[ LOGO ]Gentiva
Health Services
May 31, 2002
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Gentiva Health Services, Inc. to be held on Friday, June 28, 2002 at 9:30 a.m.
at the Fleet Auditorium located at 300 Broad Hollow Road, Melville, New York
11747-8943. This will be the first annual meeting of Gentiva Health Services as
a pure home health services company, following the sale of Gentiva's specialty
pharmaceutical services business to Accredo Health, Incorporated.
Details about the meeting, nominees for the Board of Directors and other
matters to be acted upon are presented in the Notice of Annual Meeting and Proxy
Statement that follow. We would appreciate your signing, dating and returning
the enclosed proxy in the envelope provided for that purpose so that your shares
may be represented and voted at the Annual Meeting.
Thank you for your continued support, and we look forward to greeting you
personally if you are able to be present.
Sincerely,
/s/ Edward A. Blechschmidt
---------------------------
Edward A. Blechschmidt
CHAIRMAN,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
GENTIVA HEALTH SERVICES, INC.
3 HUNTINGTON QUADRANGLE 2S
MELVILLE, NEW YORK 11747-8943
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 28, 2002
---------------------------
The Annual Meeting of Shareholders of Gentiva Health Services, Inc., a
Delaware corporation (the "Company"), will be held on Friday, June 28, 2002, at
9:30 a.m., New York time, at the Fleet Auditorium located at 300 Broad Hollow
Road, Melville, New York 11747-8943 for the following purposes:
1. To elect three directors, each to serve for a term of three years;
2. To consider and vote upon a proposal to ratify and approve the
appointment by the Board of Directors of PricewaterhouseCoopers LLP,
as independent accountants of the Company for the fiscal year ending
December 29, 2002; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record at the close of business on April 29, 2002 are
entitled to notice of and to vote at such meeting or any adjournments thereof.
By Order of the Board of Directors
/s/ Patricia C. Ma
-----------------------------------
Patricia K. Ma
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND
SECRETARY
Dated: May 31, 2002
Melville, New York
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND, PLEASE MARK, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY PROMPTLY. A STAMPED REPLY ENVELOPE IS ENCLOSED FOR THAT PURPOSE. IF YOU DO
ATTEND AND DECIDE TO VOTE IN PERSON, YOU MAY REVOKE YOUR PROXY.
[ LOGO ]Gentiva
Health Services
PROXY STATEMENT
The 2002 Annual Meeting of Shareholders of Gentiva Health Services, Inc.
(the "Company" or "Gentiva") will be held on Friday June 28, 2002, at 9:30 a.m.
at the Fleet Auditorium, located at 300 Broad Hollow Road, Melville, New York
11747-8943 for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. The Board of Directors is soliciting proxies to be used
at the Annual Meeting and any adjournment and is furnishing this Proxy Statement
and the accompanying proxy in connection with its solicitation. Only
shareholders of record at the close of business on April 29, 2002 are entitled
to vote at such meeting. This Proxy Statement and the accompanying proxy are
first being sent or given to shareholders on or about May 31, 2002.
A shareholder who executes and returns the accompanying proxy may revoke
it at any time before it is voted by giving notice in writing to the Secretary
of the Company, by granting a subsequent proxy or by appearing in person and
voting at the meeting. Any shareholder attending the meeting and entitled to
vote may vote in person whether or not the shareholder has previously submitted
a proxy. Where no instructions are given, proxies will be voted for the nominees
for directors set forth in this Proxy Statement and in favor of the other
proposal described herein.
At the close of business on April 29, 2002, the record date for
determining shareholders entitled to vote at the Annual Meeting, 26,085,902
shares of the Company's Common Stock ("Common Stock") were outstanding and
entitled to vote at the Annual Meeting. Each share of Common Stock is entitled
to one vote. A majority of all the shares entitled to vote at the meeting,
present in person or represented by proxy, shall constitute a quorum at the
Annual Meeting, and an inspector of election appointed for the meeting shall
determine whether a quorum is present. Proxies marked as abstentions and "broker
non-votes" (where a nominee holding shares for a beneficial owner has not
received voting instructions from the beneficial owner on a particular matter
and such nominee does not possess or choose to exercise its discretionary voting
authority) are counted in determining whether a quorum is present. Proxies
marked as abstentions will have the effect of a negative vote. "Broker
non-votes" will have no effect on the vote. Votes are counted by EquiServe Trust
Company, N.A., the Company's independent transfer agent and registrar.
The Company, whose principal executive offices are located at 3 Huntington
Quadrangle 2S, Melville, New York 11747-8943, was incorporated in Delaware in
August 1999 in contemplation of its split-off (the "Split-Off") from Olsten
Corporation ("Olsten"), which was effective on March 15, 2000.
A copy of the 2001 Annual Report to Shareholders, including a copy of the
Company's 2001 Form 10-K, as amended, is also being mailed to you herewith. The
Annual Report is not deemed part of the soliciting material for the proxy.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation provides
that the Board of Directors shall consist of three classes of directors with
overlapping three-year terms and that number of directors in each of the three
classes shall be as nearly equal as possible. The Company's Board of Directors
currently consists of eight members. Each class of directors is elected in a
different year for a term extending to the Annual Meeting to be held three years
later.
Three directors are to be elected at the 2002 Annual Meeting to serve for
terms ending at the 2005 Annual Meeting. Two of the directors in Class II,
Edward A. Blechschmidt and Raymond S. Troubh, are standing for re-election at
this year's Annual Meeting, and Ronald A. Malone is a new candidate for
election. Steven E. Grabowski, currently a director in Class II, is not standing
for re-election.
The vote of a plurality of the shares of Common Stock present or
represented and entitled to vote at the meeting is required for election as a
director. Proxies will be voted at the meeting (unless authority to do so is
withheld) for the election as directors of the three nominees. If for any reason
any of the nominees is not a candidate (which is not expected) when the election
occurs, the proxies may be voted for a substitute nominee or nominees. The Board
of Directors recommends that shareholders vote FOR the election of each of these
nominees.
INFORMATION AS TO NOMINEES FOR DIRECTORS AND CONTINUING DIRECTORS
The following information, as reported to the Company, is shown below for
each nominee for director and each continuing director: name, age and principal
occupation; period during which he or she has served as a director; position, if
any, with the Company; certain business experience; other directorships held;
and the committees of the Board of Directors on which the nominee or continuing
director serves.
