SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by
Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Caretenders Health Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X ] $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.
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.
(3) Filing Party:
(4) Date Filed:
<PAGE>
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 19, 1996
To the Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Caretenders Health
Corp. (the "Company"), will be held in Terrace One of Holiday Inn, 1325
Hurstbourne Lane, Louisville, Kentucky 40222, on Tuesday, November 19, 1996, at
10 a.m. local time for the following purposes:
(1) To elect a Board of five directors to serve until the next annual meeting of
stockholders;
(2) To ratify the appointment of Arthur Andersen LLP. as the Company's
independent auditor for the fiscal year ending March 31, 1997; and
(3) To transact such other business as may properly come before the meeting or
any adjournments thereof.
A Proxy Statement describing matters to be considered at the Annual Meeting is
attached to this Notice. Only stockholders of record at the close of business
on October 7, 1996 are entitled to receive notice of and to vote at the meeting.
By Order of the Board of Directors
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 15, 1996
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN PROVIDED.
IN THE EVENT YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE>
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 19, 1996
GENERAL INFORMATION
This Proxy Statement and accompanying proxy are being furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board") of
Caretenders Health Corp., a Delaware corporation (the "Company"), to be voted at
the Annual Meeting of Stockholders (the "Annual Meeting") and any adjournments
thereof. The Annual Meeting will be held in Terrace One of Holiday Inn, 1325
Hurstbourne Lane, Louisville, Kentucky 40222, on Tuesday, November 19, 1996, at
10 a.m. local time for the purposes set forth in this Proxy Statement and the
accompanying Notice of Annual Meeting. This Proxy Statement and accompanying
proxy are first being mailed to stockholders on or about October 15, 1996.
A stockholder signing and returning a proxy has the power to revoke it at any
time before the shares subject to it are voted by (i) notifying the Secretary of
the Company in writing of such revocation, (ii) filing a duly executed proxy
bearing a later date or (iii) attending the Annual Meeting and voting in person.
If the proxy is properly signed and returned to the Company and not revoked, it
will be voted in accordance with the instructions contained therein. Unless
contrary instructions are given, the proxy will be voted FOR the nominees for
director named in the Proxy Statement, FOR the ratification of Arthur Andersen
LLP as independent auditor for the Company and in the discretion of proxy
holders on such other business as may properly come before the Annual Meeting.
The original solicitation of proxies by mail may be supplemented by telephone
and other means of communication and through personal solicitation by officers,
directors and other employees of the Company, at no compensation. Proxy
materials will also be distributed through brokers, custodians and other like
parties to the beneficial owners of the Company's common stock, par value $.10
per share (the "Common Stock"), and the Company will reimburse such parties for
their reasonable out-of-pocket and clerical expenses incurred in connection
therewith.
RECORD DATE AND VOTING SECURITIES
The Board has fixed the record date (the "Record Date") for the Annual Meeting
as the close of business on October 7, 1996. At the Record Date, there were
outstanding 3,119,413 shares of Common Stock, excluding 10,000 shares held in
the Company's Treasury (each of which is entitled to one vote per share on all
matters to be considered at the Annual Meeting). No shares of the Company's
Series A Convertible Preferred Stock ("Preferred Stock") were outstanding on the
Record Date. A majority of the total number of shares of outstanding Common
Stock present in person or by proxy is required to constitute a quorum to
transact business at the Annual Meeting. Abstentions and "withheld" votes will
be counted as present for purposes of determining whether a quorum exists, but
as not voted for purposes of determining the approval of any matter submitted to
the stockholders for a vote. Because Delaware law treats only those shares
voted "for" a matter as affirmative votes, abstentions and withheld votes will
have the same effect as negative votes or votes "against" a particular matter.
If a broker indicates that it does not have discretionary authority as to
certain shares to vote on a particular matter, such shares will not be
considered as present and entitled to vote with respect to that matter.
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
Common Stock
The following table sets forth as of the Record Date certain information with
respect to the beneficial ownership of the Company's Common Stock of (i) each
executive officer of the Company named in the Summary Compensation Table set
forth herein under "Executive Compensation", (ii) each director or nominee for
director of the Company, (iii) all directors and executive officers as a group
and (iv) each person known to the Company to be the beneficial owner of more
than 5% of the outstanding Common Stock.
