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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / 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:
----------------------------------------------------------
[LOGO]
December 23, 1999
To Whom it May Concern:
The estimated mailing date of the proxy material is January 6, 2000.
Sincerely,
C. Steven Guenthner
[LOGO]
January 11, 2000
To Our Stockholders:
You are cordially invited to attend the 1999 Annual Meeting of
Stockholders of Caretenders Health Corp. on Monday, January 31, 2000.
The meeting will be held at the Holiday Inn, 1325 Hurstbourne Lane,
Louisville, Kentucky, at 10:30 a.m. local time.
Three matters will be voted on at this meeting. Please take the time
to read carefully each of the proposals for stockholder action
described in the accompanying proxy materials.
Whether or not you plan to attend, you can ensure that your shares are
represented at the meeting by promptly completing, signing and dating
your proxy form and returning it in the enclosed envelope. In the
event you attend the meeting you may revoke your proxy and vote your
shares in person.
Thank you for your continued support of our Company.
Sincerely,
[SIGNATURE]
William B. Yarmuth
Chairman of the Board,
President & CEO
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 31, 2000
To the Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of
Caretenders Health Corp. (the "Company"), will be held at the Holiday
Inn, 1325 Hurstbourne Lane, Louisville, Kentucky 40222, on Monday,
January 31, 2000, at 10:30 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 change the Company's name to "Almost Family, Inc."
(3) To ratify the appointment of Arthur Andersen llp as the Company's
independent auditor for the fiscal year ending March 31, 2000;
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 December 10, 1999, 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
January 11, 2000
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 JANUARY 31, 2000
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 at the Holiday Inn, 1325 Hurstbourne Lane, Louisville,
Kentucky 40222, on Monday, January 31, 2000, at 10:30 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
January 11, 2000.
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 the change in corporate
name, FOR the ratification of the appointment of the independent
auditor as 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 December 10, 1999. 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 December 15, 1999, 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 Nature of
Percent of
Beneficial Ownership
Class
Directors and Exective Officers
William B. Yarmuth 357,883 (3) 10.93%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 357,883 (4)
10.93%
C. Steven Guenthner 50,341 (5) 1.60%
Steven B. Bing 12,340 (6) *
Patrick B. McGinnis 17,500 (7) *
Donald G. McClinton 21,500 (7) *
Tyree G. Wilburn 21,000 (8) *
Jonathan D. Goldberg 11,500 (9) *
Wayne T. Smith 101,400 (9) 3.23%
T. Ric Pritchard 13,750 (10) *
Patrick T. Lyles 19,796 (10) *
Directors and Executive Officers
as a Group (11 persons) 627,010 (11) 18.52%
Additional Five Percent Beneficial Owners
-----------------------------------------
HEALTHSOUTH Rehabilitation Corporation
Two Perimeter Park South
Birmingham, AL 35243 1,015,101 (12) 32.43%
Heartland Advisors, Inc. 445,300 14.2%
790 North Milwaukee Street
Milwaukee, WI 53202
Yarmuth Family Limited Partnership 157,723 (13) 5.04%
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. Options
exercisable within 60 days of December 15, 1999 have been
included.
(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 power pursuant to a family trust and an option for
100,000 shares vested and exercisable, and 44,000 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 22,500 shares subject to currently exercisable options.
(6) Includes 12,000 shares subject to currently exercisable options.
(7) Includes 11,500 shares subject to currently exercisable options.
(8) Includes 11,000 shares subject to currently exercisable options.
(9) Includes 7,500 shares subject to currently exercisable options.
(10) Includes 13,750 shares subject to currently exercisable options.
(11) Includes currently exercisable options held by all directors and
executive officers as a group to purchase 255,000 shares of Common
Stock.
(12) 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 Series A Convertible Preferred Shares.
(13) Robert N. Yarmuth is the general partner and is the brother of
William B. Yarmuth.
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." 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.
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
- ----------------------------------------------------------------------
- -
William B. Yarmuth 47 Chairman of the Board, 1991
President and Chief
Executive Officer
Steven B. Bing 52 Director 1992
Donald G. McClinton 66 Director 1994
Patrick B. McGinnis 52 Director 1994
Tyree G. Wilburn 47 Director 1996
Jonathan D. Goldberg 48 Director 1997
Wayne T. Smith 53 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 5 occasions during the previous 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 Messrs. Goldberg and Smith who
attended 71% and Mr. McGinnis attended 43% of the 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, Goldberg,
McClinton, McGinnis, Smith and Wilburn. The Audit Committee met once
during the 1999 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, Goldberg, McClinton, McGinnis, Smith and
Wilburn. The Compensation Committee met once during the 1999 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, during 1999 Mr. Wilburn was granted options to purchase 2,000
shares of the Company's Common Stock at $2.625 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. During 1999 the terms of the
Director's options relative to a total of 68,000 shares were amended
to decrease the exercise price to $2.63 (the market value at the date
of amendment). No other terms of the options were changed.
