REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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STAR MULTI CARE SERVICES, INC.
(Exact name of registrant as specified in its charter)
New York 11-1975534
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99 Railroad Station, Hicksville, New York 11801
(Address of Principal Executive Offices) (Zip Code)
STAR MULTI CARE SERVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Mr. William Fellerman, Secretary
Star Multi Care Services, Inc.
99 Railroad Station
Hicksville, New York 11801
(Name and address of agent for service)
(516) 938-2016
(Telephone number, including area code, of agent for service)
with a copy to:
James Alterbaum, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 11801
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED SHARE PRICE FEE
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Common Stock, 353,934 shares(1) $5.0469(2) $1,786,269.50(2) $541.29
par value $.001
per share
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(1) The number of shares of Common Stock, par value $.001 per share, that were
originally authorized for issuance under the Employee Stock Purchase Plan
was 300,000. This amount has been adjusted to reflect two 6% stock
dividends and a 5% stock dividend. Pursuant to Rule 416(b), there shall
also be deemed covered hereby all additional securities resulting from
anti-dilution adjustments under the Employee Stock Purchase Plan.
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(2) Estimated solely for the purpose of calculating the registration fee on
the basis of, pursuant to Rule 457(c), the average of the high and low
sales prices per share of the registrant's Common Stock on the National
Association of Securities Dealers Automated Quotation System on January
29, 1997. Eighty-five percent (85%) of such average price was used as the
maximum offering price because the Employee Stock Purchase Plan provides
for the purchase at eighty-five percent (85%) of the fair-market value,
as defined in the Employee Stock Purchase Plan.
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PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with the
Securities and Exchange Commission (File No. 0-21299) pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "1934 Act") are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 1996;
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996 and November 30, 1996; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on September 4, 1996,
including any amendment or report filed for the purpose of updating such
descriptions.
All documents filed subsequent to the date of this Registration
Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and
prior to the filing of a post-effective amendment which indicates that all
securities offered 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 date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference 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 modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 722 of the New York Business Corporation Law ("NYBCL")
permits, in general, a New York corporation to indemnify any person made, or
threatened to be made, a party to an action or proceeding by reason of the fact
that he or she was a director or officer of the
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corporation, or served another entity in any capacity at the request of the
corporation, against any judgment, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein, if such person
acted in good faith, for a purpose he or she reasonably believed to be in, or,
in the case of service for another entity, not opposed to, the best interests of
the corporation and, in criminal actions or proceedings, in addition had no
reasonable cause to believe that his or her conduct was unlawful. Section 723 of
the NYBCL permits the corporation to pay in advance of a final disposition of
such action or proceeding the expenses incurred in defending such action or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount as, and to the extent, required by statute. Section
721 of the NYBCL provides that indemnification and advancement of expense
provisions contained in the NYBCL shall not be deemed exclusive of any rights to
which a director or officer seeking indemnification or advancement of expenses
may be entitled, whether contained in the certificate of incorporation or the
by-laws of the corporation or, when authorized by such certificate of
incorporation or by-laws, (i) a resolution of shareholders, (ii) a resolution of
directors or (iii) an agreement, provided no indemnification may be made on
behalf of any director or officer if a judgment or other final adjudication
adverse to the director or officer establishes that his or her acts were
committed in bad faith or were the result of active or deliberate dishonesty and
were material to the cause of action so adjudicated, or that he or she
personally gained in fact a financial profit or other advantage to which he or
she was not legally entitled.
(b) The Company's Certificate of Incorporation provides in Article
Twelfth as follows:
"TWELFTH: To the fullest extent now or hereafter provided
for or permitted by law, no director of the Company shall be personally liable
to the Company or its shareholders for damages for any breach of duty in such
capacity. Neither the amendment or repeal of this Article Twelfth, nor the
adoption of any provision of the Certificate of Incorporation inconsistent with
this Article Twelfth, shall eliminate or reduce the protection by this Article
Twelfth to a director of the Company in respect to any matter which occurred, or
any cause of action, suit or claim which but for the Article Twelfth would have
accrued or arisen, prior to such amendment, repeal or adoption."
