<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for transition period from _________ to _________
Commission File Number: 0-20372
--------------------
RES-CARE, INC.
(Exact name of Registrant as specified in its charter)
KENTUCKY 61-0875371
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
10140 LINN STATION ROAD 40223
LOUISVILLE, KENTUCKY (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (502) 394-2100
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- ----------------
Common Stock, no par value NASDAQ National Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No .
Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment of this
Form 10-K. [ ]
As of February 29, 2000, there were 24,267,644 shares of the Registrant's Common
Stock, no par value, outstanding. The aggregate market value of the shares of
Registrant held by non-affiliates of the Registrant, based on the closing price
of such on the NASDAQ National Market System on February 29, 2000, was
approximately $241,160,000. For purposes of the foregoing calculation only, all
directors and executive officers of the Registrant have been deemed affiliates.
<PAGE> 2
PART III
The Annual Report on Form 10-K of Res-Care, Inc. (ResCare or the
Registrant) filed with the Commission on March 29, 2000, incorporated Part III
of Form 10-K by reference from the Registrant's Proxy Statement for its 2000
Annual Meeting of Shareholders. Such Proxy Statement will not be filed within
120 days of the Registrant's year-end and, therefore, the information required
by Part III of Form 10-K for the year ended December 31, 1999 is included in
this amendment.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of ResCare
<TABLE>
<CAPTION>
DIRECTOR OR
NAME AGE OFFICER SINCE PRINCIPAL OCCUPATION
<S> <C> <C>
James R. Fornear 69 1974 Retired
Ronald G. Geary 52 1990 Chairman of the Board, President and
Chief Executive Officer of ResCare
E. Halsey Sandford 67 1984 Senior Executive of ResCare
Spiro B. Mitsos 69 1974 Practicing Psychologist
Seymour L. Bryson 62 1989 Associate Chancellor (Diversity),
Southern Illinois University at Carbondale
W. Bruce Lunsford 52 1992 Chairman of the Board of Ventas, Inc.
Olivia F. Kirtley 49 1998 Vice President of Vermont American Corporation
Vincent D. Pettinelli 56 1999 Retired
</TABLE>
The business experience during the past five years of each of the
directors is described below:
JAMES R. FORNEAR, the founder of ResCare, served as Chairman of the
Board of ResCare from 1984 until 1998. Mr. Fornear was the President of ResCare
from 1974 to 1990 and Chief Executive Officer of ResCare from 1989 to 1993.
RONALD G. GEARY, an attorney and certified public accountant, has
served as a director and President of ResCare since 1990 and as Chief Executive
Officer since 1993. He was elected Chairman of the Board in June 1998 when Mr.
Fornear retired. Before he was named Chief Executive Officer, Mr. Geary was
Chief Operating Officer of ResCare from 1990 to 1993. Mr. Geary is a director of
Ventas, Inc., a real estate investment trust.
E. HALSEY SANDFORD has been a director of ResCare since 1984 and has
been Senior Executive since 1997. From 1992 to 1997, Mr. Sandford served as
Executive Vice President responsible for development for ResCare's Division for
Persons with Disabilities.
SPIRO B. MITSOS, PH.D., a psychologist, has been a director of ResCare
since 1974. He has been Secretary of ResCare since 1984 and he served as
Treasurer of ResCare from 1984 until 1998. Dr. Mitsos has been employed by
ResCare to provide psychological consultation services to facilities operated by
ResCare since 1984. Dr. Mitsos has served as an adjunct faculty member at
Southern Illinois University, the University of Kentucky and the University of
Evansville.
SEYMOUR L. BRYSON, PH.D. has served as a director of ResCare since
1989. Since 1984, Dr. Bryson has held several positions with Southern Illinois
University at Carbondale, including professor in the University's Rehabilitation
Institute, Dean of the College of Human Resources, Special Assistant to the
Chancellor, Executive Assistant to the President and Executive Assistant to the
Chancellor.
W. BRUCE LUNSFORD, an attorney and certified public accountant, has
been a director of ResCare since 1992. He has served as Chairman of the Board,
President and Chief Executive Officer of Vencor, Inc., a provider of long-term
hospital care to chronically ill patients, from 1985 until January 1999 and is
Chairman of the Board of Ventas, Inc., a real estate investment trust. On
September 13, 1999, Vencor and substantially all of its subsidiaries filed
voluntary petitions for protection under Chapter 11 of the federal Bankruptcy
Code. Mr. Lunsford is a director of Churchill Downs, Incorporated, an operator
of thoroughbred racing tracks.
