U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-KSB/A
(Amendment No. 1)
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended May 31, 1996
[_] Transition Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________ to
__________
Commission File Number 1-10751
STAR MULTI CARE SERVICES, INC.
-----------------------------------------------
(Name of small business issuer in its charter)
New York 11-1975534
- --------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99 Railroad Station Plaza, Hicksville, New York 11801
- ----------------------------------------------- -------------------
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code: (516) 938-2016
--------------
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendments to
this Form 10-KSB. [X]
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The directors and executive officers of the Company, their ages and
present positions with the Company are as follows:
Name Age Position Held with the Company Director Since
- ---- --- ------------------------------ --------------
Stephen Sternbach 41 Chairman of the Board of Directors, 1987
President and Chief Executive
Officer
William Fellerman 51 Chief Financial Officer, Secretary, 1990
Treasurer, Director
Charles Berdan +*x 48 Director 1994
John P. Innes II +*x 62 Director 1991
Matthew Solof +*x 43 Director 1992
- -------------------------
+ Member of Compensation Committee
* Member of Stock Option Committee
x Member of Audit Committee
Directors hold office until the annual meeting of the shareholders
next succeeding their election, and until their successors are elected and
qualified, or until their prior death, resignation or removal. Officers hold
office until the annual meeting of the Board of Directors next succeeding their
election, and until their successors shall have been elected and qualified, or
until their death, resignation or removal.
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
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<PAGE>
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 of 1994. Mr. Innes was the Chairman
of Commonwealth Associates, an investment bank, from January 1992 to June 1994.
Mr. Innes also 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
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.
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 Forms 5 were
required for those persons, the Company believes that, during the fiscal year
ended May 31, 1996, its officers, directors, and greater than ten-percent
shareholders complied with all applicable Section 16 filing requirements.
ITEM 10. 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 $100,000.
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<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Name and Awards
Principal ------ All Other
Position Year Salary($) Bonus($) Securities Underlying Options(#) Compensation(1)
- -------- ---- --------- -------- -------------------------------- ---------------
<S> <C> <C> <C> <C> <C>
Stephen Sternbach 1996 $250,000 $34,371 20,000 $10,000
Chief Executive Officer, 1995 $225,000 -- -- $10,000
President and 1994 $225,000 -- 58,989 $ 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>
Percent of Total
Number of Securities Options Granted
Underlying Options to Employees Exercise Price
Name Granted (#) in Fiscal Year ($/Sh) Expiration Date
- ---- ----------- -------------- ------ ---------------
<S> <C> <C> <C> <C> <C>
Stephen Sternbach 20,000 26% $6.88 May 16, 2001
</TABLE>
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:
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options at Fiscal Year- Options at Fiscal Year-End
Name End (Exercisable/ Unexercisable) (Exercisable/unexercisable)(1)
- ---- -------------------------------- ------------------------------
<S> <C> <C> <C> <C>
Stephen Sternbach 154,832/0 $680,284/0
</TABLE>
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(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 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.
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<PAGE>
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 annual salary
of $250,000 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.
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 merge or is acquired by another company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Set forth below is the ownership of the Company Common Stock at
September 25, 1996 by (i) the only persons or groups who were owners of record
or were known by the Company to beneficially own more than 5% of the outstanding
shares of the Company Common Stock; (ii) each director of the Company; (iii)
Stephen Sternbach, the executive officer named in the Summary Compensation Table
under the caption "Executive Compensation"; and (iv) all directors and executive
officers of the Company as a group. The Company understands that, unless
otherwise noted below, each beneficial owner has sole voting and investment
power with respect to all shares of the Company Common Stock attributable to
such owner.
Amount and Nature
Name and Address of Beneficial Percent
Of Beneficial Owner Ownership* of Class (1)
------------------- ---------- ------------
Stephen Sternbach 1,115,897(2) 27.95%
c/o STAR Multi Care Services, Inc.
