SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
STAR MULTI CARE SERVICES, INC.
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(Name of Registrant as Specified in Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
STAR MULTI CARE SERVICES, INC.
99 RAILROAD STATION PLAZA
HICKSVILLE, NEW YORK 11801
NOTICE OF THE 1996 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 18, 1996
To the Shareholders of Star Multi Care Services, Inc.:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Shareholders
(the "Meeting") of Star Multi Care Services, Inc. (the "Company") will be held
at the offices of Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the
Americas (18th Floor), New York, New York on Wednesday, December 18, 1996 at
3:30 P.M., local time, to consider and act upon the following matters:
(1) The election of a board of seven directors to serve until
the next annual meeting of shareholders and until their
respective successors are elected and qualified;
(2) The ratification and approval of the appointment of Holtz
Rubenstein & Co., LLP as the Company's independent
certified public accountants for the fiscal year ending
May 31, 1997; and
(3) The transaction of such other business as may properly
come before the Meeting or any adjournments or
postponements thereof.
The enclosed form of proxy has been prepared at the direction of the
Board of Directors of the Company and is sent to you at its request. The persons
named in said proxy have been designated by the Board of Directors.
Information regarding the matters to be acted upon at the Meeting is
contained in the accompanying Proxy Statement.
IF YOU DO NOT EXPECT TO BE PRESENT PERSONALLY AT THE MEETING AND YOU WISH YOUR
SHARES TO BE VOTED AT THE MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED
PROXY BY MAIL IN THE POSTAGE-PAID ENVELOPE SENT TO YOU HEREWITH FOR THAT
PURPOSE. IF YOU LATER FIND THAT YOU CAN BE PRESENT AT THE MEETING OR FOR ANY
OTHER REASON DESIRE TO REVOKE OR CHANGE YOUR PROXY, YOU MAY DO SO AT ANY TIME
BEFORE IT IS VOTED.
The Board of Directors has fixed the close of business on November
13, 1996 as the time when shareholders entitled to notice of and to vote at the
Meeting shall be determined and all persons who are holders of record of the
Company's Common Stock at such time, and no others, shall be entitled to notice
of and to vote at the Meeting or any adjournments or postponements thereof.
Holders of a majority of the outstanding shares of the Company's Common Stock
must be present in person or by proxy in order for the Meeting to be held.
A copy of the Company's Annual Report to Shareholders containing the
financial statements of the Company for the fiscal year ended May 31, 1996
accompanies this Notice.
By Order of the Board of Directors,
STEPHEN STERNBACH
President and Chief Executive Officer
Hicksville, New York
November 20, 1996
<PAGE>
STAR MULTI CARE SERVICES, INC.
99 RAILROAD STATION PLAZA
HICKSVILLE, NEW YORK 11801
---------------
PROXY STATEMENT
---------------
1996 ANNUAL MEETING OF SHAREHOLDERS, DECEMBER 18, 1996
This Proxy Statement is furnished to the holders of Common Stock, par
value $.001 per share ("Common Stock") of Star Multi Care Services, Inc. (the
"Company") in connection with the solicitation by the board of directors (the
"Board of Directors" or the "Board") of the Company of proxies (the "Proxy" or
"Proxies") in the accompanying form for use at the 1996 Annual Meeting of
Shareholders of the Company to be held at 3:30 P.M. on Wednesday, December 18,
1996, at the offices of Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the
Americas (18th Floor), New York, New York, or at any adjournments or
postponements thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of 1996 Annual Meeting of Shareholders.
The presence, either in person or by properly executed Proxies, of a
majority of the shares of the Company's Common Stock entitled to vote is
necessary to constitute a quorum at the Meeting. Both abstentions and broker
non-votes are considered present for purposes of determining a quorum but are
excluded from votes cast.
