SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule
14a-11(c) or Rule 14a-12
[_] Confidential, for use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
NATIONAL HOME HEALTH CARE CORP.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NATIONAL HOME HEALTH CARE CORP.
700 White Plains Road
Scarsdale, New York 10583
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held December 9, 1996
---------------
TO THE STOCKHOLDERS OF NATIONAL HOME HEALTH CARE CORP.:
The Annual Meeting of Stockholders of National Home Health Care Corp.
(the "Company") will be held at the offices of Parker Chapin Flattau & Klimpl,
LLP, 1211 Avenue of the Americas, New York, New York, at 10:00 A.M. on Monday,
December 9, 1996, for the following purposes:
(1) To elect five Directors of the Company to hold office until the
next Annual Meeting of Stockholders and until their successors
shall have been duly elected and qualified; and
(2) To consider and transact such other business as may properly
come before the meeting or any adjournment thereof.
A Proxy Statement, form of proxy and the Annual Report to
Stockholders of the Company for the fiscal year ended July 31, 1996 are enclosed
herewith. Only holders of record of Common Stock of the Company at the close of
business on November 8, 1996 will be entitled to notice of, and to vote at, the
Annual Meeting and any adjournments thereof. A complete list of the stockholders
entitled to vote will be available for inspection by any stockholder during the
meeting. In addition, the list will be open for examination by any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least 10 days prior to the meeting at the offices of the Company,
located at 700 White Plains Road, Scarsdale, New York 10583.
By Order of the Board of Directors,
Steven Fialkow
Secretary
Scarsdale, New York
November 11, 1996
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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT
EXPECT TO BE PRESENT, PLEASE DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN
IT PROMPTLY USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
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<PAGE>
NATIONAL HOME HEALTH CARE CORP.
700 White Plains Road
Scarsdale, New York 10583
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation
by the board of directors (the "Board of Directors") of National Home Health
Care Corp. (the "Company") of proxies in the form enclosed. Such proxies will be
voted at the Annual Meeting of Stockholders of the Company to be held at the
offices of Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue of the Americas, New
York, New York, at 10:00 A.M. on Monday, December 9, 1996 (the "Meeting") and at
any adjournments thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Stockholders.
The principal executive offices of the Company are located at 700
White Plains Road, Scarsdale, New York 10583. This Proxy Statement and
accompanying form of proxy are being mailed on or about November 11, 1996 to all
stockholders of record on November 8, 1996 (the "Record Date").
Any stockholder giving a proxy has the power to revoke the same at
any time before it is voted. The cost of soliciting proxies will be borne by the
Company. The Company has no contract or arrangement with any party in connection
with the solicitation of proxies. Following the mailing of the proxy materials,
solicitation of proxies may be made by officers and employees of the Company by
mail, telephone, telegram or personal interview. Properly executed proxies will
be voted in accordance with instructions given by stockholders at the places
provided for such purpose in the accompanying proxy. Unless contrary
instructions are given by stockholders, the shares represented by such proxies
are intended to be voted in favor of the election of the five nominees for
director named herein.
VOTING SECURITIES
Stockholders of record as of the close of business on the Record Date
will be entitled to notice of, and to vote at, the Meeting or any adjournments
thereof. On the Record Date, there were 4,806,907 outstanding shares of common
stock, par value $.001 per share, of the Company (the "Common Stock"). Each
holder of Common Stock is entitled to one vote for each share held by such
holder. The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Meeting. Proxies submitted which contain abstentions or broker non-votes will be
deemed present at the Meeting in determining the presence of a quorum.
