SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MAY 31, 1996, OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM TO .
Commission file number 0-11380
STAFF BUILDERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2650500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1983 Marcus Avenue, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
(516) 358-1000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
The number of shares of Class A Common Stock and Class B Common
Stock outstanding on July 8, 1996 was 22,096,646 and 1,492,357
shares, respectively.
STAFF BUILDERS, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
May 31, 1996 and February 29, 1996 2
Condensed Statements of Consolidated
Income - Three months ended
May 31, 1996 and 1995 3
Condensed Statements of Consolidated Cash
Flows - Three months ended May 31, 1996
and 1995 4
Notes to Condensed Consolidated Financial
Statements 5-6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7-9
PART II. OTHER INFORMATION
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K 9
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STAFF BUILDERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) MAY 31,
1996 FEBRUARY 29,
(UNAUDITED) 1996
ASSETS:
Current Assets:
Cash and cash equivalents $ 3,216 $ 8,710
Accounts receivable, net of allowance
for doubtful accounts of $2,300 at May
31, 1996 and $2,200 at February 29, 1996 57,307 52,957
Deferred income tax benefits 2,475 2,403
Prepaid expenses and other current assets 3,419 3,543
Total current assets 66,417 67,613
Fixed Assets, net of accumulated
depreciation of $4,254 at May 31,
1996 and $4,751 at February 29, 1996 8,421 7,436
Intangible Assets, net of accumulated
amortization of $7,847 at May 31, 1996
and $7,282 at February 29, 1996 44,764 41,877
Other Assets 4,350 3,601
Total $123,952 $120,527
LIABILITIES:
Current Liabilities:
Accounts payable and accrued expenses $ 29,633 $ 25,481
Accrued payroll and payroll related expenses 23,017 27,769
Current portion of long-term liabilities 2,374 2,356
Total current liabilities 55,024 55,606
Amount Due Under Secured Revolving
Line of Credit 2,126 -
Other Long-Term Liabilities 10,506 9,611
STOCKHOLDERS' EQUITY:
Class A Common Stock - $.01 par value;
50,000,000 shares authorized; 22,084,455
and 22,036,313 outstanding at May 31, 1996
and February 29, 1996, respectively 221 220
Class B Common Stock - $.01 par value;
1,554,936 shares authorized; 1,493,785 and
1,501,007 outstanding at May 31, 1996 and
February 29, 1996, respectively 15 15
Convertible preferred stock, Class A;
666 2/3 shares outstanding 1 1
Additional paid-in capital 72,868 72,767
Accumulated deficit (16,809) (17,693)
Total stockholders' equity 56,296 55,310
Total $123,952 $120,527
See notes to condensed consolidated financial statements.
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STAFF BUILDERS, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
(In thousands, except per share data)
Three Months Ended
May 31,
1996 1995
Revenues:
Service revenues $112,880 $98,051
Sales of franchises and fees, net 541 375
Total revenues 113,421 98,426
Costs and Expenses:
Operating costs 70,618 60,498
General and administrative expenses 39,982 34,344
Provision for doubtful accounts 700 620
Amortization of intangible assets 578 397
Interest expense 274 276
Other (income) expense, net (310) (198)
Total costs and expenses 111,842 95,937
Income Before Income Taxes 1,579 2,489
Provision for Income Taxes 695 1,095
Net Income $ 884 $ 1,394
Weighted average number of common and
common equivalent shares:
Primary 24,610 25,222
Fully diluted 24,917 25,239
Income per common and
common equivalent share:
Primary $.04 $.06
Fully diluted $.04 $.06
See notes to condensed consolidated financial statements.
