SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Commission
Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
Caretenders Health Corp.
(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. _______________________________________________
2.
Aggregate number of securities to which transaction
applies:_________________________________________________
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):____________________________
4.
Proposed maximum aggregate value of
transaction:_____________________________________________
5.
Total fee paid:__________________________________________
/ / 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:
______________________________________________________
2. Form, Schedule or Registration Statement No.
______________________________________________________
3. Filing Party:
______________________________________________________
4. Date Filed:
______________________________________________________
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 24, 1997
To the Stockholders:
The Annual Meeting of Stockholders (the _Annual Meeting_) of Caretenders
Health Corp. (the _Company_), will be held in Terrace Room Three of the
Holiday Inn, 1325 Hurstbourne Lane, Louisville, Kentucky 40222, on Monday,
November 24, 1997, at 10:00 a.m. local time for the following purposes:
(1)To elect a Board of seven directors to serve until the next annual
meeting of stockholders;
(2)To approve the Non-Employee Directors Deferred Compensation Plan;
(3)To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditor for the fiscal year ending March 31, 1998; and
(4)To transact such other business as may properly come before the meeting
or any adjournments thereof.
A Proxy Statement describing matters to be considered at the Annual Meeting
is attached to this Notice. Only stockholders of record at the close of
business on October 6, 1997 are entitled to receive notice of and to vote
at the meeting.
By Order of the Board of Directors
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 13, 1997
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. IN THE EVENT YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY
AND VOTE YOUR SHARES IN PERSON.
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 24, 1997
GENERAL INFORMATION
This Proxy Statement and accompanying proxy are being
furnished in connection with the solicitation of proxies by
the Board of Directors (the Board) of Caretenders Health
Corp., a Delaware corporation (the Company), to be voted
at the Annual Meeting of Stockholders (the Annual Meeting)
and any adjournments thereof. The Annual Meeting will be
held in Terrace Room Three of the Holiday Inn, 1325
Hurstbourne Lane, Louisville, Kentucky 40222, on Monday,
November 24, 1997, at 10:00 a.m. local time for the purposes
set forth in this Proxy Statement and the accompanying
Notice of Annual Meeting. This Proxy Statement and
accompanying proxy are first being mailed to stockholders on
or about October 13, 1997.
A stockholder signing and returning a proxy has the power to
revoke it at any time before the shares subject to it are
voted by (i) notifying the Secretary of the Company in
writing of such revocation, (ii) filing a duly executed
proxy bearing a later date or (iii) attending the Annual
Meeting and voting in person. If the proxy is properly
signed and returned to the Company and not revoked, it will
be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the proxy
will be voted FOR the nominees for director named in the
Proxy Statement, FOR each of the proposals described herein
and in the discretion of proxy holders on such other
business as may properly come before the Annual Meeting.
The original solicitation of proxies by mail may be
supplemented by telephone and other means of communication
and through personal solicitation by officers, directors and
other employees of the Company, at no compensation. Proxy
materials will also be distributed through brokers,
custodians and other like parties to the beneficial owners
of the Company's common stock, par value $.10 per share (the
_Common Stock_), and the Company will reimburse such parties
for their reasonable out-of-pocket and clerical expenses
incurred in connection therewith.
RECORD DATE AND VOTING SECURITIES
The Board has fixed the record date (the Record Date) for
the Annual Meeting as the close of business on October 6,
1997. At the Record Date, there were outstanding 3,120,413
shares of Common Stock (each of which is entitled to one
vote per share on all matters to be considered at the Annual
Meeting). No shares of the Company's Series A Convertible
Preferred Stock (Preferred Stock) were outstanding on the
Record Date. A majority of the total number of shares of
outstanding Common Stock present in person or by proxy is
required to constitute a quorum to transact business at the
Annual Meeting. Abstentions and withheld votes will be
counted as present for purposes of determining whether a
quorum exists, but as not voted for purposes of determining
the approval of any matter submitted to the stockholders for
a vote. Because Delaware law treats only those shares voted
for a matter as affirmative votes, abstentions and
withheld votes will have the same effect as negative votes
or votes against a particular matter. If a broker
indicates that it does not have discretionary authority as
to certain shares to vote on a particular matter, such
shares will not be considered as present and entitled to
vote with respect to that matter.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
Common Stock
The following table sets forth as of October 1, 1997,
certain information with respect to the beneficial ownership
of the Company's Common Stock of (i) each executive officer
of the Company named in the Summary Compensation Table set
forth herein under Executive Compensation, (ii) each
director or nominee for director of the Company, (iii) all
directors and executive officers as a group and (iv) each
person known to the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock.
Shares of Common Stock
Beneficially Owned (1)(2)
Amount and Percent
Directors and Executive Officers Nature of of
Beneficial Class
Ownership
William B. Yarmuth 337,323 (3) 10.21%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 337,323 (4) 10.21%
C. Steven Guenthner 40,487 (5) 1.29%
Steven B. Bing 11,340 (6) *
Patrick B. McGinnis 16,000 (7) *
Donald G. McClinton 15,000 (7) *
Tyree G. Wilburn 10,000 (8) *
Jonathan D. Goldberg 6,500 (9) *
Wayne T. Smith 24,000 (9) *
Directors and Executive Officers as 460,650 10) 13.65%
a Group (9 persons)
Additional Five Percent Beneficial
Owners
HEALTHSOUTH Rehabilitation 1,015,101 (11) 29.98%
Corporation
Two Perimeter Park South
Birmingham, AL 35243
Heartland Fund Advisors 493,700 15.82%
790 North Milwaukee St.
Milwaukee, WI 53202
Robert N. Yarmuth 157,723 5.05%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
* Represents less than 1% of class.