This Proxy Statement and the accompanying form of Proxy are being
mailed on or about November 20, 1996. The Board of Directors of the Company has
fixed the close of business on November 13, 1996 as the Record Date for the
determination of shareholders entitled to notice of, and to vote at, the
Meeting. Accordingly, only holders of record of shares of Common Stock at the
close of business on the Record Date are entitled to notice of, and to vote at,
the Meeting. As of the Record Date, 4,039,148 shares of Common Stock were
outstanding and held of record by 511 shareholders. Each share is entitled to
one vote.
When a Proxy is returned, properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
Proxy. If a shareholder does not attend the Meeting and does not return the
signed Proxy, such shareholder's shares will not be voted. If a shareholder
returns a signed Proxy but does not indicate how his or her shares are to be
voted, such shares will be voted FOR each of the nominees named in this Proxy
Statement and FOR the ratification and approval of the appointment of Holtz
Rubenstein & Co., LLP as the Company's independent certified accountants for the
fiscal year ending May 31, 1997. As of the date of this Proxy Statement, the
Board of Directors does not know of any other matters which are to come before
the Meeting. If any
<PAGE>
other matters are properly presented at the Meeting for consideration, the
persons named in the enclosed Proxy and acting thereunder will have discretion
to vote on such matters in accordance with their best judgment.
Any Proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by (i)
filing with the Secretary of the Company, at or before the taking of the vote at
the Meeting, a written notice of revocation bearing a later date than the Proxy,
(ii) duly executing a later dated Proxy relating to the same shares of Common
Stock and delivering it to the Secretary of the Company before taking the vote
at the Meeting or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute a revocation of a
Proxy). Any written notice of revocation or subsequent Proxy should be sent so
as to be delivered to Star Multi Care Services, Inc., 99 Railroad Station Plaza,
Hicksville, New York, 11801, Attention: William Fellerman, Corporate Secretary,
or hand delivered to the Secretary of the Company at or before the taking of the
vote at the Meeting.
The Company will bear the cost of the solicitation of Proxies from
its shareholders. In addition to solicitation by use of the mails, Proxies may
be solicited by directors, officers and employees of the Company in person or by
telephone or other means of communication. Such directors, officers and
employees will not be additionally compensated, but may be reimbursed for
out-of-pocket expenses incurred in connection with such solicitation.
Arrangements also will be made with custodians, nominees and fiduciaries for the
forwarding of proxy solicitation materials to beneficial owners of shares held
of record by such custodians, nominees and fiduciaries, and the Company will
reimburse such custodians, nominees and fiduciaries for reasonable expenses
incurred in connection therewith.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Set forth below is the ownership of the Company's Common Stock at
November 13, 1996 by (i) the only persons or groups who were owners of record or
were known by the Company to beneficially own on November 13, 1996, more than 5%
of the outstanding shares of Common Stock; (ii) each director and nominee for
director of the Company; (iii) each executive officer named in the Summary
Compensation Table under the caption "Executive Compensation" below; and (iv)
all directors and executive officers of the Company as a group. The Company
understands that, except as noted below, each beneficial owner has sole voting
and investment power with respect to all shares attributable to such owner.
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP* OF CLASS (1)
- ------------------- ---------- ------------
Stephen Sternbach
c/o Star Multi Care Services, Inc.
99 Railroad Station Plaza
Hicksville, NY 11801 1,145,442(2) 27.26%
William Fellerman
c/o Star Multi Care Services, Inc.
99 Railroad Station Plaza
Hicksville, NY 18801 55,986(3) 1.38%
Charles Berdan
281 Potomac Drive
Basking Ridge, NJ 07920 1,019 **
John P. Innes II
8 Breckenridge Lane
Savannah, GA 31411 1,113 **
Matthew Solof
33 Fairbanks Boulevard
Woodbury, NY 11797 3,540 **
Melvin L. Katten
1480 Tower Road
Winnetka, IL 60093 59,156 1.46%
---------------------------------
(footnotes are on following page)
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<PAGE>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP* OF CLASS (1)
- ------------------- ---------- ------------
Gary L. Weinberger
38 Clayton Drive
Dix Hills, NY 11746 8,400 **
Eugene J. Mora 233,846(4) 5.77%
3252 Holiday Court, Suite 204
LaJolla, CA 92037
Heartland Advisors, Inc. 224,492(5) 5.68%
790 North Milwaukee Street
Milwaukee, WI 53202
All directors and executive 1,207,100 28.57%
officers of the Company as a group
(5 persons)
- -----------------------
* All share amounts in this Proxy Statement have been adjusted to take into
account the stock dividends effectuated on May 30, 1995, January 12, 1996
and November 4, 1996, respectively.