<PAGE>
Shares of Common Stock that are voted to abstain with respect to any
matter will be considered cast with respect to that matter. Shares subject to
broker non-votes with respect to any matter will not be considered cast with
respect to that matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock at November 1, 1996 by (i) each person or
group known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock; (ii) each director and nominee for director
of the Company; (iii) each of the executive officers named in the Summary
Compensation Table herein under "Executive Compensation"; and (iv) all directors
and executive officers of the Company as a group:
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) OF CLASS
- ------------------- ----------------------- --------
Frederick H. Fialkow 1,472,717 (2) 30.2%
700 White Plains Road
Scarsdale, Ny 10583
Bernard Levine, M.d. 668,900 (3) 13.9%
P.o. Box 2635
La Jolla, Ca 92038
Steven Fialkow 73,886 (4) 1.5%
700 White Plains Road
Scarsdale, Ny 10583
Ira Greifer, M.d. 45,000 (3) (10)
1825 Eastchester Road
Bronx, Ny 10461
Robert C. Pordy, M.d. 1,000 (10)
340 Kingsland Street
Nutley, Nj 07110
Thomas A. Smith 26,390 (5) (10)
57 Plains Road
Milford, Ct 06460
Richard Garofalo 49,583 (6) 1.0%
99 Rustic Avenue
Medford, Ny 11763
Robert P. Heller 22,895 (7) (10)
617 Fir Court
Norwood, Nj 07648
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<PAGE>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) OF CLASS
- ------------------- ----------------------- --------
Trafalger Management 390,000 (8) 8.1%
N.v.1-7 Willenstad
Curacao, Netherlands Antilles
All executive officers and directors, 2,360,371 (9) 47.4%
as a group (8 persons)
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(1) Includes, where indicated, shares allocated to certain individuals
under the Company's Savings and Stock Investment Plan (the "Savings
Plan") as of December 31, 1995 (the 1996 allocation under the Savings
Plan has not yet been determined). Under the terms of the Savings
Plan, if a participant fails to give timely instructions as to the
voting of shares of Common Stock held in a participant's account, the
trustee of the Plan will vote such shares in the same proportion as
it votes all of the shares for which such trustee receives
instructions.
(2) Does not include 500 shares of Common Stock owned by Mr. Fialkow's
wife, as to which shares Mr. Fialkow disclaims beneficial ownership.
Includes 75,000 shares of Common Stock which may be acquired pursuant
to currently exercisable options granted under the Company's 1992
Stock Option Plan (the "1992 Plan") and 49,667 allocated to Mr.
Fialkow's account under the Savings Plan.
(3) Includes 5,000 shares of Common Stock which may be acquired pursuant
to currently exercisable options granted under the 1992 Plan.
(4) Includes 42,468 shares of Common Stock which may be acquired pursuant
to currently exercisable options granted under the 1992 Plan and
25,918 shares allocated to Mr. Steven Fialkow under the Savings Plan.
(5) Includes 10, 000 shares of Common Stock which may be acquired
pursuant to currently exercisable options granted under the 1992 Plan
and 16,390 allocated to Mr. Smith's account under the Savings Plan.
(6) Includes 20,468 shares of Common Stock which may be acquired pursuant
to currently exercisable options granted under the 1992 Plan and
27,615 shares allocated to Mr. Garofalo's account under the Savings
Plan.
(7) Includes 15,000 shares of Common Stock which may be acquired pursuant
to currently exercisable options granted under the 1992 Plan and
7,895 allocated to Mr. Heller's account under the Savings Plan.
(8) The amount and nature of beneficial ownership of these shares by
Trafalger Management, N.V. ("Trafalger") is based solely on the
records of the Company's transfer agent, American Stock Transfer &
Trust Company. Trafalger has the power to vote, direct the vote,
dispose of, or direct the disposition of, these shares. The Company's
Board of Directors has no independent knowledge of the accuracy or
completeness of the information set forth by such transfer agent, but
has no reason to believe that such information is not complete or
accurate.
(9) Includes 172,936 shares of Common Stock which may be acquired
pursuant to currently exercisable options granted under to 1992 Plan
and 127,485 shares under the Savings Plan.
(10) Less than 1%.
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<PAGE>
ELECTION OF DIRECTORS
Unless otherwise indicated, the shares represented by all proxies
received by the Board of Directors will be voted at the Meeting in accordance
with their terms and, in the absence of contrary instructions, for the election
of Frederick H. Fialkow, Steven Fialkow, Ira Greifer, M.D., Bernard Levine,
M.D., and Robert C. Pordy, M.D. to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified. Although it
is anticipated that each nominee will be available to serve as a director,
should any nominee be unavailable to serve, proxies will be voted by the Board
of Directors.