1
<PAGE> 3
OLIVIA F. KIRTLEY, a certified public accountant, was appointed a
director of ResCare in October 1998. Ms. Kirtley is currently Vice President of
Vermont American Corporation, a manufacturer and marketer of power tool
accessories, and has served in various capacities including Treasurer, Vice
President-Finance and Chief Financial Officer since 1979. Ms. Kirtley also
currently serves as Immediate Past Chair of the American Institute of Certified
Public Accountants. Ms. Kirtley is a director of Lancer Corporation, a worldwide
manufacturer and distributor of fountain drink and beer dispensing equipment.
VINCENT D. PETTINELLI has served as a director of ResCare since 1999.
Mr. Pettinelli, a founder of PeopleServe, Inc., served as president of
PeopleServe, Inc., a provider of services to persons with mental retardation and
developmental disabilities, from 1979 until 1996 when he became chairman of the
board.
Executive Officers of ResCare
In addition to Messrs. Geary and Sandford, Jeffrey M. Cross, Paul G.
Dunn and Ralph G. Gronefeld, Jr. are executive officers of ResCare.
Mr. Cross, age 46, has served as Executive Vice President of
Operations, Division for Persons with Disabilities since 1994. He has been
employed with ResCare since 1984 except for a period between 1987 and 1989. He
has served in various administrative positions in ResCare's Division for Persons
with Disabilities. In 1991, he was named Vice President for Operations in
Kentucky and Indiana.
Mr. Dunn, age 34, has served as Executive Vice President, Development,
since 1997 and has responsibility for overseeing all of ResCare's development
activities. In addition, since 1999, Mr. Dunn has served as Executive Vice
President for Alternative Youth Services and Youthtrack. From 1992 to 1997, Mr.
Dunn was employed by Laidlaw, Inc., most recently as Corporate Director,
Financial Operations for the Laidlaw Medical Transportation, Inc. subsidiary, an
operator of ambulance services.
Mr. Gronefeld, age 41, was named Executive Vice President of Finance
and Administration in May 1998 after serving as Executive Vice President of
Operations for the Division for Youth Services since January 1998 and Vice
President responsible for ResCare's Alternative Youth Services and Youthtrack
subsidiaries since January 1997. Mr. Gronefeld joined ResCare in June 1995 as
Director of Internal Audit and from July 1995 through March 1996, he served as
interim senior administrator for ResCare's west region in its Division for
Persons with Disabilities. From November 1990 until June 1995, Mr. Gronefeld
served as President of Total Color Corporation, a graphic arts firm in
Louisville, Kentucky.
Section 16(a) of the Securities Exchange Act of 1934 requires ResCare's
directors and executive officers and people who own more than 10 percent of
ResCare's common stock to file initial stock ownership reports and reports of
changes in ownership with the Securities and Exchange Commission. Based on a
review of these reports, there were no late filings of the reports.
2
<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides information concerning compensation
awarded to, earned by or paid to the executive officers of ResCare during the
year ended December 31, 1999.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION OPTIONS/SAR ALL OTHER
AS OF DECEMBER 31, 1999 YEAR SALARY BONUS (1) (SHARES)(2) COMPENSATION (3)
- ----------------------- ---- ------ -------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Ronald G. Geary 1999 $314,786 $ 0 0 $36,174
Chairman of the Board, President and 1998 311,279 0 253,100 36,669
Chief Executive Officer 1997 309,752 145,105 90,000 18,585
E. Halsey Sandford 1999 100,000 0 0 10,000
Senior Executive 1998 100,000 0 0 10,173
1997 100,000 0 0 6,000
Jeffrey M. Cross 1999 152,250 0 0 22,838
Executive Vice President Operations 1998 152,267 0 93,700 18,463
Division for Persons with Disabilities 1997 149,034 30,469 38,750 8,941
Paul G. Dunn 1999 155,822 0 0 9,000
Executive Vice President, Development 1998 150,000 0 93,700 17,810
1997 96,346 25,001 37,500 43,268
Ralph G. Gronefeld, Jr. 1999 155,000 0 0 9,300
Executive Vice President Finance & 1998 135,736 0 127,500 9,538
Administration/Chief Financial Officer 1997 84,661 10,296 13,500 0
</TABLE>
- --------------------------------
(1) Bonuses paid to the executive officers are based on their employment
agreements. In September 1998, additional options were granted under
ResCare's 1998 Omnibus Stock Option Plan instead of bonuses that would
have been awarded in February 1999 for the year 1998.