** Indicates less than 1% of the outstanding shares of the Company's Common
Stock.
(1) Shares subject to options are considered outstanding only for the purpose
of computing the percentage of outstanding Common Stock which would be
owned by the optionee if the options were so exercised, but (except for
the calculation of beneficial ownership by all executive officers and
directors as a group) are not considered outstanding for the purpose of
computing the percentage of outstanding Common Stock owned by any other
person.
(2) Includes 119,606 shares of the Company's Common Stock owned by the
Stephen Sternbach Family Trust; Mr. Sternbach disclaims beneficial
ownership with respect to these shares. Also includes 162,574 shares of
the Company's Common Stock which Mr. Sternbach has a currently
exercisable option to purchase pursuant to the Company's 1992 Stock
Option Plan.
(footnotes are continued on following page)
-4-
<PAGE>
(3) Includes 24,068 shares of the Company's Common Stock owned by Mr.
Fellerman's wife; Mr. Fellerman disclaims beneficial ownership with
respect to these shares of the Company's Common Stock. Also includes
3,406 shares owned by the William Fellerman CPA PC Pension Trust Fund.
Also includes 23,262 shares of the Company's Common Stock which Mr.
Fellerman has a currently exercisable option to purchase pursuant to the
Company's 1992 Stock Option Plan.
(4) Based upon a copy of a Schedule 13D received by the Company. Includes
15,030 shares of the Company's Common Stock which Mr. Mora has a
currently exercisable option to purchase pursuant to the options assumed
by the Company upon consummation of the merger of Amserv Healthcare Inc.
with a wholly-owned subsidiary of the Company.
(5) Based upon a copy of a Schedule 13G received by the Company.
-5-
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
At the Meeting, seven directors are to be elected. Pursuant to the
Company's By Laws, all directors are elected to serve for the ensuing year and
until their respective successors are elected and qualified. Unless otherwise
directed, the persons named in the enclosed Proxy intend to cast all votes
pursuant to Proxies received for the election of Stephen Sternbach, William
Fellerman, Charles Berdan, John P. Innes II, Matthew Solof, Melvin L. Katten and
Gary L. Weinberger (collectively, the "Nominees").
Each of the Nominees has consented to serve as a director if elected.
Each of the Nominees, except for Melvin L. Katten and Gary L. Weinberger,
currently serve as a director and was elected to that position at the Company's
1995 Annual Meeting of Shareholders. Pursuant to the terms of the Agreement and
Plan of Merger dated as of February 9, 1996, as amended on July 18, 1996 between
Amserv Healthcare Inc., a Delaware corporation ("Amserv") and the Company,
providing for the merger (the "Merger") of a wholly-owned subsidiary of the
Company with and into Amserv, with Amserv becoming a wholly-owned subsidiary of
the Company, the Company agreed to take such reasonable action as may be
necessary to cause Melvin L. Katten to be appointed to the Board of Directors of
the Company at each of the next two annual meetings of the Company's
shareholders following the effective time of the Merger, for service on such
Board until the next such annual meeting of the Company's shareholders following
such two annual meetings. Unless authority to vote for any director is withheld
in a Proxy, it is intended that each Proxy will be voted FOR each of the
Nominees. In the event that any of the Nominees for director should, before the
Meeting, become unable to serve or for good cause will not serve if elected, it
is intended that shares represented by Proxies which are executed and returned
will be voted for such substitute nominees as may be recommended by the
Company's existing Board of Directors, unless other directions are given in the
Proxies. To the best of the Company's knowledge, all the Nominees will be
available to serve.
