SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<Table>
[ ] 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
</Table>
ALMOST FAMILY, INC.
--------------------------------------------------------------------------------
(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)(1) 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:
October 19, 2001
To Our Stockholders:
You are cordially invited to attend the 2001 Annual Meeting of
Stockholders of Almost Family, Inc. on Monday, November 12, 2001. The meeting
will be held at the Holiday Inn Hurstbourne, 1325 South Hurstbourne Parkway,
Louisville, Kentucky 40222, at 9:00 a.m. local time.
Two 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. If 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,
/s/ William B. Yarmuth
William B. Yarmuth
Chairman of the Board,
President & CEO
ALMOST FAMILY, INC.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 2001
To the Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Almost
Family, Inc. (the "Company"), will be held at the Holiday Inn Hurstbourne, 1325
South Hurstbourne Parkway, Louisville, Kentucky 40222, on Monday, November 12,
2001, at 9:00 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 ratify the appointment of Arthur Andersen LLP as the Company's
independent auditor for the fiscal year ending December 31, 2001; and
(3) 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 16, 2001, are entitled to receive notice of and to vote at
the meeting.
By Order of the Board of Directors
/s/ C. Steven Guenthner
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 19, 2001
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.
IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN
PERSON.
ALMOST FAMILY, INC.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 2001
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 Almost Family, Inc., a Delaware corporation (the "Company"), to be
voted on at the Annual Meeting of Stockholders (the "Annual Meeting") and any
adjournments thereof. The Annual Meeting will be held at the Holiday Inn
Hurstbourne, 1325 South Hurstbourne Parkway, Louisville, Kentucky 40222, on
Monday, November 12, 2001, at 9:00 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 19, 2001.
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 16, 2001. At the Record Date, there
were outstanding 2,461,462 shares of Common Stock (each of which is entitled to
one vote per share on all matters to be considered at the Annual Meeting). 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. Shares of common stock represented by properly executed
proxies received before the close of voting at the annual meeting will be voted
as directed by the stockholders, unless revoked as described below. Under
Delaware law, proxies marked as abstentions are not counted as votes cast, but
will be considered present and entitled to vote to determine if a quorum exists.
In addition, shares held in street name that have been designated by brokers on
proxy cards as not voted will not be counted as votes cast, but will be
considered present and entitled to vote to determine if a quorum exists. If no
instructions are given, shares represented by executed but unmarked proxies will
be voted FOR election of the individuals nominated as directors and FOR
ratification of the selection of Arthur Andersen LLP as the
1
Company's independent auditors for the current fiscal year. If any other matter
is brought before the annual meeting, shares represented by proxies will be
voted by the proxy holders as directed by a majority of the board of directors.
A stockholder who completes and returns the proxy that accompanies this
proxy statement may revoke that proxy at any time before the closing of the
polls at the annual meeting. A stockholder may revoke a proxy by filing a
written notice of revocation with, or by delivering a duly executed proxy
bearing a later date to, the Secretary of the Company at the Company's main
office address at any time before the annual meeting. Stockholders may also
revoke proxies by delivering a duly executed proxy bearing a later date to the
inspector of election at the annual meeting before the close of voting, or by
attending the annual meeting and voting in person. The presence of a stockholder
at the annual meeting will not automatically revoke the stockholder's proxy.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth as of the Record Date 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. The
Company has no shares of Preferred Stock outstanding.
SHARES OF COMMON STOCK BENEFICIALLY OWNED (1)
---------------------------------------------
AMOUNT AND NATURE OF PERCENT OF
DIRECTORS AND EXECUTIVE OFFICERS BENEFICIAL OWNERSHIP CLASS
-------------------------------- -------------------- -----
William B. Yarmuth 530,972 (2) 19.88%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 530,972 (3) 19.88%
C. Steven Guenthner 85,841 (4) 3.41%
Steven B. Bing 13,840 (5) *
Donald G. McClinton 36,566 (6) 1.47%
Tyree G. Wilburn 23,000 (7) *
Jonathan D. Goldberg 24,856 (8) 1.00%
2
Wayne T. Smith 118,571 (9) 4.78%
W. Earl Reed, III 48,185 (10) 1.95%
Patrick T. Lyles 44,796 (11) 1.80%
Anne T. Liechty 16,228 (12) *
Directors and Executive Officers as a Group 942,855 (13) 32.83%
(11 persons)
OTHER FIVE PERCENT BENEFICIAL OWNERS
Heartland Advisors, Inc. 250,000 (14) 10.16%
William J. Nasgovitz
789 North Water Street
Milwaukee, WI 53202
David T. Russell 239,120 (15) 9.71%
2001 East Jackson Street
Bloomington, IL 61701
Yarmuth Family Limited Partnership 157,723 (16) 6.41%
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, and such
shares are deemed to be outstanding for the purpose of computing the percentage
beneficially owned by such person or group. 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) Includes 8,886 shares as to which Mr. Yarmuth shares voting and investment
power pursuant to a family trust and an option for 150,000 shares vested and
exercisable, and 59,000 exercisable options owned by Mrs. Yarmuth in addition to
32,427 shares owned directly by Mrs. Yarmuth.