(c) Article X of the Company's By-Laws provides, in general, that the
Company shall indemnify any officer or director (including officers and
directors serving another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity at the Company's
request) made, or threatened to be made, a party to an action or proceeding
(whether civil, criminal, administrative or investigative) by reason of the fact
that he or she was serving in any of those capacities against judgments, fines,
amounts paid in settlement and reasonable expenses (including attorneys' fees)
actually and necessarily incurred in connection with the defense of or as a
result of such action or proceeding or in connection with any appeal thereof.
Indemnification is not available under Article X if a judgment or other final
adjudication adverse to such director or officer establishes that (i) his or her
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii)
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he or she personally gained in fact a financial profit or other advantage to
which he or she was not legally entitled.
(d) Pursuant to By-law Article X, the Company has entered into
indemnification agreements with certain of its directors and officers providing
for the indemnification of such directors and officers in derivative actions, as
well as with respect to third party actions. The NYBCL mandates indemnification
in derivative actions if the officer or director has been successful, on the
merits or otherwise, in the defense of the action. The indemnification
agreements, as well as Section 722 of the NYBCL, do not permit indemnification
in derivative actions for (a) proceedings which are settled or otherwise
disposed of or (b) claims to which a person has been adjudged to be liable,
unless court approved. However, in reliance on Section 721 of the NYBCL, which
provides that the statutory indemnification provisions are not exclusive of
other rights which may be provided to an officer or director seeking
indemnification, By-law Article X also extends the right of indemnification to
settlements and unsuccessful defenses of derivative actions without the
necessity of a court determination provided the person seeking indemnification
meets the standard described in the preceding paragraph. The Company is not
aware of any judicial determination as to whether indemnification provisions
such as those related to derivative actions in By-Law Article X (which, by their
terms, exceed the scope of NYBCL Section 722 but where the standard of conduct
set forth in NYBCL Section 721 has been met) are enforceable pursuant to such
nonexclusivity provision.
(e) By-law Article X, like the indemnification agreements, provides
that the expenses incurred in defending any action to which a director or
officer may be entitled to indemnification shall be advanced by the Company
prior to the final disposition of the action as long as the indemnitee
undertakes to repay such advances if required by law. The Company has been
advised that the NYBCL currently requires that an officer or director undertake
to repay such advances to the extent they exceed the amount to which the officer
or director ultimately is entitled. The period of time within which the Company
is to advance expenses is fifteen days after request; the time period within
which the Company is to provide indemnification after request is thirty days.
(f) By-law Article X, which by its terms is not the exclusive basis
for granting rights to indemnification or advancement of expenses, establishes
procedures for processing indemnification requests, confirms the authority of
the Company to maintain indemnification insurance and prohibits the repeal of
By-law Article X retroactively. By-law Article X also provides that it applies,
to the fullest extent permitted by law, to acts or omissions occurring prior to
its adoption. By-law Article X further stipulates that the rights granted
therein are contractual in nature, which is meant to prevent any retroactive
denial or reduction of indemnification if By-law Article X is later amended.
(g) Under By-law Article X, the Board of Directors is permitted, to
the fullest extent permitted by law, to establish an appropriate scope of and
procedure for the indemnification of, and advancement of expenses to, employees
and other persons to whom the Company is permitted to provide indemnification or
advancement of expenses.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit
NUMBER DESCRIPTION
4.01 Certificate of Incorporation filed April 25, 1961.**
4.02 Certificate of Amendment to Certificate of Incorporation filed
February 22, 1989.**
4.03 Certificate of Amendment to Certificate of Incorporation filed
December 4, 1990.**
4.04 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.)4.05 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.)
4.06 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.)
4.07 Employee Stock Purchase Plan, as amended through October 31,
1996.*
5.01 Opinion of Parker Chapin Flattau & Klimpl, LLP, counsel to the
registrant, as to the legality of the Common Stock being
offered.*
23.01 Consent of Holtz Rubenstein & Co., LLP.*
23.02 Consent of Parker Chapin Flattau & Klimpl, LLP (contained in
Exhibit 5.01).
24.01 Powers of Attorney of certain officers and directors of the
registrant (included in signature page).
