<PAGE>
As filed with the Securities and Exchange Commission
on February ____, 1996
Registration No. 33-
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
THE CARE GROUP, INC.
(Exact name of issuer as specified in its charter)
Delaware 11-2962027
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Hollow Lane, Lake Success, New York 11042
(Address of principal executive offices) (zip code)
THE CARE GROUP, INC. - 1993 Stock Option Plan
THE CARE GROUP, INC. - 1995 Stock Option Plan
Employment Agreement dated May 15, 1989, by and between
Anthony J. Esposito, Jr. and The Care Group of New York, Inc.
(Full title of the Plans)
Ann T. Mittasch
President and Chairman
THE CARE GROUP, INC.
1 Hollow Lane
Lake Success, New York 11042
__________________________________________
(Name and address of agent for service)
516-869-8383
(Telephone number, including area code of agent for service)
Copies to
Michael Harvey, Esq.
Kaufman Goldstein & Gartner, P.C.
342 Madison Avenue
New York, New York 10173
Sales of the registered securities will begin as soon as reasonably practicable
after the effective date of this Registration Statement.
Pursuant to Rule 429(b), the Resale Prospectus constituting a part of this
Registration Statement also relates to the following three Registration
Statements on Form S-8: Registration No. 33-47102, Registration No. 33-78782
and 33-61569.
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate
Securities to to be Price Per Offering Amount of
be Registered Registered (1) Share Price Registration Fee
(2)
_____________________________________________________________________________________________
<S. <C> <C> <C> <C>
Common Stock, 60,000 $1.84 (3) $110,400 $38.07
par value
$.001 per share
_____________________________________________________________________________________________
Common Stock, 282,750 $2.75 (4) $777,562.50 $268.13
par value
$.001 per share
_____________________________________________________________________________________________
TOTAL: 342,750 $877,962.50 $306.20
</TABLE>
(1) Includes (i) 60,000 shares of Common Stock issued to an employee of the
Company pursuant to a written employment agreement, and (ii) a total of 282,750
shares of Common Stock issuable upon the exercise of a total of 282,750 shares
granted pursuant to the Company's 1993 Stock Option Plan.
(2) Pursuant to Rule 416, there are also being registered such additional
shares as may become issuable as a result of the "anti-dilution" provisions of
the aforementioned 282,750 stock options.
(3) Computed solely for the purpose of calculating the registration fee
pursuant to paragraph (c) of Rule 457 under the Securities Act of 1933, as
amended. The registration fee is calculated upon the basis of the average of
the high and low prices of the Common Stock of The Care Group, Inc. reported in
the consolidated NASDAQ system on February 7, 1996.
(4) Computed solely for the purpose of cof Lake Success, State of New York, on
February 7, 1996.
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<PAGE>
THE CARE GROUP, INC.
CROSS REFERENCE SHEET
BETWEEN ITEMS OF FORM S-8 AND REGISTRATION STATEMENT
AND RESALE PROSPECTUS
S-8 Item Caption
Item 1. Plan Information Included in the Section 10(a)
Prospectus not included as a part
of the Registration Statement.
Item 2. Registrant Information Included in the Section 10(a)
and Employee Plan Annual Prospectus not included as a part
Information of the Registration Statement.
Item 3. Incorporation of Documents Item 3. -- Incorporation of
by Reference Documents by Reference.
Item 4. Description of Securities Not Applicable
Item 5. Interests of Named Experts and Not Applicable
Counsel
Item 6. Indemnification of Officers Item 6. -- Indemnification of
and Directors Officers and Directors
Item 7. Exemption from Registration Not Applicable
Claimed
Item 8. Exhibits Item 8. -- Exhibits
Item 9. Undertakings Item 9. -- Undertakings
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
There are incorporated herein by reference the following documents of The
Care Group, Inc., a Delaware corporation (the "Company"), filed with the
Securities and Exchange Commission (the "Commission"):
(a) Annual Report on Form 10-K and Amendment No. 1 thereto on Form 10-K/A
for the fiscal year ended December 31, 1994 (the Company's latest annual
report).
(b) Quarterly Report on Form 10-Q for quarter ended March 31, 1995
(c) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
(d) Quarterly Report on Form 10-Q for the quarter ended September 30,
1995
(e) 10-C dated March 6, 1995
(f) The description of the Company's Common Stock which is contained in
the Company's Form 8-A dated June 7, 1989 filed under Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act"), including any amendment
or report filed for the purpose of updating such description (file number 0-
17821).
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 prior to the filing of a post-
effective amendment which indicates that all securities offered pursuant to
this Registration Statement have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the respective dates of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in any
Prospectus relating to this Registration Statement modifies or supersedes such
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<PAGE>
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
-5-
<PAGE>
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Names Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Delaware General Corporation Law permits indemnification by the Company
of any director, officer, employee or agent of the Company or person who is
serving at the Company's request as a director, officer, employee or agent of
another corporation, or other enterprise, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with the defense of any threatened,
pending or completed action (whether civil, criminal, administrative or
investigative), to which he is or may be a party by reason of having been such
director, officer, employee or agent, provided that he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceedings, had no reasonable cause to believe his conduct was unlawful. The
Company also has the power to indemnify persons set forth above from
threatened, pending or completed actions or suits by or in the right of the
Company to procure a judgment in its favor by reason of the fact that such
person was a director, officer, employee or agent of another corporation or
enterprise against expenses actually and reasonably incurred by him in
connection with the defense or settlement of the action if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interest of the Company and except that no indemnification can be made
with regard to any claim, issue or matter as to which performance of his duty
to the Company unless and only to the extent that the court in which the action
was brought determines that the person was fairly and reasonably entitled to
indemnity. Any indemnification (unless ordered by a court) must be made by the
Company only as authorized in the specific case upon a determination that
indemnification of the person is proper in the circumstances because he has met
the applicable standards of conduct. The determination must be made by the
Board of Directors by a majority vote of a quorum consisting of directors who
are not parties to the action, or if a quorum is not obtainable or, even if
obtainable and a quorum of disinterested directors so direct, by independent
legal counsel in a written opinion, or by the stockholders. The Company may
pay the expenses of an action in advance of final
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<PAGE>
disposition if authorized by the Board of Directors in a specific case, upon
receipt of an undertaking by the person to be indemnified to repay any such
advances unless it shall ultimately be determined that such person is entitled
to be indemnified by the Company as authorized by law.
The Company's Certificate of Incorporation provides as follows:
"No director shall be liable to the corporation or any of its stockholders
for monetary damages for breach of fiduciary duty as a director, except with
respect to (1) a breach of the director's duty of loyalty to the corporation or
its stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) liability under
Section 174 of the Delaware General Corporation Law or (4) a transaction from
which the director derived an improper personal benefit, it being the intention
of the foregoing provision to eliminate the liability of the corporation's
directors to the corporation or its stockholders to the fullest extent
permitted by Section 102(b)(7) of the Delaware General Corporation Law, as
amended from time to time, each person that such Sections grant the corporation
the power to indemnify."
The By-laws of the Company provides as follows:
Indemnification of Officers and Directors
The corporation shall indemnify its officers, directors, employees and agents
to the fullest extent permitted by the Delaware Business Corporation Law.
The Company also maintains directors and officers' liability insurance in an
amount of $3,000,000 in the aggregate, covering certain liabilities of
directors and officers of the Company, including violations of the 1933 Act and
the Exchange Act.
Item 7. Exemption from Registration Claimed
Not applicable.
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<PAGE>
Item 8. Exhibits
Exhibit No.
4. (a) 1991 Stock Option Plan (included as an exhibit to the
Company's Registration Statement on Form S-1 (33-41578) filed
with the Securities and Exchange Commission on July 11, 1991,
which exhibit is incorporated herein by reference).
(b) 1993 Stock Option Plan (included as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, which exhibit is incorporated herein by
reference).
(c) 1995 Stock Option Plan.
(d) Employment Agreement between The Care Group of New
York, Inc. and Anthony J. Esposito, Jr.
5. Opinion of Kaufman Goldstein & Gartner, P.C.
24 (a) Consent of Deloitte & Touche LLP, certified public accountants.
(b) Consent of Holtz Rubenstein & Co., LLP, certified public
accountants, successor firm to Geschwind, Davidson & Co,
certified public accountants.