NOMINEES FOR WHOM PROXIES WILL BE VOTED
CLASS II - NOMINEES FOR DIRECTORS WITH TERMS EXPIRING IN 2005
Edward A. Blechschmidt ....... Mr. Blechschmidt has served as president, chief
executive officer and chairman of the board of
directors of the Company since November 1999. He
served as the chief executive officer and a
director of Olsten Corporation from February
1999 until March 2000. He was also the president
of Olsten Corporation from October 1998 until
March 2000 and served as the chief operating
officer of Olsten Corporation from October 1998
to February 1999. From August 1996 to October
1998 he was president and chief executive
officer of Siemens Nixdorf Americas, an
information technology company. Following the
closing of the sale of the Company's specialty
pharmaceutical services business, Mr.
Blechschmidt will no longer serve as an
executive officer of the Company or as chairman
of the board of directors. Mr. Blechschmidt is
49 years old.
Ronald A. Malone ............. Mr. Malone has served as executive vice
president of the Company since March 2000 and as
President of the Company's Home Health Services
Division since January 2001. Following the
closing of the sale of the Company's specialty
pharmaceutical services business, Mr. Malone
will become the Company's new chief executive
officer, and it is anticipated that, if elected
to the board, he will serve as the
2
chairman of the board of directors. Prior to
joining the Company, he served in various
positions with Olsten Corporation including
executive vice president of Olsten and
president, Olsten Staffing Services, United
States and Canada, from January 1999 to March
2000. From 1994 to December 1998, he served
successively as Olsten's senior vice president,
southeast division; senior vice president,
operations; and executive vice president,
operations. Mr. Malone is 47 years old.
Raymond S. Troubh ............ Mr. Troubh has served as a director of the
Company and a member of the Human Resources and
Compensation Committee of the Board since
November 1999 and as a member of the Audit
Committee of the Board since May 2000. He served
as a director of Olsten Corporation from 1993
until March 2000. He has been a financial
consultant for more than five years. He is a
director of ARIAD Pharmaceuticals, Inc., Diamond
Offshore Drilling Inc., Enron Corp., General
American Investors Company, Health Net, Inc.,
Hercules Incorporated, Triarc Companies and WHX
Corporation. Mr. Troubh became a director of
Enron Corp. in November 2001. He is also a
Trustee of Petrie Stores Liquidating Trust. Mr.
Troubh is 76 years old.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THESE
NOMINEES.
DIRECTORS WHOSE TERM OF OFFICE DOES NOT EXPIRE AT THIS MEETING
CLASS III - CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2003
Stuart R. Levine ............. Mr. Levine has served as a director of the
Company and a member of the Human Resources and
Compensation Committee of the Board since
November 1999. He served as a director of Olsten
Corporation from 1995 until March 2000. Since
June 1996 he has served as the chairman and
chief executive officer of Stuart Levine and
Associates LLC, an international consulting and
training company. From September 1992 to June
1996 he was chief executive officer of Dale
Carnegie & Associates, Inc. He is the author of
the best seller, THE LEADER IN YOU. Mr. Levine
currently serves as a trustee of North Shore -
LIJ Health System, and for 15 years, until 1995,
he served as a vice chairman of North Shore
Hospital. Mr. Levine is 55 years old.
Stuart Olsten ................ Mr. Olsten has served as a director of the
Company since November 1999. He served as a
director of Olsten Corporation from 1986 until
March 2000. From February 1999 until March 2000
he was the chairman of the board of directors of
Olsten Corporation. He was vice chairman of
Olsten Corporation from August 1994 to February
1999 and was president of Olsten Corporation
from April 1990 to February 1999. Since April
2001, he has been chairman of Olsten Venture
Partners, which acquires and manages companies
in the food service industry. He is the
brother-in-law of Mr. Steven Grabowski, a
director of the Company. Mr. Olsten is 50 years
old.
3
CLASS I - CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2004
Victor F. Ganzi .............. Mr. Ganzi has served as a director of the
Company and Chairman of the Audit Committee of
the Board since November 1999. He served as a
director of Olsten Corporation from 1998 until
March 2000. He has been executive vice president
of The Hearst Corporation, a diversified
communications company with interests in
magazine, newspaper and business publishing and
television and radio stations, since March 1997,
and its chief operating officer since March
1998. From 1992 to 1997, at various times, Mr.
Ganzi served as Hearst's senior vice president,
chief financial officer and chief legal officer.
From March 1995 until October 1999 he was group
head of Hearst's Books/Business Publishing
Group. Mr. Ganzi will assume the position of
president and chief executive officer of Hearst
in June 2002. He is a director of Hearst-Argyle
Television, Inc. Mr. Ganzi is 55 years old.
Josh S. Weston ............... Mr. Weston has served as a director of the
Company and Chairman of the Human Resources and
Compensation Committee of the Board since
November 1999. He served as a director of Olsten
Corporation from 1995 until March 2000. Since
May 1998, he has been honorary chairman of
Automatic Data Processing, Inc., a provider of
computerized transaction processing, data
communication and information services. He was
chairman of Automatic Data Processing, Inc. from
1982 to April 1998 and was its chief executive
officer from 1982 to August 1996. He is a
director of Aegis Communications, Inc.,
Automatic Data Processing, Inc., Exult Inc., J.
Crew Inc. and Russ Berrie Corp. and a trustee of
Atlantic Health Systems, Inc. Mr. Weston is 73
years old.
Gail Wilensky ................ Dr. Wilensky has served as a director of the
Company and a member of the Audit Committee of
the Board since March 2000. She is currently the
John M. Olin Senior Fellow at Project HOPE, an
international health foundation, and Co-Chair of
the President's Task Force To Improve Healthcare
Delivery For Our Nation's Veterans. From
1997 - 2001, she chaired the Medicare Payment
Advisory Commission. She served as deputy
assistant to President George H. Bush for policy
development from March 1992 to January 1993 and
as administrator of the Health Care Financing
Administration from January 1990 to March 1992.
She is an elected member of the Institute of
Medicine and serves as a trustee of the Combined
Benefits Fund of the United Mineworkers of
America and the Research Triangle Institute. She
is an advisor to the Robert Wood Johnson
Foundation and The Commonwealth Fund. She is a
director of Advanced Tissue Sciences, ManorCare,
Quest Diagnostics, Syncor International and
United HealthCare. Dr. Wilensky is 58 years old.