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially Owned (1) (2)
Amount and Nature Percentage
Directors and Executive Officers of Beneficial Ownership of Class
<S> <C> <C>
William B. Yarmuth 318,300 (3) 9.69%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 318,300 (3) 9.69%
C. Steven Guenthner 33,737 (4) 1.07%
Steven B. Bing 10,840 (5) *
Patrick B. McGinnis 13,500 (6) *
Donald G. McClinton 12,500 (6) *
Tyree Wilburn 7,500 (7) *
Directors and Executive Officers
as a Group (7 Persons) 396,377 (8) 11.88%
Additional Five Percent Beneficial Owners
HEALTHSOUTH Rehabilitation Corporation 1,015,101 (9) 29.98%
Two Perimeter Park South
Birmingham, AL 35243
Wellington Management Company
75 State Street
Boston, MA 02109 170,120 5.45%
Heartland Fund Advisors 329,000 10.55%
Robert N. Yarmuth 157,723 5.06%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
</TABLE>
* Represents less than 1% of the class.
<PAGE>
(1) Based upon information furnished to the Company by the named persons, and
information contained in filings with the Securities and Exchange Commission
(the "Commission"). Under the rules of the Commission, a person is deemed to
beneficially own shares over which the person has or shares voting or
investment power or has the right to acquire beneficial ownership within 60
days. Unless otherwise indicated, the named person has the sole voting and
investment power with respect to the number of shares of Common Stock set
forth opposite such person's name.
(2) Assumes inclusion of the shares of Common Stock issuable upon exercise of
outstanding redeemable warrants. Assumes conversion of series A Convertible
Preferred Stock issuable upon exercise of outstanding warrants into Common
Stock.
(3) Includes 8,886 shares as to which Mr. Yarmuth shares voting and investment
powers pursuant to a family trust, vested options for 115,917 shares held by Mr.
Yarmuth and vested options for 48,500 shares held by Mrs. Yarmuth, in addition
to 12,927 shares owned directly by Mrs. Yarmuth.
(4) Includes 25,000 shares subject to currently exercisable options.
(5) Includes 10,500 shares subject to currently exercisable options.
(6) Includes 7,500 shares subject to currently exercisable options.
(7) Includes 2,500 shares subject to currently exercisable options.
(8) Includes currently exercisable options held by all directors and executive
officers as a group to purchase 217,417 shares of Common Stock.
(9) Includes currently exercisable warrants for the purchase of 200,000 shares
of Common Stock. In addition, HEALTHSOUTH Rehabilitation Corporation
("HEALTHSOUTH") owns warrants for an additional 66,600 Series A Convertible
Preferred Shares.
Preferred Stock
The Company has no shares of Preferred Stock outstanding. HEALTHSOUTH holds
currently exercisable warrants to purchase 66,600 shares of Series A Preferred
Stock. See "Security Ownership of Principal Holders and Management --
Relationship with HEALTHSOUTH Rehabilitation Corporation." Each share of Series
A Preferred Stock is convertible into one share of Common Stock and entitled
to one vote on all matters submitted to the holders of Common Stock. The
warrants may be transferred by HEALTHSOUTH only to its affiliates.
Relationship with HEALTHSOUTH Rehabilitation Corporation
The Company has an agreement with HEALTHSOUTH under which HEALTHSOUTH purchases
certain durable medical equipment and prosthetic and orthotic appliances (to
fill HEALTHSOUTH's normal business requirements of such items) from the Company.
During the years ended March 31, 1996, 1995 and 1994, the Company realized sales
of $84,000, $391,000 and $503,000 to HEALTHSOUTH, respectively, at terms
the Company normally offers its customers. The outstanding receivables from
HEALTHSOUTH were $17,000 and $109,000 as of March 31, 1996 and 1995,
respectively.