POSITION HELD WITH THE DIRECTORS
NAME AGE COMPANY SINCE
- ---- --- ---------------------- ---------
Stephen Sternbach 41 Chairman of the Board of 1987
Directors, President and Chief
Executive Officer
William Fellerman 51 Chief Financial Officer, 1990
Secretary, Treasurer, Director
Charles Berdan + * x 48 Director 1994
John P. Innes II + * x 62 Director 1991
Matthew Solof + * x 43 Director 1992
---------------------------------
(footnotes are on following page)
-6-
<PAGE>
POSITION HELD WITH THE DIRECTORS
NAME AGE COMPANY SINCE
- ---- --- ---------------------- ---------
Melvin L. Katten 60 Nominee for Director --
Gary L. Weinberger 47 Nominee for Director --
- -----------------
+ Member of Compensation Committee
* Member of Stock Option Committee
x Member of Audit Committee
BACKGROUND OF NOMINEES:
- -----------------------
Stephen Sternbach has been the Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since 1987.
William Fellerman has been the Chief Financial Officer, Secretary and
Treasurer of the Company since November 1992 and a director of the Company since
1990. Mr. Fellerman is a certified public accountant and was, until June 15,
1994, a partner in the accounting firm of Fellerman, Cohen and Tempesta and had
been for more than the five years prior thereto.
Charles Berdan became a director of the Company in April 1994 and
served as a Branch Manager of the Company from September 1993 to March 1994.
Since April 1994, Mr. Berdan has served as a Sales Executive for Automatic Data
Processing, Inc. ("ADP"), a provider of information services. From January 1993
to September 1993, Mr. Berdan was a Vice President of the Senior Bulletin, a
newspaper, which the Company purchased in September 1993. He also served from
July 1990 through July 1992 as a Division Vice President of Managistics, Inc., a
payroll services company. For at least the two years prior to July 1990, Mr.
Berdan was a Vice President of ADP.
John P. Innes II has been a director of the Company since 1991. Since
May of 1996, he has been Special Counsel to ValuJet Airlines. He has acted as a
private investor and consultant since July 1994. Previously, he was the Chairman
of Commonwealth Associates, an investment bank, from January 1992 to June 1994.
Mr. Innes also has served as Managing Director of Sabre Insurance Company, a
casualty insurance company (1986-1991), President of Boxhall Group, Inc., a
holding company for Sabre Insurance Company (1986-1991), Vice Chairman of the
Board of Directors of Wheeling-Pittsburgh Steel Corporation, an integrated steel
manufacturing company (1987-1990) and a private investor and consultant
(1990-1992).
Matthew Solof has been a director of the Company since November 1992.
Since 1991, he has been the President and Chief Executive Officer of AMI Group,
a real estate development and acquisition company, and President and Chief
Executive Officer of Mercantile Mortgage Association, a mortgage lending
company. From 1983 to 1992, Mr. Solof was a trader at IRV Companies, a firm
-7-
<PAGE>
which specializes in oil trading, and from 1981 to 1991 he was President and
Chief Executive Officer of Matthew Solof Trading Company, a firm which also
specializes in oil trading.
Melvin L. Katten, an attorney, has been a Senior partner in the
Chicago law firm of Katten Muchin & Zavis since 1974. He was a director of
Amserv from 1985 until consummation of the Merger in August 1996. Mr. Katten
also serves as a director of Washington Scientific Industries, Inc., a
publicly-held company.
Gary L. Weinberger has been engaged in the private practice of
orthodontics for more than the past twenty years. In addition, Dr. Weinberger is
engaged as a consultant on financial planning and management. Dr. Weinberger is
a member of the International Board of Standards and Practices for Financial
Planners, the International Association of Financial Planners and the American
Association of Orthodontists.
MEETINGS OF THE BOARD OF DIRECTORS
- ----------------------------------
During the Company's last fiscal year, its Board of Directors held
two meetings and acted on seven occasions by unanimous written consent without a
meeting.