(1) Based upon information furnished to the Company by the
named persons, and information contained in filings with
the Securities and Exchange Commission (the
Commission). Under the rules of the Commission, a
person is deemed to beneficially own shares over which
the person has or shares voting or investment power or
has the right to acquire beneficial ownership within 60
days. Unless otherwise indicated, the named person has
the sole voting and investment power with respect to the
number of shares of Common Stock set forth opposite such
person's name.
(2) Assumes inclusion of the shares of Common Stock issuable
upon exercise of outstanding redeemable warrants;
assumes conversion of series A Convertible Preferred
Stock into Common Stock.
(3) Includes 8,886 shares as to which Mr. Yarmuth shares
voting and investment powers pursuant to a family trust
and an option for 129,890 shares vested and exercisable,
and 53,550 exercisable options owned by Mrs. Yarmuth in
addition to 12,927 shares owned directly by Mrs.
Yarmuth.
(4) Includes the same ownership components as stated for Mr.
Yarmuth.
(5) Includes 30,050 shares subject to currently exercisable
options.
(6) Includes 11,000 shares subject to currently exercisable
options.
(7) Includes 10,000 shares subject to currently exercisable
options.
(8) Includes 5,000 shares subject to currently exercisable
options.
(9) Includes 2,500 shares subject to currently exercisable
options.
(10) Includes currently exercisable options held by all
directors and executive officers as a group to purchase
254,490 shares of Common Stock.
(11) Includes currently exercisable warrants for the
purchase of 200,000 shares of Common Stock. In
addition, HEALTHSOUTH Rehabilitation Corporation
(HEALTHSOUTH) owns warrants for an additional 66,600
shares of Preferred Stock.
Preferred Stock
The Company has no shares of Preferred Stock outstanding.
HEALTHSOUTH holds currently exercisable warrants to purchase
66,600 shares of Preferred Stock. See _Security Ownership
of Principal Holders and Management -- Relationship with
HEALTHSOUTH Rehabilitation Corporation. Each share of
Preferred Stock is convertible into one share of Common
Stock and entitled to one vote on all matters submitted to
the holders of Common Stock. The warrants may be
transferred by HEALTHSOUTH only to its affiliates.
Relationship with HEALTHSOUTH Rehabilitation Corporation
The Company has an agreement with HEALTHSOUTH under which
HEALTHSOUTH purchases certain durable medical equipment
and prosthetic and orthotic appliances (to fill
HEALTHSOUTH's normal business requirements of such items)
from the Company. During the years ended March 31, 1997,
1996 and 1995, the Company realized sales of $15,000,
$84,000 and $391,000 to HEALTHSOUTH, respectively, at terms
the Company normally offers its customers. The
outstanding receivables from HEALTHSOUTH were $7,965 and
$17,000 as of March 31, 1997 and 1996, respectively.
ITEM 1
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors are to be elected to
serve until the next annual meeting of stockholders. The
persons named in the accompanying proxy have advised the
Company that they intend to vote the shares covered by the
proxies FOR the election of the nominees named below.
Proxies cannot be voted for a greater number of persons than
are named. Although it is not anticipated that any of the
nominees will decline or be unable to serve, if that should
occur, the proxy holders may, in their discretion, vote for
substitute nominees. Directors are elected by a plurality
of the votes cast.
Nominees for Election as Directors
Set forth below is a list of Board members who will stand
for re-election at the Annual Meeting, together with their
ages, all Company positions and offices currently held by
them and the year in which each person joined the Board of
Directors.
Name Age Position or Office Director Since
Steven B. Bing 50 Director 1992
Donald G. 64 Director 1994
Patrick B. 50 Director 1994
Tyree G. 45 Director 1996
Jonathan D. 46 Director 1997
Wayne T. Smith 51 Director 1997
William B. Yarmuth. Mr. Yarmuth has been a director of the
Company since 1991, when the Company acquired National
Health Industries (National), where Mr. Yarmuth was
Chairman, President and Chief Executive Officer. After the
acquisition, Mr. Yarmuth became the President and Chief
Operating Officer of the Company. Mr. Yarmuth became
Chairman and CEO in 1992. He was Chairman of the Board,
President and Chief Executive Officer of National from 1981
to 1991.
Steven B. Bing. Mr. Bing was elected a director in January
1992. Mr. Bing is a vice president of R. Gene Smith, Inc.,
a private investment company located in Louisville,
Kentucky. From 1989 to March 1992, Mr. Bing was President
of ICH Corporation, an insurance holding company. From 1984
to 1989, he served as Senior Vice President of ICH
Corporation. He is also a trustee of the University of
Louisville and a director of various closely-held business
entities.
Donald G. McClinton. Mr. McClinton was elected a director
in October 1994. Mr. McClinton is President and part owner
of Skylight Thoroughbred Training Center, Inc., a
thoroughbred course training center. He is also a director
of Mid-America Bancorp and Jewish Hospital Health Systems.
From 1986 to 1994, Mr. McClinton was co-chairman of
Interlock Industries, a privately held conglomerate in the
metals and transportation industries.