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
At the Annual Meeting, five directors are to be elected to serve until the next
annual meeting of stockholders. The persons named in the accompanying proxy
have advised the Company that they intend to vote the shares covered by the
proxies FOR the election of the nominees named below. Proxies cannot be voted
for a greater number of persons than are named. Although it is not anticipated
that any of the nominees will decline or be unable to serve, if that should
occur, the proxy holders may, in their discretion, vote for substitute nominees.
Directors are elected by a plurality of the votes cast.
Nominees for Election as Directors
Set forth below is a list of Board members who will stand for re-election at the
Annual Meeting, together with their ages, all Company positions and offices
currently held by them and the year in which each person joined the Board of
Directors.
<TABLE>
<CAPTION>
Name Age Position or Office Director Since
<S> <C> <C> <C>
William B. Yarmuth 44 Chairman of the Board,
President and
Chief Executive Officer 1991
Steven B. Bing 49 Director 1992
Donald G. McClinton 63 Director 1994
Patrick B. McGinnis 49 Director 1994
Tyree G. Wilburn 44 Director 1996
</TABLE>
William B. Yarmuth. Mr. Yarmuth has been a director of the Company since 1991,
when the Company acquired National Health Industries, where Mr. Yarmuth was
Chairman, President and Chief Executive Officer. After the acquisition, Mr.
Yarmuth became the President and Chief Operating Officer of the Company. Mr.
Yarmuth became Chairman and CEO in 1992. He was Chairman of the Board,
President and Chief Executive Officer of National from 1981 to 1991.
Steven B. Bing. Mr. Bing was elected a director in January 1992. Mr. Bing is
an employee of R. Gene Smith, Inc., a private investment company located in
Louisville, Kentucky. From 1989 to March 1992, Mr. Bing was President of ICH
Corporation, an insurance holding company. From 1984 to 1989, he served as
Senior Vice President of ICH Corporation.
Donald G. McClinton. Mr. McClinton was elected a director in October 1994.
From 1986 to 1994, Mr. McClinton was co-chairman of Interlock Industries, a
privately held conglomerate in the metals and transportation industries. He is
also a director of Mid-America Bancorp and Jewish Hospital Health Systems. and
is a private investor.
Patrick B. McGinnis. Mr. McGinnis was elected a director in October 1994. Mr.
McGinnis is President of Medaphis Healthcare Information Technology Company.
Prior to holding that position Mr. McGinnis was the co-founder of Healthcare
Recoveries, Inc. and served as its President and Chief Executive Officer. From
1979 to 1988, Mr. McGinnis was Vice President-Finance and Planning for Humana,
Inc.
<PAGE>
Tyree G. Wilburn was elected a director in January 1996. Mr. Wilburn is private
investor who was formerly Senior Vice President and Chief Financial Officer,
Acquisition and Development of Community Health Systems and served as its Chief
Development Officer since 1992.
Meetings of the Board of Directors
The Board met on six occasions during the 1996 fiscal year. Each incumbent
director attended at least 75% of the aggregate of the meetings of the Board and
its committees on which such director served during his period of service.
Committees of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. The Board does not have a nominating committee;
nominating functions are performed by the entire Board.
The Executive Committee is authorized to exercise the powers of the Board of
Directors during intervals between Board meetings, subject to limits set forth
by the Board, the Company's by-laws and Delaware law. The members of the
Executive Committee are Messrs. Yarmuth, Bing and McGinnis. The Executive
Committee did not meet independently during the 1996 fiscal year, but matters
normally discussed by the Executive Committee were discussed and acted upon by
the Board.
The functions of the Audit Committee include reviewing the scope of the audit,
reviewing the corporate accounting practices and policies with the independent
auditors, reviewing with the independent auditors their final report, reviewing
with independent auditors overall accounting and financial controls and
consulting with the independent auditors. The members of the Audit Committee
are the four outside members of the Company's Board of Directors, Messrs. Bing,
McClinton, McGinnis and Wilburn. The Audit Committee met once during the 1996
fiscal year.