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information concerning the
nominees for director and executive officers of the Company:
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED OR
APPOINTED PRESENT POSITION
NAME AGE DIRECTOR WITH THE COMPANY
---- --- -------- ----------------
<S> <C> <C>
Frederick H. Fialkow 65 1985 Chairman of the Board of Directors, President and
Chief Executive Officer
Bernard Levine, M.D. 68 1983 Director
Steven Fialkow 37 1991 Secretary and Director of the Company and Executive
Vice President of New England Home Care, Inc.
Ira Greifer, M.D. 65 1983 Director
Robert C. Pordy, M.D. 39 1995 Director
Thomas A. Smith 39 -- President of New England Home Care, Inc.
Richard Garofalo 45 -- President of Health Acquisition Corp.
Robert P. Heller 35 -- Vice President of Finance and Chief Financial Officer
of the Company
</TABLE>
The Company's directors are elected at each Annual Meeting of
Stockholders of the Company to serve for a term of one year or until their
successors are duly elected and qualified. Officers serve at the discretion of
the Board of Directors. The terms of office of all officers and directors expire
at the time of the annual meeting each year.
Frederick H. Fialkow has been President and Chief Executive Officer
of the Company as well as Chairman of the Board of Directors since February
1988. He has been a Director of the
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<PAGE>
Company since April 1985. Mr. Fialkow served as Executive Vice President of the
Company from March 1985 through January 1988 and as President of National HMO
(New York), Inc., the Company's wholly-owned subsidiary, from August 1984 until
January 1988. Mr. Fialkow also is a director of SunStar Healthcare, Inc., a
publicly-held company that provides managed healthcare services. Frederick H.
Fialkow is the father of Steven Fialkow and the father-in-law of Thomas A.
Smith.
Bernard Levine, M.D., has been a Director of the Company since July
1983. For more than the past 20 years he has been a Professor of Internal
Medicine at New York University School of Medicine with a sub-speciality in
Allergy and Immunology. D. Levine also is a director of SunStar Healthcare,
Inc., a publicly-held company that provides managed healthcare services. Dr.
Levine devotes a portion of his time as a private consultant to the health care
industry.
Steven Fialkow has served as Secretary of the Company since September
1995. He has served as Executive Vice President of New England Home Care, Inc.
since August 1995 and as a Director of the Company since December 1991. Prior
thereto he served as Executive Vice President of Health Acquisition Corp. from
May 1994 to August 1995. He has served as President of National HMO (New York),
Inc. from April 1989 to April 1994 and Vice President of National HMO (New York)
Inc. from August 1984 to March 1989. Steven Fialkow is a certified public
accountant. Mr. Fialkow also is a director of SunStar Healthcare, Inc., a
publicly-held company that provides managed healthcare services. He is the son
of Frederick H. Fialkow and the brother-in-law of Thomas A. Smith.
Ira Greifer, M.D. has been a Director of the Company since July 1983.
He has been a Director, Department of Pediatrics at the Hospital of Albert
Einstein College of Medicine since 1966. He is also a Professor of Pediatrics at
the Albert Einstein College of Medicine.
Robert C. Pordy, M.D., has been a director of the Company since
December 1995. Since April 1993, Dr. Pordy has served as Director of
International Cardiovascular Clinical Research at Hoffman-La Roche Inc., a
biopharmaceutical Company. From June 1990 until March 1993 he served as an
Associate Director at Hoffman-LaRoche Inc.
Thomas A. Smith has served as President of New England Home Care,
Inc. since August 1995. Prior thereto, he served as Executive Vice President of
Health Acquisition Corp. from August 1991 until August 1995. From September 1989
to July 1991, he was Director of Corporate Development of the Company. From
January 1988 to August 1989, Mr. Smith served as Vice- President of National HMO
(New York), Inc. Mr. Smith is the son-in-law of Frederick H. Fialkow and the
brother-in-law of Steven Fialkow.
Richard Garofalo has served as President of Health Acquisition Corp.,
a wholly-owned subsidiary of the Company, since January 1988.
Robert P. Heller, a certified public accountant, has served as Vice
President of Finance and Chief Financial Officer of the Company since March
1989. Prior thereto, and for more than four years, he was an employee of Richard
A. Eisner & Company, LLP, a firm of certified public accountants, who are the
Company's independent auditors.