4
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors manages or directs the management of the business
and affairs of the Company. During the past fiscal year, the Board held five
regularly scheduled and special meetings. The Board has established two standing
committees, an Audit Committee and a Human Resources and Compensation Committee,
whose principal functions are briefly described below. None of the members of
either committee is an employee or officer of the Company, and none has a
relationship which, in the opinion of the Company's Board of Directors, would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. The Board has no standing nominating committee.
During 2001, each incumbent director attended at least 75% of the aggregate
number of meetings held by the Board and all committees on which the director
served.
AUDIT COMMITTEE
The principal functions and responsibilities of the Audit Committee are:
o overseeing Gentiva's internal control structure, financial reporting
and legal and compliance program;
o reviewing and selecting an independent accounting firm, subject to
Board of Directors and shareholder ratification, to audit Gentiva's
financial statements;
o receiving and acting on reports and comments from Gentiva's
independent accountants;
o reviewing significant accounting principles employed in Gentiva's
financial reporting;
o reviewing and recommending inclusion of the annual financial
statements in Gentiva's annual report on Form 10-K;
o maintaining direct lines of communication with the Board of
Directors and Gentiva's management, internal auditing staff and
independent accountants; and
o reporting to the Board of Directors a summary of its findings and
recommendations.
Mr. Ganzi served as the Chairman, and Mr. Troubh and Dr. Wilensky served
as members, of the Audit Committee; the committee met five times in 2001.
HUMAN RESOURCES AND COMPENSATION COMMITTEE
The principal functions and responsibilities of the Human Resources and
Compensation Committee are:
o overseeing and administering Gentiva's executive compensation
policies, plans and practices;
o establishing and adjusting from time to time compensation for the
President and Chief Executive Officer, and the other executive
officers and senior management;
o authorizing the issuance of stock options in connection with the
administration of Gentiva's stock plans;
o overseeing succession planning for the Chief Executive Officer and
other key executives; and
o reporting to the Board of Directors a summary of its findings and
recommendations.
Mr. Weston served as Chairman, and Messrs. Levine and Troubh served as
members, of the Human Resources and Compensation Committee; the Committee met
five times in 2001.
5
COMPENSATION OF DIRECTORS
Each non-employee member of the Board of Directors receives an annual
retainer fee of $25,000, up to half of which may be paid in cash on a quarterly
basis with the remainder paid in shares of the Company's Common Stock.
Non-employee directors may also defer the portion of their annual retainer fee
paid in shares into a share unit account. In addition, any non-employee
directors who serve as chairperson of a committee of the Board receive $2,000
annually for acting as chairperson. Non-employee directors also receive $1,000
for each Board or committee meeting they attend ($500 if attendance is by
telephone). All directors, regardless of whether or not they are employees of
the Company, receive reimbursement for out-of-pocket expenses incurred in
connection with attending meetings of the Board of Directors. After joining the
Board, each non-employee director received stock options exercisable for up to
5,000 shares of the Company's Common Stock, with any future grants to be
determined by the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 29, 2002, the amount of
beneficial ownership of Gentiva's Common Stock by the executive officers of
Gentiva who are named in the Summary Compensation Table; each director and
nominee for director; each beneficial owner of more than five percent of
Gentiva's Common Stock; and all executive officers and directors of Gentiva as a
group. For the purpose of the table, a person or group of persons is deemed to
have "beneficial ownership" of any shares that such person or group has the
right to acquire within 60 days after such date through the exercise of options
or exchange or conversion rights, but such shares are not deemed to be
outstanding for the purpose of computing the percentage ownership of any other
person.
AMOUNT OF SHARES OF
COMMON STOCK AND PERCENT OF CLASS
NATURE OF BENEFICIAL OWNED (IF MORE
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2)(3)(4) THAN 1%)
- ------------------------- --------------------- -----------------
Edward A. Blechschmidt . . . . . . . . . . . . . . . . . . . . . . . 589,464 2.2%
John J. Collura. . . . . . . . . . . . . . . . . . . . . . . . . . . 66,703 --
E. Rodney Hornbake . . . . . . . . . . . . . . . . . . . . . . . . . 18,334 --
Ronald A. Malone . . . . . . . . . . . . . . . . . . . . . . . . . . 70,703 --
Robert J. Nixon. . . . . . . . . . . . . . . . . . . . . . . . . . . 104,947 --
Victor F. Ganzi. . . . . . . . . . . . . . . . . . . . . . . . . . . 45,257 --
Steven E. Grabowski(5) . . . . . . . . . . . . . . . . . . . . . . . 1,371,706 5.3
Stuart R. Levine . . . . . . . . . . . . . . . . . . . . . . . . . . 34,824 --
Stuart Olsten(6) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,541,927 5.9
Raymond S. Troubh(7) . . . . . . . . . . . . . . . . . . . . . . . . 136,021 --
Josh S. Weston . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,800 --
Gail Wilensky. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,562 --
Cheryl Olsten(8) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,371,706 5.3
Steinberg Priest Capital Management Company, Inc.(9) . . . . . . . . 1,671,873 6.4
12 East 49th Street
New York, NY
All executive officers and directors as a group (18 persons) . . . . 3,481,184(10) 13.0
- ----------------
(1) Unless otherwise indicated, the stockholders identified in this table have
sole voting and investment power with respect to the shares beneficially
owned by them.
(2) Includes beneficial ownership of the following number of shares that may
be acquired upon exercise of presently exercisable stock options under
Gentiva's stock option plans: Mr. Blechschmidt - 389,464; Mr. Collura -
35,000; Dr. Hornbake - 11,666; Mr. Malone - 39,070; Mr. Nixon - 71,816;
Mr. Ganzi - 5,000; Mr. Grabowski - 5,000; Mr. Levine - 5,000; Mr. Olsten -
5,000; Mr. Troubh - 5,000; Mr. Weston - 5,000; and Dr. Wilensky - 5,000.
6
(3) Includes beneficial ownership of the following number of whole shares
acquired and currently held under Gentiva's Employee Stock Purchase Plan:
Mr. Collura - 341; Mr. Malone - 3,212; and Mr. Nixon - 2,115.