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* Filed herewith.
** Incorporated by reference to the Company's Registration Statement on
Form S-18 dated May 14, 1991. (Registration No. 33-39697-NY)
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
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(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(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 thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant'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 this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 6
above, or otherwise, the registrant has been advised 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 registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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 registrant 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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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 New York, State of New York, on the 30th day of
January, 1997.
STAR MULTI CARE SERVICES, INC.
By: /s/ Stephen Sternbach
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Stephen Sternbach
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints Stephen Sternbach and William Fellerman his true and
lawful attorneys-in-fact and agents, for him and in his name, place and stead,
in any and all capacities, with full power to act alone, to sign any and all
amendments to this Registration Statement, and to file each such amendment to
this Registration Statement with all exhibits thereto, and any and all documents
in connection therewith, with the Securities and Exchange Commission, hereby
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform any and all acts and things required and
necessary to be done, as fully and to all intents and purposes as, he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
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.
SIGNATURE TITLE DATE
/s/ Stephen Sternbach Director, President and Chief January 30, 1997
- ------------------------- Executive Officer
Stephen Sternbach
/s/ William Fellerman Director, Secretary, January 30, 1997
- ------------------------- Treasurer, and Chief
William Fellerman Financial Officer
/s/ John P. Innes II Director January 30, 1997
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John P. Innes II
/s/ Matthew Solof Director January 30, 1997
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Matthew Solof
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/s/ Charles Berdan Director January 30, 1997
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Charles Berdan
/s/ Melvin L. Katten Director January 30, 1997
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Melvin L. Katten
/s/ Gary L. Weinberger Director January 30, 1997
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Gary L. Weinberger
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STAR MULTI CARE SERVICES, INC.
EMPLOYEE STOCK PURCHASE PLAN
(as amended through October 31, 1996)
1. PURPOSE OF THE PLAN. This employee stock purchase plan (the "Plan")
is intended to provide an incentive to employees of Star Multi Care Services,
Inc., a New York corpora tion (the "Company"), and its present and future
Subsidiaries, and to encourage such employees to acquire a proprietary interest
in the Company through the purchase of the Company's Common Stock. The Plan is
intended to qualify as an "employee stock purchase plan" under Section 423 of
the Code, and its provision shall be construed accordingly.
2. DEFINITIONS. Whenever used herein, the following words and phrases
shall have the meanings stated below, unless a different meaning is plainly
required by the context:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee appointed by the
Board composed of not less than two directors (or such greater number as may be
required by law), each of whom shall be a "non-employee director" within the
meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under
the Exchange Act.
(d) "Common Stock" means the shares of common stock of the Company,
$.001 par value per share.
(e) "Compensation" means the base compensation that would be paid by
the Company and its Subsidiaries to the Participant during the Offering Period
for services as an employee, computed without reduction for any withholding from
such amount or for contributions to the Company's Section 401(k) plan. It does
not include payments for overtime, shift premium, incentive compensation,
bonuses and other special payments and any noncash compensation.
(f) "Employee" means any person who is employed by the Company or a
Subsidiary on the Grant Date, other than:
(i) an employee who has been employed for a period of less
than one year,
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(ii) an employee whose customary employment is 20 hours or
less per week,
(iii) an employee whose customary employment is for not more
than five months in any calendar year,
(iv) an employee who is "highly compensated" within the
meaning of Section 414(q) of the Code, or
(v) an employee who, immediately before the Grant Date, owns
(or is deemed to own pursuant to Section 424(d) of the Code, as modified by
Section 423(b)(3) of the Code) shares possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company, a
Subsidiary or a Parent.
For this purpose, employment with a corporation all or substantially all of the
assets or shares of stock of which have been acquired by the Company or a
Subsidiary or which has been merged into or consolidated with the Company or a
Subsidiary shall be considered employment by the Company or a Subsidiary.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Exercise Date" means the last day of a calendar year on which
the principal market for the Common Stock is open.