99 Railroad Station Plaza
Hicksville, NY 11801
William Fellerman 53,320(3) 1.38%
c/o STAR Multi Care Services, Inc.
99 Railroad Station Plaza
Hicksville, NY 18801
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<PAGE>
Amount and Nature
Name and Address of Beneficial Percent
Of Beneficial Owner Ownership* Of Class (1)
------------------- ---------- ------------
Charles Berdan 970 **
281 Potomac Drive
Basking Ridge, NJ 07920
John P. Innes II 1,060 **
8 Breckenridge Lane
Savannah, GA 31411
Matthew Solof 3,371 **
33 Fairbanks Boulevard
Woodbury, NY 11797
Eugene J. Mora 222,710(4) 5.78%
3252 Holiday Court, Suite 204
LaJolla, CA 92037
Heartland Advisors, Inc. 213,802(5) 5.57%
790 North Milwaukee Street
Milwaukee, WI 53202
All directors and executive 1,174,618 29.26%
officers of the Company as a group
(5 persons)
- ---------------------------------
* All shares and per share amounts have been adjusted to take into
account the two stock dividends, effectuated on May 30, 1995 and
January 12, 1996, respectively.
** Indicates less than 1% of the outstanding shares of the Company
Common Stock.
(1) Shares subject to options are considered outstanding only for the
purpose of computing the percentage of outstanding Company 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 directors and executive officers 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 113,910 shares of the Company Common Stock owned by the
Stephen Sternbach Family Trust; Mr. Sternbach disclaims beneficial
ownership with respect to these shares. Also includes 154,832 shares
of the Company Common Stock which Mr. Sternbach has a currently
exercisable option to purchase pursuant to the Company's 1992 Stock
Option Plan.
(3) Includes 22,922 shares of the Company Common Stock owned by Mr.
Fellerman's wife; Mr. Fellerman disclaims beneficial ownership with
respect to these shares of the Company Common Stock. Also includes
3,244 shares owned by the William Fellerman CPA PC Pension Trust
Fund. Also includes 22,154 shares of the Company 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
14,314, shares of the Company Common Stock which Mr. Mora has a
currently exercisable option to purchase pursuant to the options
assumed
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<PAGE>
by the Company upon consummation of the merger of AMSERV HEALTHCARE
INC. with a wholly-owned subsidiary of the Company, which merger was
consummated on August 23, 1996
(5) Based upon a copy of a Schedule 13G received by the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Stephen Sternbach has outstanding loans in the principal amount of
$100,517 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 and Chief Financial
Officer, Treasurer and Secretary of the Company, is the sole shareholder of that
corporation.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
2. (a) Agreement and Plan of Merger among Star Multi Care Services,
Inc., AHI Acquisition Corp. and AMSERV HEALTHCARE INC. dated
as of February 9, 1996, as amended on July 18, 1996.
(Incorporated by reference to Exhibit 2(a) to the Company's
registration statement on Form S-4 (Registration No.
333-08499).)
3. (a) * Certificate of Incorporation filed April 25, 1961.
(b) * Certificate of Amendment to Certificate of Incorporation
filed February 22, 1989.
(c) * Certificate of Amendment to Certificate of Incorporation
filed December 4, 1990.
(d) Certificate of Amendment to Certificate of Incorporation filed
February 3, 1994. (Incorporated by reference to Exhibit 3(d)
to the Company's Annual Report on Form 10-KSB for the fiscal
year ended May 31, 1994.)
(e) Certificate of Change filed March 2, 1995. (Incorporated by
reference to Exhibit 3(e) to the Company's Annual Report on
Form 10-KSB for the fiscal year ended May 31, 1995.)
(f) By-Laws, as amended on November 18, 1992 and September 13,
1993. (Incorporated by reference to Exhibit 3(e) to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 1994.)
4. (a) Voting Agreement, dated as of February 9, 1996, among AMSERV
HEALTHCARE INC. and Stephen Sternbach. (Incorporated by
reference to Exhibit 4(a) to the Company's registration
statement on Form S-4 (Registration No. 333-08499).)