(3) Includes the same ownership components as stated for Mr. Yarmuth.
(4) Includes 55,000 shares subject to currently exercisable options.
3
(5) Includes 13,500 shares subject to currently exercisable options.
(6) Includes 13,500 shares subject to currently exercisable options and 8,566
phantom shares within the Non-Employee Directors Deferred Compensation Plan.
(7) Includes 13,000 shares subject to currently exercisable options.
(8) Includes 12,500 shares subject to currently exercisable options and 8,356
phantom shares within the Non-Employee Directors Deferred Compensation Plan.
(9) Includes 12,500 shares subject to currently exercisable options and 7,946
phantom shares within the Non-Employee Directors Deferred Compensation Plan.
(10) Includes 6,500 shares subject to currently exercisable options and 1,685
phantom shares within the Non-Employee Directors Deferred Compensation Plan.
(11) Includes 33,750 shares subject to currently exercisable options.
(12) Includes 14,425 shares subject to currently exercisable options.
(13) Includes currently exercisable options held by all directors and executive
officers as a group to purchase 383,675 shares of Common Stock and 26,553
phantom shares held by Non-Employee Directors within the Non-Employee Directors
Deferred Compensation Plan.
(14) Based upon a Schedule 13G/A filed with the Commission for the year ended
December 31, 2000 and information subsequently provided to the Company,
Heartland Advisors, Inc., and William J. Nasgovitz, President and principal
shareholder of Heartland Investment Advisors, Inc., have shared voting and/or
dispositive power with respect to 250,000 shares of Common Stock.
(15) Based upon a Schedule 13D/A dated June 15, 2001, filed with the Commission
and information subsequently provided to the Company.
(16) Robert N. Yarmuth is the general partner and is the brother of William B.
Yarmuth.
4
ITEM 1
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors will be elected to serve until
the next annual meeting of stockholders. To be elected, a nominee must receive a
plurality of the votes cast in the election at the annual meeting. 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.
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 each person currently holds and the year in which each
person joined the Board of Directors.
POSITION DIRECTOR
NAME AGE OR OFFICE SINCE
---- --- --------- -----
William B. Yarmuth 49 Chairman of the Board, President 1991
and Chief Executive Officer
Steven B. Bing 54 Director 1992
Donald G. McClinton 68 Director 1994
Tyree G. Wilburn 49 Director 1996
Jonathan D. Goldberg 50 Director 1997
Wayne T. Smith 55 Director 1997
W. Earl Reed, III 50 Director 2000
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
Principal and Chief Operating Officer of Prosperitas Investment Partners, L.P.,
a Louisville, Kentucky based venture fund. From 1989 to March 1992, Mr. Bing was
President of ICH Corporation, an
5
insurance holding company. From 1984 to 1989, he served as Senior Vice President
of ICH Corporation. He is also 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 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.
Tyree G. Wilburn. Mr. Wilburn was elected a director in January 1996. Mr.
Wilburn is a private investor. 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 since 1991.
Wayne T. Smith. Mr. Smith was elected a director in March 1997. Mr. Smith is
Chairman of the Board, 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.