(4) Includes beneficial ownership of the following number of shares
representing the equivalent of units deferred under Gentiva's Stock &
Deferred Compensation Plan for Non-Employee Directors: Mr. Ganzi - 5,124;
Mr. Grabowski 5,124; Mr. Olsten - 5,124; and Mr. Troubh - 5,124.
(5) In addition to shares referred to in footnotes (2) and (4), Mr.
Grabowski's holdings include 1,425 shares owned directly and 1,360,157
shares beneficially owned by his wife, Cheryl Olsten, as to which shares
he disclaims beneficial ownership. See footnote (8).
(6) In addition to shares referred to in footnotes (2) and (4), Mr. Olsten's
holdings include 845,813 shares owned directly and 300 shares owned by his
wife, as to which shares he disclaims beneficial ownership. Mr. Olsten has
shared voting and investment power as a trustee with respect to 630,709
shares owned by a trust for his and his sister's benefit. He has shared
voting and investment power as a trustee with respect to 11,250 shares
owned by a trust for the benefit of his son, 22,500 shares owned by two
trusts for the benefit of his niece and nephew and 20,901 shares owned by
a trust for the benefit of his descendants, as to which shares he
disclaims beneficial ownership. His holdings further include 330 shares
held in a custodial account for his daughter, as to which shares he
disclaims beneficial ownership.
(7) In addition to shares referred to in footnotes (2) and (4), Mr. Troubh's
holdings include 56,149 shares owned directly and 69,748 shares owned by a
limited partnership.
(8) Ms. Olsten owns directly 674,797 shares and has shared voting and
investment power as a trustee with respect to 630,709 shares owned by a
trust for her and her brother's benefit. Ms. Olsten has shared voting and
investment power as a trustee with respect to 22,500 shares owned by two
trusts for the benefit of her two children, 11,250 shares held by a trust
for the benefit of her nephew and 20,901 shares owned by a trust for the
benefit of her descendants, as to which shares she disclaims beneficial
ownership. Ms. Olsten's holdings also include 11,549 shares beneficially
owned by her husband, Mr. Grabowski, as to which shares she disclaims
beneficial ownership.
(9) Based on a Schedule 13G (Amendment No. 1) dated January 28, 2002 and filed
with the Securities and Exchange Commission, Steinberg Priest Capital
Management Company, Inc. held sole voting power as to 780,423 of such
shares and sole dispositive power as to 1,671,873 of such shares.
(10) Includes 2,775,487 shares owned by executive officers and directors,
685,201 shares that may be acquired upon exercise of presently exercisable
stock options and 20,496 shares representing shares deferred as share
units.
7
EXECUTIVE COMPENSATION
The Company began operating as an independent publicly traded company
following its Split-Off from Olsten on March 15, 2000. The information shown
below reflects the annual and long-term compensation, from all sources, of the
chief executive officer of the Company and the other four most highly
compensated executive officers of the Company at December 30, 2001 (the "Named
Officers") for services rendered in all capacities to the Company and its
subsidiaries during fiscal 2001 and 2000.
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- -------------
AWARDS
OTHER -----------
ANNUAL SECURITIES ALL OTHER
COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR(1) SALARY ($) BONUS ($) ($)(2) OPTIONS (#) ($)(3)
- --------------------------- ------- ---------- --------- ----------- ------------ ------------
Edward A. Blechschmidt . . . . . 2001 $600,000 $700,000 $7,707 60,000 $ 906,445
President, 2000 458,654 650,000 7,777 90,000 3,758,078
Chief Executive Officer and
Chairman of the Board(4)
John J. Collura . . . . . . . . . 2001 340,000 200,000 6,015 40,000 70,531
Executive Vice President, 2000 330,791 140,000 4,693 65,000 86,447
Chief Financial Officer
and Treasurer
Robert J. Nixon . . . . . . . . . 2001 380,000 165,000 4,115 40,000 37,679
Executive Vice President 2000 379,038 150,000 2,973 65,000 30,469
Ronald A. Malone . . . . . . . . 2001 375,000 180,000 3,099 40,000 38,551
Executive Vice President(5) 2000 284,519 200,000 3,162 65,000 26,919
E. Rodney Hornbake . . . . . . . 2001 275,000 60,000 1,433 15,000 11,472
Senior Vice President and 2000 273,791 65,000 1,461 20,000 14,155
Chief Medical Officer
- --------------
(1) Gentiva was not a reporting company prior to March 15, 2000.
(2) Gross-up of taxable portion of fringe benefit.
(3) Represents profit sharing and matching contributions by Gentiva for the
Named Officers pursuant to Gentiva's Nonqualified Retirement and Savings
Plan for fiscal 2001 and for the period March 15, 2000 through December
31, 2000. In addition, for fiscal 2000 for Messrs. Collura and Nixon
includes matching contributions made to Olsten Corporation's Nonqualified
Retirement and Savings Plan in the amounts of $5,241 and $4,565,
respectively, for the period January 3, 2000 through March 14, 2000. For
fiscal 2001, also includes for Mr. Blechschmidt a one-time payment of
$815,253 for excise taxes imposed by reason of the receipt of amounts
payable under his separation, consulting and non-competition agreement
with Olsten and its parent company, Adecco SA, and $3,939 of above-market
interest earned on deferred compensation and for Mr. Collura payment by
Gentiva of $34,891 for relocation expenses. For fiscal 2000, also includes
for Mr. Blechschmidt a one-time payment of $3,700,000 from Gentiva's now
terminated Supplemental Executive Retirement Plan and $625 of above-market
interest earned on deferred compensation and for Mr. Collura payment by
Gentiva of $58,140 for relocation expenses.
(4) For fiscal 2000, Mr. Blechschmidt's salary shown is for the period March
15, 2000 through December 31, 2000. In addition, for the period January 3,
2000 through March 14, 2000, (i) Mr. Blechschmidt was paid $236,538 in
salary and for unused vacation by Olsten Corporation for services
performed by Mr. Blechschmidt for Olsten Corporation and its subsidiaries,
including the Company, and (ii) $7,096 in matching contributions were made
to Olsten Corporation's Nonqualified Retirement and Savings Plan for Mr.
Blechschmidt. Other payments to Mr. Blechschmidt made by Olsten
Corporation and Adecco SA in connection with the Split-Off are not
reflected in the Summary Compensation Table.
