PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(2) and (c)
(TO PROSPECTUS DATED JANUARY 30, 1998) Registration No. 333-44029
February 25, 1998
THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IS
SUBJECT TO COMPLETION OR AMENDMENT.
RES-CARE, INC.
$109,360,000
6% CONVERTIBLE SUBORDINATED NOTES DUE 2004
AND
SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF
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This Prospectus Supplement covers the resale by the listed parties
designated under the notation Selling Securityholders on pages 1 through 4
hereof (the "Selling Securityholders"), of up to the aggregate principal amount
of 6% Convertible Subordinated Notes Due 2004 (the "Notes") of Res-Care, Inc., a
Kentucky corporation (the "Company"), and the resale of shares of Common Stock,
no par value per share (the "Common Stock") of the Company issuable upon the
conversion thereof (the "Conversion Shares") set forth opposite such Selling
Securityholder's name on the Selling Securityholders Table on pages 1 through 4
hereof. The Notes, together with the Conversion Shares were registered pursuant
to Registration No. 333-44029. This Prospectus Supplement should be read in
conjunction with the prospectus, dated January 30, 1998 (the "Prospectus"), to
be delivered with this Prospectus Supplement. All capitalized terms used but not
defined in this Prospectus Supplement shall have the meanings given them in the
Prospectus.
Based on information provided to the Company, the total principal amount of
Notes held by the additional listed Selling Securityholders included in this
Prospectus Supplement is $21,857,000. Additional Selling Securityholders or
other information concerning the Selling Securityholders may be set forth from
time to time in additional prospectus supplements.
The Notes are convertible at the option of the holder into shares of Common
Stock of the Company following the date of initial issuance thereof and prior to
maturity, unless previously redeemed or repurchased, at a conversion price of
$28.2125 per share (equivalent to a conversion rate of 38.7630 shares per $1,000
principal amount of Notes and representing in the aggregate 3,876,296 shares),
subject to adjustment in certain events. Interest on the Notes is payable
semi-annually on June 1 and December 1 of each year, commencing June 1, 1998.
<PAGE>
The Notes are not redeemable by the Company until December 5, 2000.
Thereafter, the Notes will be redeemable, at any time, upon not less than 30 nor
more than 60 days notice at the option of the Company, in whole or in part, at
the redemption prices set forth herein, plus accrued interest. Upon a Repurchase
Event (as defined), each holder of the Notes may require the Company to
repurchase all or a portion of such holder's Notes at 100% of the principal
amount thereof, together with accrued and unpaid interest to the repurchase
date. The Notes are unsecured and subordinated in right of payment in full to
all existing and future Senior Indebtedness (as defined) of the Company. See
"Description of the Notes."
The Notes were originally issued by the Company in a private placement on
November 21, 1997 to the Initial Purchasers (as defined) and were simultaneously
sold by the Initial Purchasers in transactions exempt from registration under
the Securities Act of 1933, as amended (the "Securities Act"), in the United
States to persons reasonably believed to be "qualified institutional buyers" as
defined in Rule 144A under the Securities Act and in offshore transactions to
persons outside of the United States in reliance on Regulation S under the
Securities Act.
The Selling Securityholders may offer Notes or Conversion Shares from time
to time to purchasers directly or through underwriters, dealers or agents. Such
Notes or Conversion Shares may be sold at market prices prevailing at the time
of sale or at negotiated prices. Each Selling Securityholder will be responsible
for payment of any and all commissions to brokers, which will be negotiated on
an individual basis.
The Notes have been designated for trading on the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market. The Common Stock is
quoted on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") under the symbol "RSCR." On February 23, 1998, the last reported sale
price of the Common Stock as reported on Nasdaq was $35.125 per share. The
Conversion Shares have been approved for quotation on the Nasdaq National
Market. For a description of certain federal income tax consequences to the
holders of the Notes, see "Certain Federal Income Tax Consequences."
The Company will not receive any of the proceeds from the sale of any Notes
or Conversion Shares by the Selling Securityholders. Expenses of preparing and
filing the registration statement to which this Prospectus relates and all
post-effective amendments will be borne by the Company. See "Plan of
Distribution" for a description of the indemnification arrangements between the
Company and the Selling Securityholders.
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<PAGE>
The information in the table appearing under the heading "Selling
Securityholders" in the Prospectus is superseded by the information appearing in
the table below:
(Previously listed Selling Securityholders)
<TABLE>
<CAPTION>
PERCENTAGE NUMBER OF
PRINCIPAL OF TOTAL CONVERSION PERCENTAGE PERCENTAGE OF
AMOUNT OUT- SHARES THAT OF COMMON TOTAL VOTING
OF NOTES STANDING MAY BE STOCK OUT- POWER AFTER
NAME OWNED NOTES SOLD(1) STANDING(2) CONVERSION(3)
---- ----- ----- ------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Natwest Securities Limited 11,750,000 10.74% 416,482 3.26% 3.26%
Shepherd Investments 9,250,000 8.46 327,868 2.58 2.58
International Ltd.