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STAFF BUILDERS, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(In thousands)
Three Months Ended
May 31,
1996 1995
Cash Flows from Operating Activities:
Net Income $ 884 $1,394
Adjustments to reconcile net income to net
cash provided by (used in) operations:
Depreciation and amortization 1,186 870
Allowance for doubtful accounts (100) 50
Deferred income taxes (72) (10)
Amortization of rent escalation liability (15) (20)
Change in operating assets and liabilities:
Accounts receivable (3,707) (1,395)
Prepaid expenses and other current assets 359 272
Accounts payable and accrued expenses (944) 3,376
Income taxes payable - (255)
Other assets (762) (99)
Net cash provided by (used in) operating
activities (3,171) 4,183
Cash Flows from Investing Activities:
Acquisition of businesses (3,590) (425)
Additions to fixed assets (565) (260)
Net cash used in investing activities (4,155) (685)
Cash Flows from Financing Activities:
Proceeds from Employee Stock Purchase Plan 139 96
Exercise of options 30 128
Purchase and retirement of common stock (67) -
Increase (decrease) in borrowings under
revolving line of credit 2,126 (3,355)
Reduction in other long-term liabilities (396) (129)
Net cash provided by (used in) financing
activities 1,832 (3,260)
Net Increase (Decrease) in Cash
and Cash Equivalents (5,494) 238
Cash and Cash Equivalents, Beginning
of Period 8,710 4,508
Cash and Cash Equivalents, End of Period $3,216 $4,746
Supplemental Data:
Cash paid for:
Interest $ 166 $ 275
Income taxes, net $ 161 $1,384
Acquisition of business through issuance of
note payable $ 500 $ -
Fixed assets purchased through capital lease
agreements $1,028 $ 425
See notes to condensed consolidated financial statements.
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STAFF BUILDERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. FINANCIAL STATEMENTS - In the opinion of the Company, the
accompanying unaudited condensed consolidated financial
statements contain all adjustments (consisting of only normal
and recurring accruals) necessary to present fairly the
financial position of the Company and its subsidiaries as of
May 31, 1996 and February 29, 1996 and the results of
operations and the cash flows for the three months ended May
31, 1996 and 1995. Certain prior period amounts have been
reclassified to conform with the May 1996 presentation.
The results for the three months ended May 31, 1996 and 1995
are not necessarily indicative of the results for an entire
year. It is suggested that these condensed consolidated
financial statements be read in conjunction with the Company's
audited financial statements as of February 29, 1996 and for
the year then ended.
2. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE - Earnings per
common and common equivalent share were computed by dividing
the earnings applicable to common stockholders by the weighted
average number of shares of common stock and common stock
equivalents, principally dilutive stock options and warrants
outstanding during the period.
The shares used in computing primary earnings per common and
common equivalent share were 24,610,305 shares and 25,222,302
shares for the three months ended May 31, 1996 and 1995,
respectively. The shares used in computing fully diluted
earnings per share were 24,916,780 and 25,239,164 for the
three months ended May 31, 1996 and 1995, respectively.
3. ACQUISITIONS - During the three months ended May 31, 1996, the
Company completed eight acquisitions which added 18 locations
for total consideration of approximately $4.1 million.
Included in these acquisitions was the purchase on May 31,
1996 of Complete Care, Inc., a regional home health care
provider consisting of eight locations in Missouri. This
transaction was accounted for as a purchase, whereby the
Company acquired the assets of Complete Care, Inc., for which
aggregate consideration of approximately $1.6 million was
paid. The results of operations of Complete Care, Inc. are
included in the Company's financial statements subsequent to
May 31, 1996.
Additionally, subsequent to May 31, 1996, the Company
completed the acquisition of the assets of Central
California Premier Health Services, Inc., a regional home
health care provider consisting of five locations, for
aggregate consideration of $1.7 million, including cash paid
of $1.1 million and a note payable of $600 thousand.
Revenues on a pro forma basis for the three months ended May
31, 1996, if these acquisitions had occurred on March 1,
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1996, would have approximated $117.0 million. The effect of
these acquisitions on net income and earnings per share on a
pro forma basis for three months ended May 31, 1996 is not
material.
4. PROVISION FOR INCOME TAXES - The provision for income taxes
for the three months ended May 31, 1996 and 1995 is based upon
the Company's estimated tax provision required for the full
year. The calculation for the three months ended May 31, 1996
considers the reversal of prior income tax accruals not
considered necessary.
5. CONTINGENCIES - On September 20, 1995, the United States
Attorney for the Eastern District of Pennsylvania alleged that
(i) between 1987 and 1989, a corporation, substantially all of
the assets and liabilities of which were acquired by a
subsidiary of the Company in 1993, submitted false claims to
Medicare totaling approximately $1.5 million and (ii) officers
and employees of that corporation submitted false statements
in support of such claims, and made a pre-complaint civil
settlement demand of approximately $4.5 million. The alleged
false claims and false statements were made before the Company
acquired that corporation in 1993. Based on its preliminary
investigation, the Company believes that the amount of
improper claims, if any, submitted by that corporation to
Medicare between 1987 and 1989 were significantly below $1.5
million. The Company is in negotiations with the office of
the United States Attorney to resolve this matter, but is
unable to predict the ultimate costs, if any, that may be
incurred by the Company. As such, no provision has been made
in the accompanying condensed consolidated financial
statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding
of the Company's results of operations and financial condition.