(5) For fiscal 2000, Mr. Malone's salary shown is for the period March 15,
2000 through December 31, 2000.
8
STOCK OPTIONS
STOCK OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------
POTENTIAL REALIZABLE
PERCENT VALUE AT ASSUMED
NUMBER OF OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED (#)(2) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------------- ----------- -------- ---------- ---------- -----------
Edward A. Blechschmidt . . . . . . 60,000 6.5% $13.1875 1/2/11 $497,616 $1,261,014
John J. Collura. . . . . . . . . . 40,000 4.3 13.1875 1/2/11 331,744 840,676
Robert J. Nixon. . . . . . . . . . 40,000 4.3 13.1875 1/2/11 331,744 840,676
Ronald A. Malone . . . . . . . . . 40,000 4.3 13.1875 1/2/11 331,744 840,676
E. Rodney Hornbake . . . . . . . . 15,000 1.6 13.1875 1/2/11 124,404 315,254
- -------------
(1) The dollar amounts under the indicated columns are the result of
calculation at the 5% and 10% rates set forth by the Securities and
Exchange Commission and are not intended to forecast possible future
appreciation of Gentiva's stock price.
(2) The options were granted at an exercise price equal to the fair market
value of Gentiva's Common Stock on the date of the grant. The options have
a ten-year term and become exercisable over a three-year period in
increments of 331/3% per year beginning with the first anniversary of the
date of the grant. The vesting of all outstanding options of the Company
will accelerate upon the closing of the sale of the Company's specialty
pharmaceutical services business.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END ($)
ACQUIRED ON VALUE ----------------------------- --------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- --------------
Edward A. Blechschmidt. . . 417,609 $7,258,988 339,464 120,000 $6,293,544 $1,505,625
John J. Collura . . . . . . 115,148 1,964,707 0 83,332 0 1,057,999
Robert J. Nixon . . . . . . 231,016 3,369,169 36,816 83,332 462,148 1,057,999
Ronald A. Malone. . . . . . 17,598 276,947 4,070 83,332 65,629 1,057,999
E. Rodney Hornbake. . . . . 6,668 80,891 0 28,332 0 349,249
EMPLOYMENT AGREEMENTS, CHANGE IN CONTROL AGREEMENTS AND SEVERANCE AGREEMENTS
On March 14, 2000, the Company entered into an employment agreement with
Mr. Blechschmidt, its president, chief executive officer and chairman of the
board of directors. The agreement became effective on March 15, 2000 and will be
in effect for a period of three years from such date. During the term of the
agreement, Mr. Blechschmidt will receive (i) a base salary of $600,000 per year
and (ii) an annual bonus, based on the achievement of target levels of
performance, with target bonus equal to 80 percent of his base salary and the
maximum bonus equal to 120 percent of his salary. However, Mr. Blechschmidt's
bonus could not be less than 50 percent of his base salary for 2000. Mr.
Blechschmidt will also receive customary benefits, perquisites and reimbursement
for expenses.
The agreement provides that Mr. Blechschmidt's employment will terminate
upon death or disability, termination of his employment for cause, termination
of his employment without cause or termination by Mr. Blechschmidt of his
employment for good reason. In the event his employment is terminated as a
result of his death or disability, he or his estate will be entitled to receive
his earned salary, vested benefits and accelerated vesting of his accrued
pension benefits. He will not be entitled to severance benefits. In the event
the agreement is terminated for cause by the Company he will be entitled to
receive earned salary and vested benefits and will not be entitled to severance
benefits. In the event the agreement is terminated for good reason by Mr.
Blechschmidt or without cause by the Company he will be entitled to earned
salary, vested benefits, severance benefits and accelerated vesting of his
accrued
9
pension benefits and continued medical benefits for up to two years. Severance
benefits are deemed equal to two times Mr. Blechschmidt's base salary, so long
as Mr. Blechschmidt does not receive any amounts under his change in control
agreement described below.
The employment agreement also restricts Mr. Blechschmidt's ability to
engage in any of the Company's business lines in the United States and Canada
for the term of the agreement and during the nine months after termination of
his employment, other than termination without cause and termination for good
reason. It also contains confidentiality provisions and provisions for
non-solicitation of the Company's employees.
On or prior to the date of the sale of the Company's specialty
pharmaceutical services ("SPS") business, the Company will enter into an
employment agreement with Ronald A. Malone, who will be the Company's new chief
executive officer and chairman of the board of directors. His agreement will
become effective on the closing date of the sale of the SPS business and will be
in effect for a period of three years from the closing date. During the term of
the agreement, Mr. Malone will receive: (1) a base salary of $400,000 per year,
and (2) an annual bonus, based on the achievement of target levels of
performance, with target bonus equal to 80 percent of his base salary and the
maximum bonus equal to 140 percent of his salary. However, Mr. Malone's bonus
will not be less than 50 percent of his target bonus for 2002. Mr. Malone will
also receive customary benefits, perquisites and reimbursement for expenses. The
terms of Mr. Malone's employment agreement will be similar to the terms
described in the two immediately preceding paragraphs in respect of Mr.
Blechschmidt's employment agreement.
Mr. Blechschmidt has also entered into a change in control agreement with
the Company, similar to the terms described below. Mr. Malone will enter into a
new change of control agreement (to replace his current change of control
agreement), similar to the terms described below, except that Mr. Malone's new
change in control agreement will commence on the closing date of the sale of the
SPS business.
The following Named Officers of the Company are parties to change in
control agreements in connection with their employment with the Company: Edward
A. Blechschmidt, John J. Collura, Ronald A. Malone and Robert J. Nixon. These
agreements have a term of three years, commencing on March 15, 2000. They
generally provide benefits in the event (i) the employee's employment is
terminated by the Company and the termination is not for cause or is by the
employee for good reason (as specified in the agreement) or (ii) the termination
is within three years after a change in control of the Company. In addition,
these executive officers will receive the benefit of their agreements if they
are terminated by the Company without cause up to a year before a change in
control, if their terminations arise in connection with the change in control.