Patrick B. McGinnis. Mr. McGinnis was elected a director in
October 1994. Mr. McGinnis is the co-founder of Healthcare
Recoveries, Inc. and serves as its Chairman and Chief
Executive Officer. Healthcare Recoveries, Inc. is a
provider of subrogation and other claims recovery services
to the health care industry. From 1979 to 1988, Mr.
McGinnis was Vice President-Finance and Planning for Humana
Inc.
Tyree G. Wilburn. Mr. Wilburn was elected a director in
January 1996. Mr. Wilburn is a private investor and a
director of Health Directions, Inc. From 1992 to 1996, Mr.
Wilburn was Chief Development Officer of Community Health
Systems, Inc., and most recently, Executive Vice President
and Chief Financial and Development Officer. From 1974 to
1992, Mr. Wilburn was with Humana Inc. where he held senior
and executive positions in mergers and acquisitions,
finance, planning, hospital operations, audit and investor
relations.
Jonathan D. Goldberg. Mr. Goldberg was elected a director
in February 1997. Mr. Goldberg is the managing partner of
the law firm of Goldberg and Simpson in Louisville, Kentucky
and has served in that capacity for the last five years.
Wayne T. Smith. Mr. Smith was elected a director in March
1997. Mr. Smith is President and Chief Executive Officer of
Community Health Systems, Inc. Mr. Smith was President and
Chief Operating Officer of Humana Inc. from 1993 to 1996 and
served with Humana Inc. from 1973 to 1993 in various
capacities, including numerous positions as vice president
and divisional president.
Meetings of the Board of Directors
The Board met on five occasions during the 1997 fiscal year.
Each incumbent director attended at least 75% of the
aggregate of the meetings of the Board and its committees on
which such director served during his period of service,
except Mr. McGinnis who attended 60% of such meetings.
Committees of the Board of Directors
The Board of Directors has an Audit Committee and a
Compensation Committee. The Board does not have an
executive committee or a nominating committee; executive
committee and nominating functions are performed by the
entire Board.
The functions of the Audit Committee include reviewing the
scope of the audit, reviewing the corporate accounting
practices and policies with the independent auditors,
reviewing with the independent auditors their final report,
reviewing with independent auditors overall accounting and
financial controls and consulting with the independent
auditors. The members of the Audit Committee are the six
outside members of the Company's Board of Directors, Messrs.
Bing, McClinton, McGinnis and Wilburn and Messrs. Goldberg
and Smith who joined the Audit Committee upon becoming
directors of the Company in February and March 1997,
respectively. The Audit Committee met once during the 1997
fiscal year.
The principal duties of the Compensation Committee are to
review the compensation of directors and officers of the
Company and to prepare recommendations and periodic reports
to the Board concerning such matters. The Compensation
Committee also administers the Company's employee stock
option plans. The members of the Compensation Committee are
Messrs. Bing, McClinton, McGinnis and Wilburn and Messrs.
Goldberg and Smith who joined the Compensation Committee
upon becoming directors of the Company. The Compensation
Committee met twice during the 1997 fiscal year.
Compensation of Directors
Directors who are not also employees of the Company are
entitled to compensation at a rate of $1,250 for each Board
of Directors meeting attended and $250 for each committee
meeting attended that is scheduled independently. In
addition, non-employee directors are eligible to receive
stock options under the Caretenders Health Corp. 1993 Stock
Option Plan for Non-Employee Directors (the Directors'
Plan) adopted by the Board on February 17, 1993, and
subsequently approved by stockholders. Pursuant to the
terms of the Directors' Plan, Mr. Bing was granted options
to purchase 10,000 shares of the Company's Common Stock at
$9.69 and 2,000 shares of the Company's Common Stock at
$7.13; Messrs. McGinnis and McClinton were each granted
options to purchase 10,000 shares of the Company's Common
Stock at $8.13 per share; Mr. Wilburn was granted options to
purchase 10,000 shares of the Company's Common Stock at
$7.88 per share; and Messrs. Goldberg and Smith were each
granted options to purchase 10,000 shares of the Company's
Common Stock at $6.00 per share and $6.38 per share,
respectively. The Directors' options vest 25% the day
following six months after the date of grant and 25% on each
of the first, second, and third anniversary dates of the
grant.
William Yarmuth Employment Agreement
On January 1, 1996, the Company entered into a new
employment agreement with William B. Yarmuth, its Chairman
of the Board, President and Chief Executive Officer. The
initial term of the agreement is three years with subsequent
automatic one-year renewals. The agreement provides that
Mr. Yarmuth will earn an annual base salary of $190,000 and
be eligible for a performance based cash incentive of up to
35% of annual base salary. The agreement includes a
covenant not to compete for a period of two years and
potential termination payments to Mr. Yarmuth of two times
his annual salary.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class
of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of stock
ownership and reports of changes in stock ownership and to
provide the Company with copies of all such filed forms.
Based solely on its review of such copies or written
representations from reporting persons, the Company believes
that all reports were filed on a timely basis during fiscal
1997.
Recommendation
Assuming the presence of a quorum, directors shall be
elected by a plurality of the votes cast at the Annual
Meeting by holders of Common Stock voting for the election
of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE ELECTION OF EACH OF THE SEVEN NOMINEES FOR
DIRECTOR OF THE COMPANY.
EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and
long-term compensation paid during the last three fiscal
years to the Chief Executive Officer and the most highly
compensated executive officers of the Company during the
1997 fiscal year whose combined salary and bonus exceeded
$100,000. These amounts do not include payments made to the
named executive officers in the form of automobile
allowances and certain other benefits, the aggregate amounts
of which, in the case of each named executive officer, did
not exceed 10% of the total annual salary and bonus reported
for such officer.
Summary Compensation Table
---------------------------
Long-Term
Compensation
--------------
Securities
Annual Underlying
---------------- Options
Name and Principal Year Salary Bonus (No. of Shares)
--------------------- ------- --------- ---------- ----------------
William B. Yarmuth 1997 $190,000 - -
Chairman of the Board, 1996 229,413 $126,500(1) 50,000
President and Chief 1995 230,577 81,000 -
Executive Officer
Mary A. Yarmuth 1997 126,058 - -
Senior Vice President 1996 125,000 31,250 15,000
- Operations 1995 111,154 25,000 -
C. Steven Guenthner 1997 126,058 - -
Senior Vice President, 1996 125,000 31,250 15,000
Secretary/Treasurer 1995 111,154 25,000 -
and Chief Financial
Officer
(1) On January 1, 1996, Mr. Yarmuth entered into a new
employment agreement with the Company. Of the bonus
amount shown, $60,000 was paid in connection with Mr.
Yarmuth entering into the new agreement and making
certain concessions in compensation and other
benefits as compared to his previous agreement. See
William Yarmuth Employment Agreement for more
information.
OPTION GRANTS IN FISCAL 1997
No stock options or stock appreciation rights were awarded
to the named executive officers during the 1997 fiscal year.
OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR-END VALUES
None of the executive officers named in the Summary
Compensation Table exercised stock options during the 1997
fiscal year. Set forth below is information with respect to
the number and value of unexercised stock options held by
the named executive officers at the end of the 1997 fiscal
year.
Options Held at Value of Unexercised
Shares 1997 Fiscal Year-End In-the-Money Options at
Acquired Number of Unexercised 1997 Fiscal Year-End (1)
on Value ------------------------- -------------------------
Name Excercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------ --------- -------- ----------- ------------- ----------- -------------
William B. Yarmuth - - 122,280 27,720 - -
Mary A. Yarmuth - - 48,600 9,900 $71,760 -
C. Steven Guenthner - - 25,100 9,900 - -
(1) These amounts represent the market value less the
exercise price. The market value of the Common Stock was
$5.63 based on the closing bid price per share at March
31, 1997, on the NASDAQ National Market System.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies
The Compensation Committee of the Board of Directors is
comprised of Messrs. Bing, McClinton, McGinnis, Wilburn,
Goldberg and Smith, each a non-employee director of the
Company. The Compensation Committee is responsible for
advising the Board of Directors on matters relating to the
compensation of the Company's executive officers and
administering the Company's stock option plans. Set forth
below is a report submitted by the Compensation Committee
describing its compensation policies and the committee's
decisions relating to compensation of executive officers
during the 1997 fiscal year.
The Compensation Committee's policies concerning the
compensation of the Company's executive officers are
summarized as follows:
_ Compensation awarded by the Company should be effective
in attracting, motivating and retaining key executives;
_ Executive officers of the Company should be compensated
at a level which is comparable to other executives with
similar skills and qualifications; and
_ The Company's compensation programs should give executive
officers a financial interest in the Company similar to
the interests of the Company's stockholders.
The Company's executive officers are compensated through a
combination of salary, annual bonuses (when appropriate) and
grants of stock options under the Company's option plans.
The annual salaries of the Company's executives are reviewed
from time to time by the Compensation Committee. The
Compensation Committee recommends to the Board of Directors
that adjustments be made where necessary in order for the
annual salaries of the Company's executives to be
competitive with the salaries in the health care field. To
establish such executive salaries, the Compensation
Committee compares the Company's salaries with those of
other home health care companies and public companies with
similar market capitalizations as selected by the
Compensation Committee. Officers of the Company are
eligible for performance based cash incentives based on the
Company's achievement of annual goals and objectives
established by the Compensation Committee. For fiscal 1997
the goals and objectives included meeting earnings targets
and accomplishing development and expansion objectives.
Although earnings objectives were met, development and
expansion objectives were not met, and, accordingly, no
bonuses were paid for 1997.
The Compensation Committee periodically grants stock options
under the Company's option plans in order to provide
executive officers and other employees with an additional
incentive to strive for the success of the Company's
business so as to increase the price of the Company's Common
Stock. The Compensation Committee believes that stock
options are a valuable tool in encouraging executive
officers to align their interests with the interests of the
stockholders and to manage the Company for the long term.
Compensation of the Chief Executive Officer
William B. Yarmuth, the Chairman, President and Chief
Executive Officer of the Company, is eligible to participate
in the same executive compensation plans available to the
Company's other executive officers. Mr. Yarmuth's salary of
$190,000 for the 1997 fiscal year was determined pursuant to
his employment agreement. Mr. Yarmuth is eligible for a
performance based cash incentive of up to 35% of annual base
salary. See discussion regarding incentive compensation
under Compensation Policies above.