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<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during the fiscal year
ended July 31, 1996 ("fiscal 1996") and acted by unanimous consent on two
occasions. Each director attended at least 75% of (i) all of the meetings of the
Board of Directors during fiscal 1996 and (ii) all of the meetings of all the
Committees on which he served.
The Company's Audit Committee is currently composed of Drs. Levine,
Pordy and Greifer. The function of the Audit Committee is to make
recommendations concerning the selection each year of independent auditors of
the Company, to review the effectiveness of the Company's internal accounting
methods and procedures, and to determine through discussions with the
independent auditors whether any instructions or limitations have been placed
upon them in connection with the scope of their audit or its implementation. The
Audit Committee held one meeting during fiscal 1996; in addition, its members
met informally from time to time.
The Compensation Committee is composed of Drs. Greifer and Levine.
The function of the Compensation Committee is to review and recommend to the
Board of Directors policies, practices and procedures relating to compensation
of key employees and to administer employee benefit plans. The Compensation
Committee held one meeting during fiscal 1996 and acted by unanimous consent on
one occasion.
The Nominating Committee is composed of Mr. Frederick H. Fialkow and
Drs. Greifer, Levine and Pordy. Its function is to recommend nominees for the
Board of Directors. The Nominating Committee did not meet formally during fiscal
1996; however, its members met informally from time to time.
The Quality Assurance Committee is composed of Drs. Greifer and
Levine. Its function is to review and recommend to the Board of Directors
policies, practices and procedures relating to quality assurance in connection
with health care services. The Quality Assurance Committee did not meet formally
during fiscal 1996; however, its members met informally from time to time.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual
and long term compensation during the Company's last three fiscal years of the
Company's Chief Executive Officer and other most highly compensated executive
officers of the Company, whose salary and bonus for the 1996 fiscal year exceeds
$100,000, for services rendered in all capacities to the Company and its
subsidiaries:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
YEAR SALARY BONUS OPTIONS COMPENSATION (2)
---- ------ ----- ------- ----------------
<S> <C> <C> <C> <C> <C>
Frederick H. Fialkow
Chairman of the Board, President 1996 $285,000 $82,803 (1) -- $4,750
and Chief Executive Officer 1995 285,000 -- 75,000 4,000
National Home Health Care Corp. 1994 285,000 -- -- 4,000
Richard Garofalo 1996 126,787 97,839 -- 5,000
President of 1995 120,750 54,106 42,468 5,000
Health Acquisition Corp. 1994 115,000 44,513 -- 5,000
Steven Fialkow
Secretary; Executive Vice 1996 109,394 -- -- 4,520
President of New England Home 1995 98,280 -- 42,468 2,540
Care, Inc. 1994 93,600 -- -- 3,162
Robert P. Heller
Vice President of Finance and 1996 103,710 -- -- 1,201
Chief Financial Officer 1995 94,846 -- 25,000 998
1994 90,400 -- -- 891
Thomas A. Smith 1996 109,357 -- -- 3,430
President of 1995 98,280 -- 35,000 --
New England Home Care, Inc. 1994 93,600 -- -- 976
</TABLE>
- ----------------------
(1) Includes $47,255 which represents the payment of the cost of living
increase in salary compensation for the last three fiscal years
payable pursuant to Mr. Fialkow's employment agreement with the
Company.
(2) Represents the Company's matching contribution to each individual as
deferred compensation under the Company's Savings Plan pursuant to
Section 401(k) of the Internal Revenue Code of 1986, as amended.
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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
- ---------------------------------
The Company did not grant any options to the individuals listed in
the Summary Compensation Table during the 1996 fiscal year.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE
- ---------------------------------------------------------------------
The following table contains information at July 31, 1996, relating
to the number of options exercised during the 1996 fiscal year and the number
and value of unexercised options held by those individuals listed in the Summary
Compensation Table.