(c) Consent of Kaufman Goldstein & Gartner, P.C. (contained in
the opinion)
Item 9. Undertakings
(a) The 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 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;
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<PAGE>
2. That, for the purpose of determining any liability under the
Securities Act of 1933, 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 hereof.
3. To remove from any 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 Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 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 of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, 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
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 Act and will be governed by the final
adjudication of such issue.
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<PAGE>
RESALE PROSPECTUS
761,000 SHARES OF COMMON STOCK TO BE SOLD BY SELLING STOCKHOLDERS.
THE CARE GROUP, INC.
This Prospectus relates to the offering of 701,000 shares of Common Stock,
par value $.001 per share (the "Common Stock"), of The Care Group, Inc., a
Delaware corporation (the "Company"), to be sold by certain selling
stockholders, which shares shall have been issued to such selling stockholders
pursuant to their exercise of stock options granted pursuant to the Company's
1990 Stock Option Plan (the "1990 Plan"), the Company's 1991 Stock Option Plan
(the "1991 Plan"), the Company's 1993 Stock Option Plan (the "1993 Plan"), or
the Company's 1995 Stock Option Plan (the "1995 Plan") (the 1990 Plan, the 1991
Plan, the 1993 Plan, and the 1995 Plan are collectively referred to as the
"Plans" and sometimes individually as a "Plan").
This prospectus also relates to the sale by an individual selling stockholder
(Anthony J. Esposito, Jr.) of 60,000 shares of Common Stock that were issued to
him by the Company pursuant to a written employment agreement.
All selling stockholders referred to in the prior two paragraphs are
hereinafter collectively referred to as the "Selling Stockholders" and
individually as a "Selling Stockholder".
It is anticipated that the Selling Stockholders will sell their securities
offered hereby at the market -- that is, at the prevailing price in the over-
the-counter market at the time of sale. See "SELLING STOCKHOLDERS" and "PLAN
OF DISTRIBUTION."
The Company will not receive any of the proceeds from the public sale of
shares of Common Stock by any Selling Stockholders (although the Company will
receive proceeds pursuant to the exercise by Selling Stockholders of stock
options under the Plans). The Company will bear all expenses in connection
with the registration of the securities being offered hereby.
The Common Stock is traded on the National Market System of NASDAQ under the
symbol "CARE". On February 7, 1996, the closing bid price for the Common Stock
was $1-15/16.
_____________________________________________________________________________
PROSPECTIVE PURCHASERS OF THE COMMON STOCK SHOULD
CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER THE CAPTION
"INVESTMENT CONSIDERATIONS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONS
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSIONS PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________________________________________________________________
The date of this Prospectus is February , 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-8 of which
this Prospectus is a part, together with all amendments, schedules and exhibits
thereto (the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted in
accordance with the rules and regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document are not necessarily complete and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof; each
such statement contained herein is qualified in its entirety by such reference.
For further information with respect to the Company and the securities offered
by this Prospectus, reference is made to such Registration Statement.
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. The Registration Statement and such reports, proxy statements and
other information can be inspected and copied at public reference facilities of
the Commission at prescribed rates at 450 Fifth Street, N.W., Washington, D.C.
20549 and at the following regional office of the Commission: 7 World Trade
Center, 14th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, Washington, D.C. 20549.
* * *
No dealer, salesperson or other person has been authorized in connection with
any offering made hereby to give any information or to make any representation
not contained in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the securities to which
it relates nor does it constitute an offer to sell or a solicitation of an
offer to buy any securities by or an offer to any person in any jurisdiction in
which
<PAGE>
such an offer or solicitation is unauthorized. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any time
subsequent to the date hereof.
The Company will furnish annual reports to its stockholders which will
include audited financial statements that have been examined and reported upon,
with an opinion expressed by an independent certified public accountant. The
Company will also furnish such other reports (none of which will include
audited financial statements) to its stockholders as the Company, in its sole
discretion, deems appropriate.
The Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, on written or oral request of such person, a
copy of any or all information that is incorporated by reference in this
Prospectus (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates). Requests should be
directed to The Care Group, Inc., 1 Hollow Lane, Lake Success, New York 11042
(telephone: 516-869-8383).
__________________________
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<PAGE>
TABLE OF CONTENTS
ITEM PAGE
Available Information 1
Summary Information 4
Investment Considerations 9
Proceeds to the Company 11
Selling Stockholders 11
Plan of Distribution 18
Incorporation of Certain Information
by Reference 18
Transfer Agent 19
Legal Matters 19
Material Changes 20
Indemnification 20
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<PAGE>
SUMMARY INFORMATION
General Development of the Company:
The Care Group, Inc., a Delaware corporation, and its wholly - owned
subsidiaries (collectively, the "Company") provide homecare and alternative
site care to specific patient populations through the Company's fully
integrated nursing and pharmaceutical programs. The Company's business is
primarily the care and treatment of patients with the Human Immunodeficiency
Virus ("HIV") and Acquired Immune Deficiency Syndrome ("AIDS"). The Company
also treats and cares for terminally ill and medically fragile infants and
children. The Company also sells and leases durable medical equipment ("DME")
and provides diagnostic sleep studies through a subsidiary.
Over the past decade the scope of care provided by the Company has been
expanded and at present offers a wide range of nursing and pharmaceutical
services from nursing para-professionals to registered nurses with advanced
certification(s) and from oral medications to infusion therapies. The
Company's mix of business is approximately 37% nursing, 56% pharmaceuticals and
7% DME. Currently the Company provides its services in Atlanta, GA; Austin,
TX; Dallas, TX; Houston, TX; Long Island, NY; Los Angeles, CA; and New York
City, NY. Each branch has a clinical pharmacy adjacent to the Company's
nursing office combining the nursing and pharmaceutical disciplines, enabling
the Company to provide state-of-the-art case management. The Company's
subsidiary that conducts the DME business is located in Fort Washington,
Pennsylvania. The Company operates through its subsidiaries.
The executive offices of the Company are located at 1 Hollow Lane, Lake
Success, New York 11042, and its telephone number is (516) 869-8383.
Description of Business:
Home Healthcare Services
Treating a patient at home can include para-professional nursing care,
nursing care, intermittent nursing visits, physical or occupational therapist
visits, social worker consultations, administration of pharmaceutical therapies
and durable medical equipment and devices. Plans of treatment establish the
needs of a specific patient. Home
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<PAGE>
healthcare begins with a physician's orders for nursing and/or pharmaceutical
regimens and/or ancillary services. These orders are implemented by the
Company's clinical nursing and/or clinical pharmacy team which works closely
with the physician to monitor the patient's progress. The on-going
collaboration among physician, nurses, therapists and pharmacists enables the
patient to stay at home. The significant increases in the costs of
hospitalization have increased the acceptance of homecare by insurance
companies over the past decade. The nature of the illnesses in which the
Company specializes are among the most expensive patient populations to the
insurance companies, and the Company believes that as a result its services
provide a cost effective alternative.
How The Company Delivers Care
The Company operates several offices (branches) in different states, namely
New York, Georgia, Texas and California. The Company has developed clinical
nursing and pharmaceutical policies and procedures that ensure that each branch
operates under the same clinical standards that have been established by the
Company. These policies and procedures begin with the intake process and are
followed through every phase of the patients' care process including discharge
procedures. The continual interaction among the patient's physician and the
Company's clinical staff monitor the progress of the patient and modify the
patient's regimen according to the patient's specific needs. For example, a
patient who has been having 24 hour care may have progressed and only require
intermittent nursing visits. Conversely the opposite situation may occur.
Many of the Company's HIV and other patients require constant attention to
nursing notes, results of blood tests and other diagnostic tools that aid in
providing the patient with the highest quality of care. Each branch has
clinical and support personnel on call 24-hours-a-day, 365-days per year.
An integral part of the Company's clinical policies and procedures is the
Company's Quality Assurance/Continuous Quality Improvement program which is
reviewed quarterly by a Professional Board. The Professional Board is
comprised of both employees and outside professionals including physicians,
dietitians, social workers, consumers and nurses. Additionally, a Corporate
Quality Assurance/Continuous Quality Improvement Advisory Board has been
established to monitor the branches.
-5-
<PAGE>
JCAHO Accreditation
All of the Company's current branches are accredited by the Joint Commission
on Accreditation of Healthcare Organizations ("JCAHO"). Accreditation by JCAHO
has become a prerequisite for contracts from many insurance companies, health
maintenance organizations ("HMO's") and preferred provider organizations
("PPO's").
