Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Dear Sir or Madam:
Enclosed is our definitive proxy statement which will be sent to shareholders
of record on January 11, 2000.
Yours truly,
C. Steven Guenthner
Sr. Vice President
& Chief Financial Officer
January 11, 2000
To Our Stockholders:
You are cordially invited to attend the 1999 Annual Meeting of Stockholders of
Caretenders Health Corp. on Monday, January 31, 2000. The meeting will be held
at the Holiday Inn, 1325 Hurstbourne Lane, Louisville, Kentucky, at 10:30 a.m.
local time.
Three matters will be voted on at this meeting. Please take the time to read
carefully each of the proposals for stockholder action described in the
accompanying proxy materials.
Whether or not you plan to attend, you can ensure that your shares are
represented at the meeting by promptly completing, signing and dating your
proxy form and returning it in the enclosed envelope. In the event you attend
the meeting you may revoke your proxy and vote your shares in person.
Thank you for your continued support of our Company.
Sincerely,
William B. Yarmuth
Chairman of the Board,
President & CEO
<PAGE>
CARETENDERS HEALTH CORP.
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 31, 2000
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, January 31, 2000, 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 change the Company's name to "Almost Family, Inc."
(3) To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditor for the fiscal year ending March 31, 2000; and
(4) 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 December 10, 1999, 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
January 11, 2000
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 JANUARY 31, 2000
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, January 31,
2000, 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
January 11, 2000.
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 change in corporate name, FOR
the ratification of the appointment of the independent auditor as described
therein 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 December 10, 1999. At the Record Date, there were
outstanding 3,120,413 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 outs
tanding 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 December 15, 1999, 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)
Directors and Executive Officers
Amount and Nature of Percent of
Beneficial Ownership Class
<S> <C> <C>
William B. Yarmuth 357,883 (3) 10.93%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
Mary A. Yarmuth 357,883 (4) 10.93%
C. Steven Guenthner 50,341 (5) 1.60%
Steven B. Bing 12,340 (6) *
Patrick B. McGinnis 17,500 (7) *
Donald G. McClinton 21,500 (7) *
Tyree G. Wilburn 21,000 (8) *
Jonathan D. Goldberg 11,500 (9) *
Wayne T. Smith 101,400 (9) 3.23%
T. Ric Pritchard 13,750 (10) *
Patrick T. Lyles 19,796 (10) *
Directors and Executive Officers
as a Group (11 persons) 627,010 (11) 18.52%
Additional Five Percent Beneficial Owners
HEALTHSOUTH Rehabilitation Corporation
Two Perimeter Park South
Birmingham, AL 35243 1,015,101 (12) 32.43%
Heartland Advisors, Inc. 445,300 14.20%
790 North Milwaukee Street
Milwaukee, WI 53202
Yarmuth Family Limited Partnership 157,723 (13) 5.04%
100 Mallard Creek Road, Suite 400
Louisville, KY 40207
* Represents less than 1% of class.
</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. Options exercisable within 60 days of December
15, 1999 have been included.
(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 100,000 shares vested and
exercisable, and 44,000 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 22,500 shares subject to currently exercisable options.
(6) Includes 12,000 shares subject to currently exercisable options.
(7) Includes 11,500 shares subject to currently exercisable options.
(8) Includes 11,000 shares subject to currently exercisable options.
(9) Includes 7,500 shares subject to currently exercisable options.
(10) Includes 13,750 shares subject to currently exercisable options.
(11) Includes currently exercisable options held by all directors and executive
officers as a group to purchase 255,000 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.
(13) Robert N. Yarmuth is the general partner and is the brother of William B.
Yarmuth.
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 Management." 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.
<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 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 47 Chairman of the Board, 1991
President and Chief
Executive Officer
Steven B. Bing 52 Director 1992
Donald G. McClinton 66 Director 1994
Patrick B. McGinnis 52 Director 1994
Tyree G. Wilburn 47 Director 1996
Jonathan D. Goldberg 48 Director 1997
Wayne T. Smith 53 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 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 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 1994, Mr.
McClinton was co-chairman of Interlock Industries, a privately held conglomerate
in the metals and transportation industries.
<PAGE>
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 health care 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 five occasions during the previous 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,
except Messrs. Goldberg and Smith who attended 71% and Mr. McGinnis attended 43%
of the meetings.
