <C>
SEC Registration Fee .................................... $ 186.23(2)
Legal Fees and Expenses ................................. 10,000.00
Accounting Fees and Expenses ............................ 5,000.00
Transfer Agents Fees and Expenses ....................... 1,000.00
Printing Expenses........................................ 5,000.00
---------
Total ................................................. $ 21,186.23
---------
---------
- -------------------------
(1) All of these expenses will be paid by the Company. The Selling Shareholders
will pay the expenses of their counsel.
(2) Does not reflect credit applied pursuant to Rule 429 of the Securities
Act.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of Staff Builders, Inc., a Delaware
corporation (the "Company") provides that (i) the Company shall, to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law
("Section 145"), indemnify all persons whom it may indemnify pursuant thereto
and (ii) the personal liability of the directors of the Company is eliminated to
the fullest extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law ("Section 102(b)(7)"). The Company has entered into separate
indemnification agreements with certain of its officers to the same effect.
Section 145 permits the Company to indemnify any person who was or is a
party or is threatened to be made a party to a threatened, pending or completed
administrative, investigative, civil or criminal action, suit or proceeding
(other than an action by or in the right of the registrant in question) by
reason of the fact that he is or was a director, officer, employee or agent of
the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another company, partnership, joint venture, trust
or "other enterprise" against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement he actually and reasonably incurred in
connection with such an action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of such registrant (and, in the case of a criminal action or proceeding, had no
reason to believe his conduct was unlawful). In the case of an action by or in
the right of the Company he may not be indemnified in respect of any claim,
issue or matter as to which he was adjudged liable to the Company unless and
only to the extent that the court determines that he is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
Payment may be made in advance of the final disposition of a criminal
action or proceeding if the officer or director agrees to repay to the Company
such an amount in the event it is determined that he was not entitled to it.
Indemnification against expenses (including attorney's fees) actually
II-1
<PAGE>
and reasonably incurred must be given under Section 145 to the extent an
officer, director, employee or agent is successful in an action described above.
In addition, Section 145 permits the Company to purchase and maintain
insurance on behalf of any officer, director, employee and agent of the Company
or any person serving at the request of the Company as an officer, director,
employee or agent of another corporation serving as described above whether or
not the Company would have the power to indemnify him under Section 145. The
Company maintains directors and officers liability insurance for all duly
elected or appointed officers and directors of the Company.
Section 102(b)(7) permits the Company to eliminate or limit the personal
liability of a director to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation, (iii) under Section 174 of the General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company, pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. See Item 17. "Undertakings."
II-2
<PAGE>
ITEM 16. EXHIBITS
Exhibit No.
in Document
Sequentially Incorporated by
Exhibit No. Exhibit Numbered Page Reference
----------- ------- ------------- ---------------
2 Agreement of Merger among Staff 2
Builders, Inc., ATC Acquisition Corp.,
ATC Services Incorporated, Terrance L.
Bauer and the Shareholders of ATC
Services Incorporated, dated July 22, 1994.
(A)
4.1 Specimen Class A Common Stock Certificate (B) 4.1
5 Opinion of Richards & O'Neil, LLP (C)
23.1 Consent of Deloitte & Touche LLP (C)
23.2 Consent of Richards & O'Neil, LLP
(included in Exhibit 5)
24 Power of Attorney (included as part of signature page) (C)
-----------------------------
(A) Incorporated by reference to the Company's Current Report on Form 8-K,
dated July 22, 1994.
(B) Incorporated by reference to the Company's Registration Statement on
Form 8-A, as amended by Amendment No. 1 to the Registration Statement
on Form 8-A of the Company, which was filed under the Exchange Act and
declared effective on October 26, 1995.
(C) Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "1933 Act");
II-3
<PAGE>
(ii) To reflect in the prospectus any facts or event arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Company pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 (the "1934 Act") that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Company's
annual report pursuant to Section 13(a) or 15(d) of the 1934 Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling persons
of the Company, pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit, or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue. See Item 15. "Indemnification of Directors and
Officers."
II-4
<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 in his or her name, place and stead, to execute in the
name of such person, in the capacities stated below, and to file, such one
or more amendments to this Registration Statement as the Registrant deems
appropriate, and generally to do all such things in the name and on behalf
of such person, in the capacities stated below, to enable the Registrant to
comply with the provisions of the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission thereunder, hereby
ratifying and confirming the signature of such person as may be signed by
said attorneys-in-fact, or any one of them to any and all amendments to this
Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Stephen Savitsky Chairman of the Board, December 22, 1995
- ---------------------------- President and Chief
Stephen Savitsky Executive Officer
(Principal Executive
Officer) and Director
/s/ David Savitsky Executive Vice President, December 22, 1995
- ---------------------------- Chief Operating Officer,
David Savitsky Secretary, Treasurer and
Director
/s/ Gary Tighe Senior Vice President, December 22, 1995
- ---------------------------- Finance and Chief Financial
Gary Tighe Officer (Principal
Financial and Accounting
Officer)
/s/ Bernard J. Firestone
- ----------------------------
Bernard J. Firestone, Ph.D. Director December 22, 1995
/s/ Jonathan Halpert
- ----------------------------
Jonathan Halpert, Ph.D. Director December 22, 1995
/s/ Donald Meyers
- ----------------------------
Donald Meyers Director December 22, 1995
<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 sale of 196,386
shares of the Company's Class A common stock par value $.01 per share (the
"Class A Common Stock"), issued by the Company to former shareholders of ATC
Services Incorporated, a Georgia corporation and currently a wholly-owned
subsidiary of the Company, pursuant to a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended.
As counsel to the Company, we have reviewed the various corporate
proceedings taken by the Company in connection with the authorization and
issuance of the shares of Class A Common Stock. In connection therewith, we
have examined originals or copies certified or otherwise identified to our
satisfaction, of such corporate records of the Company and other instruments
and documents as we have deemed necessary as a basis for the opinions
hereinafter expressed. We also have assumed that all meetings, the minutes or
certified extracts of which have been submitted to us, were properly convened
and held and that all resolutions voted upon at such meetings were properly
proposed and passed.
For purposes of this opinion, we have assumed, without
any independent investigation or verification of any kind the
genuineness of all signatures on, and the authenticity and
<PAGE>
Staff Builders, Inc.
December 22, 1995
Page 2
completeness of, all documents submitted to us as originals and
the conformity to original documents and completeness of all
documents submitted to us as certified, conformed or photostatic
copies.
Based upon and subject to the foregoing, we are of the
opinion that the shares of Class A Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit
to the Registration Statement and the reference to this firm
under the caption "Legal Matters" in the prospectus contained
therein.
Very truly yours,
/s/ RICHARDS & O'NEIL, LLP
<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