Pharmaceutical Services/Home Infusion Therapies
Home infusion is an industry that began in the early 1980s with advances in
equipment that delivers intravenous therapies including antibiotics, total
parental nutrition therapy, chemotherapy and other pharmaceutical therapies.
Previously, patients who required intravenous therapies were hospitalized for
the duration of the treatment. The Company began its home infusion operations
in 1991 with the acquisition of CareLine in Dallas, TX. Clinical pharmacies
are now adjacent to nursing offices in all branches.
The Company has also begun offering oral medications. This product category
enables the Company to begin a relationship with the patient at an earlier
point in time and continues to build upon the Company's expanded scope of care
philosophy for referral sources.
Durable Medical Equipment
In May, 1994, the Company acquired Advanced Care Associates, Inc. and
affiliates (collectively "Advanced Care"), which sell and lease specialized
medical and health care equipment based on a national sales network developed
by Advanced Care. Advanced Care also provides diagnostic sleep study services.
Mail Order Prescriptions
In January, 1995, the Company began operations of a newly developed, wholly
owned subsidiary called Mail Order Meds, Inc. ("MOM"). MOM specializes in the
mail order distribution of HIV/AIDS pharmaceuticals, nutrition supplements,
vitamins, herbals, educational books, books on a tape and videos.
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<PAGE>
Reimbursement For Services
Over 95% of the Company's revenues are received from third-party payors
(insurance companies or government agencies) with payment from the patient
comprising the balance. In order to assure payment, the Company's
reimbursement specialists verify the patient's insurance coverage as part of
the patient intake system. At present, it is common for prices to be
negotiated during the verification process for the services to be rendered.
The Company's reimbursement specialists continue to monitor the patient's
insurance coverage until discharge. Due to the catastrophic nature of the
illnesses of the Company's patient population, the Company's reimbursement
specialists continually monitor the lifetime limits, the availability of
special state programs and other reimbursement related issues. In an effort by
payors to control costs, verification and negotiation are becoming standard
procedures on an industry-wide basis.
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<PAGE>
The Offering
Total Number of shares of Common Stock
included in this offering 761,000 shares
Common Stock outstanding prior
to the offering 8,420,385 shares
Common Stock to be outstanding
after the offering 9,121,385 shares
NASDAQ/NMS Symbol CARE
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<PAGE>
INVESTMENT CONSIDERATIONS
In evaluating the Company and this offering, prospective investors should
carefully consider all of the information contained in this Prospectus and
incorporated by reference, including the following factors:
Government Regulations and Litigation. The Company's current operations are
subject to licensing and other federal and state regulations. The Company
believes that it is in substantial compliance with all required certificates
and licenses, which are subject to periodic review and renewal. The Company's
loss of certain licenses may adversely affect the Company.
In September 1994, the Company's then recently acquired subsidiary, Advanced
Care Associates, Inc., and the subsidiary's prior owners were served with a
civil lawsuit by the U.S. Department of Justice alleging improper Medicare
billing and reimbursement practices during periods prior to the Company's
acquisition of the subsidiary. The Company has been engaged in settlement
discussions with the U.S. Department of Justice and believes that the final
settlement will be entered into within the next one to three months, although
there can be no assurance. While management believes that the outcome of this
matter will not have a material adverse impact on the Company, there can be no
assurance that the Company will not be materially adversely affected.
In October, 1994, the Company also filed a lawsuit against the former owners
of Advanced Care Associates, Inc. seeking rescission of their employment
agreements and monetary damages. While the Company believes that this matter
will be resolved favorably for the Company, there can be no assurance.
Competition. The home health care and infusion businesses are highly
competitive. Some of the Company's competitors are national service providers,
but most are regional or local in scope. Many of the Company's competitors and
potential competitors are larger in size and possess significantly greater
financial resources than the Company.
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<PAGE>
Reimbursement by Third-Party Payors. The Company is primarily reimbursed for
its services by insurance companies or other third-party payors. The Company
typically receives payment between 90 and 120 days after rendering an invoice,
although such period can be longer. The size and nature of claims related to
services provided by the Company result in a large number of such claims being
reviewed by third-party payors prior to payment, and the third-party payors may
attempt to deny reimbursement of certain claims. Accordingly, because these
factors may delay payments to the Company for its services, the Company's cash
flow may at times be insufficient to meet its accounts payable. The Company
has been required to borrow funds to meet its ongoing obligations and may be
required to do so in the future.
Insurance. The Company is subject to potential liability and therefore
carries various insurance policies, including policies insuring against certain
negligent acts. There can be no assurance that the Company's insurance
policies will adequately meet its potential liabilities. Nor can it be assured
that the Company will continue to qualify for, obtain or afford insurance
coverage.
Shares Eligible for Future Sale and Registration Rights; Underwriter's
Warrants and Redeemable Public Investor Warrants. As of January 22, 1996, the
Company had 8,420,385 shares of Common Stock outstanding. Of these shares,
approximately 7,045,668 have been registered or are otherwise tradable under
the 1933 Act. The Company has also granted various registration rights in
connection with certain acquisitions. The remaining shares of outstanding
Common Stock are restricted from current public sale under Rule 144 promulgated
under the 1933 Act.
As of January 22, 1996, there were also outstanding (i) Underwriter Warrants
exercisable to purchase 194,597 shares of Common Stock at a per share exercise
price of $4.58 and (ii) 701,000 options granted pursuant to the Company's stock
option plans (each option exercisable to purchase one share of Common Stock at
an average exercise price of approximately $3.00).
The possibility of future sales by existing stockholders under Rule 144, or
through the exercise of outstanding "piggyback" or demand registration rights
may have a depressive effect on the market price of the Common Stock, and such
sales, if substantial, might also adversely affect the Company's ability to
raise additional capital. In addition, the exercise of the aforementioned
warrants and options by the holders thereof could
-10-
<PAGE>
result in a dilution of the then book value of the Company's Common Stock. The
aforementioned warrants and options are likely to be exercised at a time when
the Company would be able to obtain additional capital on terms more favorable
than those provided by such warrants.
Security Interest in Assets; Restrictions in Credit Facility. As of January
22, 1996, the Company was obligated to Chase Manhattan Bank, N.A. ("Chase") for
a principal amount of $6,600,000 in the form of a revolving line of credit (the
"Credit Facility") expiring November 1998 under which the Company at any time
can borrow up to 70% of its eligible receivables, not to exceed $12,000,000.
In connection with Credit Facility, the Company pledged all of its assets and
all of its subsidiaries to Chase. If the Company were to default with respect
to any of its obligations under the Credit Facility, Chase could foreclose on
such pledged assets, which could adversely affect the Company. The Credit
Facility also places certain restrictions or limitations on the Company's
ability to incur indebtedness, dispose of significant assets and other matters.
No Dividends. The Company has not paid any dividends since inception and
does not anticipate the payment of dividends in the foreseeable future.
PROCEEDS TO THE COMPANY
The Company will not receive any of the proceeds from the public sale of
shares of Common Stock by any Selling Stockholders (although the Company will
receive proceeds pursuant to the exercise by Selling Stockholders of their
stock options granted under the Plans).
SELLING STOCKHOLDERS
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned (as defined in Rule 13d-3 promulgated under the
Exchange Act) as of January 22, 1996, and as adjusted to reflect the sale of
shares offered hereby by the Selling Stockholders. The table also includes all
other persons who may be deemed to beneficially own the shares of Common Stock
to be sold by the Selling Stockholders.
Except as otherwise provided herein, neither the Selling Stockholders nor any
of their affiliates have maintained any position, office or other material
relationship
-11-
<PAGE>
within the past three years with the Company or any of the Company's
predecessors or affiliates.
The shares to be sold by all Selling Stockholders, except for Mr. Anthony J.
Esposito, Jr., consist of shares of Common Stock issuable upon exercise of
employee stock options. The shares to be sold by Mr. Esposito include 60,000
shares of Common Stock issued to him pursuant to an employment agreement and
30,000 shares of Common Stock issuable upon exercise of stock options.
[Table on next page]
-12-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Owner Prior to Owner After
Public Offering Number Public Offering
Number of Percentage of of Shares Number of Percentage of
Name of Owner Shares Total Shares To be Sold Shares Total Shares
<S> <C> <C> <C> <C> <C>
Ann T. Mittasch (1) 1,470,200 18.87% 292,000 1,178,200 13.50%
1 Hollow Lane
Lake Success,
NY 11042
Gilda G.