W. Earl Reed, III. Mr. Reed was elected a director in November 2000. Mr. Reed
has served as Chairman, President and Chief Executive Officer of Rehab Designs
of America Corporation, a private venture-capital backed orthotics and
prosthetics healthcare company, since March 1, 2000. Mr. Reed has been a partner
with The Allegro Group, a healthcare financial advisory firm which advises
public and private healthcare organizations, since September 1998. From 1987 to
1998, Mr. Reed was Chief Financial Officer and member of the board of directors
of Vencor, Inc. Rehab Designs of America Corporation filed a voluntary petition
for protection under Chapter 11 of the federal bankruptcy code in February 2001.
Vencor filed voluntary petitions for protection under Chapter 11 of the federal
bankruptcy code in September 1999 and emerged in April 2001 after successfully
completing its financial restructuring.
MEETINGS OF THE BOARD OF DIRECTORS
The Board met on seven 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.
6
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 principal duties of the Audit Committee include reviewing the scope
of the audit, 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, Reed, Smith and
Wilburn. The Audit Committee met once during the 2001 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, Reed, Smith and Wilburn. The Compensation Committee met twice during
the 2001 fiscal year.
COMPENSATION OF DIRECTORS
Directors who are not also employees of the Company are entitled to
compensation at a rate of $2,000 for each Board of Directors meeting attended
and $500 for each independently scheduled committee meeting attended. In
addition, non-employee directors are eligible to receive stock options under the
Almost Family, Inc. 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, on
November 3, 2000, Mr. Reed was granted options to purchase 10,000 shares of the
Company's Common Stock at $3.88 per share. In addition, each non-employee
director was granted options to purchase 6,000 shares of the Company's Common
Stock at $4.25 per share on February 5, 2001. 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
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 earned an annual base salary of $190,000
in fiscal 2001. This annual base salary was increased to $250,000 on May 1,
2001. In addition, Mr. Yarmuth 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.
7
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 2001.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
EACH OF THE SEVEN NOMINEES FOR DIRECTOR OF THE COMPANY.
8
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 who earned $100,000 during fiscal year March 31, 2001.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (NO. OF SHARES)
--------------------------- ---- ------ ----- -------------
William B. Yarmuth 2001 $190,000 $99,750 100,000
Chairman of the Board, 2000 $190,000 $50,000(1) 0
President and Chief Executive Officer 1999 $190,000 0 100,000
Mary A. Yarmuth 2001 $136,638 $51,736 20,000
Senior Vice President - 2000 $132,121 0 0
Service Development 1999 $130,050 0 20,000
C. Steven Guenthner 2001 $136,638 $51,736 20,000
Senior Vice President 2000 $132,121 $25,000(1) 0
Secretary/Treasurer and 1999 $130,050 0 20,000
Chief Financial Officer
Patrick T. Lyles 2001 $126,079 $31,826 10,000
Senior Vice President 2000 $121,911 $25,000(1) 0
1999 $120,000 0 15,000
-------------------------
(1) Bonuses for these individuals were granted by the Board for the successful
sale of the product operations in November 1999.
9
OPTION GRANTS IN FISCAL 2001
Set forth below is information with respect to grants of stock options
in fiscal 2001 to the executive officers named in the Summary Compensation
Table.
Potential Reliazable
Percentage of Value At Assumed
Total Options Annual Rates of Stock
Number of Granted to Price Appreciation
Shares Employees Exercise For Option Term
Underlying in Fiscal or Base Expiration ---------------
Name Options Year Price Date 5% 10%
---- ------- ---- ----- ---- --- ---
William B. Yarmuth 100,000 46.5% $4.25 2/4/2011 $267,280 $677,341
Mary A. Yarmuth 20,000 9.3% $4.25 2/4/2011 $ 53,456 $135,468
C. Steven Guenthner 20,000 9.3% $4.25 2/4/2011 $ 53,456 $135,468
Patrick T. Lyles 10,000 4.7% $4.25 2/4/2011 $ 26,728 $ 67,734
10
OPTION EXERCISES IN FISCAL 2001 AND FISCAL YEAR-END VALUES
William B. Yarmuth exercised stock options during the 2001 fiscal year
as set forth below. In addition, 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 2001 fiscal year.
Number of Securities
Underlying
Unexercised Options Value of Unexercised
At Fiscal In-The-Money At
Shares Year-End Fiscal Year-End
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable(1)
---- -------- -------- ------------- ----------------
William B. Yarmuth 100,000 $217,438 150,000 100,000 $517,938 $239,563
Mary A. Yarmuth 0 0 59,000 20,000 $205,233 $ 47,913
C. Steven Guenthner 0 0 55,000 20,000 $191,213 $ 47,913
Patrick T. Lyles 0 0 33,750 11,250 $119,153 $ 28,884
(1) These amounts represent the market value less the exercise price.