(2) Options reflect the 3-for-2 stock split that was effective in June
1998.
(3) All Other Compensation represents amounts ResCare contributed to the
Retirement Savings Plan and to the 401(k) Restoration Plan which is
described later. Mr. Geary's other compensation for 1998 and 1999
includes $7,241 and $17,287, respectively, for personal use of the
ResCare corporate airplane. Mr. Dunn's other compensation for 1997
includes reimbursement for moving expenses and for 1998 includes
forgiveness of the balance of $6,274 due on a loan ResCare made to him
when he moved. Mr. Dunn was not eligible to participate in the
Retirement Savings Plan in 1997.
ResCare has established the 401(k) Restoration Plan to permit certain
members of management to defer compensation pre-tax and to permit ResCare to
contribute on behalf of such employees without the restrictions imposed by the
Internal Revenue Code on the tax-qualified Retirement Savings Plan. ResCare's
matching contribution on behalf of each participant matches the employee's
contribution dollar for dollar up to the first three percent and one-half of the
next three percent of the employee's salary which is the same as the
contribution ResCare makes for employees who participate in ResCare's Retirement
Savings Plan.
Option Grants for 1999
There were no options granted in 1999 to executive officers.
3
<PAGE> 5
Mr. Cross exercised stock options during the year ending December 31,
1999. The following table indicates the total number of exercisable and
unexercisable stock options on December 31, 1999 held by the executive officers
named in the Summary Compensation Table and the related value of such options
based on the last sales price of the common stock on The NASDAQ National Market
on December 31, 1999 of $12.75 per share.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End
Option Values
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
-------------------- --------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ronald G. Geary 0 0 703,546 shares 0 shares $1,261,759 $ 0
E. Halsey Sandford 0 0 2,025 shares 0 shares 0 0
Jeffrey M. Cross 21,750 307,489 146,305 shares 22,020 shares 67,041 21,500
Paul G. Dunn 0 0 119,980 shares 11,220 shares 0 0
Ralph G. Gronefeld, Jr. 0 0 92,400 shares 52,651 shares 16,125 8,062
</TABLE>
- ---------------------------
(1) Market value on the date of exercise of shares acquired upon exercise, less
the option exercise price.
Employment Agreements
Mr. Geary has an employment agreement with ResCare that extends for a
five-year term. It expires in September 2000; however, it automatically renews
for one-year periods beginning one year before the expiration date so that the
remaining term equals two years. Under the agreement which was signed in 1995,
Mr. Geary receives a base salary of $300,000 which is adjusted each year based
on the increase in the Consumer Price Index for Urban Wage Earners and Clerical
Workers. Mr. Geary is eligible for an annual bonus equal to from 0 percent to 50
percent of his base salary based on performance criteria that Mr. Geary and the
executive compensation committee of the board of directors mutually agree to on
or before January 1 of each year. Effective on the date of the agreement, Mr.
Geary was granted options to purchase 97,500 shares (adjusted for the stock
splits) of common stock at a price of $16.00 per share which could be exercised
beginning with the date of the grant. In addition, ResCare will grant options to
purchase 112,500 shares (adjusted for the 3-for-2 split) of common stock at the
fair market value on the last Thursday of February during each of the remaining
years of the term of the agreement.
In addition, ResCare provides to Mr. Geary maximum disability insurance
coverage permitted under ResCare's current benefit plan, equips an office in Mr.
Geary's home, pays fees for personal tax and financial planning and for an
annual physical. The agreement also provides that if Mr. Geary's employment is
terminated following a change in the control of ResCare, Mr. Geary shall be
entitled to receive the unpaid balance of his full base salary through the
effective termination date of the agreement and for an additional two years. The
agreement may be terminated with or without cause at any time. If it is
terminated without cause, Mr. Geary will continue to receive his base salary for
the balance of the term. He would also receive a prorated bonus earned for that
year plus any unpaid cash bonus for a prior year. If there is a change of
control of ResCare, or if the agreement is terminated without cause, ResCare
will repurchase unexercised vested options.