Schechter (2) 265,500 3.15% 5,500 260,000 3.09%
Randolph J.
Mittasch (3) 252,500 2.96% 97,500 155,000 1.82%
John J. Lynch (4) 3,250 * 3,250 -0- -0-
Pat Celli (5) 116,000 1.36% 113,000 -3,000- *
Anthony J. Esposito
Jr. (6) 90,000 1.07% 90,000 -0- *
Dr. Alex Maurillo(7) 2,000 * 2,000 -0- -0-
Richard Mittasch (8) 133,000 1.58% 21,000 112,000 1.33%
Don Schaffer(8) 1,000 * 1,000 -0- -0-
Benjamin Portnoy(8) 1,000 * 1,000 -0- -0-
</TABLE>
_________________
* Less Than 1% of Total Shares
-13-
<PAGE>
<TABLE>
<CAPTION>
Owner Prior to Owner After
Public Offering Number Public Offering
Number of Percentage of of Shares Number of Percentage of
Name of Owner Shares Total Shares To be Sold Shares Total Shares
<S> <C> <C> <C> <C> <C>
Susan Carr (8) 3,500 * 3,500 -0- -0-
Marie D'Antuano(8) 12,000 * 12,000 -0- -0-
Alan Kakan(8) 5,000 * 5,000 -0- -0-
Roger Heintzelman(8) 5,000 * 5,000 -0- -0-
Jennifer Davis(8) 2,500 * 2,500 -0- -0-
Chris Mutkoski(8) 20,000 * 20,000 -0- -0-
Valerie Incobucci(8) 10,000 * 10,000 -0- -0-
Pamela Greenfield (8) 30,000 * 30,000 -0- -0-
Joseph Baldi (8) 11,000 * 11,000 -0- -0-
Lisa Miranda (8) 1,000 * 1,000 -0- -0-
Rhoda Rubenstein(8) 1,000 * 1,000 -0- -0-
Sandra Curando-Dien(8) 1,000 * 1,000 -0- -0-
</TABLE>
_________________
* Less Than 1% of Total Shares
-14-
<PAGE>
<TABLE>
<CAPTION>
Owner Prior to Owner After
Public Offering Number Public Offering
Number of Percentage of of Shares Number of Percentage of
Name of Owner Shares Total Shares To be Sold Shares Total Shares
<S> <C> <C> <C> <C> <C>
Lori Alexander(8) 1,000 * 1,000 -0- -0-
Sheri Lauch(8) 1,000 * 1,000 -0- -0-
Kerri Lenox(8) 1,000 * 1,000 -0- -0-
Brad Jones(8) 500 * 500 -0- -0-
Jennifer
Kalinowski(8) 1,000 * 1,000 -0- -0-
Cindy Burtt (8) 500 * 500 -0- -0-
Ed Auty(8) 500 * 500 -0- -0-
Phil Bauer(8) 1,000 * 1,000 -0- -0-
Janet Joyce(8) 2,500 * 2,500 -0- -0-
Mike Amory(8) 1,000 * 1,000 -0- -0-
Dennis Kochem(8) 500 * 500 -0- -0-
</TABLE>
_________________
* Less Than 1% of Total Shares
-15-
<PAGE>
<TABLE>
<CAPTION>
Owner Prior to Owner After
Public Offering Number Public Offering
Number of Percentage of of Shares Number of Percentage of
Name of Owner Shares Total Shares To be Sold Shares Total Shares
<S> <C> <C> <C> <C> <C>
Becky Skymer(8) 2,500 * 2,500 -0- -0-
Ellen Betley(8) 1,000 * 1,000 -0- -0-
Leslie Chevine(8) 1,000 * 1,000 -0- -0-
Patti Montague(8) 1,000 * 1,000 -0- -0-
Bruce Matsen(8) 1,000 * 1,000 -0- -0-
Marc LeBlanc(8) 1,000 * 1,000 -0- -0-
Lorraine Franco(8) 1,000 * 1,000 -0- -0-
Kim Toscano(8) 3,500 * 3,500 -0- -0-
Dolores Wenger(8) 3,500 * 3,500 -0- -0-
Violet Kinkela(8) 2,000 * 2,000 -0- -0-
Jim Hennig(8) 2,500 * 2,500 -0- -0-
Peter Berger(8) 750 * 750 -0- -0-
Leda Sternberg 1,500 * 1,500 -0- -0-
</TABLE>
________________
* Less Than 1% of Total Shares
-16-
<PAGE>
(1) Mrs. Mittasch, Chairman and President of the Company, directly owns
933,200 shares of Common Stock for her own account and may be deemed to
beneficially own an additional 245,000 shares of Common Stock subject to a
ten year voting trust (the "Voting Trust") expiring February 27, 1999 of
which she is the sole voting trustee with respect to the 140,000 shares of
Common Stock directly owned by Randolph J. Mittasch and an additional
105,000 shares directly owned by one other person. Mrs. Mittasch also
holds options expiring February 27, 1999 to acquire 292,000 shares of
Common Stock at an average exercise price of $2.79 per share.
(2) Gilda G. Schechter is the Executive Vice President and director of the
Company. The shares beneficially owned by Ms. Schechter include 260,000
shares that she beneficially owns for her own account and options expiring
February 27, 1999 to acquire 5,500 shares of Common Stock at an average
exercise price of $5.13 per share.
(3) Randolph J. Mittasch, Secretary, Treasurer and a director of the Company,
directly owns 155,000 shares of Common Stock, 140,000 of which are subject
to the Voting Trust. The shares beneficially owned by Mr. Mittasch also
include options expiring February 27, 1999 to acquire 97,500 shares of
Common Stock at an average exercise price of $2.77. Randolph J. Mittasch
disclaims beneficial ownership of any securities of the Company
beneficially owned by Ann T. Mittasch, except for the 140,000 shares that
he directly owns that are subject to the Voting Trust.
(4) The shares of Common Stock beneficially owned by John J. Lynch, a director
of the Company, consist of options expiring February 27, 1999 to acquire
3,250 shares of Common Stock at an average exercise price of $3.00.
(5) The shares of Common Stock beneficially owned by Pat H. Celli, Chief
Financial Officer, Assistant Secretary and Assistant Treasurer of the
Company, consist of 3,000 shares of stock directly owned by Pat H. Celli,
and options expiring February 27, 1999 to acquire 113,000 shares of Common
Stock at an average exercise price of $2.74 per share.
(6) Anthony J. Esposito, Jr. has been Vice President of operations of certain
of the Company's subsidiaries for more than the past five years; Mr.
Esposito has announced his intention to resign from the Company during
February, 1996. Mr. Esposito directly owns 60,000 shares of Common Stock
and has options to acquire 30,000 shares of Common Stock at a per share
exercise price of $4.13. All 90,000 shares of Common Stock beneficially
owned by Mr. Esposito are covered by this prospectus.
(7) The shares of Common Stock beneficially owned by Dr. Alex Maurillo, a
director of the Company, consist of options to purchase 2,000 shares of
Common Stock at
-17-
<PAGE>
an average exercise price of $ 3.38. Dr. Maurillo disclaims beneficial
ownership of 981,206 shares of Common Stock owned by the Company's Board
of Directors.
(8) An employee of the Company or a subsidiary thereof, and an affiliate of
the Company.
-18-
<PAGE>
PLAN OF DISTRIBUTION
The Selling Stockholders intend to publicly sell their securities offered
hereby on a continuous basis at the market -- that is, at the prevailing price
in the over-the-counter market at the time of sale. It is anticipated that
underwriters will not be used in connection with the shares of Common Stock to
be offered by Selling Stockholders. The Company is not aware of any agreement,
arrangement or understanding entered into by the Selling Stockholders with any
other broker-dealers or the Company prior to the date of this Prospectus with
respect to its securities of the Company covered by this Prospectus.
If the Selling Stockholders sell any of their securities offered hereby
through a broker-dealer, it is anticipated that the broker-dealer shall only
receive its customary and ordinary brokerage commission for the transaction.
Expenses of this Offering
All of the expenses of this offering, which are estimated at $10,000, are
payable by the Company.
No Escrow Arrangements
There is no arrangement to have funds received by the Company placed in any
escrow, trust or similar account or arrangement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents and information filed by the Company with the
Securities and Exchange Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K and Amendment No. 1 thereto on Form 10-K/A
for the fiscal year ended December 31, 1994.