This discussion should be read in conjunction with the Condensed
Consolidated Financial Statements appearing in Item 1.
Results of Operations
Total revenues increased by $15.0 million or 15.2% for the three
months ended May 31, 1996 ("the 1996 period") to $113.4 million
from $98.4 million for the three months ended May 31, 1995 ("the
1995 period"). This increase included approximately $8.3 million
of revenue in 26 franchise and 8 company-owned locations added from
acquisitions made since May 31, 1995, including $2.7 million of
revenue from a regional home health care provider based in Raleigh-
Durham, North Carolina. Additionally, an increase in revenue of
$6.7 million was generated from locations operating prior to May
31, 1995, representing an increase of 7% in the 1996 period over
the 1995 period.
The Company receives payment for its services from several sources
as indicated in the following table.
Service Revenues
Three Months Ended
May 31,
1996 1995
Medicare ................................ 56.8% 58.5%
Medicaid and other local government
programs ............................... 20.4 18.1
Insurance and private payors ............ 14.2 12.7
Hospitals, nursing homes and
other health care institutions ......... 8.5 10.6
Other ................................... 0.1 0.1
Total ................................... 100.0% 100.0%
Operating costs were 62.6% and 61.7% of service revenues for the
1996 and 1995 periods, respectively. The increase in operating
costs as a percentage of service revenues is primarily due to a
change in revenue mix toward non-Medicare services which
traditionally have lower gross margins.
General and administrative expenses increased by $5.7 million, or
16.4%, to $40.0 million for the 1996 period from $34.3 million for
the 1995 period. These costs, expressed as a percentage of service
revenues, were 35.4% and 35.0% for the 1996 and 1995 periods,
respectively. The increase in these expenses is due, in part, to
approximately $2.4 million incurred during the 1996 period in
operating those locations added since May 31, 1995. Additionally,
an increase of approximately $700 thousand was incurred in the
Company's corporate expenses primarily related to the Company's
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development of several new programs and systems to augment its home
health care services. Such programs include ancillary products and
services such as intravenous therapies, durable medical equipment
and respiratory and home prescription services. Systems are being
developed to quantitatively measure patient outcomes and the
effectiveness of our comprehensive home care services in meeting
patient needs.
Provision for doubtful accounts was approximately $700 thousand and
$600 thousand for the 1996 and 1995 periods, respectively. The
provisions represented 0.6% of service revenues in each of the
three months ended May 31, 1996 and 1995.
Interest expense was approximately $300 thousand in each of the
three months ended May 31, 1996 and 1995. The Company has a
revolving line of credit under which the average amount borrowed
was approximately $300 thousand and $4.9 million for the 1996 and
1995 periods, respectively. The resultant decrease in interest
expense under the revolving line of credit for the three months
ended May 31, 1996 was offset by an increase in interest expense
incurred on additional capital leases and on notes payable in
connection with acquisitions made since May 31, 1995. The average
interest rate relating to these borrowings was 8.25% and 9.00% for
the 1996 and 1995 periods, respectively.
The provision for income taxes decreased to $700 thousand for the
1996 period as compared to $1.1 million for the 1995 period,
primarily due to the decrease in income before income taxes. The
Company's effective income tax rate was 44% in each of the 1996 and
1995 periods. See Note 4 - Provision for Income Taxes.
Income before income taxes for the 1996 period decreased
approximately $1.0 million to $1.6 million compared to $2.5 million
for the 1995 period. Net income for the 1996 period was $900
thousand as compared to $1.4 million for the 1995 period.
Liquidity and Capital Resources
The Company has a secured revolving credit facility which consists
of a revolving line of credit and an acquisition line of credit,
under which it can borrow up to an aggregate amount of $25 million.
The credit facility expires on July 31, 1997. As of May 31, 1996
and February 29, 1996, the amounts available for borrowing under
the credit facility were approximately $22.4 million and $24.8
million, respectively. The acquisition line of credit provides for
borrowings up to $7.5 million without collateral to finance
acquisitions made by the Company, provided that the sum of all
borrowings does not exceed $25 million.
At May 31, 1996, the Company borrowed $2.1 million under this
facility. There were no borrowings under this facility at February
29, 1996. Trade accounts receivable at May 31, 1996 and February
29, 1996 were outstanding approximately 48 days as compared to 53
days at May 31, 1995.
