SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the 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 Rule 14a-11(c) or Rule
14a-12
Caretenders Health Corp.
(Name of Registrant as Specified In Its Charter)
__________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / 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 DECEMBER 14, 1998
To the Stockholders:
The Annual Meeting of Stockholders (the _Annual Meeting_) of Caretenders
Health Corp. (the _Company_), will be held at the Holiday Inn, 1325
Hurstbourne Lane, Louisville, Kentucky 40222, on Monday, December 14, 1998,
at 10:30 a.m. local time for the following purposes:
(1) To elect a Board of seven 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, 1999; 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 November 13, 1998 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
November 20, 1998
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 DECEMBER 14, 1998
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 at the Holiday Inn,
1325 Hurstbourne Lane, Louisville, Kentucky 40222, on Monday, December 14,
1998, at 10:30 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 November 20, 1998.
A stockholer 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 ratification of
the appointment of the independent auditor as described herein and in the
discretion of proxy holders on such other business as may properly come
before the Annual Meeting.
The original soliciation 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 November 13, 1998. At the Record Date,
there were outstanding 3,130,413 shares of Common Stock (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.
1
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
Common Stock
The following table sets forth as of November 1, 1998, 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>
Shares of Common Stock
Beneficially Owned (1)(2)
---------------------------
Amount and
Nature of Percent
Beneficial of
Directors and Executive Officers Ownership Class
- ---------------------------------------------------------------
<S> <C> <C>
William B. Yarmuth 406,133 (3) 12.19%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 406,133 (4) 12.19%
C. Steven Guenthner 50,812 (5) 1.61%
Steven B. Bing 11,840 (6) *
Patrick B. McGinnis 17,000 (7) *
Donald G. McClinton 21,000 (7) *
Tyree G. Wilburn 17,500 (8) *
Jonathan D. Goldberg 9,000 (9) *
Wayne T. Smith 83,900 (9) 2.68%
T. Ric Pritchard 5,000 (9) *
Patrick T. Lyles 16,064 (10) *
Directors and Executive Officers as 638,249 (11) 18.59%
a Group (11 persons)
Additional Five Percent Beneficial Owners
- -----------------------------------------
HEALTHSOUTH Rehabilitation 1,015,101 (12) 32.43%
Corporation
Two Perimeter Park South
Birmingham, AL 35243
Heartland Fund Advisors 520,700 16.63%
790 North Milwaukee St.
Milwaukee, WI 53202
Robert N. Yarmuth 157,723 5.04%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
</TABLE>
* Represents less than 1% of class.
2
<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 coting or investment power or has the right to acquire beneficial
ownership within 60 days. Unless otherwise indicated, the named person
has 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 power pursuant to a family trust and an option for 143,750
shares vested and exercisable, and 58,500 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 35,000 shares subject to currently exercisable options.
(6) Includes 11,500 shares subject to currently exercisable options.
(7) Includes 11,000 shares subject to currently exercisable options.
(8) Includes 7,500 shares subject to currently exercisable options.
(9) Includes 5,000 shares subject to currently exercisable options.
(10)Includes 10,000 shares subject to currently exercisable options.
(11)Includes currently exercisable options held by all directors and
executive officers as a group to purchase 303,250 shares of Common
Stock.
(12)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 Preferred Stock.
See _Security Ownership of Principal Holders and Managment -- Relationship
with HEALTHSOUTH Rehabilitation Corporation._ Each share of 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 each of the years ended March 31, 1998, 1997 and,
1996, the Company realized sales of less than $85,000 to HEALTHSOUTH at terms
the Company normally offers its customers.
3
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
At the Annual Meeting, seven 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 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>
Name Age Position or Office Director Since
- --------------------------------------------------------------------
<S> <C> <C> <C>
William B. Yarmuth 46 Chairman of the Board, 1991
President and Chief
Executive Officer
Steven B. Bing 51 Director 1992
Donald G. McClinton 65 Director 1994
Patrick B. McGinnis 51 Director 1994
Tyree G. Wilburn 46 Director 1996
Jonathan D. Goldberg 47 Director 1997
Wayne T. Smith 52 Director 1997
</TABLE>
William B. Yarmuth. Mr. Yarmuth has been a director of the Company since
1991, when the Company acquired National Health Industries (_National_),
where Mr. Yarmuth was Chairman, President and Chief Executive Officer. After
the acquisition, Mr. Yarmuth becaome 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 a vice president 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. He is also a
trustee of the University of Louisville and a director of various closely-
held business entities.
Donald G. McClinton. Mr. McClinton was elected a director in October 1994.
Mr. McClinton is President and part owner of Skylight Thoroughbred Training
Center, Inc., a thoroughbred course training center. He is also a director
of Mid-America Bancorp and Jewish Hospital Health Systems. From 1986 to
4
<PAGE>
1994, Mr. McClinton was co-chairman of Interlock Industries, a privately held
conglomerate in the metals and transportation industries.
Patrick B. McGinnis. Mr. McGinnis was elected a director in October 1994.