<TABLE>
<CAPTION>
Number of Securities
Underlying-Unexercised Value of Unexercised
Shares Options-at-Fiscal Year in-the-Money Options
Acquired End at Fiscal Year End
on Exercise Value Exercisable-/ Exercisable-/
Name (#) Realized($) Unexercisable Unexercisable(1)
- --------------- ----------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Frederick H. Fialkow ---- ---- 75,000 / 0 $247,537 / 0
Steven Fialkow ---- ---- 42,468 / 0 $151,292 / 0
Richard Garofalo 22,000 $85,250 20,468 / 0 $72,917 / 0
Thomas A. Smith 25,000 $96,875 10,000 / 0 $35,625 / 0
Robert P. Heller 10,000 $38,750 15,000 / 0 $53,437 / 0
</TABLE>
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(1) Determined based on the fair market value of underlying securities
(the closing bid price ($6 3/16) of Common Stock on the Nasdaq
National Market) at fiscal year end (July 31, 1996), minus the
exercise price.
STANDARD REMUNERATION OF DIRECTORS
The Company's non-employee directors are paid a fee of $3,500 for
each meeting of the Board of Directors attended.
EMPLOYMENT AND RELATED AGREEMENTS
Frederick H. Fialkow. Effective April 30, 1993, the Company entered
into an amended and restated five-year employment agreement with Mr. Fialkow
pursuant to which he is employed as the Company's President and Chief Executive
Officer. Mr. Fialkow may terminate the agreement, without liability, at any time
upon at least one year prior written notice. The agreement is automatically
renewable for an additional five-year period, unless terminated at the option of
either party, and provides for an annual salary of $285,000, subject to a cost
of living adjustment. In addition, Mr. Fialkow is entitled to receive an annual
bonus in an amount equal to 5% of the Company's consolidated net income (before
income taxes) in such year in which the consolidated net income is
-8-
<PAGE>
in excess of $3,000,000, provided that the bonus may not exceed $150,000 in any
year. Further, Mr. Fialkow's employment agreement provides for the Company to
pay Mr. Fialkow the approximate sum of $4,184 representing the amount of his
annual contribution under the Company's Premium Conversion Plan.
Steven Fialkow. Effective as of August 1, 1993, and amended as of
July 1, 1996, the Company entered into an employment agreement with Mr. Steven
Fialkow. Pursuant to the agreement, Mr. Fialkow currently is employed as an
executive officer of the Company at an annual salary of $120,750. The employment
agreement provides for a 5% increase over the initial rate during each
subsequent 12-month period. In addition, the employment agreement provides for
the Company to pay Mr. Fialkow the approximate sum of $4,184.00 representing the
amount of his annual contribution under the Company's Premium Conversion Plan.
Mr. Fialkow receives additional benefits that are generally provided other
employees of the Company and a change of control bonus generally equal to six
months' salary. The employment agreement expires on July 31, 1997.
Richard Garofalo. Effective as of August 1, 1993, and amended as of
July 1, 1996, the Company entered into an employment agreement with Mr.
Garofalo. Pursuant to the agreement, Mr. Garofalo currently is employed as an
executive officer of the Company at an annual salary of $157,500. The employment
agreement provides for a 5% increase over the initial rate during each
subsequent 12-month period. In addition, the employment agreement provides for
the Company to pay Mr. Garofalo the approximate sum of $5,610 representing the
amount of his annual contribution under the Company's Premium Conversion Plan.
Mr. Garofalo receives additional benefits that are generally provided other
employees of the Company and a change of control bonus generally equal to six
months' salary. The employment agreement expires on July 31, 1997.
Thomas A. Smith. Effective as of August 1, 1993, and amended as of
July 1, 1996, the Company entered into an employment agreement with Mr. Smith.
Pursuant to the agreement, Mr. Smith currently is employed as an executive
officer of the Company at an annual salary of $120,750. The employment agreement
provides for a 5% increase over the initial rate during each subsequent 12-month
period. In addition, the employment agreement provides for the Company to pay
Mr. Smith the approximate sum of $5,610.00 representing the amount of his annual
contribution under the Company's Premium Conversion Plan. Mr. Smith receives
additional benefits that are generally provided other employees of the Company
and a change of control bonus generally equal to six months' salary. The
employment agreement expires on July 31, 1997.
Robert P. Heller. Effective July 1, 1996, the Company entered into an
employment agreement with Mr. Heller pursuant to which he is employed as Vice
President of Finance and Chief Financial Officer of the Company. The agreement
has a term of one year and currently provides for an annual salary of $112,350
with a 5% increase over the initial rate during each subsequent 12-month period.