OBRA Deductibility Limitation
Under the Omnibus Budget Reconciliation Act of 1993
(OBRA), subject to certain exceptions and transition
provisions, the allowable deduction for compensation paid or
accrued with respect to the chief executive officer and each
of the four most highly compensated executive officers of a
publicly held corporation, is limited to $1 million per
year, per executive officer. The Company has determined not
to take any actions at this time with respect to its
compensation plans which might be necessary to exempt
compensation under such plans from the OBRA deductibility
limitation.
THE COMPENSATION COMMITTEE:
Steven B. Bing
Donald G. McClinton
Patrick B. McGinnis
Tyree G. Wilburn
Jonathan D. Goldberg
Wayne T. Smith
COMPARISON OF FIVEYEAR CUMULATIVE STOCKHOLDER RETURN
The graph that follows compares the cumulative return
experienced by holders of the Company's Common Stock during
the last five fiscal years to the returns of the CRP Index
for NASDAQ stock market (U.S. Companies) and the returns of
a peer group index comprised of other publicly-traded
companies within the home health care industry. The graph
assumes the investment of $100 on March 31, 1992 in the
Company's Common Stock and each of the indices, and the
reinvestment of all dividends paid during the period of the
securities comprising the indices.
[Graph filed via hard copy]
Fiscal Year Ended March 31,
----------------------------------------
1992 1993 1994 1995 1996 1997
------- ------- ------ ------ ------ ------
Caretenders Health Corp $100.00 $69.60 $60.90 $45.20 $51.30 $39.10
CRP Index for Nasdaq Stock
Market (U.S. Companies) 100.00 115.00 124.10 138.00 187.40 208.30
Peer Group Index (1) 100.00 61.40 35.80 25.00 27.90 16.50
_______________________
(1) In addition to the Company, the peer group includes the
following home health care companies: Hospital Staffing
Services, Inc.; In Home Health, Inc.; and U.S. HomeCare
Corporation.
ITEM 2
PROPOSAL TO ADOPT NON-EMPLOYEE
DIRECTORS DEFERRED COMPENSATION PLAN
On October 1, 1997, the Board of Directors approved the
Caretenders Health Corp. Non-Employee Directors Deferred
Compensation Plan (the Plan) and directed that the Plan be
presented to stockholders for their consideration at the
Annual Meeting. The Plan permits a non-employee director of
the Company (Participant) to defer in stock or cash the
receipt of fees which would otherwise be paid to the
director for services on the Board and its committees. The
purpose of the Plan is, among other goals, to provide an
incentive to the Company's non-employee directors to
continue to serve the Company and to provide flexibility to
the Company in attracting and retaining directors. The
Company currently has six non-employee directors who are
eligible to participate in the Plan.
The Plan reserves 100,000 shares of the Company's
Common Stock for issuance in connection with any stock
deferrals under the Plan. The full text of the Plan is
included as Appendix A to the Proxy Statement, and the
following description of the material terms of the Plan is
qualified in its entirety by reference to the full text of
the Plan.
The Plan will be administered by the Board of
Directors, the Compensation Committee of the Board, or by
any other committee appointed by the Board consisting of two
or more non-employee directors of the Company. An election
to participate in the Plan made by a non-employee director
will be effective with respect to amounts which would
otherwise be paid to him or her beginning on or after the
first day of the calendar year following the making of the
election. The Plan requires Participants to defer 100% of
their fees if they make a deferral election. Currently,
non-employee directors receive a $1,250 fee for each Board
meeting they personally attend and $250 for each committee
meeting attended that is scheduled independently.
Participants may elect to have the deferred amounts
deemed invested 100% in shares of the Company's Common Stock
(a Share Election) or to accumulate and be deemed to earn
interest (a Cash Election). Participants may also elect
to make a Share Election with respect to 50% of their fees
and a Cash Election with respect to 50% of their fees. No
Share Election will be effective until six months after the
effective date of the Share Election, with the result that
during such six-month period, the Participant will be deemed
to have made a Cash Election. Once an election has been
made, it will remain in effect with respect to all future
amounts which would otherwise be paid to the Participant as
a director until changed by the filing of a new election in
accordance with the terms of the Plan.
An account will be established for each Participant
(Participant Account) and deferred compensation will be
credited to the director's Participant Account as of the
date such compensation would otherwise be payable. If the
Participant makes a Cash Election, the amounts so deferred
in such Participant's Account (Deferred Cash Account) will
be deemed to earn interest at a floating rate equal to the
announced prime rate of National City Bank, Kentucky, Inc.,
compounded annually. To encourage directors to purchase
shares of the Company's Common Stock, if a Share Election is
made, such Participant's Account (Deferred Stock Account)
will be credited with 110% of the compensation otherwise
payable to the Participant which is covered by the Share
Election. Deferred Stock Accounts will also be credited as
of the payment date for an amount equal to the dividends, if
any, attributable to the number of shares of Common Stock
then held in the Deferred Stock Account. As of the end of
each quarter, the deferred amounts then in the Deferred
Stock Account will be treated as if converted into shares of
the Company's Common Stock based upon the fair market value
of the Common Stock on such date. Participant Accounts are
merely bookkeeping entries and there will be no segregation
of funds. The Participants will not have any right to
specific assets of the Company and will be merely general
creditors of the Company.