(i) "Fair Market Value" of a share of Common Stock on any day shall
mean (i) if the principal market for the Common Stock is a national securities
exchange, the average between the high and low sales prices per share of the
Common Stock on such day as reported by such exchange or on a consolidated tape
reflecting transactions on such exchange, (ii) if the principal market for the
Common Stock is not a national securities exchange and the Common Stock is
quoted on the National Association of Securities Dealers Automated Quotation
Systems ("NASDAQ"), and (x) if actual sales price information is available with
respect to the Common Stock, the average between the high and the low sales
prices per share of the Common Stock on such day on NASDAQ, or (y) if such
information is not available, the average between the highest bid and lowest
asked prices per share for the Common Stock on such day on NASDAQ, or (iii) if
the principal market for the Common Stock is not a national securities exchange
and the Common Stock is not quoted on NASDAQ, the average between the highest
bid and lowest asked prices per share for the Common Stock on such day as
reported on the NASDAQ OTC Bulletin Board or by National Quotations Bureau,
Incorporated or a comparable service; provided that if clauses (i), (ii) and
(iii) of this Paragraph are all inapplicable, or if no trades have been made or
no quotes are available for such day, the Fair Market Value of the Common Stock
shall be determined by the Committee, in good faith, in a manner that is not
inconsistent with Section 423 of the Code or the regulations thereunder.
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(j) "Grant Date" means January 19, 1996 for the 1996 calender year
and thereafter, January 2 of each calender year commencing with January 2, 1997.
(k) "Offering Period" means the period from the Grant Date through
the Exercise Date with respect to an option under the Plan.
(l) "Option Price" means the lesser of 85% of the Fair Market Value
of one share of Common Stock on the Grant Date or 85% of the Fair Market Value
of one share of Common Stock on the Exercise Date.
(m) "Parent" means a parent corporation of the Company as defined in
Section 424(e) of the Code.
(n) "Participant" with respect to an Offering Period means an
Employee who has elected to participate in the Plan pursuant to Paragraph 5 with
respect to such Offering Period, or with respect to a prior Offering Period if
such Employee has not withdrawn from the Plan.
(o) "Plan" means the Star Multi Care Services, Inc. Employee Stock
Purchase Plan as set forth herein.
(p) "Subsidiary" shall mean a subsidiary corporation of the Company
as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. The aggregate number of shares of Common
Stock for which options may be granted under the Plan shall not exceed 353,9341.
Such shares may, in the discretion of the Board, consist either in whole or in
part of authorized but unissued shares of Common Stock or shares of Common Stock
held in the treasury of the Company. The Company shall at all times during the
term of the Plan reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the Plan. Subject to
the provisions of Paragraph 15, any shares subject to an option which for any
reason expires, is canceled or is terminated unexercised shall again become
available for grant under the Plan.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Board which, to the extent it shall determine, may delegate its powers with
respect to the administration of the Plan to the Committee. A majority of the
members of the Committee shall constitute a quorum, and the acts of a majority
of the members present at any meeting at which a
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1 The number of shares of Common Stock that were originally authorized for
issuance under the Plan was 300,000. This amount has been adjusted to
reflect two 6% stock dividends and a 5% stock dividend that took place
after the adoption of the plan.
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quorum is present and any acts approved in writing by all members without a
meeting shall be the acts of the Committee. Subject to the express provisions of
the Plan, the Committee may interpret the Plan, prescribe, amend, or rescind
rules and regulations relating to it, and make all other determinations
necessary or advisable for the administration of the Plan. The determinations of
the Committee on all matters regarding the Plan shall be conclusive. Reference
in the Plan to determinations or actions by the Committee shall be deemed to
include determinations and actions by the Board.
All Employees shall have the same rights and privileges under the Plan,
except that, subject to the limitations hereunder, the amount of Common Stock
which may be purchased by any Participant under the Plan shall bear a uniform
relationship to their Compensation. All rules and determinations of the
Committee shall be uniformly and consistently applied to all persons in similar
circumstances.
No member or former member of the Committee shall be liable for any
action, failure to act or determination made in good faith with respect to the
Plan or any option under the Plan.
5. PARTICIPATION. An Employee may become a Participant by filing a
prescribed election form with the Committee at least 20 days prior to the first
Grant Date for which the election is to be effective. Participation in the Plan
shall continue until the Employee withdraws pursuant to Paragraph 10 hereof.