10. (a) * Form of indemnification agreement between the Company and
Stephen Sternbach.
(b) Employment Agreement, dated as of December 3, 1995 between the
Company and Stephen Sternbach. (Incorporated by reference to
Exhibit 10.(x) to the Company's Quarterly Report on Form
10-QSB for the quarterly period ended February 29, 1996.)
(c) * The Company's 1991 Incentive Stock Option Plan.
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<PAGE>
(d) The Company's 1992 Incentive Stock Option Plan, as amended and
restated September 13, 1993. (Incorporated by reference to
Exhibit 10(h) to the Company's Annual Report on Form 10-KSB
for the fiscal year ended May 31, 1994.)
(e) Amendment No. 1 to the Company's 1992 Stock Option Plan.
(Incorporated by reference to Exhibit 10.(z) to the Company's
Quarterly Report on Form 10-QSB for the quarterly period ended
February 26, 1996.)
(f) The Company's Employee Stock Purchase Plan, as amended
December 15, 1995. (Incorporated by reference to Exhibit
10.(y) to the Company's Quarterly Report on Form 10-QSB for
the quarterly period ended February 26, 1996.)
(g) Form of Incentive Stock Option Contract. (Incorporated by
reference to Exhibit 10(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1993.)
(h) * New York State Department of Consumer Affairs Employment
Agency License.
(i) * New York State Health Department Home Care License.
(j) * New Jersey Employment Agency License.
(k) Form of Indemnification Agreement between the Company and
directors and officers. (Incorporated by reference to Exhibit
10(k) to the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1992.)
(l) Asset Purchase Agreement dated as of November 1, 1991 by and
among Unity Care Services, Inc., Unity Healthcare Holding
Company, Inc. and the Company. (Incorporated by reference to
Exhibit 10(l) to the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1992.)
(m) Asset Purchase Agreement dated January 30, 1992 by and among
Unity Healthcare Holding Company, Inc., Unity Care Services,
Inc. and the Company. (Incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K dated May 26,
1992.)
(n) Asset Purchase Agreement dated January 30, 1992 by and between
Unity Home Care of Florida, Inc. and the Company.
(Incorporated by reference to Exhibit 10.2 to the Company's
Current Report on Form 8-K dated May 26, 1992.)
(o) Employment Agreement dated February 15, 1990, between Alan
Spector and the Company, as assignee of Unity Home Care of
Florida, Inc. (Incorporated by reference to Exhibit 10(o) to
the Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1992.)
(p) Asset Purchase Agreement dated November 8, 1993 by and between
DSI Health Care Services, Inc. and Star Multi Care Services of
Long Island, Inc., a wholly-owned subsidiary of the Company.
(Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated November 22, 1993.)
(q) Asset Purchase Agreement dated as of January 6, 1995, as
amended, by and between Long Island Nursing Registry, Inc. and
the Company. (Incorporated by reference to Exhibit 21 to the
Company's Current Report on Form 8-K dated May 19, 1995.)
(r) Employment Agreement dated May 19, 1995 by and between the
Company and Gregory Turchan. (Incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated
May 19, 1995.)
(s) Loan Agreement dated November 1, 1995 by and between the
Company and Chase Manhattan Bank, N.A. (Incorporated by
reference to Exhibit 10.(w) to the Company's Quarterly Report
on Form 10-QSB for the quarterly period ended November 30,
1995.)
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<PAGE>
(t) *** Non-Qualified Retirement and Death Benefit Agreement,
dated February 1, 1994, between the Company and Stephen
Steinbach.
21. ** List of subsidiaries.
23. ** Consent of Holtz Rubenstein & Co., LLP.
27. ** Financial Data Schedule.
b. During the last quarter of the period covered by this report, the Company
did not file any reports on Form 8-K.
- ---------------------
* Denotes Exhibits incorporated by reference to the Company's Registration
Statement on Form S-18 dated May 14, 1991 (Registration No.
33-39697-NY).