Mr. Sandford has had an employment agreement with ResCare since March
1, 1992. The agreement was amended effective March 1, 1996 on substantially the
same terms and conditions except that effective June 1, 1996 it reduced Mr.
Sandford's time commitment to 32 hours a week and established his base salary at
$100,000. The agreement automatically renewed effective March 1, 1997 for a
one-year term. In January 1998, ResCare entered into a new employment agreement
with Mr. Sandford on basically the same terms and conditions effective as of
March 1, 1998 for a term of one year. The agreement was renewed effective March
1, 1999 and again effective March 1, 2000. Mr. Sandford does not participate in
ResCare's incentive stock option plan or the annual bonus plan.
4
<PAGE> 6
ResCare has employment agreements with Messrs. Cross, Dunn and
Gronefeld that contain basically the same terms and conditions. The agreements
are for initial terms of three years commencing January 1, 1997, May 1, 1997 and
January 1, 1998 respectively. The agreements for Messrs. Cross, Dunn and
Gronefeld renew automatically for one-year periods after the expiration of their
respective terms unless either ResCare or the employee gives notice of
termination. ResCare may terminate all of the agreements with or without cause
at any time. They provide for base salaries of $150,000, except for Mr.
Gronefeld whose base salary is $155,000, subject to annual increases based on
the Consumer Price Index "All Items" category. Each of these executives also
participates in ResCare's Compensation/Evaluation Bonus Plan and is eligible to
receive an annual bonus of up to 25% of that year's base salary. Under the
agreements, Messrs. Cross and Dunn each were granted options on August 15, 1997
to purchase 37,500 shares of common stock exercisable on August 15, 1998 and, on
August 15, 1998, each was granted options to purchase 75,000 shares of common
stock exercisable in 50% increments on August 15, 1999 and 2000. Under his
agreement, on August 15, 1998, Mr. Gronefeld was granted options to purchase
37,500 shares of common stock exercisable on August 15, 1999 and, on September
1, 1998, he was granted options to purchase 75,000 shares exercisable in 50%
increments on September 1, 1999 and 2000. The exercise price for the options
under all of the agreements is the closing sale price of the common stock on the
grant date.
Bonuses awarded under the Compensation/Evaluation Bonus Plan are based
on achieving various individual, department, division and Company goals,
including goals that relate to such matters as quality control compliance,
divisional revenue growth, and budgetary compliance. Bonuses are calculated on
the basis of the percentage of goals met during the year.
If any of the agreements with Messrs. Sandford, Cross, Dunn and
Gronefeld are terminated without cause, the employee will receive the full base
salary for six months after the date of termination, unless the termination is
after a change of control in which case he will receive the full base salary for
one year after termination. In case of termination without cause, Messrs. Cross,
Dunn and Gronefeld will also receive a cash bonus prorated based on the number
of full months that have passed from the immediately preceding January 1 (May 1
for Mr. Dunn) until the date of termination, plus any earned but unpaid cash
bonus from a prior period. If ResCare terminates an executive's employment
agreement for cause, the executive would not be entitled to any compensation
following the date of termination other than the pro rata amount of the then
current base salary through such date. If their employment is terminated for any
reason, Mr. Sandford will be prohibited from competing with ResCare for five
years and Messrs. Geary, Cross, Dunn and Gronefeld will be prohibited for one
year.
Compensation of Directors
Directors who are employees of ResCare receive no compensation for
their services as directors. ResCare's non-employee directors, Messrs. Fornear,
Bryson, Lunsford, Pettinelli and Ms. Kirtley, receive an annual retainer of
$6,000 plus $1,000 for each board meeting that they attend and $500 for each
committee meeting they attend as members of committees of the board. In
addition, the non-employee directors participate in ResCare's 1993 Non-Employee
Directors Stock Ownership Incentive Plan which provides for the grant of options
to purchase 4,500 shares of ResCare common stock to each non-employee director
on the first business day of July of each year that the director serves on the
board.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Ownership of Equity Securities
The following table shows certain information about the beneficial
ownership of ResCare common stock as of March 31, 2000 by:
o each person whom ResCare knows beneficially owns more than five
percent of the outstanding shares of ResCare common stock;
o each of ResCare's directors;
o each of ResCare's executive officers named in the Summary
Compensation Table; and
o all directors and executive officers of ResCare as a group.