The Stock Option Committee of the Board of Directors consists of
Messrs. John P. Innes II, Matthew Solof and Charles Berdan. The function of this
committee, which held one meeting during the past fiscal year, is to administer
the Company's stock option plans.
The Audit Committee of the Board of Directors consists of Messrs.
John P. Innes II, Matthew Solof and Charles Berdan and its function is to
nominate independent auditors, subject to approval by the Board of Directors,
and to examine and consider matters related to the audit of the Company's
accounts, the financial affairs and accounts of the Company, the scope of the
independent auditors' engagement and their compensation, the effect on the
Company's financial statements of any proposed changes in generally accepted
accounting principles, disagreements, if any, between the Company's independent
auditors and management, and matters of concern to the independent auditors
resulting from the audit, including the results of the independent auditors'
review of internal accounting controls. The Audit Committee held no meetings
during the past fiscal year.
The Compensation Committee consists of Messrs. John P. Innes II,
Matthew Solof and Charles Berdan and its function is to fix the salaries,
bonuses and other compensation arrangements of the executive officers of the
Company, and it also has the authority to examine, administer and make
recommendations to the Board with respect to benefit plans and arrangements
(other than the stock option plans which are administered by the Stock Option
Committee) of the Company and its subsidiaries. The Compensation Committee acted
on one occasion by unanimous written consent without a meeting during the past
fiscal year.
-8-
<PAGE>
The Board of Directors has no standing nominating committee.
Each incumbent director attended at least 75% of the meetings of the
Board of Directors and the committee on which he served which were held while he
was serving as a director and/or committee member during the Company's last
fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
- -----------------------------------------------------------
No members of the Compensation Committee has a relationship that
would constitute an interlocking relationship with executive officers or
directors of another entity.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
its common stock, to file reports of ownership and changes of ownership with the
Securities and Exchange Commission ("SEC") and each exchange on which the
Company's securities are registered. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the Company
with copies of all ownership forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain persons that no Form 5 was required
for those persons, the Company believes that, during the year ended May 31,
1996, its officers, directors and greater than ten-percent shareholders complied
with all applicable Section 16 filing requirements.
-9-
<PAGE>
PERFORMANCE GRAPH
- -----------------
Set forth below is a graph comparing the yearly change in the
cumulative shareholder return of the Company's Common Stock with the National
Association of Securities Dealers Automated Quotation Market Index and a peer
group index of six competing companies for the same period. The comparison
assumes $100 was invested at the close of business on May 31, 1991 in the
Company's Common Stock and in each of the comparison groups, and assumes
reinvestment of dividends. The Company paid no dividends during the periods.
[GRAPHICS INTENTIONALLY REPLACED WITH TABULAR CHART]
================================================================================
Base INDEXED RETURNS
Period Years Ending
COMPANY NAME/INDEX MAY 91 MAY 92 MAY 93 MAY 94 MAY 95 MAY 96
- --------------------------------------------------------------------------------
Star Multi Care Services 100 63.78 36.20 51.72 82.23 162.73
Nasdaq - US 100 117.40 141.22 148.67 176.86 257.05
Peer Group 100 112.24 78.52 77.28 98.03 84.38
================================================================================
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<PAGE>
COMPENSATION COMMITTEE REPORT
- -----------------------------
Overview and Philosophy
-----------------------
The Compensation Committee of the Board of Directors is composed of
three directors, Messrs. Berdan, Innes and Solof. The Compensation Committee is
responsible for developing and making recommendations to the Board of Directors
with respect to the Company's executive compensation policies. The Compensation
Committee's executive compensation philosophy (which is intended to apply to all
members of the Company's management, including its Chief Executive Officer) is
to provide competitive levels of compensation, integrate managements' pay with
achievement of the Company's performance goals, reward above average corporate
performance, recognize individual initiative and achievement and assist the
Company in attracting and retaining qualified management.