Bankers Trust International 7,500,000 6.86 265,839 2.10 2.10
CFW-C, L.P. 5,500,000 5.03 194,949 1.55 1.55
Argent Classic Convertible 5,400,000 4.94 191,404 1.52 1.52
Arbitrage Fund (Bermuda), L.P.
Froley Revy Investment Co. Inc. 3,500,000 3.20 124,058 * *
Account: State of Oregon/ SAIF
Corporation
Forest Fulcrum Fd, LP 3,125,000 2.86 110,766 * *
Forest Global Convert Ser A-5 2,775,000 2.54 98,360 * *
R2 Investments, LDC 2,450,000 2.24 86,840 * *
AIM Balanced Fund 2,000,000 1.83 70,890 * *
Commonwealth Life Insurance 2,000,000 1.83 70,890 * *
Company (Teamsters - Camden
Non-Enhanced)
Black Diamond Partners, L.P. 1,852,000 1.69 65,644 * *
Black Diamond Ltd. 1,801,000 1.65 63,836 * *
Lincoln National Convertible 1,715,000 1.57 60,788 * *
Securities Fund
State Board of Administration of 1,500,000 1.37 53,167 * *
Florida
Goldman, Sachs & Co. 1,500,000 1.37 53,167 * *
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
PERCENTAGE NUMBER OF
PRINCIPAL OF TOTAL CONVERSION PERCENTAGE PERCENTAGE OF
AMOUNT OUT- SHARES THAT OF COMMON TOTAL VOTING
OF NOTES STANDING MAY BE STOCK OUT- POWER AFTER
NAME OWNED NOTES SOLD(1) STANDING(2) CONVERSION(3)
---- ----- ----- ------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Hudson River Trust Growth & 1,150,000 1.05 40,762 * *
Income Account
Equitable Life Assurance 1,150,000 1.05 40,762 * *
Separate Account Convertibles
Hudson River Trust Balanced 1,095,000 1.00 38,812 * *
Account
Argent Classic Convertible 1,000,000 * 35,445 * *
Arbitrage Fund, L.P.
Pennsylvania Power & Light Co. 1,000,000 * 35,445 * *
Retirement Plan
Swiss Bank Corporation - London 1,000,000 * 35,445 * *
Branch (4)
Stark International 1,000,000 * 35,445 * *
Memphis Light, Gas & Water 980,000 * 34,736 * *
Retirement Fund
Hudson River Trust Growth 820,000 * 29,065 * *
Investors
KA Management Ltd. 570,000 * 20,203 * *
Weirton Trust 510,000 * 18,077 * *
CPR (USA) 500,000 * 17,772 * *
TQA Vantage Fund, Ltd. 500,000 * 17,722 * *
Dr. Scholl Foundation 450,000 * 15,950 * *
KA Trading L.P. 430,000 * 15,241 * *
Libertyview Plus Fund 400,000 * 14,178 * *
Forest Performance Fund 300,000 * 10,633 * *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE NUMBER OF
PRINCIPAL OF TOTAL CONVERSION PERCENTAGE PERCENTAGE OF
AMOUNT OUT- SHARES THAT OF COMMON TOTAL VOTING
OF NOTES STANDING MAY BE STOCK OUT- POWER AFTER
NAME OWNED NOTES SOLD(1) STANDING(2) CONVERSION(3)
---- ----- ----- ------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Fox Family Portfolio Partnership 300,000 * 10,633 * *
TQA Leverage Fund, L.P. 300,000 * 10,633 * *
Forest Global Convert Ser B-1 275,000 * 9,747 * *
The Frist Foundation 255,000 * 9,038 * *
TQA Vantage Plus, Ltd. 200,000 * 7,089 * *
Walker Art Center 195,000 * 6,911 * *
Forest Global Convert Ser B-3 175,000 * 6,202 * *
LLT Limited (5) 175,000 * 6,202 * *
Highbridge Capital Corp. 160,000 * 5,671 * *
Forest Convertible Opportunity 150,000 * 5,316 * *
Fund
Forest Global Convert Ser B-2 125,000 * 4,430 * *
Fox Family Foundation 125,000 * 4,430 * *
Forest Global Convert Ser B-5 100,000 * 3,544 * *
Goldman, Sachs & Co. Employee 100,000 * 3,544 * *
Benefit Plan
Libertyview Fund LLC 100,000 * 3,544 * *
United National Insurance 80,000 * 2,835 * *
Forest Performance Greyhound 75,000 * 2,658 * *
David Lipscomb University 65,000 * 2,303 * *
General Endowment
Forest Global Convert Ser A-1 50,000 * 1,772 * *
</TABLE>
<PAGE>
(Selling Securityholders added by this Prospectus Supplement)
<TABLE>
<CAPTION>
PERCENTAGE NUMBER OF
PRINCIPAL OF TOTAL CONVERSION PERCENTAGE PERCENTAGE OF
AMOUNT OUT- SHARES THAT OF COMMON TOTAL VOTING
OF NOTES STANDING MAY BE STOCK OUT- POWER AFTER
NAME OWNED NOTES SOLD(1) STANDING(2) CONVERSION(3)
---- ----- ----- ------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Merrill Lynch International Ltd. $6,000,000 5.49 212,671 1.69% 1.69%
BNP Arbitrage SNC (6) 4,000,000 3.66 141,781 1.13 1.13
NationsBanc Montgomery 4,000,000 3.66 141,781 1.13 1.13
Securities LLC (7)
Donaldson, Lufkin & Jenerette 2,000,000 1.83 70,890 * *
Securities Corp.