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
-19-
<PAGE>
(c) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(d) Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
(e) 10-C dated March 6, 1995
(f) The description of the Company's Common Stock which is contained in the
Company's Form 8-A dated June 7, 1989 as filed under Section 12 of the
Securities Exchange Act of 1934, including any amendment or report filed for
the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the shares of Common Stock
covered by this Prospectus shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the respective dates of filing of
such documents. Any statement contained in a document 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 which also is or
is deemed to be incorporated by reference herein or in any Prospectus
Supplement modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
TRANSFER AGENT
The transfer agent for the Common Stock is American Stock Transfer and Trust
Company, 40 Wall Street, New York, New York 10005.
LEGAL MATTERS
Kaufman Goldstein Gartner & Taub, P.C., 342 Madison Avenue, New York, New
York 10173 has acted as counsel for the Company in connection with this
prospectus.
-20-
<PAGE>
MATERIAL CHANGES
The Company's Current Report on Form 8-K dated May 19, 1994 as filed with the
Securities Exchange Commission which reports the acquisition by the Company of
Advanced Care Associates, Inc. and affiliates is incorporated herein by
reference.
INDEMNIFICATION
The Company's certificate of incorporation provides that to the fullest
extent permitted under the General Business Corporation Law ("GCL") of the
State of Delaware, no director of the Company shall be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director. The Company's by-laws provide that the Company's officers and
directors will be indemnified to the fullest extent permitted by GCL.
Section 145 of GCL contains various provisions entitling directors, officers,
employees or agents of the Company to indemnification from judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees,
as the result of an action or proceeding (whether civil, criminal,
administrative or investigative) in which they may be involved by reason of
being or having been a director, officer, employee or agent of the Company
provided said persons acted in good faith and in a manner reasonably believed
to be in or not opposed to the best interest of the Company (and, with respect
to any criminal action or proceedings, had no reasonable cause to believe that
the conduct complained of was unlawful).
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, or otherwise, 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 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
-21-
<PAGE>
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
-22-
<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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lake Success, State of New York, on February 7,
1996.
THE CARE GROUP, INC.
By: /s/ Ann T. Mittasch
Ann T. Mittasch, President
and Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Date: February 7, 1996 /s/ Ann T. Mittasch
Ann T. Mittasch, Chairman
and President
Date: February 7, 1996 /s/ Gilda G. Schechter
Gilda G. Schechter, Executive
Vice President and a Director
Date: February 7, 1996 /s/ Randolph J. Mittasch
Randolph J. Mittasch, Secretary,
Treasurer and Director
Date: February 7, 1996 /s/ Pat H. Celli
Pat H. Celli, Chief Financial
Officer, Assistant Secretary,
Assistant Treasurer (Principal
Financial and Accounting Officer)
Date: February 7, 1996 /s/ Dr. Alex Maurillo
Dr. Alex Maurillo, Director
Date: February 7, 1996 /s/ John L. Lynch
John J. Lynch, Director
<PAGE>
THE CARE GROUP, INC.
1995
STOCK OPTION PLAN
SECTION I
NATURE AND PURPOSE
This Plan shall be known as "The Care Group, Inc. 1995 Stock Option Plan."
This Plan permits the grant of both (i) options intended to qualify as
incentive stock options ("ISOs") under Section 422 of the Internal Revenue Code
of 1986 (the "Code"), and (ii) nonstatutory restricted stock options ("ROs").
This Plan is designed to encourage certain highly talented officers, directors,
employees and consultants of The Care Group, Inc. (the "Company") and its
subsidiaries to help build the Company and its subsidiaries into a strong,
profitable and growing business. This Plan is in addition to the Company's
1990 Stock Option Plan, 1991 Stock Option Plan and 1993 Stock Option Plan.
SECTION II
GRANT OF OPTIONS
1. Grant of Options. The Board of Directors of the Company is empowered
from time to time to grant (i) ISOs to one or more officers or key employees of
the Company or any of its subsidiaries and (ii) ROs to one or more of the
officers, directors, employees, consultants, advisers or affiliates of the
Company or any of its subsidiaries (ISOs and ROs are hereinafter collectively
referred to as "Company Options" and, individually, as a "Company Option"). A
total of one million (1,000,000) Company Options may be granted under this
Plan. Each Company Option shall be expressly designated as an ISO or RO.
2. Exercise of Company Options.
(a) Each Company Option is exercisable for one (1) share of Common
Stock, par value $.001 per share, of the Company (the "Common Stock"), subject
to adjustment as provided below (the share of Common Stock subject to each
Company Option is sometimes hereinafter referred to as a "Company Option
Share," and all such shares are hereinafter sometimes collectively referred to
as the "Company Option Shares"; the share of Common Stock
<PAGE>
subject to an ISO is sometimes hereinafter referred to as an "ISO Share," and
all such shares are sometimes hereinafter referred to as the "ISO Shares";
the share of Common Stock subject to an RO is sometimes hereinafter referred
to as an "RO Share," and all such shares are sometimes hereinafter referred
to as the "RO Shares").
(b) Subject to Paragraph 4 of this Section II, each Company Option
(other than an ISO granted to a "Significant Stockholder" (hereinafter
defined)) may be exercised by an optionee upon ten days prior written notice to
the Company at any time during the period commencing upon the date of grant of
such option and expiring on December 31, 2004. At 11:59 p.m. on December 31,
2004, each Company Option (other than an ISO granted to a Significant
Stockholder) will expire. Each ISO granted to a Significant Stockholder at the
date of grant will expire 5 years after date of grant. Each Company Option
shall be nontransferrable by the optionee to whom it is granted and, except as
provided in Subparagraph 4(c) of this Section II, shall be exercisable only by
such optionee.
3. Purchase Price of Company Options.
(a) The purchase price of each RO Share shall be at least ninety
percent of the per share fair market value of the Common Stock on the date of
grant (as determined pursuant to paragraph 3(c)).
(b) The purchase price of each ISO Share shall be the fair market
value per share of Common Stock on the date of grant (as determined pursuant to
paragraph 3(c)). In the case of an ISO to be granted to a person owning stock
possessing more than ten percent of the total combined voting power of all
classes of the stock of the Company and all of its subsidiaries (a "Significant
Stockholder"), the purchase price of the ISO share subject to such option shall
be 110% of the fair market value of the Common Stock on the date of grant (as
determined pursuant to paragraph 3(c)). In no event shall the aggregate fair
market value (determined at the time the option is granted) of Common Stock for
which ISOs granted to any employee are exercisable for the first time by such
employee during any calendar year (under all stock option plans of the Company
and all its subsidiaries) exceed $100,000.
(c) For the purpose of this paragraph 3(b), the "fair market value"
of the Common Stock "on the date of grant" shall be determined as of the last
business day for which the prices or quotes of the Common Stock are available
prior to such date of grant and shall mean (i) the closing bid price (or
average of bid prices) last quoted (on the date) by an established quotation
service for over-the-counter securities, if the Common Stock is reported on
neither the NASDAQ National Market System ("NMS") nor a national securities
exchange; or (ii) the last reported sale price (on the date) of the Common
Stock on the NMS, if the Common Stock is then traded on the NMS but not on a
national securities exchange; or (iii) the average (on the date) of the high
and low prices of the Common Stock on the principal national securities
exchange, if the Common Stock is traded on a national securities exchange.
-2-
<PAGE>
However, if the Common Stock is not publicly traded at the time a Company
Option is granted under this Plan, "fair market value" shall be deemed to be
the fair value of the Common Stock as determined by the Company's Board of
Directors after taking into consideration all factors which the Board of
Directors deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at arm's
length.
4. Early Expiration of Options.
(a) If an optionee ceases to be employed or affiliated with the
Company such that he is no longer an officer, director, employee, adviser,
consultant or affiliate thereof prior to expiration of his Company Options
other than by Disability (hereinafter defined), death or for Cause (hereinafter
defined), his Company Options, if then exercisable, may be exercised by the
optionee only within three months after the date that his employment or
affiliation with the Company ceases (but in no event may his Company Options be
exercised beyond December 31, 2004); provided, however, that if the optionee
dies within such three-month period the provisions of subparagraph (c) of this
paragraph 4 shall govern. A leave of absence for less than 90 days or where
the optionee's return to employment is guaranteed by contract or statute is not
deemed a termination of employment.