In addition, the employment agreement provides for the Company to pay Mr. Heller
the approximate sum of $5,610 representing the amount of his annual contribution
under the Company's Premium Conversion Plan. Mr. Heller receives additional
benefits that are generally provided other employees of the Company and a change
of control bonus generally equal to six months' salary.
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<PAGE>
Each of the employment agreements summarized above contains
confidentiality and nondisclosure provisions relating to the Company's business
and all confidential information developed or made known to each individual
during his term of employment. Each agreement also contains certain
non-competition provisions that preclude each individual from competing with the
Company for a period of one year (six months in the case of Mr. Heller) from the
date of termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are Drs. Ira Greifer and Bernard Levine, non-employee directors. No
members of the Compensation Committee has a relationship that would constitute
an interlocking relationship with executive officers or directors of another
entity.
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<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of
Common Stock for the five years ended July 31, 1996 with the National
Association of Securities Dealers Automated Quotation System Market Index and a
SIC group index (1) for the same period. The comparison assumes $100 was
invested at the close of business on August 1, 1991 in the Common Stock and in
each of the comparison groups, and assumes reinvestment of dividends. The
Company paid no dividends during the periods.
[GRAPHICS INTENTIONALLY REPLACED WITH TABULAR CHART]
<TABLE>
FISCAL YEAR ENDING
COMPANY 1991 1992 1993 1994 1995 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONAL HOME HEALTH CARE 100.00 145.83 75.00 91.67 120.83 200.00
INDUSTRY INDEX 100.00 101.48 76.00 73.54 82.08 68.71
BROAD MARKET 100.00 102.46 127.27 138.88 170.19 185.53
- -------------------------------------------------------------------------------------
</TABLE>
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(1) The peer group selected by the Company includes those companies
within the Company's Standard Industrial Code ("SIC") of "home health
care services". The companies which comprise the SIC group are
Amedisys Inc., Apria Healthcare Group, The Care Group Inc.,
Caretenders Healthcorp, Coram Healthcare, DSI Industries Inc., DYNACQ
International Inc., Healthdyne Inc., Hospital Staffing Services, In
Home Health Inc., Infu-Tech Inc., Medical Innovations Inc., Medquist
Inc., Numed Home Health Care, Option Care Inc., Pacific Rehab &
Sports, Pediatric Services of America, Physician CP of America,
Quantum Health Resources, Rotech Medical CP, Staff Builders Inc.,
Telmed Inc., Tokos Medical CP, U.S. Homecare CP, Vivra Inc. and
Wellpoint Health Network.
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<PAGE>
REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors is composed
entirely of non-employee directors and is responsible for developing and making
recommendations to the Board of Directors with respect to the Company's
executive compensation policies. In addition, the Compensation Committee,
pursuant to authority delegated by the Board of Directors, determines the
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company.
The objectives of the Company's executive compensation program are
to:
* Support the achievement of desired Company
performance
* Provide compensation that will attract and
retain superior talent and reward performance
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the health care industry, as
well as with a broader group of companies of comparable size and complexity.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of
base salary, annual cash incentive compensation, long-term incentive
compensation in the form of stock options, specific performance - base bonuses
and various benefits, including medical and pension plans generally available to
employees of the Company.
BASE SALARy
Base salary levels for the Company's executive officers are
competitively set relative to companies in the health care industry. In
determining salaries, the Committee also takes into account individual
experience and performance and specific issues particular to the Company.
STOCK OPTION PROGRAM
The stock option program is the Company's long-term incentive plan
for providing an incentive to key employees (including directors and officers
who are key employees) and to Directors who are not employees of the Company.
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<PAGE>
The 1992 Stock Option Plan authorizes the Compensation Committee to
award key executives stock options. Options granted under the plan may be
granted containing terms determined by the Committee, including exercise period
and price; provided, however, that the plan requires that exercise price may not
be less than the fair market value of the Common Stock on the date of the grant
and the exercise period may not exceed ten years, subject to further
limitations.
BENEFITS
The Company provides to executive officers, medical and pension
benefits that generally are available to Company employees. The amount of
perquisites, as determined in accordance with the rules of the Securities and
Exchange Commission relating to executive compensation, did not exceed 10% of
salary for fiscal 1996.