The principal duties of the Compensation Committee are to review the
compensation of directors and officers of the Company and to prepare
recommendations and periodic reports to the Board concerning such matters. The
Compensation Committee also administers the Company's employee stock option
plans. The members of the Compensation Committee are Messrs. Bing, McClinton,
McGinnis and Wilburn. The Compensation Committee met twice during the 1996
fiscal year.
<PAGE>
Compensation of Directors
Directors who are not also employees of the Company are entitled to compensation
at a rate of $1,250 for each Board of Directors meeting attended and $250 for
each committee meeting attended that is scheduled independently. In addition,
non-employee directors are eligible to receive stock options under the
Caretenders Health Corp. 1993 Stock Option Plan for Non-Employee Directors (the
"Directors' Plan") adopted by the Board on February 17, 1993, and subsequently
approved by stockholders. Pursuant to the terms of the Directors' Plan, Mr.
Bing was granted options to purchase 10,000 shares of the Company's Common Stock
at $9.69, Messrs. McGinnis and McClinton were each granted options to purchase
10,000 shares of the Company's Common Stock at $8.13 per share, and Mr. Wilburn
was granted options to purchase 10,000 shares of the Company's Common Stock at
$7.88 per share. The Directors' options vest 25% the day following six months
after the date of grant and 25% on each of the first, second, and third
anniversary dates of the grant.
William Yarmuth Employment Agreement
On January 1, 1996, the Company entered into a new employment agreement with
William B. Yarmuth, its Chairman of the Board, President and Chief Executive
Officer. The initial term of the agreement is three years with subsequent
automatic one-year renewals. This agreement replaced Mr. Yarmuth's previous
agreement which was not scheduled to expire until 1998. Under the terms of the
new agreement, Mr. Yarmuth will earn an annual base salary of $190,000 and be
eligible for a performance based cash incentive of up to 35% of annual base
salary. The agreement includes a covenant not to compete for a period of two
years and potential termination payments to Mr.Yarmuth of two times his annual
salary.
Upon entering into this new agreement, Mr. Yarmuth received a one-time cash
payment of $60,000 and was awarded an option to purchase 25,000 shares of the
Company's common stock pursuant to the 1987 Nonqualified Stock Option Plan at
fair market value ($5.88) on the date of grant (January 1, 1996).
Compliance With Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of stock ownership and reports of
changes in stock ownership and to provide the Company with copies of all such
filed forms. Based solely on its review of such copies or written
representations from reporting persons, the Company believes that all reports
were filed on a timely basis, with the exception of the late filing by Tyree
Wilburn, a director of the Company, of one Form 3 report disclosing options to
purchase Common Stock of the Company upon becoming a director. In addition, at
the date of this proxy statement, the Company had not received a copy of one
Form 5 report from Robert Shulman (or a written confirmation from Mr. Shulman
that the Form 5 was not required). Mr. Shulman ceased to be a director of the
Company in December 1995.
<PAGE>
RECOMMENDATION
Assuming the presence of a quorum, directors shall be elected by a plurality of
the votes cast at the Annual Meeting by holders of Common Stock voting for the
election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
EACH OF THE FIVE NOMINEES FOR DIRECTOR OF THE COMPANY.
EXECUTIVE COMPENSATION
Set forth below is information concerning the annual and long-term compensation
paid during the last three fiscal years to the Chief Executive Officer and the
most highly compensated executive officers of the Company during the 1996 fiscal
year whose combined salary and bonus exceeded $100,000. These amounts do not
include payments made to the named executive officers in the form of automobile
allowances and certain other benefits, the aggregate amounts of which, in the
case of each named executive officer, did not exceed 10% of the total annual
salary and bonus reported for such officer.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Securities
Underlying
Annual Compensation Options
Name and Principal Position Year Salary Bonus No. ofShares
<S> <C> <C> <C> <C>
William B. Yarmuth 1996 $229,413 $126,500(1) 50,000
Chairman of the Board, 1995 230,577 81,000 -
President and Chief 1994 220,000 108,000 -
Executive Officer
Mary A. Yarmuth 1996 125,000 31,250 15,000
Senior Vice President-Operations 1995 111,154 25,000 -
1994 110,000 40,000 -
C. Steven Guenthner 1996 125,000 31,250 15,000
Senior Vice President, 1995 111,154 25,000 -
Secretary/Treasurer and 1994 103,000 40,000 -
Chief Financial Officer
JoAnn Young 1996 101,858 10,186 4,500
Vice President-Operations 1995 101,538 15,000 6,000
1994 81,154 25,000 4,000
</TABLE>
(1) On January 1, 1996, Mr. Yarmuth entered into a new employment agreement
with the Company. Of the bonus amount shown, $60,000 was paid in connection
with Mr. Yarmuth entering into the new agreement and making certain concessions
in compensation and other benefits as compared to his previous agreement see
"William Yarmuth Employment Agreement" for more information.