(b) If an optionee ceases to be employed or affiliated with the
Company such that he is no longer an officer, director, employee, adviser,
consultant or affiliate thereof prior to the expiration of his Company Options
by Disability, his Company Options, if then exercisable, may be exercised by
the optionee only within one year after the date of such Disability (but in no
event later than December 31, 2004); provided, however, that if the optionee
dies within such one year period the provisions of subparagraph (c) of this
paragraph 4 shall govern.
(c) In the event of the death of an optionee prior to the expiration
of his Company Options, his Company Options, if then exercisable, may be
exercised by his estate, personal representative or beneficiaries who has
acquired the Company Option by will or by the laws of descent or distribution
at any time prior to one year following the optionee's death but no later than
December 31, 2004.
(d) If an optionee ceases to be either an officer, director or
employee of the Company for Cause prior to expiration of his Company Options,
then each of his then outstanding Company Options shall, upon his so ceasing to
be an officer, director or employee, thereupon expire and be cancelled in full.
(e) As used in this paragraph 5, the following terms shall have the
following meanings:
-3-
<PAGE>
(i) "Cause": The grossly negligent or
otherwise unsatisfactory performance of the optionee's duties to the Company as
an officer, director or employee thereof, or the optionee's willfully engaging
in either misconduct materially injurious to, or fraudulent conduct involving,
the Company.
(ii) "Disability": The inability of the optionee, due to total
and permanent physical or mental incapacity, to be able to perform
substantially all of the duties and activities to be performed by such optionee
as an officer, director, employee, consultant or agent of the Company or any
of its subsidiaries performed during the six months prior to such incapacity or
illness.
5. Buy-Out. If at any time prior to expiration of the Company Options
the Company approves (i) a definitive agreement to merge or consolidate the
Company with or into another corporation or other business entity whereby the
holders of all of the issued and outstanding shares of Common Stock immediately
prior to the merger or consolidation will, immediately after the merger or
consolidation, hold no more than 60% of the aggregate value of the capital
stock of the surviving entity or (ii) the sale of at least 50% of the assets of
the Company based on fair value, then the Company may, within seven days after
the Company so approves such definitive agreement or asset sale, purchase any
or all of the then outstanding Company Options with respect to which the
optionees shall not have then exercised (whether or not notice of exercise of
any such Company Options shall then have been delivered pursuant to
subparagraph 2(b)) at a per option price equal to $.10; provided, however, that
(i) if the Company shall purchase less than all then outstanding Company
Options, the Company shall purchase Company Options from each optionee on a
prorated basis in accordance with the number of Company Options held by each
such optionee as such number bears to the total number of then issued and
outstanding Company Options, and (ii) the Company shall not have the right
under this paragraph to purchase any outstanding ISOs to the extent that the
right to effect such purchases will disqualify the ISOs granted hereunder as
"incentive stock options" under Section 422A of the Code.
6. Reclassification, Reorganization or Merger.
(a) In case of any reclassification, capital reorganization or other
change of outstanding shares of the Common Stock of the Company (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of an issuance of Common Stock by way of dividend or
other distribution or of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into any corporation or a merger
of another corporation with and into the Company or in case of any sale or
-4-
<PAGE>
conveyance to another corporation of all or substantially all of the property
of the Company (any of the foregoing transactions hereinafter being referred to
as an "Extraordinary Transaction"), the Company shall cause effective provision
to be made so that each optionee shall have the right thereafter, upon
exercising his Company Options, to receive the kind and amount of shares of
stock and other securities and property receivable upon such Extraordinary
Transaction as if such optionee had exercised his Company Options immediately
prior to such Extraordinary Transaction. Any such provision shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Plan and Agreement. The
foregoing provisions of this paragraph shall similarly apply to successive
reclassifications, capital reorganizations and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
(b) Notwithstanding the foregoing, any adjustment made pursuant to
paragraph 6(a) with respect to ISOs shall only be made after the Board of
Directors, after consulting with counsel for the Company, determines whether
such adjustments would constitute a "modification" of such ISOs (as that term
is defined in Section 425 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee determines that
such adjustments made with respect to ISOs would constitute a modification of
such ISOs, it may refrain from making such adjustments.
SECTION III
PROVISIONS GOVERNING
THE GRANT OF ISOs
Notwithstanding anything to the contrary contained herein, each ISO and
each ISO Share subject thereto shall be subject to the following terms and
conditions:
1. No ISO optionee can transfer, sell, pledge, hypothecate, gift or
otherwise dispose of an ISO Share until the expiration of both (i) two years
after the date of grant of the ISO pursuant to which such ISO Share was issued,
and (ii) one year after the optionee acquires the ISO Share. Provided,
however, that the foregoing sentence does not apply to ISOs that are exercised
after the death of the ISO optionee.
2. A Company Option shall be treated as an ISO only if the optionee, at
all times during the period beginning on the date of the granting of the option
and ending on the day 3 months before the date of exercise of the option, was
an employee of either the Company, a subsidiary or parent of the Company, or a
company (or a parent or subsidiary of such company) issuing or assuming such
Company Option.
-5-
<PAGE>
3. The Company's Board of Directors, at the written request of any ISO
optionee, may in its discretion take such actions as may be necessary to
convert such optionee's ISOs that have not been exercised on the date of
conversion into ROs at any time prior to the expiration of such ISOs,
regardless of whether the optionee is an employee of the Company or a
subsidiary thereof at the time of such conversion. Such actions may include,
but not be limited to, extending the exercise period or reducing the exercise
price of the appropriate installments of such Options. At the time of such
conversion, the Committee (with the consent of the optionee) may impose such
conditions on the exercise of the resulting ROs as the Company's Board of
Directors in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any ISO optionee the right to have such option's ISO converted into ROs,
and no such conversion shall occur until and unless the Board of Directors take
appropriate action. The Company's Board of Directors, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
4. In order for the Company to issue any ISOs, this Plan must receive
the approval of the holders of a majority of the Company's Common Stock.
SECTION IV
ERISA; CERTIFICATES;
AMENDMENT OF PLAN; RESERVATION OF SHARES
1. ERISA and Federal Income Taxes. This Plan and Agreement is not
subject to the Employee Retirement Income Security Act of 1974, nor is this
Plan and Agreement qualified under Section 401(a) or the Internal Revenue Code
of 1954, as amended.
2. Certificates. The Company Options granted hereunder will be
represented by certificates. Upon the exercise of any Company Option the
optionee will submit the certificate representing such option to the Company at
its principal executive offices, and if the exercise is for a portion of such
optionee's Company Options, a new certificate will be issued to the optionee by
the Company representing the remainder of such optionee's unexercised Company
Options.
3. Amendment to the Plan. It is understood that the Board of Directors
of the Company may from time to time amend this Plan except that if any such
amendment shall adversely affect any optionee under this Plan or require
stockholder vote, such amendment must be consented to in writing by such
optionee or approved by the Company's stockholders, as the case may be.
Provided, however, that the Company may, without receiving the written consent
-6-
<PAGE>
of any optionee, amend this Plan to permit any or all transactions to be
effectuated under this Plan to be exempt from the operation of Section 16(b) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), pursuant
to Rule 16b-3 under the Exchange Act or any successor law, rule or regulation
thereof. The Board of Directors may either modify any of the terms of any or
all of the Company Options after they are granted or terminated and reissue any
or all Company Options that may be outstanding from time to time. The Board of
Directors may in its discretion assign and delegate all responsibilities for
administering this Plan and granting Company Options to a compensation
committee of the Board of Directors, and such assignment and delegation shall
not require the consent of any optionee. Nothing in this Plan shall in any way
limit or restrict the Company's right or ability to establish any other
compensation, incentive, pension, stock option or similar plans or programs or
to issue shares of the Company's securities to any person or entity for any
reason whatsoever.
4. Reservation of Shares. The Company agrees that at all times there
shall be reserved for issuance upon exercise of the Company Options granted
hereby a sufficient number of shares of Common Stock and/or other securities as
shall be required for such issuance.
SECTION IV
ASSIGNMENTS; INVESTMENT INTENTION
1. Assignment and Successors and Assigns. The terms of this Plan shall
bind and inure to the benefit of the respective heirs, appointees, assigns,
executors, administrators and successors of the respective parties hereto but
shall not be assignable by any optionee without the Company's affirmative
consent, except as otherwise expressly provided in any other section of this
Plan.