Payment of amounts in a Participant Account will be
made on the earliest to occur of (i) 60 days following the
date the Participant ceases to be a director, (ii) the date
selected by the Participant at the time of electing to
participate in the Plan or (iii) 60 days following a Change
in Control of the Company (as defined in the Plan). Payment
will be made in the form of a lump sum in cash or stock as
previously elected by the Participant. Participants may
specify different payment dates with respect to their
Deferred Stock Accounts and Deferred Cash Accounts. If
payment is made by virtue of (ii) or (iii) above, the
Participant shall no longer be permitted to participate in
the Plan.
Participants may not transfer or assign the right to
receive payments under the Plan except by will or by the
laws of descent and distribution. The Plan may be amended,
modified or terminated by the Board at any time, except
that, without the approval of the stockholders of the
Company to the extent required by Section 16 of the
Securities Exchange Act of 1934, as amended (_Exchange Act_)
and the rules promulgated thereunder, any national
securities exchange or system on which the Common Stock is
then listed or reported or a regulatory body having
jurisdiction with respect thereto, no such amendment,
modification or termination may (i) materially increase the
benefits accruing to the Participants under the Plan, (ii)
materially increase the total number of shares of Common
Stock which may be issued under the Plan or (iii) materially
modify the eligibility requirements for participation in the
Plan.
No income will be recognized by a Participant at the
time of the deferral of compensation. Upon payment to a
Participant with respect to amounts previously deferred, the
Participant will recognize ordinary income in an amount
equal to the sum of the cash and the fair market value of
the Shares received (unless the Participant is subject to
Section 16(b) of the Exchange Act with respect to the sale
of such shares and does not make a Section 83(b) election,
in which case the fair market value of the Shares on the
date any applicable Section 16(b) restrictions lapse [but
not later than six months from the date the Shares are
received] will be the amount recognized). The Company will
be entitled to a compensation deduction in an amount equal
to the income recognized by the Participant at the same time
as the Participant includes such amount in his or her
income. For purposes of the self-employment tax, deferred
amounts will be treated as self-employment income at the
time earned even though not received at that time.
The Board of Directors intends to cause the following
resolution to be presented to the stockholders for action at
the Annual Meeting:
RESOLVED, that the Caretenders Health Corp. Non-
Employee Directors Deferred Compensation Plan be, and it
hereby is, approved by the stockholders of the Company.
Approval of Item No. 2 requires the affirmative vote of
the holders of a majority of the shares of Common stock
present, in person or by proxy, and entitled to vote at the
Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR APPROVAL OF THE PLAN.
ITEM 3
RATIFICATION OF INDEPENDENT AUDITOR
The Board of Directors has appointed Arthur Andersen LLP as
its independent auditor for the fiscal year ending March 31,
1998. Representatives of Arthur Andersen are expected to be
present at the Annual Meeting where they will have an
opportunity to make a statement, if they desire to do so,
and to respond to appropriate questions.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT AUDITOR FOR THE 1998 FISCAL YEAR.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the
next annual meeting of stockholders must be received by the
Company by June 15, 1998 in order to be considered for
inclusion in the Company's proxy materials for such meeting.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal
year ended March 31, 1997 accompanies this Proxy Statement.
FORM 10-K
The Company's annual report on Form 10-K for the fiscal year
ended March 31, 1997 accompanies this Proxy Statement.
Stockholders may obtain copies of exhibits at $0.25 per page
to cover the Company's costs in furnishing such copies by
sending a written request to C. Steven Guenthner,
Caretenders Health Corp., 100 Mallard Creek Road, Suite 400,
Louisville, Kentucky 40207.
OTHER BUSINESS
The Board of Directors is not aware of any other matters to
be presented at the Annual Meeting other than those set
forth in the Notice of Annual Meeting and routine matters
incident to the conduct of the meeting. If any other
matters should properly come before the Annual Meeting or
any adjournment or postponement thereof, the persons named
in the proxy, or their substitutes, intend to vote on such
matters in accordance with their best judgment.
By Order of the Board of Directors
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 13, 1997
APPENDIX A
CARETENDERS HEALTH CORP.
NON-EMPLOYEE DIRECTORS DEFERRED
COMPENSATION PLAN
I. ARTICLE
Purposes
A. Purposes. The purposes of this Non-Employee Directors
Deferred Compensation Plan (Plan) of Caretenders Health
Corp., a Delaware corporation (the Company), are to
encourage the Company's non-employee directors to invest in
the future of the Company through ownership of an interest
in the Company, to provide an incentive to such directors to
continue to serve the Company and to provide flexibility to
the Company in attracting and retaining directors.
II. ARTICLE
Eligibility and Participation
A. Eligibility. Any director of the Company who is not an
employee of the Company or a subsidiary of the Company
(Director) is eligible to participate in the Plan.
B. Participation. A Director shall become a participant
in the Plan (Participant) by filing an election form
prescribed by the Committee (as hereinafter defined)
(Election Form) in accordance with the provisions of
Section . A Participant shall remain a Participant until
such time as the Participant has received all payments to
which the Participant is entitled under the terms of the
Plan.
II. ARTICLE
Shares Subject to Plan
A. Number of Shares. Subject to adjustment as provided in
Section , the number of shares of the Company's common
stock, par value $0.10 per share (Common Stock), reserved
for issuance under the Plan is 100,000 shares. Any Common
Stock issued under the Plan may consist, in whole or in
part, of authorized and unissued shares or treasury shares.