** Previously filed.
*** Filed herewith.
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<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: September 27, 1996 STAR MULTI CARE SERVICES, INC.
By /s/ Stephen Sternbach
-----------------------------
Stephen Sternbach, President, Chairman
of the Board of Directors and Chief
Executive Officer
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<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
2. (a) Agreement and Plan of Merger among Star Multi Care Services,
Inc., AHI Acquisition Corp. and AMSERV HEALTHCARE INC. dated as
of February 9, 1996, as amended on July 18, 1996. (Incorporated
by reference to Exhibit 2(a) to the Company's registration
statement on Form S-4 (Registration No. 333-08499).)
3. (a) * Certificate of Incorporation filed April 25, 1961.
(b) * Certificate of Amendment to Certificate of Incorporation filed
February 22, 1989.
(c) * Certificate of Amendment to Certificate of Incorporation filed
December 4, 1990.
(d) Certificate of Amendment to Certificate of Incorporation filed
February 3, 1994. (Incorporated by reference to Exhibit 3(d) to
the Company's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 1994.)
(e) Certificate of Change filed March 2, 1995. (Incorporated by
reference to Exhibit 3(e) to the Company's Annual Report on Form
10-KSB for the fiscal year ended May 31, 1995.)
(f) By-Laws, as amended on November 18, 1992 and September 13, 1993.
(Incorporated by reference to Exhibit 3(e) to the Company's
Annual Report on Form 10-KSB for the fiscal year ended May 31,
1994.)
4. (a) Voting Agreement, dated as of February 9, 1996, among AMSERV
HEALTHCARE INC. and Stephen Sternbach. (Incorporated by
reference to Exhibit 4(a) to the Company's registration
statement on Form S-4 (Registration No. 333-08499).)
10. (a) * Form of indemnification agreement between the Company and
Stephen Sternbach.
(b) Employment Agreement, dated as of December 3, 1995 between the
Company and Stephen Sternbach. (Incorporated by reference to
Exhibit 10.(x) to the Company's Quarterly Report on Form 10-QSB
for the quarterly period ended February 29, 1996.)
(c) * The Company's 1991 Incentive Stock Option Plan.
(d) The Company's 1992 Incentive Stock Option Plan, as amended and
restated September 13, 1993. (Incorporated by reference to
Exhibit 10(h) to the Company's Annual Report on Form 10-KSB for
the fiscal year ended May 31, 1994.)
(e) Amendment No. 1 to the Company's 1992 Stock Option Plan.
(Incorporated by reference to Exhibit 10.(z) to the Company's
Quarterly Report on Form 10- QSB for the quarterly period ended
February 26, 1996.)
(f) The Company's Employee Stock Purchase Plan, as amended December
15, 1995. (Incorporated by reference to Exhibit 10.(y) to the
Company's Quarterly Report on Form 10-QSB for the quarterly
period ended February 26, 1996.)
(g) Form of Incentive Stock Option Contract. (Incorporated by
reference to Exhibit 10(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1993.)
(h) * New York State Department of Consumer Affairs Employment
Agency License.
(i) * New York State Health Department Home Care License.
(j) * New Jersey Employment Agency License.
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<PAGE>
Exhibit No. Description
- ----------- -----------
(k) Form of Indemnification Agreement between the Company and
directors and officers. (Incorporated by reference to Exhibit
10(k) to the Company's Annual Report on Form 10-K for the fiscal
year ended May 31, 1992.)
(l) Asset Purchase Agreement dated as of November 1, 1991 by and
among Unity Care Services, Inc., Unity Healthcare Holding
Company, Inc. and the Company. (Incorporated by reference to
Exhibit 10(l) to the Company's Annual Report on Form 10-K for
the fiscal year ended May 31, 1992.)
(m) Asset Purchase Agreement dated January 30, 1992 by and among
Unity Healthcare Holding Company, Inc., Unity Care Services,
Inc. and the Company. (Incorporated by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K dated May 26, 1992.)