The market value of the Common Stock was $6.13 based on the closing bid price
per share at March 31, 2001, on the Nasdaq Small Cap System.
11
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICIES
The Compensation Committee of the Board of Directors is comprised of
Messrs. Bing, Goldberg, McClinton, Reed, 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 2001 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 of other executives with similar skills and
qualifications. Officers of the Company are eligible for performance based cash
incentives based on the Compensation Committee's subjective determination in
conjunction with a review of the Company's achievement of annual goals and
objectives established by the Compensation Committee. For fiscal 2001 the goals
and objectives included meeting earnings targets and increasing shareholder
value as measured by stock price performance. Based on these goals and
objectives, Mr. Yarmuth, the Chief Executive Officer, received a bonus of
$99,750 and the other executive officers named in the Summary Compensation Table
received bonuses in the aggregate amount of $135,298.
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 Compensation
Committee granted options for a total of 150,000 shares of Common Stock to the
executive officers named
12
in the Summary Compensation Table, with 100,000 of those options awarded to the
Chief Executive Officer. The Compensation Committee determined the number of
options granted to the executive officers based upon its subjective evaluation
of the performance and responsibilities of each of the officers.
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 2001 fiscal year was determined pursuant to his employment
agreement. Mr. Yarmuth received a bonus of $99,750. 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 that might be necessary to exempt compensation under such
plans from the OBRA deductibility limitation.
COMPENSATION COMMITTEE
Steven B. Bing
Jonathan D. Goldberg
Donald G. McClinton
W. Earl Reed, III
Wayne T. Smith
Tyree G. Wilburn
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of six
independent outside directors. The Committee acts under a written charter
adopted by the Board of Directors, a copy of which is attached to this Proxy
Statement as Appendix I. The Audit Committee has prepared the following report
on its activities with respect to the Company's audited financial statements for
the fiscal year ended March 31, 2001 (the "audited financial statements").
- The Audit Committee has reviewed and discussed the audited financial
statements with management;
- The Audit Committee has discussed with Arthur Andersen LLP, the
Company's independent auditors, the matters required to be discussed by
Statements on Auditing Standards No. 61 (Communication with Audit
Committees);
13
- The Audit Committee has received the written disclosures and the letter
from Arthur Andersen LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and has
discussed with Arthur Anderson LLP its independence from the Company and
its management; and
- Based on the review and discussion referred to above, and in reliance
thereon, the Audit Committee has recommended to the Board of Directors
that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2001, for
filing with the U.S. Securities and Exchange Commission.
AUDIT COMMITTEE
Steven B. Bing
Jonathan D. Goldberg
Donald G. McClinton
W. Earl Reed, III
Wayne T. Smith
Tyree G. Wilburn
2001 AUDITOR FEES
Audit Fees
The aggregate fee billed by Arthur Andersen LLP for professional
services rendered for the audit of the Company's annual financial statements for
the year ended March 31, 2001 and the reviews of the Company's financial
statements included in the Company's Forms 10-Q for the year ended March 31,
2001 was $102,000.
Financial Information Systems Design and Implementation Fees
No fees were billed by Arthur Andersen LLP for information technology
services of the type described in Rule 2-01(c)(4)(ii) of Regulation S-X during
the year ended March 31, 2001.
All Other Fees
The aggregate amount of fees billed for all other non-audit services,
including fees for tax-related services, rendered by Arthur Andersen LLP during
the year ended March 31, 2001 was $69,505.
The Audit Committee has considered whether Arthur Andersen LLP's
provision of non-audit services to the Company is compatible with the auditor's
independence.
14
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 the Nasdaq stock market (U.S. Companies), the
Russell 2000 Index, the returns of the Company's prior peer group index
comprised of other publicly-traded companies within the healthcare industry, and
the returns of a new peer group index comprised of other publicly-traded
companies within the healthcare industry. The graph assumes the investment of
$100 on March 31, 1996 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.