2. Investment Intention. Each optionee hereby represents, warrants,
covenants and agrees that he is acquiring the Company Options hereunder, and
that upon exercise of such options he will be purchasing the Company Option
Shares, for investment and not with intention of distribution or resale and
that the Company Options and Company Option Shares may not be offered or sold
except in compliance with the provisions of the Securities Act of 1933, as
amended.
SECTION V
MISCELLANEOUS
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<PAGE>
1. Notices.
(a) Any notice which any party hereto may be required or permitted
to give shall be in writing, or may
be delivered personally or by mail, postage prepaid, or telegram, telecopy or
telex, addressed as follows: to the Company, at 1 Hollow Lane, Lake Success,
New York 11042, or at such other address as the Company, by written notice to
the optionees, may designate from time to time; to each optionee, at the last
address contained in the Company's records for the optionee or at such other
address as the optionee, by written notice to the Company, may designate from
time to time.
2. No Implied Right of Employment. The selection of an optionee for
participation in this Plan shall not ipso facto give the optionee any rights to
serve as a director, officer or employee of the Company or any subsidiary.
3. No Contingent Voting Rights. An optionee shall have no voting or
other rights with respect to any Company Option Shares until certificates
representing such Company Option Shares shall actually have been delivered to
him following his exercise of the corresponding Company Options.
4. Other Benefits. The benefits provided for the optionees under this
Plan and Agreement shall be in addition to and shall in no way preclude other
benefits or forms of compensation from the Company to the optionees.
5. Governing Law. This Plan shall be construed in accordance with the
substantive laws of the State of New York without regard to its conflict of law
doctrine.
6. Consolidation Clause; Survival. This Plan contains the entire
understanding of the parties with respect to its subject matter. All
representations, warranties, covenants and agreements made herein shall survive
the execution of this Plan.
7. Effective Date of Plan. This Plan was approved by the Company's
Board of Directors as of April 6, 1995.
-8-
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT made as of this 15th day of May, 1989, by and between Windsor
Home Care, Inc. ("Windsor"), a corporation organized and existing under the
laws of the State of New York, and Anthony J. Esposito, Jr., an individual
residing in New York City, New York (the "Executive").
W I T N E S S E T H
WHEREAS, the Corporation (hereinafter defined) desires to employ the
Executive, and the Executive desires to be employed by the Corporation, as Vice
President, pursuant to the terms and conditions set forth and described herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the parties agree as follows:
1. Term and Definition of Corporation
(a) This Agreement shall commence on the date hereof and, subject to the
provisions providing for termination of this Agreement as set forth herein,
shall continue until April 30, 1994.
(b) "Corporation" means, collectively, Windsor and all other
subsidiaries of The Care Group, Inc., a Delaware corporation ("Care Group"),
for which Executive shall serve as Vice President as requested by the Board of
Directors of Care Group.
2. Scope of Employment. The Executive shall serve as Vice President of
the Corporation and shall have the following powers and duties: subject to the
sole and exclusive direction of Ann T. Mittasch ("Mittasch"), President of the
Corporation, and Gilda G. Schechter ("Schechter"), Executive Vice President of
the Corporation, or their successors, the Executive shall (i) participate in
the management of the business of the Corporation; (ii) see that the directions
of Mittasch and Schechter (or their successors) are carried into effect; and
(iii) in general, discharge all duties incident to the office of Vice President
and such other duties incident to the office of Vice President and such other
duties as may be required by Mittasch and Schechter from time to time. The
Executive shall never be required to report to or take directions from any
person other than Mittasch and Schechter or their successors. The Executive
shall not, without the prior written consent of Schechter or Mittasch, execute
for the Corporation any contracts, deeds, mortgages, bonds, notes, loan
agreements or other instruments. The Executive shall devote all of his working
time and efforts to the business and affairs of the Corporation.
3. Compensation.
(a) For all services to be rendered by the Executive in any capacity
hereunder, including services as an officer, or member of any committee of the
Corporation and/or one or more of its
<PAGE>
affiliates or any other duties assigned by him hereunder by Mittasch and/or
Schechter or their successors, the Corporation agrees to pay to the Executive a
total base salary of $70,000 during the year May 1, 1989 to April 30, 1990, and
for each successive year thereafter beginning on each May 1 and ending the
immediately following April 30, a total base salary equal to 15% greater than
the base salary for the prior year. In particular, Executive will receive the
following base salaries:
May 1, 1989 to April 30, 1990: $70,000
May 1, 1990 to April 30, 1991: 80,500
May 1, 1991 to April 30, 1992: 92,575
May 1, 1992 to April 30, 1993: 106,461
May 1, 1993 to April 30, 1994: 122,430
(b) executiterms of this Agreement, and such punitive and compensatory
damages shall be awarded. The foregoing shall not be construed to limit any
relief at law, including but not limited to damages, to which either party may
be entitled by reason of any breach of the terms of this Agreement.
(c) In addition to the base salary set forth in paragraph (a) hereof, the
Executive shall be entitled to receive such incentive compensation payments and
bonuses as the Board of Directors of Care Group may from time to time
determine. In addition, Executive shall be entitled to participate in any
incentive or compensation plans directed to executives or key management
employees that the Corporation may establish.
(d) The Executive shall, as the Board of Directors of Care Group may from
time to time determine, be entitled to participate in or receive benefits under
all of the Corporation's or Care Group's employee benefit plans and
arrangements, including, without limitation, any pension plan, profit-sharing
plan, savings plan, stock option plan, life insurance, health-and-accident plan
or arrangement made available by the Corporation or Care Group in the future to
its executives and key management employees, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements. Nothing paid to the Executive under any plan or arrangement
shall be deemed in lieu of compensation to the Executive under paragraph 3(a)
hereunder.
(e) The Executive shall be entitled to the following number of paid vacation
weeks in each of the following calendar years:
1989: 3 weeks
1990: 3 weeks
1991: 4 weeks
1992: 4 weeks
1993: 4 weeks
The Executive shall also be entitled to all paid holidays given by the
Corporation and Care Group to their senior executive officers.
<PAGE>
4. Unauthorized Disclosure; Non-Competition.
(a) During the period of the Executive's employment hereunder and continuing
forever thereafter, the Executive shall neither, directly or indirectly without
the written consent of Care Group's Board of Directors or a person authorized
by due resolution thereby, (x) disclose through any means whatsoever any
Confidential Information (hereinafter defined) to any person, other than an
officer, director, employee, consultant, adviser or agent of the Corporation or
Care Group, nor (y) use any Confidential Information for any purpose except
insofar as such use is consistent with both the scope of his duties to the
Corporation and the terms and conditions of this Agreement. "Confidential
Information" means trade secrets, marketing information, customer lists and
information concerning business relationships between or among Care Group
and/or the Corporation. "Confidential Information" shall not include
information (i) which is in the public domain other than by disclosure by
Executive, or (ii) which is known to Executive as a result of his own efforts
prior to his affiliation with the Corporation.
(b) During the term of this Agreement the Executive will neither directly or
indirectly, alone or together with or through one or more persons, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected as an officer, employee, partner, independent
contractor, agent, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of (collectively, "Compete
in"), any business ("Competitive Operation") which competes with or is in the
same business as any business or operation conducted by the Corporation, Care
Group, or by any group, division or subsidiary of the foregoing, including home
care and pharmaceutical/infusion services. During the twenty-four month period
beginning upon termination of this Agreement, Executive shall not Compete in
any Competitive Operation within a one hundred mile radius of any office of the
Corporation or Care Group and/or any groups, divisions or subsidiaries of the
foregoing. Ownership of five percent (5%) or less of the voting stock of any
corporation shall not by itself constitute a violation hereof. However, if
this Agreement is terminated pursuant to Section 5(c), the restrictions imposed
upon the Executive as set forth in this paragraph 4(b) shall not apply.
5. Rights to Terminate Employment. Notwithstanding anything herein to the
contrary, the Executive's employment hereunder shall be terminated as follows
(and Executive shall be entitled to receive such compensation through the
actual date of his employment as provided in Section 6(a)):
(a) The Executive's employment hereunder shall terminate upon his death.
(b) The Corporation may terminate the Executive's employment hereunder on
60 days' prior notice to Executive for Cause. For the purposes of this
Agreement, the Corporation shall have "Cause" to terminate the Executive's
employment hereunder upon (i) a failure by the Executive to substantially
perform his duties hereunder, other than any such failure resulting from the
Executive's incapacity due to physical or mental illness; (ii) the engaging by
the Executive in gross misconduct materially injurious to the Corporation;
(iii) the material breach by the Executive of any material provision, term or
condition of this Agreement; or (iv) the conviction by the Executive of a
felony.
<PAGE>
(c) The Executive may terminate this Agreement and his employment
hereunder on 60 days' prior written notice to Care Group by reason of a
material breach by the Corporation of any material provision of this Agreement.
6. Compensation Upon Termination; Return by Executive of Corporation
Property.
(a) if the Executive's employment shall be terminated hereunder for any
reason (Cause or otherwise), the Corporation shall pay the Executive's full
base salary through the date of Termination at the rate in effect at the time
when written notice of termination is submitted (the "Cause Time"). In
addition, the Executive shall be entitled to receive through the date of
termination such amounts as may be provided in any of the Corporation's
incentive or compensation plans in effect and in which the Executive shall be a
participant immediately prior to the Cause Time.
(b) In the event of the Executive's termination of employment from the
Corporation for any reason, the Executive shall, or prior to termination of
such employment, return to the Corporation all papers, documents, computer
disks, employee lists and all other property belonging to the Corporation, Care
Group or any subsidiaries or affiliates of the foregoing.
7. Insurance. The Executive agrees that the Corporation procure or maintain
insurance on the life of the Executive, in such amounts as the Corporation may
in its discretion determine, with Care Group and/or the Corporation named as
the beneficiary under any such policies.
8. Successors; Binding Agreement; Assignment; Early Termination.
(a) This Agreement is personal to the Executive and cannot be assigned nor
may the duties of the Executive be delegated.
(b) this agreement shall inure to the benefit of and be enforceable by the
Executive's personal and permitted legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.
(c) This Agreement will terminate on August 31, 1989 if Care Group will not
then have successfully completed an initial public offering.
9. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when physically received, or if sent by Federal
Express or other overnight courier, when sent, to the Corporation or Care Group
at its principal office or to the Executive at his address set forth on the
first page of this Agreement.
10. Equitable Remedies. Each party agrees that violation of the terms of
this Agreement would cause irreparable damage to other parties for which the
remedies at law would be inadequate, and each party shall be entitled, either
in any court of law or equity, to preliminary,
<PAGE>
permanent and other injunctive and equitable relief against any breach of the
shall devote all of his working time and efforts to the business and affairs of
the Corporation.
11. Savings Clause; Validity.
(a) If any of the restrictions set forth in Section 4 should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction,
the validity or enforceability of the remainder of such restrictions shall not
thereby be adversely affected. It is intended that such restrictions shall be
severable and shall apply separately and distinctly to every jurisdiction where
applicable with the same force and effect as though the said covenants were
separately expressed with respect to each of such jurisdictions. The parties
hereto declare that if any of the time, area or other restrictions or
limitations contained in Section 44 is deemed to be unreasonable by a court of
competent jurisdiction, then the parties agree and submit to the reduction of
said time and/or area limitations and modifications of such other restrictions
to such period or area or other restrictions as said court shall deem
reasonable in light of and in furtherance of the intent of this Agreement.
(b) Notwithstanding any other provisions of this Agreement, the
invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
12.Arbitration. All disputes, differences and controversies
(collectively in this paragraph referred to as "disputes") arising out of or in
any way related to this Agreement may, at the request of the Corporation (or
any of its subsidiaries) or Executive, be submitted to and be heard and decided
by the American Arbitration Association ("AAA"), in Nassau County, New York to
be heard and decided in accordance with the same terms and conditions of this
Agreement and the then rules of the AAA ("AAA Rules") by a panel of three (3)
arbitrators (unless AAA Rules, as the case may be, shall require a different
number of arbitrators) chosen in accordance with the applicable AAA Rules. The
decision of the arbitrators shall be final and binding upon the parties, and an
order may be entered upon the award of the arbitrators in any court of
competent jurisdiction.
13. Miscellaneous. No provision in this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
it writing and signed by the Executive and by such officer as may be
specifically designated by the Board of Directors of the Corporation. No
waiver by either party hereto at any time of any breach by the other hereto of,
or compliance with any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WINDSOR HOME CARE, INC.
By:/s/ Ann T. Mittasch
Ann T. Mittasch
EXECUTIVE
/s/ Anthony J. Esposito, Jr.
Anthony J. Esposito, Jr.
<PAGE>
INDEPENDENT AUDITORS+ CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Care Group, Inc. on Form S-3 of our report dated March 20, 1995, appearing
in the Annual Report on Form 10-K of The Care Group, Inc. for the year ended
December 31, 1994.
/s/ Deloitte & Touche LLP
Jericho, New York
January 2, 1996
<PAGEA>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in this Registration Statement on Form S-3 (the
"Registration Statement") of The Care Group, Inc. (the "Registrant"), a
Delaware corporation, and to the Prospectus to be used in connection with the
Registration Statement, of (i) the Geschwind, Davidson & Co. report dated March
22, 1994 on the consolidated financial statements of the Company for the years
ended December, 1993 and December, 1992 included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1994 filed with the Securities and
Exchange Commission and incorporated into the Registration Statement by
reference, and (ii) the Geschwind, Davidson & Co. report on the combined
financial statements of Advanced Care Associates, Inc. and affiliates dated
March 31, 1994, included in the Registrant's Current Report on Form 8-K dated
May 19, 1994, which report is incorporated into the Registration Statement by
reference.
/s/ Holtz Rubenstein & Co., LLP
Holtz Rubenstein & Co., LLP (successor
to the practice of Geschwind, Davidson &
Co., Certified Public Accountants, who
examined the financial statements for the years
ended December 31, 1993 and December 31, 1992)
Melville, New York
February 5, 1996
<PAGE>
February 8, 1996
The Care Group, Inc.
1 Hollow Lane
Lake Success, New York 11042
RE: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as special counsel to The Care Group, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the
Company's Registration Statement on Form S-3 , which Registration Statement
covers a total of 761,000 shares (the "Registered Shares") of Common Stock, par
value $.001 of the Company. Such registration statement is hereinafter
referred to as the "Registration Statement"; and the securities being
registered in the Registration Statement are hereinafter referred to as the
"Registered Securities". The Shares included in the Registration Statement are
held by and are to be sold by a Selling Stockholder.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of all such records of the Company, certificates of officers
or representatives of the Company and the selling stockholders and others, and
such other documents, certificates and corporate or other records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to
any facts material to this opinion expressed herein which were not
independently established or verified, we have relied upon statements,
representations and warranties of officers and other representatives of the
Company, the selling stockholders and others.
Based upon the foregoing, we are of the opinion that if and when each of the
following events shall have occurred:
(a) The Registration Statement shall have become effective and
shall remain effective in accordance with its terms and undertakings;
(b) The provisions of applicable state securities or blue sky laws
1
<PAGE>
shall have been complied with; and
(c) The Registered Securities shall have been sold in accordance with the
Registration Statement and full payment therefor shall have been made
pursuant to the terms of the Registration Statement,
then the Registered Securities will, when offered or sold in accordance with
the terms of the Registration Statement, be legally issued, fully paid and non-
assessable.
In connection with the opinion set forth above, we have participated in
conferences with officers and other representatives of the Company, the selling
stockholders and representatives of the independent certified public accountant
for the Company at which the contents of the Registration Statement and
Prospectus and related matters were discussed. We are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus.
The opinion rendered above is subject to the following exceptions: (i)
enforceability as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally, and (ii) the availability of equitable remedies is
subject to the discretion of the court before which any proceeding thereof may
be brought.
We are members of the Bar of the State of New York only and do not hold
ourselves out as being conversant with, and express no opinion with respect to,
the laws of any jurisdiction other than the laws of the State of New York and
the United States of America and the corporate law of the State of Delaware.
We are furnishing this opinion to the Company solely for its benefit, and
this opinion is not to be used, circulated, quoted or otherwise referred to for
any other purpose.
We consent to the inclusion of this opinion letter as an exhibit to the
Registration Statement and to the use of our name in the -Legal Matters+
section of the Registration Statement.
Very truly yours,
/s/ KAUFMAN GOLDSTEIN GARTNER & TAUB, P.C.
KAUFMAN GOLDSTEIN GARTNER & TAUB, P.C.