5
<PAGE> 7
Unless otherwise indicated, each of the shareholders listed below has
sole voting and investment power over the shares.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS (1) BENEFICIALLY OWNED (2) PERCENT OF TOTAL
- -------------------- ---------------------- ----------------
<S> <C> <C>
James R. Fornear 2,621,795 (3)(4) 10.8%
Vincent D. Pettinelli 2,305,504 9.5%
Ronald G. Geary 1,614,138 (5) 6.4%
FMR Corporation 1,606,800 (6) 6.6%
Margaret H. Fornear 1,363,876 (7) 5.6%
Spiro B. Mitsos, Ph.D. 283,265 (8) 1.2%
Jeffrey M. Cross 167,154 (9) *
E. Halsey Sandford 143,715 (10) *
Paul G. Dunn 121,280 (11) *
Ralph G. Gronefeld, Jr. 100,115 (12) *
W. Bruce Lunsford 57,750 (13) *
Seymour L. Bryson, Ph.D. 28,688 (14) *
Olivia F. Kirtley 9,225 (15) *
All directors and executive officers as a group (11 persons) 7,452,599 (16) 29.2%
</TABLE>
* Indicates less than 1 percent of outstanding common stock.
(1) The following are addresses of the people ResCare knows beneficially own
more than five percent of the outstanding common stock: James R. and
Margaret H. Fornear, 4331 U.S. 60 East, Marion, Kentucky 42064; Vincent D.
Pettinelli, 5943 Macewen Court, Dublin, OH 43017; Ronald G. Geary, 10140
Linn Station Road, Louisville, Kentucky 40223; FMR Corporation, 82
Devonshire Street, Boston, Massachusetts 92109; and Goldman Sachs Asset
Management, 1 New York Plaza, New York, NY 10004.
(2) Each named person or group is considered to be the beneficial owner of
securities that the person may acquire within 60 days through the exercise
or conversion of options, warrants and rights, if any. Those securities
are included in the total number of outstanding shares when computing the
percentage beneficially owned by the person or group. The securities are
not included in the total number of outstanding shares when computing the
percentage of stock beneficially owned by any other person or group. The
number of shares includes shares that would be issued when a person
converts convertible securities or when a person or group exercises
options (including employee stock options).
(3) As husband and wife, James R. Fornear and Margaret H. Fornear each may be
considered the beneficial owner of the shares of common stock owned by the
other under the applicable rules of the Securities and Exchange
Commission. Both Mr. and Mrs. Fornear disclaim such beneficial ownership.
Does not include shares owned by Mr. and Mrs. Fornear's adult children.
(4) Includes 1,403,757 shares over which Mr. Fornear shares voting and
investment power and 1,218,038 shares over which he has sole voting and
investment power. Includes 702,209 shares over which Mr. Fornear shares
voting and investment power with Mrs. Fornear as trustee of three trusts
of which she is the beneficiary. Also includes 1,125 shares subject to
options that are presently exercisable.
(5) Includes 816,046 shares subject to options that are presently exercisable,
3,925 shares held by two family members in which Mr. Geary disclaims
beneficial ownership and 2,094 shares held as of February 4, 2000 for the
benefit of Mr. Geary by the Retirement Savings Plan over which Mr. Geary
has no voting power but does have investment power.
(6) The information for FMR Corporation and its controlling stockholders,
Edward D. Johnson, III and Abigail P. Johnson, based on the Schedule 13G
dated February 14, 2000 filed with the Securities and Exchange Commission,
states that these shares were acquired in the ordinary course of business
solely for investment purposes and not for the purpose or effect of
changing or influencing the control of ResCare.
(7) Includes 702,209 shares over which Mrs. Fornear has shared voting and
investment power as beneficiary of three trusts of which Mr. Fornear is
trustee and 661,667 shares over which she has sole voting and investment
power. Does not include shares held for the benefit of family members in
trusts with an independent trustee.
6
<PAGE> 8
(8) Represents shares owned jointly by Dr. and Mrs. Mitsos over which they
share voting and investment power.
(9) Represents shares owned jointly by Mr. and Mrs. Cross over which they
share voting and investment power. Includes 144,504 shares subject to
options that are presently exercisable.
(10) Includes 2,025 shares subject to options that are presently exercisable.