(n) Asset Purchase Agreement dated January 30, 1992 by and between
Unity Home Care of Florida, Inc. and the Company. (Incorporated
by reference to Exhibit 10.2 to the Company's Current Report on
Form 8-K dated May 26, 1992.)
(o) Employment Agreement dated February 15, 1990, between Alan
Spector and the Company, as assignee of Unity Home Care of
Florida, Inc. (Incorporated by reference to Exhibit 10(o) to the
Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1992.)
(p) Asset Purchase Agreement dated November 8, 1993 by and between
DSI Health Care Services, Inc. and Star Multi Care Services of
Long Island, Inc., a wholly-owned subsidiary of the Company.
(Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated November 22, 1993.)
(q) Asset Purchase Agreement dated as of January 6, 1995, as
amended, by and between Long Island Nursing Registry, Inc. and
the Company. (Incorporated by reference to Exhibit 21 to the
Company's Current Report on Form 8-K dated May 19, 1995.)
(r) Employment Agreement dated May 19, 1995 by and between the
Company and Gregory Turchan. (Incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated
May 19, 1995.)
(s) Loan Agreement dated November 1, 1995 by and between the Company
and Chase Manhattan Bank, N.A. (Incorporated by reference to
Exhibit 10.(w) to the Company's Quarterly Report on Form 10-QSB
for the quarterly period ended November 30, 1995.)
(t)*** Non-Qualified Retirement and Death Benefit Agreement, dated
February 1, 1994, between the Company and Stephen Steinbach.
21. ** List of subsidiaries.
23. ** Consent of Holtz Rubenstein & Co., LLP.
27. ** Financial Data Schedule.
- ----------------------------------
* Denotes Exhibits incorporated by reference to the Company's Registration
Statement on Form S-18 dated May 14, 1991 (Registration No.
33-39697-NY).
** Previously filed.
*** Filed herewith.
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NON-QUALIFIED RETIREMENT AND DEATH BENEFIT AGREEMENT
THIS AGREEMENT made this first day of February 1994 by and
between STAR MULTI CARE SERVICES, INC., a corporation organized under the laws
of the State of New York (the "Corporation"), and STEPHEN STERNBACH residing in
the State of New York (the "Employee").
WITNESSETH THAT:
In consideration of the agreements hereinafter contained the
parties hereto agree as follows:
1. The Corporation agrees to employ the Employee and the
Employee agrees to serve the corporation in such capacity as the Board of
Directors of the Corporation (the "Board") may designate from time to time, as
per employment contract dated December 4, 1990.
2. During the term of his employment, the Employee shall devote
all of his time, attention, skill and efforts to the performance of his duties
for the Corporation.
3. The Corporation shall pay the Employee during the term of
his employment contract hereunder such salary payable monthly as the Board may
from time to time determine together with deferred compensation payable as
provided in paragraph 5 below, unless forfeited by the occurrence of any of the
events of forfeiture specified in paragraph 7, below.
4. (a) The Corporation shall credit to a book reserve (the
"Deferred Compensation Account") established for this purpose, an amount not to
exceed 5% of the employee's gross annual salary, on the last day of May, 1994,
and an amount not to exceed 5% of the employee's gross annual salary on the last
day of May thereafter during the continuance of the Employee's employment
hereunder.
(b) Any such funds so credited to the Deferred Compensation
Account may be kept in cash or invested and reinvested in mutual funds, stocks,
bonds, securities, or any other assets as may be selected by the Chief Financial
Officer in his discretion. In the exercise of the foregoing discretionary
investment powers, the Chief Financial Officer may engage investment counsel
and, if he so desires, may delegate to such counsel full or limited authority to
select the assets in which the funds are to be invested.
(c) The Employee agrees on behalf of himself and his
designated beneficiary to assume all risk in connection with any decrease in
value of the funds which are invested or which continue to be invested in
accordance with the provisions of this Agreement.