6. PAYROLL DEDUCTIONS. An amount equal to not less than 3% but not more
than 6% of the Compensation to which a Participant would be entitled to receive
on each pay day shall be deducted from his pay. Such amount shall be credited to
an account for such Participant under the Plan. A Participant may not make any
separate cash contributions into such account.
The Company (and each Subsidiary) shall not be required to segregate such
funds, which may be used for general corporate purposes. The Participant (and
his beneficiaries) shall not have any right, title, interest or claim in or to
or lien on such account or any specific asset, fund, reserve or property of the
Company or any Subsidiary, but shall be a general, unsecured creditor of the
Company or the Subsidiary.
7. GRANT OF OPTIONS. On a Grant Date, each Participant is granted an
option to purchase the number of full shares of Common Stock equal to such
percentage as selected on the Participant's election form in an amount equal to
not less than 3% but not more than 6% of the Participant's Compensation divided
by the applicable Option Price. In no event may an option for a fraction of a
share be granted under the Plan. Notwithstanding the foregoing, the maximum
number of shares for which any option may be granted to an Employee on any Grant
Date shall not exceed 2,000 shares. In the event the remaining shares available
for grant
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under the Plan are not sufficient to grant all the options otherwise required on
a Grant Date, the number of shares subject to each option on such date shall be
reduced proportionately.
Moreover, no Participant shall be granted an option if, immediately after
the grant, such Participant will own (or be deemed to own pursuant to Section
424(d) of the Code, as mod ified by Section 423(b)(3) of the Code) shares
possessing 5% or more of the total combined voting power or value of all classes
of stock of the Company, a Subsidiary or a Parent. If a Par ticipant would be
subject to the limitation in the preceding sentence taking into account an
option to which he would otherwise be entitled to on the Grant Date under the
Plan, the number of shares subject to the option granted on the Grant Date in
question shall be reduced by the minimum amount necessary to avoid such
limitation.
Notwithstanding any other provision of the Plan to the contrary, no
Participant may be granted an option which permits him to purchase stock under
the Plan or any other employee stock purchase plan of the Company, its
Subsidiaries or a Parent to accrue at a rate which exceeds $25,000 of the Fair
Market Value of such stock (determined at the time such option is granted) for
any one calendar year.
8. EXERCISE OF OPTION. Unless a Participant gives written notice to the
Committee (as provided below), his options hereunder shall be automatically
exercised on the Exercise Date, by the purchase of the number of shares which
the aggregate amount of payroll deductions credited to his account will purchase
at that time at the Option Price, subject to the limitations described in
Paragraph 7. In the event the Participant gives written notice to the Committee
at least 20 days before the Exercise Date setting forth a smaller number of
shares as to which the option shall be exercised, the option shall be exercised
with respect to such lesser number of shares. In each case any excess balance in
the Participant's account on the Exercise Date (after taking into account such
exercise) shall be promptly refunded to the Participant, without interest.
In no case may a fractional share be purchased or issued under the Plan.
No portion of the payroll deductions accumulated during one Offering Period and
no portion of any option granted with respect to one Offering Period may be
carried over to or be used in another Offering Period.
As soon as practicable after the Exercise Date, the Company shall deliver
to each Participant certificates evidencing the number of shares, if any,
purchased upon the exercise of his option. A person entitled to receive Common
Stock upon the exercise of an option hereunder shall not have the rights of a
stockholder with respect to such shares until the date of issuance of a stock
certificate to him for such shares.
9. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in its
discretion, as a condition to the exercise of an option, that either (a) a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the
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shares of Common Stock to be issued upon such exercise shall be effective and
current at the time of exercise or (b) there is an exemption from registration
under the Securities Act for the issuance of shares of Common Stock upon such
exercise. Nothing herein shall be construed as requiring the Company to register
shares subject to any option under the Securities Act.