B. Adjustments. In the event of a merger, reorganization,
consolidation, recapitalization, reclassification, split-up,
spin-off, separation, liquidation, stock dividend, stock
split, reverse stock split, share combination, share
exchange or other change in the corporate structure of the
Company affecting the Common Stock, the Committee shall
substitute or adjust the total number and class of stock or
securities which may be issued under the Plan and which are
credited to a Participant's Deferred Stock Account as it
determines to be appropriate and equitable to prevent
dilution or enlargement of the rights of Participants.
II. ARTICLE
Administration
A. The Committee. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the
Company (Board), or by any other committee (Committee)
appointed by the Board consisting of two or more non-
employee directors of the Company.
B. Authority of the Committee. The Committee shall have
sole discretion to make all determinations which may be
necessary or advisable for the administration of the Plan.
To the extent permitted by law and Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended
(Exchange Act), the Committee may delegate its authority
as identified hereunder. All determinations and decisions
made by the Committee pursuant to the provisions of the
Plan, and all related orders or resolutions of the Board,
shall be final, conclusive and binding upon all persons,
including the Company, Participants and their estates and
beneficiaries.
C. Section 16 Compliance. It is the intention of the
Company that the Plan and the administration of the Plan
comply in all respects with Section 16(b) of the Exchange
Act and the rules and regulations promulgated thereunder.
If any Plan provision, or any aspect of the administration
of the Plan, is found not to be in compliance with Section
16(b) of the Exchange Act, the provision or administration
shall be deemed null and void, and in all events the Plan
shall be construed in favor of its meeting the requirements
of Rule 16b-3 promulgated under the Exchange Act.
II. ARTICLE
Deferral Election
A. Making of Election.
1. Each Director may elect in writing, in the manner and
on the Election Form, to defer payment of all, but not less
than all, of the fees which would otherwise be paid to such
Director by the Company for services on the Board and
committees thereof. An election shall be effective with
respect to amounts which would otherwise be paid to the
Participant beginning on or after the first day of the
calendar year following the making of the election. Once an
election has been made, it shall remain in effect with
respect to all future amounts which would otherwise be paid
to the Participant as a Director until the beginning of the
calendar year following the filing of a new election.
2. At the time of making any deferral election or change
in an existing election, the Participant shall further
elect, in accordance with procedures adopted by the
Committee, (i) to have either 100% or 50% of the amount of
such deferred fees be deemed invested in Common Stock
(Share Election), or (ii) to have either 100%, if no Share
Election is chosen, or 50%, if a 50% Share Election is
chosen, of such deferred fees deemed invested with interest
(Cash Election); provided, however, that in no event shall
a Share Election be effective until six months after the
effective date of the Share Election, with the result that
during such six-month period, the Participant shall be
deemed to have made a Cash Election.
B. Participant Account. An account shall be established
for each Participant (Participant Account). Deferred
compensation will be credited to the Participant's
Participant Account as of the date such compensation would
otherwise be payable to the Participant. A Participant
Account shall include a Deferred Cash Account, if a Cash
Election has been made, and a Deferred Stock Account, if a
Share Election has been made.
C. Deferred Cash Account. Each Deferred Cash Account
shall be credited with the amounts deferred on behalf of a
Participant plus annual interest thereon as provided in
Section .
D. Deferred Stock Account. Each Deferred Stock Account
shall be credited with 110% of the amounts deferred to the
Deferred Stock Account on behalf of a Participant. Deferred
Stock Accounts shall also be credited as of the payment date
for dividends on Common Stock in an amount equal to the
dividends attributable to the number of shares of Common
Stock credited to the Participant's Deferred Stock Account
as of the record date set by the Board for the payment of
dividends (the amounts referred to in the first two
sentences of this Section are hereinafter referred to as
the Cash Credits). As of the last day of March, June,
September and December of each year, there shall be credited
to a Participant's Deferred Stock Account a number of shares
of Common Stock equal to that whole number obtained by
dividing (i) the amount of Cash Credits in the Deferred
Stock Account as of such date, by (ii) the fair market value
of the Common Stock (determined as provided in Section ) on
such date. Any amount of the Deferred Stock Account in
excess of the number of shares of Common Stock credited to
the Deferred Stock Account shall be treated as a Cash Credit
and held in the Deferred Stock Account until the end of the
following quarterly crediting date.
II. ARTICLE
Fair Market Value
A. Fair Market Value. For purposes of this Plan, the fair
market value of the Common Stock on any date shall be (i) if
the Common Stock is listed on a national or regional
exchange, or on the NASDAQ National Market System or a
comparable market, the closing price of the Common Stock on
such date, or (ii) if (i) above does not apply, the value
determined by the Committee.
II. ARTICLE
Interest
A. Interest on Deferred Cash Account. Interest will be
credited to each Deferred Cash Account at the announced
prime rate of National City Bank, Kentucky, Inc., as the
same shall exist from time to time, changing with each
change in such announced prime rate. This assumed interest
shall be compounded annually and treated as earned from the
date deferred compensation is credited to the Deferred Cash
Account to the date of withdrawal.
II. ARTICLE
Payment of Deferred Amounts
A. Limitation Payment on of Deferred Amounts. No payment
may be made from any Participant Account except as provided
in this Article .
B. Time for Payment of Deferred Amounts.
1. Payment of the amount in a Participant Account shall be
made upon the earlier to occur of (i) 60 days following the
date the Participant ceases to be a Director, (ii) the date
selected by the Participant at the time of making a Cash
Election or Share Election (which date may be different for
the Cash Election and the Share Election) or (iii) 60 days
following a Change in Control (as defined in Section ).