<PAGE>
OPTION GRANTS IN FISCAL 1996
No stock appreciation rights were awarded to the named executive officers during
the 1996 fiscal year. The following table sets forth information with respect
to the number of stock options granted to the executive officers named in the
Summary Compensation Table during the 1996 fiscal year under the 1987
Nonqualified Stock Option Plan and 1986 Incentive Stock Option Plan.
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options Granted at Assumed Annual Rates of
Underlying
Options to All Exercise or Stock Price Appreciation
GrantedEmployees in Base Price Expiration for Option Term(5)
Name No. of Shares Fiscal 1996 ($ per share) Date (4) 5% 10%
Potential
Number of % of Total Realizable Value
Securities Options at Assumed Annual
Underlying Granted Rates of Stock
Options to All Exercise or Price Appreciation
No. of Employees in Base Price Expiration for Term (5)
Name Shares Fiscal 1996 $ per share Date (4) 5% 10%
<S> <C> <C> <C> <C> <C> <C>
William B. Yarmuth 17,000(1) 13.6% $ 6.25 10/22/05 $ 66,820 $169,335
William B. Yarmuth 8,000(2) 6.4% 6.25 10/22/05 31,445 79,687
William B. Yarmuth 25,000(3) 20.0% 5.88 12/31/05 92,448 234,280
Mary A. Yarmuth 15,000(1) 12.0% 6.25 10/22/05 58,959 149,413
C. Steven Guenthner15,000(1) 12.0% 6.25 10/22/05 58,959 149,413
JoAnn Young 4,500(2) 3.6% 6.25 10/22/05 17,688 44,824
</TABLE>
(1) Options granted under the 1986 Incentive Stock Option Plan. These options
vest 34% one year from date of grant and 33% at the second and third anniversary
dates for the date of the grant.
(2) Options granted under the 1987 Nonqualified Stock Option Plan. These options
vest 25% at date of grant and 25% at each of the first, second and third
anniversary dates of the grant.
(3) Options granted under the 1987 Nonqualified Stock Option Plan. These
options vest 25% at six months from the date of grant and 25% at each of the
first, second and third anniversary dates of the grant.
(4) Options expire upon the earlier of the expiration date or 90 days following
termination of employment.
(5) Based upon actual option term and annual compounding, without regard to
taxes associated with gains upon option exercises. These amounts assume the
stated rates of appreciation will be realized. Actual gains, if any, are
dependent upon future performance of the Company's Common Stock, as well as
continued employment of the option holder through the vesting period.
<PAGE>
OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END VALUES
None of the executive officers named in the Summary Compensation Table exercised
stock options during the 1996 fiscal year. Set forth below is information with
respect to the number and value of unexercised stock options held by the named
executive officers at the end of the 1996 fiscal year.
<TABLE>
<CAPTION>
Shares Value of Unexercised
Acquired Number of Unexercised In-the-Money Options
on Value Options at Fiscal Year-end at Fiscal Year-end(1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C>
<C>
William B. Yarmuth - - 100,000 50,000 $2,260 $65,750
Mary A. Yarmuth - - 43,500 15,000 $105,885 $16,950
C. Steven Guenthner - - 20,000 15,000 - $16,950
JoAnn Young - - 8,625 7,375 $1,271 $3,814
</TABLE>
(1) These amounts represent the market value less the exercise price. The
market value of the Common Stock was $7.38 based on the closing bid price per
share at March 31, 1996, on the NASDAQ over-the-counter market.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies
The Compensation Committee of the Board of Directors is comprised of Messrs.