BONUS
Following consultations with its financial advisor and in light of
the Compensation Committee's satisfaction with the performance of management,
the Company provides to certain executive officers bonuses based on performance
and/or a change of control of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Frederick H. Fialkow was appointed to the position of Chief
Executive Officer in February 1988. His initial base salary was $200,000.
Effective January 1, 1990, Mr. Fialkow's salary was increased to $250,000 per
year. Effective April 30, 1993, the Company entered into an amended and restated
five year employment agreement providing for an annual salary of $285,000,
subject to a cost of living adjustment. In addition, Mr. Fialkow is entitled to
receive an annual bonus in an amount equal to 5% of the Company's consolidated
net income (before certain taxes) in such year in excess of $3,000,000, provided
that the bonus may not exceed $150,000 in any year. Further, Mr. Fialkow's
employment agreement provides for the Company to pay Mr. Fialkow the approximate
sum of $4,184 representing the amount of his annual contribution under the
Company's Premium Conversion Plan.
Ira Greifer, M.D.
Bernard Levine, M.D.
Members of the Compensation Committee
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A lease for office premises maintained by Health Acquisition Corp., a
wholly-owned subsidiary of the Company, located in Queens, New York is with a
company owned (in whole or in part) and controlled by the Company's Chairman of
the Board of Directors, President and Chief Executive Officer, which company
also is owned in part by a director of the Company who is also the Executive
Vice President of New England Home Care, Inc. Rent expense under such lease is
approximately $120,000 per year. The Company believes that such lease contains
terms in the aggregate no less advantageous to the Company than otherwise could
have been obtained from an unrelated third party.
STOCKHOLDER PROPOSALS FOR 1997
Stockholders wishing to present proposals at the 1997 Annual Meeting
of Stockholders and wishing to have their proposals presented in the proxy
statement distributed by the Board of Directors in connection with the 1997
Annual Meeting of Stockholders must submit their proposals to the Company in
writing on or before July 15, 1997.
VOTING REQUIREMENTS
Assuming a quorum is present, a plurality of the votes cast at the
Meeting will be required for the election of directors. Shares of Common Stock
that are voted to abstain with respect to any matter will be considered cast
with respect to that matter. Shares subject to broker non-votes with respect to
any matter will not be considered cast with respect to that matter.
OTHER MATTERS
The Board of Directors of the Company knows of no other matter to
come before the meeting. However, if any matters required a vote of the
stockholders arise, it is the intention of the persons named in the enclosed
form of proxy to vote such proxy in accordance with their best judgment.
By Order of the Board of Directors
Steven Fialkow
Secretary
Dated: Scarsdale, New York
November 11, 1996
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PROXY
-----
NATIONAL HOME HEALTH CARE CORP.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned Stockholder of Common Stock of National Home Health
Care Corp. (the "Company") hereby revokes all previous proxies, acknowledges
receipt of the Notice of the Stockholders' Meeting to be held on December 9,
1996, and hereby appoints Frederick H. Fialkow and Steven Fialkow, and each of
them, as proxies of the undersigned, with full power of substitution, to vote
and otherwise represent all of the shares of the undersigned at said meeting and
at any adjournment or adjournments thereof with the same effect as if the
undersigned were present and voting the shares. The shares represented by this
proxy shall be voted in the following manner.
(1) Election of directors
|_| FOR all nominees listed below (except as
indicated)
|_| WITHHOLD authority to vote for all nominees
listed below
TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE THROUGH THAT
NOMINEE'S NAME IN THE LIST BELOW:
Frederick H. Fialkow
Steven Fialkow
Ira Greifer, M.D.
Bernard Levine, M.D.
Robert C. Pordy, M.D.
(2) In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting.
[CONTINUED AND TO BE SIGNED ON REVERSE SIDE]
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY, DULY EXECUTED, WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATION MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE NOMINEES, AND FOR SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM
ADVISABLE.
Dated: __________________, 1996
________________________________
Signature
________________________________
Print Name
________________________________
(Title, if appropriate)
This proxy should be signed by the Stockholder(s) exactly as his or her name
appears hereon. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign. If
a corporation, please sign in full corporate name by the president or other
authorized officer and should bear the corporate seal. If a partnership, please
sign in partnership name by authorized person.
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK,
SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE
