SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K / A
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________to_______________
Commission file number 1-9848
CARETENDERS HEALTH CORP.
(Exact name of registrant as specified in its charter)
Delaware 06-1153720
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 Mallard Creek Road, Suite 400, Louisville, Kentucky 40207
(Address of principal executive offices) (Zip Code)
(502) 899-5355
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Common stock, par value $.10 per share Nasdaq National Market
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
As of July 27, 1998, 3,130,413 shares of the registrant's common stock
were outstanding. The aggregate market value of Registrant's voting common
stock held by non-affiliates of the registrant as of July 27, 1998 was
approximately $12,481,652 (based on the last sale price of a share of the
common stock as of July 27, 1998 ($4.00), as reported by the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
system).
DOCUMENTS INCORPORATED BY REFERENCE
None.
ITEM 10. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
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 forms they file. 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.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid by the
Company for services rendered in all capacities during the last three fiscal
periods to the Chief Executive Officer and the most highly compensated
executive officers during fiscal year 1998.
Summary Compensation Table
----------------------------
Long-Term
Compensation
------------
Securities
Annual Compensation Underlying
---------------------- Options/
Name and Principal Year Salary Bonus (No. of
Position Shares)
- -------------------- ------ ---------- ----------- ----------------
William B. Yarmuth 1998 $190,000 $ 75,596 0
Chairman of the 1997 190,000 0 0
Board,President and 1996 229,413 126,500 (1) 50,000
Chief Executive Officer
Mary A. Yarmuth 1998 129,854 36,904 0
Senior Vice 1997 126,058 0 0
President - Service 1996 125,000 31,250 15,000
Development
C. Steven Guenthner 1998 129,854 36,904 0
Senior Vice President, 1997 126,058 0 0
Secretary/Treasurer 1996 125,000 31,250 15,000
and Chief Financial Officer
T. Ric Pritchard 1998 9,615 (2) 2,733 20,000
Senior Vice President- 1997 N/A N/A N/A
Operations 1996 N/A N/A N/A
Patrick T. Lyles 1998 43,386 (3) 12,330 20,000
Senior Vice President- 1997 N/A N/A N/A
Planning and 1996 N/A N/A N/A
Development
<FN>
(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
consideration of 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 below for
more information.
(2) Mr. Pritchard was employed by the Company on February 16, 1998
(3) Mr. Lyles was employed by the Company on October 6, 1997
Option Grants in Fiscal 1998
Mr. Pritchard was awarded options to purchase 20,000 shares of the Company's
common stock at $7.95 per share. Mr. Lyles was awarded options to purchase
20,000 shares of the Company's common stock at $8.50 per share. No other
stock options or stock appreciation rights were awarded to the named executive
officers during the 1998 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 2,000 shares of the
Company's Common Stock at $7.125 per share, and Messrs. McGinnis and McClinton
were each granted options to purchase 2,000 shares of the Company's Common
Stock at $8.125 per share.. 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. This agreement replaced Mr. Yarmuth's previous
agreement which was not scheduled to expire until 1998 Under the terms of the
new agreement, Mr. Yarmuth will earn an annual base salary of $190,000 and be
eligible for a performance based cash incentive of 35% of annual base salary.
The agreement includes a covenant not to compete for a period of two years and
potential termination payments of two times annual salary.
Upon entering into this new agreement, Mr. Yarmuth received a one-time cash
payment of $60,000 and was awarded an option to purchase 25,000 shares of the
Company's common stock pursuant to the 1987 Nonqualified Stock Option plan at
fair value at the date of grant January 1, 1996 ($5.88).
Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values
Set forth below is information with respect to unexercised stock options held
by the executive officers named in the Summary Compensation Table at March 31,
1998. None of the named executive officers exercised any stock options during
the 1998 fiscal year.
In-the-Money Options Value of Unexercised
Shares Number of Unexercised In-the-Money Options
acquired Options at Fiscal Yearend at Fiscal Yearend(1)
on Value ------------------------- ------------------------
Name exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------- --------- -------- ----------- ------------- ----------- -------------
William B. 0 0 122,280 27,720 0 0
Yarmuth
Mary A. 0 0 48,600 9,900 $71,760 0
Yarmuth
C. Steven 0 0 25,100 9,900 0 0
Guenthner
T. Ric 0 0 5,000 15,000 0 0
Pritchard
Patrick T. 0 0 5,000 15,000 0 0
Lyles
<FN>
(1) These amounts represent the market value less the exercise price. The
market value of the common stock was $7.75 based on the closing price
per share at March 31, 1998, on the NASDAQ National Market.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
Based on information filed with the Securities and Exchange Commission and the
Company's stock records, the following table sets forth the beneficial
ownership of the Common Stock as of June 30, 1998, by (I) beneficial owners of
more than five percent of the Common Stock, (ii) each director and nominee for
director, (iii) current named executive officers and (iv) all directors and
officers of the Company as a group.
Shares of Capital
Stock Beneficially Owned (1)(2)
-------------------------------------
Name and Address Amount and Nature Percentage
Directors and Executive Officers of Beneficial Ownership of Class
- ----------------------------------- ------------------------- ------------
William B. Yarmuth 343,573 (3) 10.35%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 343,573 (4) 10.35%
C. Steven Guenthner 40,651 (5) 1.29%
Steven B. Bing 11,840 (6) *
Patrick B. McGinnis 16,500 (7) *
Donald G. McClinton 15,500 (7) *
Tyree Wilburn 12,500 (8) *
Jonathan Goldberg 9,000 (9) *
Wayne Smith 31,500 (9) *
T. Ric Pritchard 5,000 (9) *
Patrick T. Lyles 6,000 (9) *
Directors and Officers
as a Group (11 Persons) 492,128 (11) 14.43%
Additional Five Percent Beneficial Owners
- -----------------------------------------
HEALTHSOUTH Rehabilitation Corporation 1,015,101 (10) 32.43%
Two Perimeter Park South
Birmingham, AL 35243
Heartland Fund Advisors 520,700 16.63%
Robert N. Yarmuth 157,723 5.04%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
* Represents less than 1% of the 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 as a family trust and an option for 136,140 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 11,500 shares subject to currently exercisable options.
(7) Includes 10,500 shares subject to currently exercisable options.
(8) Includes 7,500 shares subject to currently exercisable options.
(9) Includes 5,000 shares subject to currently exercisable options.
(10) Includes currently exercisable warrants for the purchase of 200,000
shares of Common Stock. In addition, HEALTHSOUTH owns warrants for an
additional 66,600 Series A Convertible Preferred Shares.
(11) Includes currently exercisable options held by all directors and officers
as a group to purchase 229,480 shares of Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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, 1998, 1997 and 1996, the
Company realized sales of less than $85,000 to HEALTHSOUTH at terms the
Company normally offers its customers.
SIGNATURES
Pursuant to the requirements to the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 29, 1998 Caretenders Health Corp.
(Registrant)
By:/s/ C. Steven Guenthner
-----------------------------
(Signature)
C. Steven Guenthner
Senior Vice President, Chief Financial
Officer, and Secretary/Treasurer