The objectives of the Company's executive compensation program are
to:
* Support the achievement of desired Company
performance.
* Provide compensation that will attract and
retain superior talent and reward performance.
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the healthcare industry, as
well as with a broader group of companies of comparable size and complexity.
Executive Officer Compensation
------------------------------
The Company's executive officer compensation is comprised of base
salary, annual cash bonus and long-term incentive compensation in the form of
stock options and various benefits, including medical plans generally available
to employees of the Company.
It is the philosophy of the Compensation Committee that compensation
of executive officers should be closely aligned with the financial performance
of the Company. Accordingly, benefits are provided through stock option
incentives and bonuses which are generally consistent with the goal of
coordinating the rewards to management with a maximization of shareholder
return. In reviewing Company performance, consideration is given to the
Company's earnings. Also taken into account are external economic factors that
effect results of operations. An attempt is also made to maintain compensation
within the range of that afforded like executive officers at companies whose
size and business is comparable to that of the Company. The Committee also
granted options in 1996 to purchase 80,993 shares of stock of which 31,500 were
to executive officers including Mr. Sternbach.
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<PAGE>
CEO Compensation
----------------
In the case of Stephen Sternbach, the Chief Executive Officer, the
Compensation and Stock Option Committee evaluates the Company's mid and long
range strategic planning and its implementation as well as the considerations
impacting the compensation of executive officers generally which are described
above. Pursuant to the terms of his employment agreement with the Company, Mr.
Sternbach was paid a bonus of $34,371 for the year ended May 31, 1996. The
Committee also granted grant options in 1996 to purchase 21,000 shares of stock.
Benefits
--------
The Compensation Committee endorses the position that equity
ownership by management is beneficial in aligning managements' and shareholders'
interest in the enhancement of shareholder value. Stock options were granted at
exercise prices equal to the market value of the Company's Common Stock on the
date of grant.
The Company provides to executive officers medical benefits that
generally are available to Company employees. The amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed 10% of salary for
fiscal 1996.
Charles Berdan
John P. Innes II
Matthew Solof
Members of the Compensation Committee
-12-
<PAGE>
EXECUTIVE COMPENSATION
The following table provides information with respect to all
compensation paid or accrued by the Company during the three fiscal years ended
May 31, 1996 to Stephen Sternbach, the Company's Chief Executive Officer, the
only executive officer of the Company whose salary and bonus for fiscal 1996
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Annual Compensation Long Term Compensation
Principal Awards All Other
Position Year Salary($) Bonus($) Securities Underlying Options(#) Compensation(1)
- -------- ---- --------- -------- -------------------------------- ---------------
<S> <C> <C> <C> <C> <C>
Stephen Sternbach 1996 $250,000 $34,371 21,000 $10,000
Chief Executive Officer, 1995 $225,000 -- -- $10,000
President and 1994 $225,000 -- 61,938 $ 5,000
Chairman of the Board
</TABLE>
- -----------------------
(1) Represents amounts credited by the Company to a book reserve account as
contingent deferred compensation for the benefit of Mr. Sternbach
pursuant to a Non-Qualified Retirement and Death Benefit Agreement
between the Company and Mr. Sternbach.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value At
Number of Percent of Assumed Annual Rates Of Stock
Securities Total Options Price Appreciation For
Underlying Granted Exercise Option Term(1)
Options to Employees Price ----------------------
Name Granted (#) in Fiscal Year ($/Sh) Expiration Date 5% ($) 10% ($)
---- ----------- -------------- -------- --------------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Stephen 21,000 26% $6.53 May 16, 2001 $38,000 $84,000
Sternbach
</TABLE>
- -----------------------
(1) Represents possible gains, assuming that the market price for the
Company's Common Stock appreciates during the option term at annualized
rates of 5% and 10%, respectively.