Payment shall be made in the form of a lump sum, with
payment from a Deferred Cash Account made in cash, and
payment from a Deferred Stock Account made in Common Stock
(except for any Cash Credits remaining in the Participant's
Deferred Stock Account, which shall be paid in cash). If
payment is made by virtue of (ii) or (iii) above, the
Participant shall no longer be permitted to participate in
the Plan.
2. For purposes of the Plan, a Change in Control
shall occur upon (i) the acquisition by any person after the
date hereof of beneficial ownership of 50% or more of the
voting power of the Company's outstanding voting stock, (ii)
five or more of the current members of the Board ceasing to
be members of the Board unless any replacement director was
elected by a vote of either at least 75% of the remaining
directors, or of at least 75% of the shares entitled to vote
on such replacement, or (iii) approval by the stockholders
of the Company of (a) a merger or consolidation of the
Company with another corporation if the stockholders of the
Company immediately before such vote will not, as a result
of such merger or consolidation, own more than 50% of the
voting stock of the corporation resulting from such merger
or consolidation, or (b) a complete liquidation of the
Company or sale of all, or substantially all, of the assets
of the Company. Notwithstanding the foregoing, a Change in
Control shall not occur solely because 50% or more of the
voting stock of the Company is acquired by (i) a trust which
is part of an employee benefit plan maintained by the
Company or its subsidiaries, or (ii) a corporation which,
immediately following such acquisition, is owned directly or
indirectly by the stockholders of the Company in the same
proportion as their ownership of stock in the Company
immediately prior to such acquisition.
II. ARTICLE
Miscellaneous
A. Assignability. No right to receive payments hereunder
shall be transferable or assignable by a Participant except
by will or by the laws of descent and distribution.
B. Amendment or Termination. The Plan may be amended,
modified or terminated by the Board at any time or from time
to time. Notwithstanding the foregoing, without the
approval of stockholders of the Company (as may be required
by Section 16 of the Exchange Act and the rules promulgated
thereunder, any national securities exchange or system on
which the Common Stock is then listed or reported or a
regulatory body having jurisdiction with respect hereto), no
such amendment, modification or termination may (i)
materially increase the benefits accruing to Participants
under the Plan, (ii) materially increase the total number of
shares of Common Stock which may be issued under the Plan,
except as provided in Section or (iii) materially modify
the eligibility requirements for participation in the Plan.
No amendment, modification or termination shall, without the
consent of a Participant, adversely affect such
Participant's existing rights under the Plan.
C. Future Director Terms. Nothing in the Plan, nor any
action taken under the Plan, shall be construed as giving
any Participant a right to continue as a Director or require
the Company to nominate or cause the nomination of a
Participant for a future term as a Director.
D. Participant's Rights Unsecured. The right of any
Participant to receive payment of deferred amounts under the
provisions of the Plan shall be an unsecured claim against
the general assets of the Company. The maintenance of
individual Participant Accounts is for bookkeeping purposes
only. The Company is not obligated to acquire or set aside
any particular assets for the discharge of its obligations,
nor shall any Participant have any property rights in any
particular assets held by the Company, whether or not held
for the purpose of funding the Company's obligations
hereunder.
E. Governing Law. To the extent not preempted by Federal
law, this Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware without
regard to its conflict of laws rules.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400, Louisville, Kentucky 40207
PROXY--ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a stockholder of CARETENDERS HEALTH CORP., a
Delaware corporation (the "Company"), hereby appoints WILLIAM B.
YARMUTH and C. STEVEN GUENTHNER, and each of them, the true and
lawful attorneys and proxies with full power of substitution, for
and in the name, place and stead of the undersigned, to vote all of
the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held in Terrace Room Three of the
Holiday Inn, 1325 Hurstbourne Lane, Louisville, Kentucky, on
Monday, November 24, 1997, at 10:00 a.m. local time, and at any
adjournment thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS:
William B. Yarmuth, Steven B. Bing, Donald G. McClinton,
Patrick B. McGinnis, Tyree G. Wilburn, Jonathan D. Goldberg and
Wayne T. Smith.
/ / Vote FOR all nominees listed
(except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for
all nominees listed above
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.
2.
PROPOSAL TO APPROVE THE NON-EMPLOYEE DIRECTORS DEFERRED
COMPENSATION PLAN.
/ / For / / Against / / Abstain
This Proxy is continued on the reverse side. Please sign on the
reverse side and return promptly.
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as
independent auditors for the Company.
/ / For / / Against / / Abstain
This proxy, when properly executed, will be voted in accordance
with any directions hereinbefore given. IF NO ELECTION IS MADE,
THE PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3. MANAGEMENT
RECOMMENDS A VOTE FOR THE ABOVE MATTERS.
4. DISCRETIONARY AUTHORITY: To vote with discretionary authority
with respect to all other matters which may properly come before
the Annual Meeting.
Please sign exactly as name appears on
label. If shares are held by joint
tenants, all parties in the joint tenancy
must sign. When signing as attorney,
executor, administrator, trustee or
guardian, please indicate the capacity in
which signing. If a corporation, please
sign in full corporate name by president
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
__________________________________ _______________
Signature Date
__________________________________ _______________
Signature, if held jointly Date