The benefits conferred under these agreements generally will include a cash
payment equal to two times the employee's base salary and target bonus;
continued benefits for the two years following the termination or until such
earlier date that the employee obtains comparable benefits from another
employer; immediate vesting of any stock options held by the employee (those
options would remain exercisable for one year following the termination, but not
beyond the original full term); and full vesting of retirement and deferred
compensation benefits. Under certain circumstances the benefits could be reduced
in order to avoid the incurrence of excise taxes by the employees.
Under the agreements, a change in control is defined to include the
following events: a person or group (with certain exceptions for the Olsten
family) beneficially owns at least 25 percent or more of the voting stock;
either the directors (and their approved successors) cease to constitute a
majority of the board of directors or a majority of the persons nominated by the
board of directors for election fails to be elected; a merger of the Company if
the stockholders do not own a majority of the stock of the surviving company or
if the members of the board of directors do not constitute a majority of the
directors of the surviving company's board; if the Company is liquidated; or if
all or substantially all of the assets are sold.
In addition, the change in control agreements provide that if an employee
substantially prevails in a dispute with the Company relating to his or her
agreement, the Company will pay that employee's
10
attorney's fees which result from the suit. The employees who have these
agreements are not required to seek other employment or otherwise mitigate any
damages they are caused as a result of a change in control, but they are
required to keep the Company's confidential information private.
Upon the closing of the sale of the Company's SPS business or shortly
thereafter, the following Named Officers will no longer be employed by the
Company and their change in control agreements will be triggered: Edward A.
Blechschmidt, John J. Collura and Robert J. Nixon.
The Named Officers (with the exception of Mr. Blechschmidt, who is party to
an employment agreement) are parties to severance agreements in connection with
their employment with the Company. These severance agreements generally provide
that, in the event the officer is terminated other than for cause or has his/her
base salary reduced in a situation that is not part of a general salary
reduction, the officer has the right to receive payments for periods ranging
from twelve to eighteen months in an amount based on that officer's base salary
at the time of termination. Additionally, the severance agreements provide that
the Company will provide these officers with health benefits based on their
benefit levels at the time of termination for the same period or until they
obtain similar health benefits elsewhere.
HUMAN RESOURCES AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Company's executive compensation philosophy is to align the interests
of the Company's shareholders and its executive officers, while also promoting
teamwork among those executives. The Board of Directors and the Human Resources
and Compensation Committee, which administers the Company's executive
compensation programs, have implemented this philosophy through a compensation
program which combines three components: base salary, bonuses and stock options.
BASE SALARY
The base salaries of executive officers are determined by several factors,
including comparisons with industry levels. In addition, salary determinations
were made in conjunction with other compensation components discussed herein, to
focus attention on Company goals.
BONUSES
The Human Resources and Compensation Committee's policy is to provide a
portion of officers' compensation through performance-based and discretionary
annual bonuses as incentives to achieve the Company's financial and operational
goals and increase shareholder value. The Company's bonus arrangements for its
executive officers are intended to make a major portion of each executive
officer's compensation dependent on the Company's overall performance. Such
bonuses are also intended to link executive compensation to shareholder value
and to encourage the executives to act as a team. Bonuses are also intended to
recognize the executive's individual contributions to the Company.
STOCK OPTIONS
The Company's 1999 Stock Incentive Plan is used as a means to attract,
retain and motivate selected employees of the Company. The 1999 Stock Incentive
Plan provides for the grant to eligible employees of incentive stock options and
non-qualified stock options.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Blechschmidt's base salary is set at $600,000 per annum under the terms
of his employment agreement with the Company.
In determining Mr. Blechschmidt's bonus for fiscal year 2001, the Human
Resources and Compensation Committee concluded that the Company had performed
well under his leadership, either meeting or making significant progress with
respect to its goals and objectives. In recognition of strong individual
11
and Company performance in fiscal year 2001 and consistent with its compensation
philosophy, the Human Resources and Compensation Committee awarded Mr.
Blechschmidt a bonus of $700,000.
The Human Resources and Compensation Committee granted 60,000 stock options
to Mr. Blechschmidt in fiscal year 2001 as long-term incentives, vesting over
three years. In determining the number of options granted, the Human Resources
and Compensation Committee considered the value of long-term incentives provided
by other comparable companies, as reported in surveys. The Human Resources and
Compensation Committee also considered Mr. Blechschmidt's total compensation, as
well as his past and expected future contributions to the Company's achievement
of its long-term performance goals.
Human Resources and Compensation Committee:
Josh S. Weston, CHAIRMAN
Stuart R. Levine
Raymond S. Troubh
12
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total return on
the Company's Common Stock against the cumulative total return of the Nasdaq
Market Index and a peer issuer group selected by the Company (the "Peer Group
Index") for the period commencing on March 16, 2000 (when the Company's Common
Stock was first quoted on Nasdaq) and ending December 30, 2001.
The Peer Group Index is comprised of the following publicly traded
companies: Accredo Health, Incorporated; Apria Healthcare Group Inc.; Caremark
RX, Inc.; Matria Healthcare, Inc.; and Option Care, Inc.
The line graph assumes that $100 was invested on March 16, 2000 in each of
the Company's Common Stock, the Nasdaq Market index and the Peer Group Index and
that all dividends (if any) were reinvested. Media General Financial Services
furnished the data for the graph.
[PERFORMANCE GRAPH]
- --------------------------------------------------------------------------------
3/16/2000 12/31/00 12/30/01
- --------------------------------------------------------------------------------
GENTIVA HEALTH SERVICES, INC. $100.00 $222.92 $366.67
- --------------------------------------------------------------------------------
NASDAQ MARKET INDEX 100.00 53.34 42.52
- --------------------------------------------------------------------------------
PEER GROUP INDEX 100.00 212.92 243.41
- --------------------------------------------------------------------------------
13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
GENTIVA OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF A SUBSIDIARY
TRUST
On March 15, 2000 certain of the Company's directors and officers, members
of the Olsten family and some other investors, purchased approximately $20
million of 10% convertible trust preferred securities issued by a trust
("Trust"), of which the Company owned all the common equity. The investments
were in the following aggregate amounts: Miriam Olsten, $7.35 million; Mr.