Mr. McGinnis is the co-founder of Healthcare Recoveries, Inc. and serves as
its Chairman and Chief Executive Officer. Healthcare Recoveries, Inc. is a
provider of subrogation and other claims recovery services to the healthcare
industry. From 1979 to 1988, Mr. McGinnis was Vice President-Finance and
Planning for Humana Inc.
Tyree G. Wilburn. Mr. Wilburn was elected a director in January 1996. Mr.
Wilburn is a private investor and a director of Health Directions, Inc. From
1992 to 1996, Mr. Wilburn was Chief Development Officer of Community Health
Systems, Inc., and most recently, Executive Vice President and Chief
Financial and Development Officer. From 1974 to 1992, Mr. Wilburn was with
Humana Inc. where he held senior and executive positions in mergers and
acquisitions, finance, planning, hospital operations, audit and investor
relations.
Jonathan D. Goldberg. Mr. Goldberg was elected a director in February 1997.
Mr. Goldberg is the managing partner of the law firm of Goldberg and Simpson
in Louisville, Kentucky and has served in that capacity for the last five
years.
Wayne T. Smith. Mr. Smith was elected a director in March 1997. Mr. Smith
is President and Chief Executive Officer of Community Health Systems, Inc.
Mr. Smith was President and Chief Operating Officer of Humana, Inc. from 1993
to 1996 and served with Humana, Inc. from 1973 to 1993 in various capacities,
including numerous positions as vice president and divisional president.
Meetings of the Board of Directors
The Board met on four occasions during the 1998 fiscal year. Each incumbent
director attened 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, except Mr. McClinton who was present for 75% of the Board meetings,
but was unable to attend the Compensation Committee Meeting.
Committees of the Board of Directors
The Board of Directors has an Audit Committee and a Compensation Committee.
The Board does not have an executive committee or a nominating committee;
executive committee and nominating functions are performed by the entire
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 six outside members of the Company's Board of
Directors, Messrs. Bing, Goldberg, McClinton, McGinnis, Smith and Wilburn.
The Audit Committee met once during the 1998 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
5
<PAGE>
option plans. The members of the Compensation Committee are Messrs. Bing,
Goldberg, McClinton, McGinnis, Smith and Wilburn. The Compensation Committee
met once during the 1998 fiscal year.
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 Direcots 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. During the 1998 fiscal year,
pursuant to the terms of the Directors's Plan, Messrs. McGinnis and McClinton
were each granted options to purchase 2,000 shares of the Company's Common
Stock at $8.125 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 enterend 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 inventivce of 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 value at the date of grant, January 1, 1996 ($5.88).
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 during fiscal 1998.
Recommendation
Assuming the presence of a quorum, directors shall be elected by a plurailty
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 SEVEN NOMINEES FOR DIRECTOR OF THE COMPANY.
6
<PAGE>
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 years to the Chief Executive Officer and the most highly compensated
executive officers.
<TABLE>
Summary Compensation Table
---------------------------
Long-Term
Compensation
---------------
Securities
Annual Compensation Underlying
Name and ------------------- Options
Principal Position Year Salary Bonus (No. of Shares)
- --------------------- ---- --------- --------- ---------------
<S> <C> <C> <C> <C>
William B. Yarmuth 1998 $190,000 $ 75,596 -
Chairman of the 1997 190,000 - -
Board, President 1996 229,413 126,500(1) 50,000
and Chief Executive
Officer
Mary A. Yarmuth 1998 129,854 36,904 -
Senior Vice President 1997 126,058 - -
- - Operations 1996 125,000 31,250 15,000
C. Steven Guenthner 1998 129,854 36,904 -
Senior Vice President,1997 126,058 - -
Secretary/Treasurer 1996 125,000 31,250 15,000
and Chief Financial
Officer
T. Ric Pritchard 1998 9,615(2) 2,733 20,000
Senior Vice President 1997 N/A N/A N/A
- -Operations 1996 N/A N/A N/A
Patrick T. Lyles 1998 43,386(3)12,330 20,000
Senior Vice President 1997 N/A N/A N/A
- - Planning and 1996 N/A N/A N/A
Development
</TABLE>
(1) On January 1, 1996, Mr. Yarmuth entered into a new employment
agreement with the Company. Of the bonus amount shoun. $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.
(2) Mr. Pritchard was employed by the Company on February 16, 1998.
(3) Mr. Lyles was employed by the Company on October 6, 1997.
7
<PAGE>
OPTION GRANTS IN FISCAL 1998
Mr. Pritchard was awarded options to purchase 20,000 shares of the Company's
common stock at $7.75 per share. Mr. Lyles was awarded options to purchase
20,000 shares of the Company's common stock at $8.50 per share. No other
stock options or stock appreciation rights were awarded to the named
executive officers during the 1998 fiscal year.
OPTION EXERCISES IN FISCAL 1998 AND FISCAL YEAR-END VALUES
None of the executive officers named in the Summary Compensation Table
exercised stock options during the 1998 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 1998 fiscal year.
