Amendment No. 1
Filed July 29, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K / A
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
___________________________to______________________________
Commission file number 1-9848
CARETENDERS HEALTH CORP.
(Exact name of registrant as specified in its charter)
Delaware 06-1153720
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 Mallard Creek Road, Suite 400, Louisville, Kentucky 40207
(Address of principal executive offices)
(502) 899-5355
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Common stock, par value $.10 per share Nasdaq National Market
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 period 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 Item 405 of regulation S-K is not contained
herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
As of July 26, 1996, 3,129,413 shares of the registrant's
common stock were outstanding. The aggregate market value of
Registrant's voting common stock held by non-affiliates of the
registrant as of July 26, 1996 was approximately $23,395,598
(based on the last sale price of a share of the common stock
as of July 26, 1996 ($7.50), as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") system).
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
ITEM 10. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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 Exchange
Commission initial reports of stock ownership and reports of
changes in stock ownership and to provide the company with copies
of all such forms they file. 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,
and at the date of this filing, the Company had not received a
copy of one Form 5 report from Robert S. Shulman, who ceased to
be a director of the company in December, 1995.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning
compensation paid by the Company for services rendered in all
capacities during the last three fiscal periods to the Chief
Executive Officer and the most highly compensated executive
officers during fiscal year 1996.
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Securities
Underlying
Annual Compensation Options/
Name and Principal Position Year Salary Bonus (No. of Shares
<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 0
President and Chief 1994 220,000 108,000 0
Executive Officer
Mary A. Yarmuth 1996 125,000 31,250 15,000
Senior Vice President- 1995 111,154 25,000 0
Operations
1994 110,000 40,000 0
C. Steven Guenthner 1996 125,000 31,250 15,000
Senior Vice President, 1995 111,154 25,000 0
Secretary/Treasurer and 1994 103,000 40,000 0
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
<FN>
(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 consideration of 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'' below for more information.
</FN>
</TABLE>
<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 Company's 1991 Long-Term
Incentive Plan, Nonqualified Stock Option Plan and 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
Granted employees in Base Price Expiration for Option Term (5)
Name number of 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 Guenthner 15,000(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
<FN>
(1) Options granted under the 1986 incentive stock plan. 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. 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. 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; acctual 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.
</FN>
</TABLE>
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.
<PAGE>
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 35% of annual base salary. The agreement includes a
covenant not to compete for a period of two years and potential
termination payments of two times 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 value at the date
of grant January 1, 1996 ($5.88).
Aggregate Option Exercises in Last Fiscal Year and Year-End
Option Values
Set forth below is information with respect to unexercised stock
options held by the executive officers named in the Summary
Compensation Table at March 31, 1996. None of the named
executive officers exercised any stock options during the 1996
fiscal year.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Options at Fiscal Yearend at Fiscal Yearend (1)
on Value ------------------------- -------------------------
Name exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- - -------------- -------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William B. 0 0 100,000 50,000 $2,260 $65,750
Yarmuth
Mary A. 0 0 43,500 15,000 $105,885 $16,950
Yarmuth
C. Steven 0 0 20,000 15,000 0 $16,950
Guenthner
JoAnn 0 0 8,625 7,375 $1,271 $3,814
Young
<FN>
(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.
</FN>
</TABLE>
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
Based on information filed with the Securities and Exchange
Commission and the Company's stock records, the following table
sets forth the beneficial ownership of the Common Stock as of
June __, 1996, by (I) beneficial owners of more than five percent
of the Common Stock, (ii) each director and nominee for director,
(iii) current named executive officers and (iv) all directors and
officers of the Company as a group.
<TABLE>
<CAPTION>
Shares of Capital
Stock Beneficially Owned(1)(2)
------------------------------
Amount Percentage
Name and Address -------------- ---------------
Directors and Executive Officers
of Beneficial Ownership of Class
<S> <C> <C>
William B. Yarmuth 305,633(3) 9.03%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 305,633(4) 9.03%
C. Steven Guenthner 28,694(5) *
Steven B. Bing 10,340(6) *
Patrick B. McGinnis 11,000(7) *
Donald G. McClinton 10,000(7) *
Tyree Wilburn 7,500(8) *
Directors and Officers
as a Group (11 Persons) 409,721(10) 11.14%
Additional Five Percent Beneficial Owners
HEALTHSOUTH 1,015,101 (9) 29.83%
Rehabilitation Corporation
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
<FN>
* Represents less than 1% of the class.
</FN>
</TABLE>
<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 into
Common Stock.
(3) Includes 8,886 shares as to which Mr. Yarmuth shares voting
and investment powers as a family trust and an option for
108,250 shares vested and exercisable, and 43,500
exercisable options owned by Mrs. Yarmuth in addition to
12,927 shares owned directly by Mrs. Yarmuth.
(4) Includes the same ownership components as stated for Mr.
Yarmuth.
(5) Includes 20,000 shares subject to currently exercisable
options.
(6) Includes 10,000 shares subject to currently exercisable
options.
(7) Includes 5,000 shares subject to currently exercisable
options.
(8) Includes 2,500 shares subject to currently exercisable
options.
(9) Includes currently exercisable warrants for the purchase of
200,000 shares of Common Stock. In addition, HEALTHSOUTH
owns warrants for an additional 66,600 Series A Convertible
Preferred Shares.
(10) Includes currently exercisable options held by all directors
and officers as a group to purchase 226,350 shares of Common
Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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 receivable from HEALTHSOUTH was
$17,000 and $109,000 as of March 31, 1996 and 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements to the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: July 26, 1996 Caretenders Health Corp.
(Registrant)
By: /S/ C. Steven Guenthner
(Signature)
C. Steven Guenthner
Senior Vice President, Chief
Financial Officer, and
Secretary/Treasurer