Blechschmidt, $1.25 million; Stuart Olsten and Cheryl Olsten, $1 million each;
Mr. Troubh $650,000; Messrs. Ganzi and Weston, $600,000 each; Mr. Levine
$250,000; Messrs. Malone and Nixon, $100,000 each; Mr. Collura and Dr. Hornbake,
$50,000 each; Messrs. Christmas, Perry and Silver and Ms. Ma, $25,000 each;
other current and former personnel, an aggregate of $350,000; and other
investors, an aggregate of $6.55 million. The convertible trust preferred
securities were offered in a private placement exempt from the registration
requirements of the Securities Act of 1933. The convertible trust preferred
securities were convertible into the Company's Common Stock at a conversion
price of $9.319219. The Company made a $618,600 investment in the Trust to
acquire its common securities. The Company issued $20,618,600 of convertible
subordinated debentures to the Trust on the same terms, including, but not
limited to, maturity, interest, conversion and redemption price, as the 10%
convertible trust preferred securities in exchange for $20,618,600.
In August 2001 the Company called for redemption all of its outstanding 10%
convertible trust preferred securities at a redemption price of 108 percent of
their original principal amount. In accordance with the terms of the trust
agreement and other related documents, holders were permitted to convert prior
to the date called for redemption. All of the convertible trust preferred
securities were converted, and none were redeemed. Following conversion of the
10% convertible trust preferred securities held by them, the above-named
individuals received whole shares of the Company's Common Stock as follows:
Miriam Olsten, 788,692; Mr. Blechschmidt, 134,131; Stuart Olsten and Cheryl
Olsten, 107,305 each; Mr. Troubh, 69,748; Messrs. Ganzi and Weston, 64,383 each;
Mr. Levine, 26,826; Messrs. Malone and Nixon, 10,730; Mr. Collura and Dr.
Hornbake, 5,365 each; and Messrs. Christmas, Perry and Silver and Ms. Ma, 2,682
each.
INCORRECTLY IDENTIFIED INCENTIVE STOCK OPTIONS
The exercise by Messrs. Blechschmidt, Collura and Nixon of stock options in
2001 which were incorrectly identified by the Company as incentive stock options
(instead of as nonqualified stock options) resulted in an acceleration of income
tax liability to such individuals and the acceleration of related income tax
deductions by the Company. The Company, after consultation with counsel, has
agreed to reimburse such individuals, on an after tax basis, for certain costs
attributable to the acceleration of their tax liabilities as follows: Mr.
Blechschmidt ($173,721), Mr. Collura ($11,355) and Mr. Nixon ($3,472). The
Company has also agreed to reimburse each of them for any penalties resulting
from the failure to pay estimated taxes on a timely basis due to such
acceleration.
14
PROPOSAL 2
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as
independent accountants of the Company for the 2002 fiscal year, subject to
ratification and approval by the shareholders. PricewaterhouseCoopers LLP has
audited the books and records of the Company since the Company's incorporation
in 1999.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the meeting and will have the opportunity to make a statement and to respond to
appropriate questions posed by shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY.
AUDIT FEES
Fees billed or expected to be billed to the Company by
PricewaterhouseCoopers LLP for the audit of the Company's annual financial
statements for the year ended December 30, 2001 and for reviews of those
financial statements included in the Company's quarterly reports on Form 10-Q
for such year, total $469,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed or expected to be billed to the Company by
PricewaterhouseCoopers LLP for financial information systems design and
implementation services provided during the Company's 2001 fiscal year.
ALL OTHER FEES
Fees billed or expected to be billed to the Company by
PricewaterhouseCoopers LLP for services provided during the Company's 2001
fiscal year for all services rendered to the Company, other than audit services
and financial information systems design and implementation services, total
$676,000, which includes $280,000 for tax and audit services related to the sale
of the specialty pharmaceutical services business, $207,000 for tax planning and
compliance services, $165,000 for reviews required by the Company's corporate
integrity agreements and $24,000 for miscellaneous accounting services.
GENERAL
The Audit Committee of the Board of Directors has considered whether the
provision of services by PricewaterhouseCoopers LLP covered by "Financial
Information Systems Design and Implementation Fees" and "All Other Fees" above
is compatible with maintaining independence with PricewaterhouseCoopers LLP.
AUDIT COMMITTEE REPORT
The Audit Committee of the Company's Board of Directors is currently
comprised of three directors, none of whom is an officer or employee of the
Company.
All members are "independent" under rules adopted by the National
Association of Securities Dealers. The Board of Directors has adopted a written
charter for the Audit Committee, and in accordance with its written charter the
Audit Committee assists the Board in fulfilling its responsibility for
monitoring the integrity of the accounting, auditing and financial reporting
practices and compliance of the Company. In addition, for each fiscal year the
Audit Committee selects independent public accountants to audit the financial
statements of the Company and its subsidiaries, subject to approval of the Board
of Directors and the Company's shareholders.
15
The Audit Committee has received from PricewaterhouseCoopers LLP the
written disclosures and the letter regarding its independence as required by
Independence Standards Board Standard No. 1, describing all relationships
between the auditors and the Company that might bear on the auditors'
independence, and has discussed this information with PricewaterhouseCoopers
LLP. The Audit Committee has also discussed with management and with
PricewaterhouseCoopers LLP the quality and adequacy of the Company's accounting
principles, including internal controls and the internal audit and compliance
functions, organization, responsibilities, budget and staffing. The Audit
Committee has also reviewed with both PricewaterhouseCoopers LLP and the
Company's internal auditors and the Company's chief compliance officer their
audit and compliance plans, scope and identification of audit risks.
The discussions with PricewaterhouseCoopers LLP also included the matters
required by generally accepted auditing standards, including those described in
Statement on Auditing Standards No. 61 (Communication with Audit Committees), as
amended.
The Audit Committee has reviewed the audited financial statements of the
Company and its consolidated subsidiaries as of and for the fiscal year ended
December 30, 2001 and has discussed the audited financial statements with
management and with PricewaterhouseCoopers LLP. Based on all of the foregoing
reviews and discussions with management and PricewaterhouseCoopers LLP, the
Audit Committee recommended to the Board of Directors that the audited financial
statements for the fiscal year ended December 30, 2001 be included in the
Company's Annual Report on Form 10-K for such fiscal year filed with the
Securities and Exchange Commission.