WILLIAM YARMUTH EMPLOYMENT AGREEMENT
The Company has a year-to-year employment agreement with William B.
Yarmuth, its Chairman of the Board, President and Chief Executive
Officer. Under the terms of the agreement, Mr. Yarmuth earns an annual
base salary of $190,000 and is 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 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 1999.
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
The following table sets forth information concerning compensation
paid by the Company for services rendered in all capacities during the
last three fiscal years to the Chief Executive Officer and the most
highly compensated executive officers.
Summary Compensation Table ------------------
--------
Long-Term
Compensation
------------
Securities
Annual Compensation Underlying
------------------- Options
Name and Principals Year Salary Bonus (No. of Shares)
- ------------------- ---- ------- ----- ---------------
William B. Yarmuth 1999 $190,000 $0 100,000
Chairman of the Board, 1998 190,000 75,596 -
President and Chief 1997 190,000 $0 -
Executive Officer
Mary A. Yarmuth 1999 $130,050 $0 20,000
Senior Vice President 1998 129,854 36,904 -
Operations 1997 126,058 - -
C. Steven Guenthner 1999 $130,050 $0 20,000
Senior Vice President, 1998 129,854 36,904 -
Secretary/Treasurer and 1997 126,058 - -
Chief Financial Officer
T. Ric Pritchard 1999 $125,000 $0 15,000
Senior Vice President 1998 9,615(1) 2,733 20,000
- -Operations 1997 N/A N/A N/A
Patrick T. Lyles 1999 $120,000 $0 15,000
Senior Vice President- 1998 43,386(2) 12,330 20,000
Planning and Development 1997 N/A N/A N/A
(1) Mr. Pritchard was employed by the Company on February 16,
1998.
(2) Mr. Lyles was employed by the Company on October 6, 1997.
OPTION GRANTS IN FISCAL 1999
Mr. Yarmuth was awarded options to purchase 100,000 shares of the
Company's common stock at $2.19 per share. Mr. Guenthner and Mrs.
Yarmuth were awarded options to purchase 20,000 shares of the
Company's common stock at $2.19 per share. Mr. Pritchard and Mr.
Lyles were awarded options to purchase 15,000 shares of the Company's
common stock at $2.19 per share. No other stock options or stock
appreciation rights were awarded to the named executive officers
during the 1999 fiscal year.
OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END VALUES
None of the executive officers named in the Summary Compensation Table
exercised stock options during the 1999 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
1999 fiscal year.
Number of Unexercised Value of
Unexercised
Options Held at In-the-Money
Options
1998 Fiscal Year-End
at 1998 Fiscal Year-
End(1)
Shares ----------------------- ----------
- ---------
Acquired
On Value
Name Exercise Realized Exercisable
Unexercisable Exercisable Unexercisable
- ----------------- ------- ------- -------- ---------- -----
- ---- ----------
William B. Yarmuth - - 100,000 150,000
- - -
Mary A. Yarmuth - - 44,000 34,500
$975 -
C. Steven Guenthner - - 22,500 32,500 - -
T. Ric Pritchard - - 13,750 21,250 - -
Patrick T. Lyles - - 13,750 21,250 - -
(1) These amounts represent the market value less the exercise
price. The market value of the Common Stock was $2.00 based
on the closing bid price per share at March 31, 1999, 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, Goldberg, McClinton, McGinnis, Smith and Wilburn, 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 1999 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 1999 the goals and objectives included meeting
earnings targets and accomplishing development and expansion
objectives. Based on these goals and objectives, Mr. Yarmuth, the
Chief Executive Officer, received a bonus of $0 and the other four
executive officers named in the Summary Compensation Table received
bonuses in the aggregate amount of $0.
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. The executive officers who received options
were Mr. William B. Yarmuth, 100,000 shares on 3/5/99, Mrs. Mary A.
Yarmuth, 20,000 shares on 3/5/99, Mr. C. Steven Guenthner, 20,000
shares on 3/5/99, Mr. T. Ric Pritchard, 15,000 shares on 3/5/99, and
Mr. Patrick T. Lyles, 15,000 shares on 3/5/99.