(d) Title to and beneficial ownership of any assets, whether
cash or investments which the Corporation may earmark to pay the contingent
deferred compensation hereunder, shall at all times remain in the Corporation
and the Employee and his designated beneficiary shall not have any property
interest whatsoever in any specific assets of the Corporation.
<PAGE>
5. The benefits to be paid as deferred compensation (unless
they are forfeited by the occurrence of any of the events of forfeiture
specified in paragraph 7, below) are as follows:
(a) If the Employee's employment hereunder is terminated on
or after the Employee shall have reached the age of 50, the Corporation shall
pay to him in a lump sum an amount equal to the fair market value of the assets
in the Deferred Compensation Account as of such date.
(b) If the Employee's employment hereunder is terminated for
any reason other than death and disability but before the Employee shall have
reached the age of 50, then the Corporation shall pay to him a lump sum an
amount equal to the fair market value of his account on that date.
(c) If the Employee's employment is terminated because of
disability or death before he has reached the age of 50, and while he is in the
employ of the Corporation, then the Corporation shall pay to the Employee (in
the event of his disability) or his designated beneficiary (in the event of his
death) in the same manner and to the same extent as provided in paragraph 5(a),
above.
(d) If the Corporation is involved in a merger or is
acquired by another Company, the Corporation shall pay to the Employee in a lump
sum an amount equal to the fair market value of the assets in the Deferred
Compensation Account as of such date.
(e) The beneficiary referred to in this paragraph may be
designated or changed by the Employee (without the consent of any prior
beneficiary) on a form provided by the Corporation and delivered to the
Corporation before his death. If no such beneficiary shall have been designated,
or if no designated beneficiary shall survive the Employee, the payment payable
under paragraph 5(c), above shall be payable to the Employee's estate.
(f) The Employee shall be deemed to have become disabled for
purposes of paragraph 5(c), above if the Board shall find on the basis of
medical evidence satisfactory to the Board that the Employee is totally
disabled, mentally or physically, so as to be prevented from engaging in further
employment by the Corporation and that such disability will be permanent and
continuous during the remainder of his life.
6. Nothing contained in this Agreement and no action taken
pursuant to the provisions of this Agreement shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Corporation
and the Employee, his designated beneficiary or any other person. Any funds
which may be invested under the provisions of this Agreement shall continue for
all purposes to be a part of the general funds of the Corporation and no person
other than the Corporation shall by virtue of the provisions of the Agreement
have any interest in such funds. To the extent that any person acquires a right
to receive payments from the Corporation under this agreement, such right shall
be no greater than the right of any unsecured general creditor of the
Corporation.
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7. The right of the Employee or any other person to the payment
of deferred compensation or other benefits under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by the laws of
descent and distribution.
8. If the Board shall find that any person to whom any payment
is payable under this Agreement is unable to care for his affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, a child, a parent, or a brother
or sister, or to any person deemed by the Board to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Board may determine. Any such payment shall be a complete discharge of the
liabilities of the Corporation under this agreement.
9. Nothing contained herein shall be construed as conferring
upon the Employee the right to continue in the employ of the Corporation as an
executive or in any other capacity.
10. Any deferred compensation payable under this Agreement
shall not be deemed salary or other compensation to the Employee for the purpose
of computing benefits to which he may be entitled under any pension plan or
other arrangement of the Corporation for the benefit of its employees.
11. The Board shall have full power and authority to interpret,
construe and administer this Agreement and the Board's interpretations and
construction thereof, and actions thereunder, including any valuation of the
Deferred Compensation Account, or the amount or recipient of the payment to be
made therefrom, shall be binding and conclusive on all persons for all purposes.
No member of the Board shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his own willful misconduct or lack of good
faith.
12. This agreement shall be binding upon and inure to the
benefit of the Corporation, its successors and assigns and the Employee and his
heirs, executors, administrators and legal representatives.
13. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be executed by its duly authorized officers and Employee has hereunto set his
hand and seal as of the date first above written.
By: /S/ WILLIAM FELLERMAN
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Secretary
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