-13-
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
No options were exercised by Mr. Sternbach during the fiscal year
ended May 31, 1996. The following table contains information concerning the
number and value, at May 31, 1996, of unexercised options held by Mr. Sternbach:
Value of Unexercised
Number of Unexercised In-the-Money Options Held at
Options Held at Fiscal Year-End Fiscal Year-End
Name (Exercisable/unexercisable) (Exercisable/unexercisable)(1)
- ---- --------------------------- ------------------------------
Stephen 162,574/0 $680,284/0
Sternbach
- ----------
(1) Fair market value of underlying securities (the closing price of the
Company's Common Stock on the Nasdaq National Market) at fiscal year end
(May 31, 1996), minus the then effective exercise price.
COMPENSATION OF DIRECTORS
The Company's non-employee directors are paid a fee of $750 for each
Board of Directors meeting which they attend. They are not paid any additional
fee for serving on any committees of the Board of Directors.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Stephen Sternbach dated
as of December 3, 1995 (the "Sternbach Employment Agreement"). The Sternbach
Employment Agreement has a term of five years and provides for an initial annual
salary of $250,000 (subject to annual increase by the amount of the increase in
the Consumer Price Index from the immediate preceding year) plus a bonus of 6%
of the Company's net profit before taxes in excess of $1,200,000, not to exceed
an aggregate annual bonus of $150,000. The Sternbach Employment Agreement
provides that after a Change in Control (as defined in the Sternbach Employment
Agreement) of the Company has occurred, if either Mr. Sternbach terminates his
employment within six months after he has obtained actual knowledge of the
Change in Control or the Company (or any successor thereto) terminates his
employment with the Company within one year after the Change in Control, Mr.
Sternbach will be entitled to receive (i) his salary, bonuses, awards,
perquisites and benefits including, without limitation, benefits and awards
under the Company's stock option plans and pension and retirement plans and
programs, accrued through the date Mr. Sternbach's employment with the Company
is terminated and (ii) a lump-sum payment in cash equal to 2.99 times Mr.
Sternbach's base amount.
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<PAGE>
In addition, the Company and Mr. Sternbach are parties to a
Non-Qualified Retirement and Death Benefit Agreement dated February 1, 1994,
pursuant to which the Company credits to a bank reserve (the "Deferred
Compensation Account") established for that purpose, an amount not to exceed 5%
of Mr. Sternbach's gross annual salary during Mr. Sternbach's employment with
the Company. Any funds so credited to the Deferred Compensation Account may be
kept in cash or invested and reinvested in mutual funds, stocks, bonds,
securities or other assets as may be selected by the Company's Chief Financial
Officer in his discretion. Mr. Sternbach has agreed to assume all risk in
connection with any decrease in value of the funds which are invested. Unless
otherwise forfeited, Mr. Sternbach shall be entitled to the Deferred
Compensation Account upon his termination, disability or death or if the Company
is involved in a merger or is acquired by another company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Stephen Sternbach has outstanding loans in the principal amount, as
of November 1, 1996 of $97,503 from the Company and a subsidiary of the Company.
The loan from the subsidiary has been assigned to the Company. These loans bear
interest at 6% per annum and each have a scheduled maturity date of August 1,
1998.
In connection with services provided to the Company during the fiscal
years ended May 31, 1995 and 1996, the Company paid William Fellerman, CPA,
P.C., approximately $100,000 each year. Mr. Fellerman, a director, Chief
Financial Officer, Treasurer and Secretary of the Company, is the sole
shareholder of that corporation.
PROPOSAL 2 - RATIFICATION AND APPROVAL OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected the accounting firm of Holtz
Rubenstein & Co., LLP to serve as independent auditors of the Company for the
fiscal year ending May 31, 1997 and proposes the ratification and approval of
such decision. Holtz Rubenstein & Co., LLP has served as the principal
independent auditors of the Company since March 1993 and is familiar with the
business and operations of the Company. Representatives of Holtz Rubenstein &
Co., LLP are expected to be present at the Meeting and will have the opportunity
to make a statement if they desire to do so. Such representatives are also
expected to be available to respond to appropriate questions during the Meeting.