Fiscal Year-Ended March 31,
(Fiscal Year End. March 31) 1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----
Almost Family, Inc. 100.00 76.27 105.08 27.12 38.14 83.05
Nasdaq Stock Market 100.00 111.14 168.46 227.60 423.37 169.33
(US Companies)
Russell 2000 100.00 105.11 149.27 125.00 171.62 145.32
Prior Self-Determined Peer Group 100.00 66.65 37.33 10.76 21.77 0.00
New Self-Determined Peer Group 100.00 95.81 107.90 72.78 44.97 72.70
------------------------------------------------------------------------------
In prior years, the Company has presented performance information for the Nasdaq
Stock Market (U.S. Companies) an a self-determined peer group. In the future,
the Company will present performance information for the Russell 2000 Index and
a new self-determined peer group. The
15
Company based its decision to change its broad market index on its belief that
the Nasdaq Stock Market (U.S. Companies) is dominated by technology companies
and that the Russell 2000 Index is a more representative broad market index. In
addition to the Company, the prior peer group includes the following healthcare
companies: Hospital Staffing Services, Inc.; In Home Health, Inc.; and U.S.
HomeCare Corporation. The Prior Peer Group Index for the 1998 fiscal year
includes Hospital Staffing Services, Inc. through March 12, 1998, the last day
on which its shares were traded on the New York Stock Exchange. The Prior Peer
Group Index for the 2001 fiscal year includes In Home Health, Inc., which was
acquired by ManorCare Health Services, Inc. on December 29, 2000 and U.S.
HomeCare Corporation, which had its assets foreclosed upon by its secured
creditor on April 28, 2000. In the acquisition of In Home Health, Inc., each
shareholder of In Home received the right to receive $3.70 in cash from
ManorCare for each share of In Home common stock owned. The per share value of
In Home common stock on March 31, 1996 was $7.125. In addition to the Company,
the new peer group includes the following companies: Amedisys Inc.; Apria
Healthcare Group Inc.; Beverly Enterprises Inc.; Gentiva Health Services Inc.;
ManorCare Inc.; National Home Health Care Corporation; New York Health Care
Inc.; Res-Care, Inc.; and Sunrise Assisted Living Inc.
16
ITEM 2
RATIFICATION OF INDEPENDENT AUDITOR
The Board of Directors has appointed Arthur Andersen LLP as its
independent auditor for the fiscal year ending December 31, 2001.
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 DECEMBER 31,
2001.
STOCKHOLDER PROPOSALS
Under Rule 14a-8 promulgated under the Exchange Act, the Company
shareholders may present proposals to be included in the Company proxy statement
for consideration at the next annual meeting of its shareholders by submitting
their proposals to the Company in a timely manner. Any such proposal must comply
with Rule 14a-8.
The Company's by-laws require shareholders who intend to propose
business for consideration by shareholders at an annual meeting, other than
shareholder proposals that are included in the proxy statement, to give written
notice to the President or Secretary of the Company not less than thirty days
before the annual meeting. This notice must include a brief description of the
business, any material interest the shareholder has in such business, the name
and address of the shareholder as they appear on the Company's books and the
class and number of the Company common shares the shareholder beneficially owns.
A shareholder must submit a matter to be raised at the Company's 2002 annual
meeting and included in the proxy statement no later than June 20, 2002 and must
include a brief description of the business, any material interest the
shareholder has in such business, the name and address of the shareholder as
they appear on the Company's books and the class and number of the Company
common shares the shareholder beneficially owns.
SEC rules set forth standards for what shareholder proposals the
Company is required to include in a proxy statement for an annual meeting.
FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2001 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, Almost Family, Inc.,
100 Mallard Creek Road, Suite 400, Louisville, Kentucky 40207.
17
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
/s/ C. Steven Guenthner
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 19, 2001
18
APPENDIX I
ALMOST FAMILY, INC.
AUDIT COMMITTEE CHARTER
The Board of Directors of Almost Family, Inc. has appointed an Audit Committee
pursuant to authorization in Section 3.6 of the Company's Bylaws. The
objectives, composition, and responsibilities of the Audit Committee are as
follows:
Objectives
The primary objective of the Audit Committee is to assist the Board of Directors
in fulfilling its oversight responsibility relating to the Company's internal
controls and financial reporting practices. In addition, the Committee will
maintain open lines of communication among the Board, management, and the
Company's independent auditors on these matters.