In addition, if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares subject to such
option on any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of or in connection with, the granting of an option or the issue of
shares thereunder, such option may not be exercised in whole or in part unless
such listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
10. WITHDRAWAL. A Participant may withdraw from the Plan by giving
written notice thereof to the Committee, which notice shall be effective 20 days
after receipt thereof. In such event, all of the Participant's payroll
deductions credited to his account during the Offering Period for which the
withdrawal is effective shall be promptly paid to the Participant, without
interest, and no further payroll deductions under Paragraph 6 shall be made from
such Participant's Compensation, unless a new authorization is filed in
accordance with Paragraph 5. A Participant's withdrawal shall not affect his
eligibility to participate in the Plan with respect to future Offering Periods
or in a similar plan which may be adopted by the Company or its Subsidiaries.
11. TERMINATION OF EMPLOYMENT. The termination of a Participant's
employment with the Company and its Subsidiaries for any reason shall be deemed
to be a notice of withdrawal given to the Committee on the date of such
termination, which shall be effective on such date without regard to the 20 day
notice period. Nothing in the Plan or in any option granted under the Plan shall
confer on any individual the right to continue in the employ of the Company or
any of its Subsidiaries, or interfere in any way with any right of the Company
or its Subsidiaries to terminate the individual's employment at any time for any
reason without liability to the Company or its Subsidiaries.
12. DESIGNATION OF BENEFICIARY. A Participant may designate a
beneficiary or beneficiaries entitled to receive the payments to be made to the
Participant hereunder in the event he dies before such payment is made. The
designation may be made, revoked or changed by the Participant at any time by
completing, signing and delivering to the Committee a designation in the
appropriate form. If a Participant does not designate a beneficiary to whom
payment is to be made after his death, or if none of the designated
beneficiaries survives the Participant, any required payments hereunder after
the death of the Participant shall be made to the executor or administrator of
his estate.
13. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Not withstanding any
provisions of the Plan, in the event of any change in the outstanding Common
6
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Stock by reason of a stock dividend, recapitalization, merger in which the
Company is the surviving corporation, reorganization, split-up, combination or
exchange of shares or the like, the aggregate number and kind of shares
available under the Plan, the maximum number and kind of shares for which a
Participant may be granted options in an Offering Period, the aggregate number
and kind of shares subject to each outstanding option and the Option Price
thereof shall be appropriately adjusted by the Board, whose determination shall
be conclusive.
14. NONTRANSFERABILITY. No option, account or rights under the Plan
shall be transferable other than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent provided
above, no option, account or other rights under the Plan may be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and any such options, accounts or rights shall
not be subject to execution, attachment or similar process.
15. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the
Board on September 13, 1995 and was amended by the Board on December 15, 1995.
No option may be granted under the Plan after September 12, 2005. The Board,
without further approval of the Company's shareholders, may at any time suspend
or terminate the Plan, in whole or in part, amend it from time to time in such
respects as it may deem advisable, including, without limitation, to insure that
the Plan qualifies as an "employee stock purchase plan" under Section 423 of the
Code or to conform to any change in applicable law or to regulations and rulings
thereunder; provided, however, that no amendment shall be effective without
requisite prior or subsequent approval of the shareholders of the Company if
such amendment would (a) except as contemplated in Paragraph 13, increase the
maximum number of shares for which options may be granted under the Plan or
which may be granted to a Participant in any Offering Period, (b) materially
increase the benefits to Participants under the Plan, (c) change the eligibility
requirements for participation in the Plan, or (d) effect any change
inconsistent with Section 423 of the Code or regulations issued thereunder. No
termination, suspension or amendment of the Plan shall, without consent of the
holder of an existing option affected thereby, materially adversely affect his
rights under such option. The power of the Committee to construe and administer
the Plan with respect to any options granted prior to the termination or
suspension of the Plan nevertheless shall continue after such termination or
during such suspension. Upon a termination of the Plan, the Company shall
promptly pay to the Participants all of their payroll deductions which were
credited to their account (but not used to purchase stock) under the Plan,
without interest.