The Board of Directors recommends a vote FOR ratification and
approval of the selection of Holtz Rubenstein & Co., LLP as the independent
auditors for the Company for the year ending May 31, 1997.
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<PAGE>
VOTING REQUIREMENTS
Directors are elected by a plurality of the votes cast at the
Meeting. The affirmative vote of a majority of the votes cast at the Meeting
will be required to ratify and approve the appointment of Holtz Rubenstein &
Co., LLP as independent auditors of the Company for the fiscal year ending May
31, 1997. Abstentions and broker non-votes with respect to any matter are not
considered as votes cast with respect to that matter.
OTHER MATTERS
The Board of Directors of the Company knows of no other matter to
come before the Meeting. However, if any matter requiring a vote of the
Shareholders should arise, it is the intention of the persons named in the
enclosed form of Proxy to vote such Proxy in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
- ---------------------
Shareholder proposals intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company by July 23, 1997 for
possible inclusion in the proxy material relating to such meeting.
ANNUAL REPORT ON FORM 10-KSB
- ----------------------------
A copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended May 31, 1996, which has been filed with the Securities and Exchange
Commission, is available to shareholders to whom this Proxy Statement is mailed
upon written request to Ms. Carol Post, Star Multi Care Services, Inc., 99
Railroad Station Plaza, Hicksville, New York 11801.
By order of the Board of Directors,
STEPHEN STERNBACH
President and Chief Executive Officer
Dated: November 20, 1996
Hicksville, New York
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<PAGE>
PROXY PROXY
STAR MULTI CARE SERVICES, INC.
This Proxy is solicited on behalf of the Board of Directors
PROXY for Annual Meeting of Shareholders - December 18, 1996
The undersigned shareholder of common stock of STAR MULTI CARE SERVICES, INC.
hereby constitutes and appoints Stephen Sternbach and William Fellerman, and
each of them, as proxies for the undersigned, each with full power of
substitution, to vote and otherwise represent all of the shares of the
undersigned of the 1996 Annual Meeting of Shareholders of the Company to be held
at the offices of Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the
Americas (18th Floor), New York, New York on December 18, 1996 at 3:30 P.M.
local time, and at any adjournments or postponements thereof, as if the
undersigned were present and voting the shares, in the following manner:
(1) Election of Directors:
[_] FOR ALL nominees listed below [_] WITHHOLD AUTHORITY
below (except as indicated to the to vote for all nominees listed
contrary below) below
NOMINEES: Stephen Sternbach, William Fellerman, Charles Berdan, John P. Innes
II, Matthew Solof, Melvin L. Katten and Gary L. Weinberger
(Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below)
- --------------------------------------------------------------------------------
(2) Ratification and approval of the appointment of Holtz Rubenstein & Co.,
LLP as the Company's independent certified accountants
[_] FOR [_] AGAINST [_] ABSTAIN
This Proxy is solicited on behalf of the Board of Directors and, unless
contrary instructions are indicated, will be voted FOR the election of
all nominees for directors and FOR ratification and approval of the
appointment of Holtz, Rubenstein & Co., LLP as the Company's independent
certified accountants. In their discretion, the proxies are authorized to
vote upon such other matters as may properly come before the meeting or
any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of a copy of the accompanying
Notice of Meeting, Proxy Statement and Annual Report to Shareholders of
the fiscal year ended May 31, 1996 and hereby revokes any proxy or
proxies previously given.
Dated:________________________, 1996
____________________________________
Signature
____________________________________
Signature
Please date and sign exactly as name appears hereon. If signing as
attorney, executor, administrator, trustee, or guardian, please indicate
the capacity in which your are acting. Proxies executed by corporations
should be signed in the corporation's full name by a duly authorized
officer. Proxies executed by partnerships should be signed in the
partnership name by an authorized person. If shares are held jointly,
each shareholder named should sign.
PLEASE MARK, SIGN AND DATE THIS PROXY AND PROMPTLY RETURN IT IN THE ENVELOPE
PROVIDED.