<TABLE>
Number of Unexercised Value of Unexercised
Shares Options Held at In-the-Money Options at
Acquired 1998 Fiscal Year-End 1998 Fiscal Year-End(1)
on Value ------------------------- -------------------------
Name Excercise Relized Exercisable Unexercisable Exercisable Unexercisable
- ------------------- --------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William B. Yarmuth - - 122,280 27,720 - -
Mary A. Yarmuth - 48,600 9,900 $71,760 -
C. Steven Guenthner - - 25,100 9,900 - -
T. Ric Pritchard - - 5,000 15,000 - -
Patrick T. Lyles - - 5,000 15,000 - -
</TABLE>
(1) These amounts represent the market value less the exercise price.
The market value of the Common Stock was $7.75 based on closing bid
price per share at March 31, 1998, on the NASDAQ National Market
System.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies
The Compensation Committee of the Board of Directors is comprised of Messrs.
Bing, Goldberg, McClinton, McGinnis, Smith 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 1998 fiscal year.
8
<PAGE>
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.
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 options 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. Officers of the Company are eligible for performance based cash
incentives based on the Company's achievement of annual goals and objectives
established by the Compensation Committee. For fiscal 1998 the goals and
objectives included meeting earnings targets and accomplishing development
and expansion objectives. Based on these goals and objectives, Mr. Yarmuth,
the Chief Executive Officer, received a bonus of $75,596 and the other four
executive officers named in the Summary Compensation Table received bonuses
in the aggregate amount of $88,871.
The Compensation Committee periodically grants stock options under the
Company's option plans in order to provide executive officers and other
employees with an additional incentive to strive 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. The
Compensation Committee did not grant stock options to the Chief Executive
Officer during the 1998 fiscal year. The only executive officers who
received options were Messrs. Pritchard and Lyles, who each were granted
options for 20,000 shares. Messrs. Pritchard and Lyles joined the Company
during the 1998 fiscal year and the Compensation Committee believed that the
new executive officers should be granted options to provide additional
incentive for performance.
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 $190,000 for the 1998 fiscal year was determined pursuant to his
employment agreement. Mr. Yarmuth received a bonus of $75,596 in 1998. See
discussion regarding incentive compensation under _Compensation Policies_
above.
9
<PAGE>
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
Jonathan D. Goldberg
Donald G. McClinton
Patrick B. McGinnis
Wayne T. Smith
Tyree G. Wilburn
10
<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 the CRP Index for NASDAQ stock market (U.S. Companies) and the returns of
a peer group index comprised of other publicly-traded companies within the
home health care industry. The graph assumes the investment of $100 on
March 31, 1993 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.
[CHART FILED VIA HARD COPY WITH SECURITIES AND EXCHANGE COMMISSION]
<TABLE>
Fiscal Year-Ended March 31,
-------------------------------------------------
1993 1994 1995 1996 1997 1998
-------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Caretenders Health Corp. $100.00 $87.50 $65.00 $73.70 $56.20 $77.50
CRP Index for Nasdaq Stock
Market (US Companies) 100.00 107.90 120.10 163.00 181.20 274.90
Peer Group Index (1) 100.00 58.30 40.80 45.50 26.90 17.20
</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. The Peer Group Index for
the 1998 fiscal year includes Hospital Staffing Services, Inc. through
March 12, 1998, the last day on which such company's shares were traded
on the New York Stock Exchange.
11
<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, 1999. Representatives of Arthur
Andersen are expected to be present at the Annual Meeting where they will
have an opportunity to make a statement, if they desire 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 1999 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 July 23, 1999 in order to
be considered for inclusion in the Company's proxy materials for such
meeting. In addition, a stockholder proposal received by the Company. which
is presented otherwise than in accordance with Rule 14a-8 under the
Securities Exchange Act of 1934, will be considered untimely if received
after October 6, 1999.
ANNUAL REPORT
The Company's Annual Report to Stockholders and Annual Report on Form 10-K
for the fiscal year ended March 31, 1998 accompany this Proxy Statement.
Stockholders may obtain copies of exhibits at $0.25 per page to cover the
Company's costs in furnishing such copies by sending a written request to
C. Steven Guenthner, Caretenders Health Corp., 100 Mallard Creek Road, Suite
400, Louisville, Kentucky 40207.
OTHER BUSINESS
The Board of Directors is not aware of any other matters to be presented at
the Annual Meeting other than tose 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
November 20, 1998
12
<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 Commons Stock of the Company which
the undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held at the Holiday Inn, 1325 Hurstbourne Lane,
Louisville, Kentucky, on Monday,December 14, 1998, at 10:30 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, Tyree G. Wilburn, Jonathan D. Goldberg and Wayne T. Smith.
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.
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This Proxy is continued on the reverse side. Please sign on the reverse side
and return promptly.
<PAGE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP as independent
auditors for the Company.
For Aginst 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.
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Signature Date
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Signature, if held jointly Date