Bing, McClinton, McGinnis and Wilburn, each a non-employee director of the
Company. The Compensation Committee is responsible for advising the Board of
Directors on matters relating to the compensation of the Company's executive
officers and administering the Company's stock option plans. Set forth below
is a report submitted by the Compensation Committee describing its compensation
policies and the committee's decisions relating to compensation of executive
officers during the 1996 fiscal year.
The Compensation Committee's policies concerning the compensation of the
Company's executive officers are summarized as follows:
- - Compensation awarded by the Company should be effective in attracting,
motivating and retaining key executives;
- - Executive officers of the Company should be compensated at a level which is
comparable to other executives with similar skills and qualifications; and
- - The Company's compensation programs should give executive officers a financial
interest in the Company similar to the interests of the Company's stockholders.
<PAGE>
The Company's executive officers are compensated through a combination of
salary, annual bonuses (when appropriate) and grants of stock options under the
Company's option plans. The annual salaries of the Company's executives are
reviewed from time to time by the Compensation Committee. The Compensation
Committee recommends to the Board of Directors that adjustments be made where
necessary in order for the annual salaries of the Company's executives to be
competitive with the salaries in the health care field. To establish such
executive salaries, the Compensation Committee compares the Company's salaries
with those of other home health care companies and public companies with similar
market capitalizations as selected by the Compensation Committee. Annual
bonuses, when appropriate, may be awarded by the Board of Directors based on the
Company's achievement of objectives established by the Board.
The Compensation Committee periodically grants stock options under the Company's
option plans in order to provide executive officers and other employees with an
incentive to work for the success of the Company's business so as to increase
the price of the Company's Common Stock. The Compensation Committee believes
that stock options are a valuable tool in encouraging executive officers to
align their interests with the interests of the stockholders and to manage the
Company for the long term.
Compensation of the Chief Executive Officer
William B. Yarmuth, the Chairman, President and Chief Executive Officer of the
Company, is eligible to participate in the same executive compensation plans
available to the Company's other executive officers. Mr. Yarmuth's salary of
$229,413 for the 1996 fiscal year was determined pursuant to his employment
agreement. In recommending Mr. Yarmuth's 1996 bonus of $126,500, the
Compensation Committee considered the Company's improved financial performance
and other components of financial position during the 1996 fiscal year. Of that
amount, $60,000 was paid to Mr. Yarmuth in connection with his execution of a
new employment agreement with the Company. The new employment agreement reduced
Mr. Yarmuth's salary for the 1997 fiscal year to $190,000, while allowing for a
bonus of up to 35% of base salary for 1997. The Compensation Committee believes
that Mr. Yarmuth played an important role in these efforts and the Company's
improved operating results during fiscal 1996.
OBRA Deductibility Limitation
Under the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), subject to certain
exceptions and transition provisions, the allowable deduction for compensation
paid or accrued with respect to the chief executive officer and each of the four
most highly compensated executive officers of a publicly held corporation, is
limited to $1 million per year, per executive officer. The Company has
determined not to take any actions at this time with respect to its compensation
plans which might be necessary to exempt compensation under such plans from the
OBRA deductibility limitation.
THE COMPENSATION COMMITTEE:
Steven B. Bing
Donald G. McClinton
Patrick B. McGinnis
Tyree G. Wilburn
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE STOCKHOLDER RETURN
The graph that follows compares the cumulative return experienced by holders of
the Company's Common Stock during the last five fiscal years to the returns of a
peer group index comprised of other publicly-traded companies within the home
health care industry ("Peer Group") and to the returns of the CRP Index for
NASDAQ stock market (U.S. Companies). The graph assumes the investment of $100
on March 29, 1991 in the Company's Common Stock and each of the indices, and the
reinvestment of all dividends paid during the period on the securities
comprising the indices.