Composition
The Committee shall consist of not fewer than three directors, none of whom
(except in extraordinary and limited circumstances), as of June 9, 2000, shall
be (nor in the previous three years shall have been) an officer or employee of
the Company or of any subsidiary or affiliated company. Each Committee member
shall be able to read and understand fundamental financial statements, or will
become able to do so within a reasonable period of time after appointment. At
least one member will have past experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities. Additional criteria, if any, for membership shall be
determined by the Board of Directors consistent with governing rules,
regulations and exchange requirements. Each year, one of the members shall be
appointed Chairman of the Committee by the full Board of Directors.
Responsibilities
- The Committee shall meet at least four times per year or more frequently
as circumstances require. The Committee may ask members of management or
others to attend the meeting and provide pertinent information as
necessary. In addition, the Committee shall meet privately with the
Company's independent auditors (who shall be ultimately accountable to
the Board of Directors and the Committee) and shall review annually the
audit plan of the Company's independent auditors.
- The Committee shall report its activities to the full Board of Directors
on a regular basis.
- The Committee shall review the effectiveness of independent auditors
through regular meetings with them and shall have the ultimate
responsibility for selection, evaluation, and replacement of independent
auditors to audit the financial statements of the Company.
19
- The Committee shall review annually and discuss with the auditors all
relevant matters and shall review significant relationships the
auditors have with the Company to determine the auditors' independence,
including non-auditing services; in that regard, the Committee shall
require the auditors to submit a formal written statement regarding
relationships and services which may affect objectivity and
independence, and shall recommend that the full Board take appropriate
action to address the auditors' independence whenever necessary.
- The Committee shall review with financial management and the
independent accountants the 10-Q prior to its filing or prior to the
release of earnings. The Chair of the Committee may represent the
entire Committee for purposes of this review.
- The Committee shall review filings within the SEC and other published
documents containing the Company's financial statements and consider
whether the information contained in these documents is consistent with
the information contained in the financial statements.
- The Committee shall review annually with management and the independent
auditors the need for and/or status of any internal audit activities to
be performed during the ensuing year, the manner in which such
activities will be carried out, and the coordination of such activities
with the independent auditors.
- The Committee shall discuss with the independent auditors and monitor
the adequacy of the Company's internal controls by reviewing audit
recommendations and management's response and actions to correct
identified deficiencies.
- The Committee shall review the Company's annual financial statements
with management and the independent auditors. The Committee shall
discuss with the independent auditors its judgment about the quality,
not just the acceptability, of significant accounting principles,
accounting changes, and underlying estimates.
- The Committee shall identify and direct special projects, hold special
meetings, or perform any other actions it believes are necessary in
order to perform its oversight function.
- The Committee shall review and reassess annually the adequacy of this
Charter.
20
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
REVOCABLE PROXY
ALMOST FAMILY, INC.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, a stockholder of ALMOST FAMILY, INC., 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 on Monday,
November 12, 2001, at 9:00 a.m. local time, and at any adjournment thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS (except as marked to the contrary below):
FOR ALL
FOR WITHHOLD EXCEPT
[ ] [ ] [ ]
WILLIAM B. YARMUTH, STEVEN B. BING, DONALD G. MCCLINTON, TYREE G. WILBURN,
JONATHAN D. GOLDBERG, WAYNE T. SMITH AND W. EARL REED, III.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR
ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
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2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as independent
auditors for the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. DISCRETIONARY AUTHORITY: To vote with discretionary authority with respect to
all other matters which may properly come before the Annual Meeting.
Please be sure to sign and date this Proxy in the box below.
--------------------
Date
--------------------------------------------------------------------------------
------ Stockholder sign above ------------ Co-holder (if any) sign above -------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH
ANY DIRECTIONS HEREINBEFORE GIVEN. UNLESS OTHERWISE SPECIFIED, THE PROXY WILL BE
VOTED FOR ELECTION OF THE INDIVIDUALS NOMINATED AS DIRECTORS AND FOR APPROVAL
OF PROPOSAL 2.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE AND FOR
PROPOSAL 2.
- DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED. -
ALMOST FAMILY, INC.
100 MALLARD CREEK ROAD, SUITE 400, LOUISVILLE, KENTUCKY 40207
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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.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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