Bankers Trust International 1,200,000 1.10 42,534 * *
Natwest Securities Limited 1,050,000 * 37,217 * *
NHBD L.P. 1,000,000 * 35,455 * *
Argent Classic Convertible 750,000 * 26,583 * *
Arbitrage Fund (Bermuda), L.P.
Colonial Penn Life Insurance Co. 750,000 * 26,583 * *
Gleneagles Fund Company 400,000 * 14,178 * *
Palladin Overseas Funds Ltd. 350,000 * 12,405 * *
Worldwide Transactions Limited 187,000 * 6,628 * *
Hudson River Trust Growth & 170,000 * 6,025 * *
Income Account
</TABLE>
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* Less than 1%.
(1) Assumes conversion of the full amount of Notes held by such holder at
the initial conversion price of $28.2125 per share; such conversion price is
subject to adjustment as described under "Description of the Notes--
Conversion." Accordingly, the number of shares of Common Stock issuable upon
conversion of the Notes may increase or decrease from time to time. Under the
terms of the Indenture, fractional shares will not be issued upon conversion of
the Notes; cash will be paid in lieu of fractional shares, if any.
(2) Computed in accordance with Rule 13d-3(d)(1) promulgated under the
Exchange Act and based upon 12,365,682 shares of Common Stock outstanding as of
December 31, 1997, treating as outstanding the number of Conversion Shares shown
as being issuable upon the assumed conversion by the named holder of the full
amount of such holder's Notes but not assuming the conversion of the Notes of
any other holder. Includes Common Stock, if any, beneficially owned by the
holder other than the Conversion Shares.
(3) The percentage of total voting power after conversion represents the
percentage of the voting power each stockholder will have after the conversion
based upon 12,365,682 shares of Common Stock outstanding as of December 31, 1997
treating as outstanding the number of Conversion Shares as being issuable upon
the assumed conversion by the named holder of the full amount of such holder's
<PAGE>
Notes but not assuming the conversion of the Notes of any other holder. Includes
Common Stock, if any, beneficially owned by the holder other than the Conversion
Shares.
(4) SBC Warburg Dillon Read Inc. acts as investment advisor for Swiss Bank
Corporation - London Branch.
(5) With respect to the principal amount of notes owned, LLT Limited shares
beneficial ownership and investment power with Forest Investment Management,
L.P.
(6) BNP Arbitrage SNC owns 5,500 shares of the Company's Common Stock.
(7) NationsBanc Montgomery Securities LLC participated in the completion of
a follow on offering of the Company's Common Stock in April 1997 and the
placement of the Notes described herein.
None of the Selling Securityholders has, or within the past three years has
had, any position, office or other material relationship with the Company or any
of its predecessors or affiliates except as described above. Because the Selling
Securityholders may, pursuant to this Prospectus, offer all or some portion of
the Notes or the Conversion Shares, no estimate can be given as to the amount of
the Notes or the Conversion Shares that will be held by the Selling
Securityholders upon termination of any such sales. In addition, the Selling
Securityholders identified above may have sold, transferred or otherwise
disposed of all or a portion of their Notes, in transactions exempt from the
registration requirements of the Securities Act, since the date on which they
provided the information regarding their Notes. Information regarding changes
with respect to the Selling Securityholders will be set forth in additional
supplements to the Prospectus if and when necessary. See "Plan of Distribution."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THE PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE NOTES
AND THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus Supplement is February 25,1998