[Stock performance graph filed in hard copy form with the Securities and
Exchange commission pursuant to Rule 901(d) of Regulation S-T ; Chart data
listed below]
<TABLE>
<CAPTION>
Fiscal Year-Ended
March 31,
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Caretenders Health Corp. 100.00 173.59 120.76 105.66 78.49 89.06
Peer Group Index (1) 100.00 211.31 129.65 75.65 52.85 58.93
CRP Index for Nasdaq Stock Market 100.00 127.45 146.51 158.15 175.93 238.88
(U.S. Companies)
</TABLE>
(1) In addition to the Company, the peer group includes the following home
health care companies: Hospital Staffing Services, Inc.; In Home Health, Inc.;
and U.S. HomeCare Corporation.
<PAGE>
ITEM 2
RATIFICATION OF INDEPENDENT AUDITOR
The Board of Directors has appointed Arthur Andersen LLP as its independent
auditor for the fiscal year ending March 31, 1997. Representatives of Arthur
Andersen are expected to be present at the Annual Meeting where they will have
an opportunity to make a statement, if theydesire to do so, and to respond to
appropriate questions.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ARTHUR ANDERSEN
LLP AS THE COMPANY'S INDEPENDENT AUDITOR FOR THE 1997 FISCAL YEAR.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the next annual meeting of
stockholders must be received by the Company by June 12, 1997 in order to be
considered for inclusion in the Company's proxy materials for such meeting.
ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended March 31,
1996 accompanies this Proxy Statement.
FORM 10-K
The Company will provide without charge to each person to whom a copy of this
Proxy Statement is delivered a copy of the Company's annual report on Form 10-K
filed with the Securities and Exchange Commission (excluding exhibits to the
Form 10-K), upon written request addressed to C. Steven Guenthner, Caretenders
Health Corp., 100 Mallard Creek Road, Suite 400, Louisville, Kentucky 40207.
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of any other matters to be presented at the
Annual Meeting other than those set forth in the Notice of Annual Meeting and
routine matters incident to the conduct of the meeting. If any other matters
should properly come before the Annual Meeting or any adjournment or
postponement thereof, the persons named in the proxy, or their substitutes,
intend to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
C. Steven Guenthner
Secretary
Louisville, Kentucky
October 15, 1996
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
PROXY--ANNUAL MEETING OF STOCKHOLDERS
The undersigned, a stockholder of CARETENDERS HEALTH CORP., a Delaware
corporation (the "Company"), hereby appoints WILLIAM B. YARMUTH and C. STEVEN
GUENTHNER, and each of them, the true and lawful attorneys and proxies with full
power of substitution, for and in the name, place and stead of the undersigned,
to vote all of the shares of Common Stock of the Company which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders to be held in Terrace One of the Holiday Inn, 1325 Hurstbourne
Lane, Louisville, Kentucky, on Tuesday, November 19, 1996, at 10:00 a.m. local
time, and at any adjournment thereof.
The undersigned hereby instructs said proxies or their substitutes:
1. ELECTION OF DIRECTORS:
William B. Yarmuth, Steven B. Bing, Donald G. McClinton, Patrick B. McGinnis
and Tyree Wilburn.
[ ]Vote FOR all nominees listed [ ]WITHHOLD AUTHORITY to
(except as marked to the contrary below) vote for all nominees listed above
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name
in the space below.
This Proxy is continued on the reverse side. Please sign on the reverse
side and return promptly.
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as independent
auditors for the Company.
[ ]For [ ]Against [ ]Abstain
This proxy, when properly executed, will be voted in accordance with any
directions hereinbefore given. IF NO ELECTION IS MADE, THE PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2. MANAGEMENT RECOMMENDS A VOTE FOR THE ABOVE MATTERS.
3. DISCRETIONARY AUTHORITY: To vote with discretionary authority with respect
to all other matters which may properly come before the Annual Meeting.
Please sign exactly as name appears on label. If shares are
held by joint tenants, all parties in the joint tenancy must
sign. When signing as attorney, executor, administrator,
trustee or guardian, please indicate the capacity in which
signing. If a corporation, please sign in full corporate name
by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
__________________________________ _______________
Signature Date
__________________________________ _______________
Signature, if held jointly Date