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At May 31, 1996, the Company's debt obligations due within the next
twelve months were $2.4 million.
The Company expects that its existing cash, cash provided from
operations and its banking facilities will be sufficient to meet
its needs for at least the next twelve months. The Company expects
that it will be able to extend or replace its revolving credit
agreement on favorable terms prior to its expiration on July 31,
1997.
PART II. OTHER INFORMATION
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(A) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant for the quarter
ended May 31, 1996.
(B) Exhibit
Exhibit No.
10.1 Employment Agreement, dated as March 1, 1996,
between the Company and Larry Campbell.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Staff Builders, Inc.
Dated: July 15, 1996 By: /s/ Stephen Savitsky
Stephen Savitsky
Chairman of the Board, President
and Chief Executive Officer
Dated: July 15, 1996 By: /s/ Gary Tighe
Gary Tighe
Senior Vice President, Finance
(Principal Financial and
Accounting Officer)
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EMPLOYMENT AGREEMENT
Employment Agreement, effective as of March 1, 1996, by
and between STAFF BUILDERS, INC., a New York corporation ("Staff
Builders" or the "Corporation"), and Larry Campbell who resides at
13626 Ashley Run, Houston, Texas 77077-1509 ("Executive").
WHEREAS, Staff Builders wishes to secure the services of the
Executive on the terms and conditions set forth below;
AND WHEREAS, the Executive represents that he has no
restrictions on employment arising out of any previous employment
agreements and the Executive is willing to accept employment with
Staff Builders on such terms and conditions.
NOW, THEREFORE, in consideration of their mutual promises and
other adequate consideration, Staff Builders and the Executive do
hereby agree as follows:
1. EMPLOYMENT. Staff Builders will employ the Executive as
Executive Vice President for National Health Care Operations, in
accordance with the terms and provisions of this Agreement.
2. DUTIES. The Executive shall report to the President-CEO
of Staff Builders and shall be responsible for the management of
all aspects of the home health care business of Staff Builders. The
Executive shall perform such other duties as shall be assigned to
the Executive by the President-CEO of Staff Builders. The
Executive shall devote his full business time, attention and skill
to the performance of his duties hereunder and to the advancement
of the business and interests of Staff Builders. During the term
of this Agreement, the Executive shall be required to base his
business office at the Lake Success Corporate office location. The
Executive's base business office shall not be changed without his
prior consent.
3. TERM. This Agreement shall be effective on March 1,
1996, and shall remain in effect until February 28, 1999, unless
terminated earlier pursuant to the terms hereof.
4. COMPENSATION.
(a) Salary. The Executive shall be paid a salary
during the term hereof in weekly installments at the following
rates:
March 1, 1996 to February 28, 1997 = $180,000
March 1, 1997 to February 28, 1998 = $190,000
March 1, 1998 to February 28, 1999 = $200,000
(b) Sign-on Bonus. The Executive shall receive a one
time sign-on bonus in the amount of $80,000, payable by Staff
Builders upon commencement of employment. In the event the
Executive voluntarily terminates this Agreement prior to February
28, 1997, Executive shall repay to Staff Builders the full amount
of the sign-on bonus; in the event the Executive voluntarily
terminates this Agreement prior to February 28, 1998, the Executive
shall repay to Staff Builders the sum of $50,000; and in the event
the Executive voluntarily terminates this Agreement prior to
February 28, 1999, the Executive shall repay to Staff Builders the
sum of $25,000.
(c) Benefits. The Executive shall be eligible to
receive and participate in all health, medical or other insurance
benefits which Staff Builders provides or makes available to its
employees.
(d) Expenses. Staff Builders shall reimburse the
Executive for all reasonable moving expenses from Houston to New
York, and necessary temporary housing which shall be previously
approved by the President-CEO. Otherwise, Staff Builders shall
reimburse the Executive for all reasonable and necessary expenses
upon submission by the Executive of receipts, accounts or such
other documents reasonably requested by Staff Builders.
(e) Incentive Compensation. The Executive will be
eligible to participate in Staff Builders' Tip Top Program with the
same bonus percentage as the CEO of Staff Builders, Inc.
(Delaware).
(f) Options. The Executive shall receive 100,000
stock options of Staff Builders, Inc. (Delaware) ("SBD") at market
price for close of trading on February 29, 1996, which shall be
vested over a three (3) year period, such that 33,334 will become
vested immediately; 33,333 will become vested as of March 1, 1997,
and 33,333 will become vested as of March 1, 1998, in accordance
with the terms of an option agreement to be entered into between
SBD and the Executive.