Audit Committee:
Victor F. Ganzi, CHAIRMAN
Raymond S. Troubh
Gail Wilensky
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules thereunder require the Company's directors and
officers and persons who beneficially own more than ten percent of its
outstanding Common Stock to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company and to furnish the Company with
copies of all Section 16(a) forms they file. To the Company's knowledge, based
solely on review of copies of reports furnished to the Company and upon
representations made, the Company believes that during the fiscal year ended
December 30, 2001, all persons subject to the Section 16(a) filing requirements
filed the required reports on a timely basis, except that Steven E. Grabowski, a
director of the Company, filed two late reports, one in December 2001 covering a
transaction in September 2001 and the other in January 2002 covering a
transaction in August 2001.
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Proposals of shareholders intended for inclusion in the Company's proxy
statement and form of proxy for its 2003 Annual Meeting must be received in
writing by January 31, 2003 at the Office of Secretary at the Company's
principal executive offices located at 3 Huntington Quadrangle 2S, Melville, New
York 11747-8943. In addition, notice of any proposal that a shareholder desires
to propose for consideration at the 2003 Annual Meeting must, to satisfy
requirements under the Company's By-Laws, be received in writing by the Company
at the above address on or after February 28, 2003 and on or before March 30,
2003.
16
OTHER MATTERS
A COPY OF THE ANNUAL REPORT ON FORM 10-K, AS AMENDED, FILED BY THE COMPANY
WITH THE SECURITIES AND EXCHANGE COMMISSION FOR ITS LAST FISCAL YEAR IS
AVAILABLE WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST TO PATRICIA C. MA,
SECRETARY, GENTIVA HEALTH SERVICES, INC., 3 HUNTINGTON QUADRANGLE 2S, MELVILLE
NEW YORK 11747-8943.
Gentiva will pay the cost of soliciting proxies in the accompanying form.
The Company does not expect to pay any fees for the solicitation of proxies, but
may pay brokers, nominees, fiduciaries and other custodians their reasonable
fees and expenses for sending proxy materials to beneficial owners and obtaining
their instructions. In addition to solicitation by mail, proxies may be
solicited in person, or by telephone, facsimile transmission or other means of
electronic communication, by directors, officers and other employees of the
Company.
The Board of Directors knows of no other matters that may come before the
meeting. If any other matters should be brought before the meeting for action,
it is the intention of the persons named in the proxy to vote in accordance with
their discretion pursuant to authority conferred by the proxy.
By Order of the Board of Directors
/s/ Patricia C. Ma
----------------------------------
Patricia C. Ma
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
Dated: May 31, 2002
Melville, New York
17
GENTIVA HEALTH SERVICES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS, JUNE 28, 2002
P
The undersigned hereby appoints Ronald A. Malone, John R. Potapchuk and Patricia C. Ma, and each of them,
as proxies, with full power of substitution, to represent and to vote, as designated herein, all shares
R of Common Stock of Gentiva Health Services, Inc. (the "Company"), at its Annual Meeting of Shareholders to
be held at the Fleet Auditorium, 300 Broad Hollow Road, Melville, New York on Friday, June 28, 2002 at 9:30
a.m., and at all adjournments thereof, which the undersigned could vote, if present, in such manner as the
O proxies may determine on any matters which may properly come before the meeting and to vote on the
following as specified below:
X THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING: (Change of Address)
1. ELECTION OF DIRECTORS for a term to expire in 2005
Y Nominees: 01. Edward A. Blechschmidt; 02. Ronald A. ------------------------------------------
Malone; and 03. Raymond S. Troubh.
------------------------------------------
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS: Ratification of Appointment of ------------------------------------------
PricewaterhouseCoopers LLP as independent public
accountants of the Company. ------------------------------------------
(If you have written in the above space,
You are encouraged to specify your choices by marking please mark the corresponding box on the
the appropriate boxes on the reverse side but you need reverse side of this card)
not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendation.
THIS PROXY, WHEN PROPERLY EXECUTED ON THE REVERSE SIDE OF THIS CARD, WILL BE VOTED IN THE -----------
MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL SEE REVERSE
NOMINEES AND FOR THE RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS. THE SIDE
PROXIES, IN THEIR DISCRETION, ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY -----------
PROPERLY COME BEFORE THE MEETING.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
As part of Gentiva Health Services, Inc.'s ongoing efforts to reduce
expenses, we are asking our shareholders to authorize us to send only one
copy of shareholder publications to their household. If you are receiving
multiple copies of shareholder reports at your address and wish to
eliminate them for the account shown on the attached Proxy Card, please
mark the appropriate box. You will continue to receive your proxy mailings
for shares held in this account.
We urge you to vote your shares. Thank you very much for your cooperation
and continued loyalty as a Gentiva Health Services, Inc. shareholder.
PLEASE MARK YOUR
[X] VOTES AS IN THIS
EXAMPLE.
FOR ALL
EXCEPT
FOR NOMINEE(S) WITHHELD
ALL WRITTEN BELOW ALL FOR AGAINST ABSTAIN
1. Election of [ ] [ ] [ ] 2. Ratification of appointment of [ ] [ ] [ ]
Directors PricewaterhouseCoopers
LLP as independent public
accountants
FOR, except vote withheld from the
following nominee(s):
-----------------------------------
Change of Address on Reverse Side [ ]
Will Attend Annual Meeting [ ]
Discontinue Mailing
Publications to this Account [ ]
The signer hereby revokes all proxies heretofore
given by the signer to vote at said meeting or any
adjournment thereof.
Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. Only authorized officers
should sign for corporations. PLEASE SIGN AND DATE HERE AND RETURN
PROMPTLY.
-------------------------------------------------------------------
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SIGNATURE(S) DATE
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o FOLD AND DETACH HERE o
GENTIVA HEALTH SERVICES, INC.
THE GENTIVA VISION
o Gentiva Health Services will be a leader in home health services.
o We will consistently exceed our customers' expectations for
efficient, reliable, high-quality services.
o Our goal is to set the industry standards for quality care, service
delivery and personal devotion to clients.
OUR MISSION
o Gentiva Health Services is dedicated to improving the health status
of patients and their families while creating value for our
customers and shareholders.
OUR VALUES
o We respect our associates. We conduct business as responsible
corporate citizens with the highest ethical behavior. We value
trust, responsiveness, innovation and teamwork in everything we do.
IMPORTANT: PLEASE VOTE, DATE AND SIGN YOUR PROXY CARD AND
RETURN IT IN THE ENVELOPE PROVIDED.
THANK YOU FOR VOTING.