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 1999
fiscal year was determined pursuant to his employment agreement. Mr.
Yarmuth received no bonus. See discussion regarding incentive
compensation under "Compensation Policies" above.
REPRICING OF OPTIONS
On December 14, 1998, the Compensation Committee approved the
repricing of certain employee stock options with an exercise price in
excess of the fair market value of the Company's Common Stock on that
date. The Compensation Committee was aware that many employees,
including the named executive officers, held options below market
value as a result of a substantial decrease in the Company's stock
price due, in part, to changes in regulations governing reimbursement
for services provided by the Company. The Compensation Committee
concluded that these options no longer served to motivate and retain
key employees.
The Compensation Committee determined that it was important to the
long-term success of the Company to provide a meaningful incentive to
its employees holding options. Accordingly, the Compensation
Committee approved an offer to certain option holders to exchange
options with an exercise price above the current market price on
December 14, 1998, for options with an exercise price equal to the
market price on that date. The terms of the new options also varied
from those of the existing options in the following manner:
Vesting of the replacement options will occur in 25% increments at
each of four six-month intervals until fully vested. Twenty-three
employees, including all of the named executive officers, exchanged
options to purchase an aggregate of 305,000 shares for options to
purchase the same number of shares of the Company's common stock
pursuant to the exchange offer. See "Ten-Year Option Repricings" for
details concerning the exchange of options held by the named executive
officers.
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
Jonathan D. Goldberg Donald G.
McClinton Patrick B. McGinnis Wayne
T. Smith
Tyree G. Wilburn
COMPARISON OF FIVE-YEAR 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, 1994 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.
[TO COME]
TEN-YEAR OPTION REPRICINGS
Set forth below is information with respect to repricing which
occurred during the previous fiscal year of options held by the named
executive officers.
Length of
Securities
Original
Underlying Market Price Exercise
Option Re-
Number of of Stock at Price at
maining at
Options Time of Time of New
date of
Repriced or Repricing or Repricing
Exercise Repricing
Name Date Amended Amendment or
Amendment Price or Amendment
William B. Yarmuth 2/14/98 100,000 $2.63 $8.75 $2.63
2.3
12/14/98 17,000 2.63 6.25 2.63 6.9
12/14/98 8,000 2.63 6.25 2.63 6.9
12/14/98 25,000 2.63 5.88 2.63 7.1
Mary A. Yarmuth 12/14/98 12,000 2.63 9.38 2.63 3.1
12/14/98 12,000 2.63 9.38 2.63 4.2
12/14/98 15,000 2.63 6.25 2.63 6.9
C. Steven Guenthner 12/14/98 20,000 2.63 9.69 2.63 3.8
12/14/98 15,000 2.63 6.25 2.63 6.9
T. Ric Pritchard 12/14/98 20,000 2.63 7.75 2.63 9.3
Patrick T. Lyles 12/14/98 20,000 2.63 8.50 2.63 8.9
ITEM 2
The Board of Directors has approved a change in the Company's name to
"Almost Family, Inc." Twelve of the Company's twenty-three adult day
care centers currently operate under the Almost Family trade name
while the remaining eleven centers operate under the Caretenders trade
name. The Board determined that this change was appropriate and
advisable due to recent changes in the nature of the Company's
business which have enabled it to become a single-focus adult day
health services company.
RECOMMENDATION
The affirmative vote of a majority of the Company's outstanding Common
Stock is required to approve the name change.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE AMENDMENT OF
THE FIRST ARTICLE OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO
CHANGE THE COMPANY'S NAME TO "Almost Family, Inc."
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, 2000.
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
FISCAL YEAR ENDING MARCH 31, 2000.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the next annual
meeting of stockholders must be received by the Company by September
13, 2000, in order to be considered for inclusion in the Company's
proxy materials for such meeting.
FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999 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
January 11, 2000
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 at the Holiday Inn, 1325 Hurstbourne Lane, Louisville, Kentucky,
on Monday, January 31, 2000, at 10:30 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 / / WITHHOLD AUTHORITY to
(except as marked to the contrary below) 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.
- ----------------------------------------------------------------------
- -----------
This Proxy is continued on the reverse side. Please sign on the reverse
side and return p romptly.
2. PROPOSAL TO CHANGE CORPORATE NAME TO "--------------------------."
/ / For / / Against / / Abstain
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.
3. 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