(g) Vacation. The Executive shall receive fifteen (15)
days vacation each year during the term of the Agreement.
(h) Car Lease. Staff Builders shall lease a Lexus ES-
300 automobile for the Executive's exclusive use.
5. TERMINATION: RIGHTS AND OBLIGATIONS UPON TERMINATION.
(a) If the Executive dies during the Term, then the
Executive's employment under this Agreement shall terminate. In
such event, the Executive's estate shall be entitled only to
compensation and expenses accrued and unpaid as at the date of the
Executive's death.
(b) If, as a result of the Executive's total incapacity
due to physical or mental illness, whether or not job related, the
Executive is absent from his duties hereunder for 180 consecutive
days, the Executive's employment hereunder shall terminate. The
Executive's salary shall continue during such period of incapacity
until the period of 180 consecutive days has elapsed. In such
event, the Executive shall be entitled to severance, payable as the
then weekly base salary for a period of six (6) months, and
expenses accrued and unpaid as at the date of termination of the
Executive's employment.
(c) The Corporation shall have the right to terminate
the Executive's employment under this Agreement for Cause. For
purposes of the Agreement, the Corporation shall have "Cause" to
terminate the Executive's employment if (i) the Executive assigns,
pledges, or otherwise disposes of his rights and obligations under
this Agreement, or attempts to do the same without the prior
written consent of the Corporation; or (ii) the Executive
deliberately or intentionally fails or habitually neglects to
fulfill his obligations under this Agreement (except by reason of
incapacity due to physical or mental illness or disability), has
engaged in willful misconduct or has acted in bad faith; (iii) the
Executive has breached Section 7 of this Agreement; (iv) the
Executive has committed a felony or other crime involving moral
turpitude or perpetrated a fraud or other dishonest acts against
the Corporation; or (v) the Executive has engaged in deliberate or
reckless acts which place the Employer's officers, employees,
customers or invitees in immediate physical danger or deliberate or
reckless acts which result in damage to or destruction of
Employer's property. If the Corporation terminates this Agreement
for Cause, the Corporation's obligations hereunder shall cease,
except for the Corporation's obligation to pay the Executive the
compensation and expenses accrued and unpaid as of the date of
termination in accordance with the provisions hereof.
(d) In the event that (i) the Executive is discharged by the
President-CEO for any reason other than for Cause, (as defined
above), or (ii) the Executive is no longer responsible for the
management of all aspects of the home health care business of Staff
Builders, except as established by mutual consent of the parties,
prior to the end of the term hereof, the Executive shall receive
within thirty (30) days after such discharge or change in
responsibility a one time, lump sum severance payment equal to
twelve (12) months' salary at the same rate of pay in effect at the
date of the termination, including any accrued incentive or bonuses
of the date of termination. Staff Builders shall, in addition, pay
to the Executive all reasonable moving expenses from New York to
Houston or from New York to Missouri. In such event, the
Restrictive Covenant period as defined in Section 7(b) hereof,
shall be reduced to six (6) months.
(e) Notwithstanding anything to the contrary contained
herein, all payments owed to the Executive upon termination of this
Agreement shall be subject to offset by the Corporation for amounts
owed to the Corporation by the Executive hereunder or otherwise.
(f) The obligations of the Corporation and the Executive
pursuant to this Section 5 shall survive the termination of this
Agreement.
6. NOTICES. Any written notice permitted or required under
this Agreement shall be deemed sufficient when hand delivered or
posted by certified or registered mail, postage prepaid, and
addressed to:
if to Staff Builders:
Staff Builders, Inc.
1983 Marcus Avenue,
Lake Success, New York 11042
Attention: Chairman of the Board
or
if to the Executive:
Larry Campbell
13626 Ashley Run
Houston, Texas 77077-1509
Either party may, in accordance with the provisions of this
Section, give written notice of a change of address, in which event
all such notices and requests shall thereafter be given as above
provided at such changed address.
7. CONFIDENTIALITY OBLIGATIONS; NON-COMPETITION BY
EXECUTIVE.