16. WITHHOLDING TAXES. The Company may with the authorization of the
Committee withhold cash and/or shares of Common Stock to be issued with respect
thereto having an aggregate Fair Market Value equal to the amount which it
determines is necessary to satisfy its obligation to withhold Federal, state and
local income taxes or other amounts incurred by reason of the grant or exercise
of an option, its disposition, or the disposition of the underlying shares of
Common Stock. Alternatively, the Company may require the holder to pay to the
7
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Company such amount, in cash, promptly upon demand. The Company shall not be
required to issue any shares of Common Stock pursuant to any such option until
all required payments have been made.
Notwithstanding anything in the Plan or in any agreement to the contrary,
the Company may not withhold shares of Common Stock to satisfy the tax
withholding consequences of the exercise of an option by an optionee who is
subject to the reporting requirements of Section 16(a) of the Exchange Act (as
it constitutes a deemed exercise of a stock appreciation right ("SAR") under
Rule 16b-3 under the Exchange Act), unless (a) the Company has filed all
periodic reports and statements required to be filed by it pursuant to Section
13(a) of the Exchange Act for at least one year prior to the date of such
exercise, (b) the Company on a regular basis releases for publication quarterly
and annual summary statements of sales and earnings in the manner contemplated
in the rules promulgated under Section 16 of the Exchange Act, (c) except when
the date of exercise of such SAR is automatic or fixed in advance under the Plan
and is outside the control of the optionee, the election by such optionee to
receive cash in full or partial settlement of the SAR, as well as the exercise
of the SAR for cash, is made during the period beginning on the third business
day following the date of release of the summary statements referred to in
clause (b) and ending on the 12th business day following such date, and (d) the
option has been held for at least six months from the date of grant to the date
of cash settlement. Any optionee subject to the reporting requirements of
Section 16(a) of the Exchange Act may request the Committee to withhold shares
only if the option is exercised within the applicable period prescribed above.
17. NOTICE. Any notice, designation or other communication required or
permitted under the Plan shall be in writing, signed by the party giving the
notice and delivered in person or sent by certified or registered mail, return
receipt requested, addressed (a) if to the Company, to 26 Court Street,
Brooklyn, New York 11242, Attention: Compensation Committee, and (b) if to an
employee, to the last address shown for him on the records of the Company or its
Subsidiaries.
18. APPLICABLE LAW. Any questions pertaining to the validity,
construction or administration of the Plan and the options granted hereunder
shall be determined under the laws of the State of New York, without regard to
conflict of law provisions, to the extent not inconsistent with Section 423 of
the Code and the regulations thereunder.
19. SHAREHOLDER APPROVAL. The Plan was approved by the affirmative vote
of a majority of all outstanding shares of the Company at the meeting of the
Company's shareholders held on November 14, 1995 at which a quorum was present.
8
January 30, 1997
Star Multi Care Services, Inc.
99 Railroad Station
Hicksville, New York 11801
Gentlemen:
We have acted as counsel to Star Multi Care Services, Inc. (the
"Registrant") in connection with its Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission relating to 353,934 shares of Common Stock, par value $.001 per
share, of the Registrant (the "Shares"), subject to the Registrant's Employee
Stock Purchase Plan (the "Plan").
In connection with the foregoing, we have examined, among other
things, the Registration Statement and originals or copies, satisfactory to us,
of all such corporate records and of all such agreements, certificates and other
documents as we have deemed relevant and necessary as a basis for the opinion
hereinafter expressed. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity with the original documents of documents submitted to us as
copies. As to any facts material to such opinion, we have, to the extent that
relevant facts were not independently established by us, relied on certificates
of public officials and certificates, oaths and declarations of officers or
other representatives of the Registrant.
Based upon and subject to the foregoing, we are of the opinion that
the Shares to be issued pursuant to the exercise of options granted or to be
granted under the Plan will be, when issued pursuant to the provisions of the
Plan, validly issued, fully paid and non-assessable.
We hereby consent to the filing of a copy of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference into the Registration
Statement on Form S-8 of our report dated July 19, 1996 with respect to the
consolidated financial statements of Star Multi Care Services, Inc. included in
the Annual Report (Form 10-KSB) for the year ended May 31, 1996.
/s/ Holtz Rubenstein & Co., LLP
HOLTZ RUBENSTEIN & CO., LLP
Melville, New York
January 30, 1997