Does not include 129,622 shares held in trust for the benefit of Mrs.
Sandford and their children for which Mrs. Sandford is trustee and over
which Mr. Sandford has no voting or investment power and in which he
disclaims any beneficial interest.
(11) Represents shares owned jointly by Mr. and Mrs. Dunn over which they share
voting and investment power. Includes 119,980 shares subject to options
that are presently exercisable.
(12) Includes 99,151 shares subject to options that are presently exercisable
and 264 shares held by the Retirement Savings Plan over which Mr.
Gronefeld has no voting power, but does have investment power. Also
includes 700 shares held in Mrs. Gronefeld's IRA over which Mr. Gronefeld
holds neither voting nor investment power.
(13) Includes 15,750 shares subject to options that are presently exercisable.
(14) Includes 15,750 shares subject to options that are presently exercisable.
(15) Includes 5,625 shares over which Ms. Kirtley exercises sole voting and
investment power and 3,600 over which she shares voting and investment
power with her husband. Also includes 1,125 shares subject to options that
are presently exercisable.
(16) Includes 1,215,465 shares subject to options that are presently
exercisable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Lunsford, a director of ResCare, is Chairman of the board of
Ventas, Inc., a real estate investment trust. Mr. Lunsford owns less than five
percent of its common stock and less than one percent of ResCare common stock.
Mr. Lunsford serves on the Executive Compensation Committee of the ResCare board
of directors. Mr. Geary, a director and Chairman of the board, President and
Chief Executive Officer of ResCare, is a director of Ventas. Mr. Geary is the
beneficial owner of approximately 6.4 percent of ResCare common stock and less
than one percent of Ventas common stock. Mr. Geary serves on the Executive
Compensation Committee of Ventas.
In October 1998, ResCare acquired the stock of Tangram Rehabilitation
Network, Inc. As part of that transaction, immediately before the closing,
Tangram sold ten real estate properties to Ventas. Tangram then leased the
properties back from Ventas. The lease is for a term of twelve years with
options to renew for four five-year terms. The annual rent is 10.25 percent of
the sales price annually adjusted based on Consumer Price Index subject to some
limitations specified in the agreement. Messrs. Lunsford and Geary did not
participate when the boards of Ventas and ResCare discussed and voted on the
transaction.
Mr. Pettinelli has an interest in partnerships that own approximately
60 properties that are leased to subsidiaries of ResCare or to non-profit
agencies with which subsidiaries of ResCare have management agreements. The
leases generally have terms ranging from 10 to 25 years. Rental under these
leases is approximately $1 million annually. In addition, PeopleServe, Inc., a
subsidiary of ResCare, has guaranteed or in some other way agreed to be
obligated for the payment of funds borrowed by these partnerships from third
party lenders. Mr. Pettinelli has indemnified PeopleServe, Inc. and the
indemnification is secured with a pledge of ResCare stock or other securities.
7
<PAGE> 9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RES-CARE, INC
Date: April 28, 2000 By: /s/ Ronald G. Geary
------------- ------------------------------------
Ronald G. Geary
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronald G. Geary Chairman of the Board, President, Chief April 28, 2000
- ---------------------------------- Executive Officer and Director
Ronald G. Geary (Principal Executive Officer)
/s/ E. Halsey Sandford Senior Executive and Director April 28, 2000
- ----------------------------------
E. Halsey Sandford
/s/ Ralph G. Gronefeld, Jr. Executive Vice President, April 28, 2000
- ---------------------------------- Finance and Administration and
Ralph G. Gronefeld, Jr. Chief Financial Officer
(Principal Financial Officer)
/s/ James R. Fornear Director April 28, 2000
- ----------------------------------
James R. Fornear
/s/ Seymour L. Bryson Director April 28, 2000
- ----------------------------------
Seymour L. Bryson
/s/ W. Bruce Lunsford Director April 28, 2000
- ----------------------------------
W. Bruce Lunsford
/s/ Spiro B. Mitsos Director April 28, 2000
- ----------------------------------
Spiro B. Mitsos
/s/ Olivia F. Kirtley Director April 28, 2000
- ----------------------------------
Olivia F. Kirtley
/s/ Vincent D. Pettinelli Director April 28, 2000
- ----------------------------------
Vincent D. Pettinelli
</TABLE>
8