(a) The Executive acknowledges that in the course of
performing his duties hereunder, he will be made privy to
confidential and proprietary information. The Executive covenants
and agrees that during the term of this Agreement and at any time
after the termination of this Agreement, he will not directly or
indirectly, for his own account or as an employee, officer,
director, partner, joint venturer, shareholder, investor, or
otherwise, disclose to others or use for his own benefit or cause
or induce others to do the same, any proprietary or confidential
information or trade secrets of Staff Builders, including but not
limited to, any matters concerning the business or operations of
Staff Builders, including its plans, procedures or methods of
operations, any Staff Builders' lists of clients or business
contacts, any information concerning specialty programs or business
development, other work product or records of Staff Builders, other
than in the performance of his duties hereunder.
(b) The Executive agrees that, during the term hereof and
for one (1) year following the termination hereof (the "Restrictive
Covenant Period"), he will not, within the United States (A)
compete, directly or indirectly, for his own account or as an
employee, officer, director, partner, joint venturer, shareholder,
investor, or otherwise, with the home health care or supplemental
staffing business conducted by Staff Builders or (B) be employed
by, work for, advise, consult with, serve or assist in any way,
directly or indirectly, any person or entity whose business is home
health care of supplement staffing; or (C) directly or indirectly
solicit, recruit or hire any employee of Staff Builders to leave
the employ of Staff Builders; or (D) solicit any client or customer
of Staff Builders to terminate or modify its business relationship
with Staff Builders. During the Restrictive Covenant Period, Staff
Builders shall pay to the Executive the sum of $180,000 in fifty-
two (52) equal weekly installments.
(c) The foregoing restrictions on the Executive set
forth in this Section 7 shall be operative for the benefit of Staff
Builders and of any business owned or controlled by Staff Builders,
or any successor or assign of any of the foregoing.
(d) Executive acknowledges that the restricted period of
time and geographical area specified in this Section 7 is
reasonable, in view of the nature of the business in which Staff
Builders is engaged and the Executive's knowledge of Staff
Builders' business. Notwithstanding anything herein to the
contrary, if the period of time or the geographical area specified
in this Section 7 should be determined to be unreasonable in a
judicial proceeding, then the period of time and territory of the
restriction shall be reduced so that this Agreement may be enforced
in such area and during such period of time as shall be determined
to be reasonable.
(e) The parties acknowledge that any breach of this
Section 7 will cause Staff Builders irreparable harm for which
there is no adequate remedy at law, and as a result of this, Staff
Builders shall be entitled to the issuance of an injunction,
restraining order or other equitable relief in favor of Staff
Builders restraining Executive from committing or continuing any
such violation. Any right to obtain an injunction, restraining
order or other equitable relief hereunder shall not be deemed a
waiver of any right to assert any other remedy Staff Builders may
have at law or in equity.
(f) For purposes of this Section 7, the term "Staff
Builders" shall refer to the Corporation and all of its parents,
subsidiaries and affiliated corporations.
8. JURISDICTION. The Executive consents to the jurisdiction
of the Supreme Court of the State of New York or of any Federal
Court in the City of New York for a determination of any dispute as
to any matters whatsoever arising out of or in any way connected
with this Agreement and authorizes the service of process on him by
registered mail sent to him at his address shown on the records of
Staff Builders.
9. HANDBOOK;GROUP INSURANCE PROGRAM BOOKLET. The Executive
acknowledges receipt of Staff Builders Employee Handbook and Group
Insurance Program booklet (together, the "Handbook"). The terms of
the Handbook are incorporated herein by reference.
10. BINDING EFFECT. This agreement shall bind and inure to
the benefit of Staff Builders, its successors and assigns and shall
inure to the benefit of, and be binding upon, the Executive, his
heirs, executors and legal representatives.
11. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision, or any part thereof.
12. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties hereto pertaining to the subject
matter hereof and supersedes all prior and contemporaneous
agreements, understandings, negotiations, and discussions, whether
oral or written, of the parties.
14. MODIFICATION, TERMINATION OR WAIVER. This Agreement may
only be amended or modified by a written instrument executed by the
parties hereto. The failure of any party at any time to require
performance of any provision of this Agreement shall in no manner
affect the right of such party at a later time to enforce the same.
IN WITNESS WHEREOF, Staff Builders and the Executive have
executed this Employment Agreement as of the date first above
written.
STAFF BUILDERS, INC.
By: /s/ Stephen Savitsky
STEPHEN SAVITSKY, President-CEO
/s/ Larry Campbell
LARRY CAMPBELL
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> MAR-01-1996
<PERIOD-END> MAY-31-1996
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<ALLOWANCES> 2300
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0
1
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<OTHER-SE> 56059
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