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 1999 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, Goldberg,
McClinton, McGinnis, Smith and Wilburn. The Compensation Committee met once
during the 1999 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. Wilburn was granted options to purchase 2,000 shares of the
Company's Common Stock at $2.625 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. During 1999 the terms
of the Director's options relative to a total of 68,000 shares were amended
to decrease the exercise price to $2.63 (the market value at the date of
amendment). No other terms of the options were changed.
William Yarmuth Employment Agreement
The Company has a year-to-year employment agreement with William B. Yarmuth, its
Chairman of the Board, President and Chief Executive Officer. Under the terms of
the agreement, Mr. Yarmuth earns an annual base salary of $190,000 and is
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 to Mr. Yarmuth of two times his annual
salary.
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 1999.
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 SEVEN NOMINEES FOR DIRECTOR OF THE COMPANY.
<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>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Securities
Annual Compensation Underlying
Options
Name and Principal Position Year Salary Bonus (No. of shares)
<S> <C> <C> <C> <C>
William B. Yarmuth 1999 $ 190,000 - 100,000
Chairman of the Board, 1998 190,000 75,596 -
President and Chief 1997 190,000 - -
Executive Officer
Mary A. Yarmuth 1999 130,050 - 20,000
Senior Vice President 1998 129,854 36,904 -
Operations 1997 126,058 - -
C. Steven Guenthner 1999 $ 130,050 - 20,000
Senior Vice President, 1998 129,854 36,904 -
Secretary/Treasurer and 1997 126,058 - -
Chief Financial Officer
T. Ric Pritchard 1999 $ 125,000 - 15,000
Senior Vice President 1998 9,615 (1) 2,733 20,000
- -Operations 1997 N/A N/A N/A
Patrick T. Lyles 1999 $ 120,000 - 15,000
Senior Vice President- 1998 43,386 (2) 12,330 20,000
Planning and Development 1997 N/A N/A N/A
(1) Mr. Pritchard was employed by the Company on February 16, 1998.
(2) Mr. Lyles was employed by the Company on October 6, 1997.
<PAGE>
OPTION GRANTS IN FISCAL 1999
Mr. Yarmuth was awarded options to purchase 100,000 shares of the Company's
common stock at $2.19 per share. Mr. Guenthner and Mrs. Yarmuth were awarded
options to purchase 20,000 shares of the Company's common stock at $2.19 per
share. Mr. Pritchard and Mr. Lyles were awarded options to purchase 15,000
shares of the Company's common stock at $2.19 per share. No other stock
options or stock appreciation rights were awarded to the named executive
officers during the 1999 fiscal year.
OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END VALUES
None of the executive officers named in the Summary Compensation Table exercised
stock options during the 1999 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 1999 fiscal year.
</TABLE>
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options Held at In-The-Money Options at
Shares 1999 Fiscal Year-End 1999 Fiscal Year-End (1)
Acquired
On Value
Name Exercise Realized Exercis. Unexercis. Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
William
B. Yarmuth - - 100,000 150,000 - -
Mary A.
Yarmuth - - 44,000 34,500 $975 -
C. Steven
Guenthner - - 22,500 32,500 - -
T. Ric
Pritchard - - 13,750 21,250 - -
Patrick
T. Lyles - - 13,750 21,250 - -
(1)These amounts represent the market value less the exercise price. The
market value of the Common Stock was $2.00 based on the closing bid price per
share at March 31, 1999, on the NASDAQ National Market System.
</TABLE>
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 1999 fiscal year.
<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 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.
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 1999 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 $0 and the other four executive
officers named in the Summary Compensation Table received bonuses in the
aggregate amount of $0.
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 executive
officers who received options were Mr. William B. Yarmuth, 100,000 shares on
3/5/99, Mrs. Mary A. Yarmuth, 20,000 shares on 3/5/99, Mr. C. Steven Guenthner,
20,000 shares on 3/5/99, Mr. T. Ric Pritchard, 15,000 shares on 3/5/99, and
Mr. Patrick T. Lyles, 15,000 shares on 3/5/99.
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 1999 fiscal year was determined pursuant to his employment
agreement. Mr. Yarmuth received no bonus. See discussion regarding incentive
compensation under "Compensation Policies" above.
<PAGE>
Repricing of Options
On December 14, 1998, the Compensation Committee approved the repricing of
certain employee stock options with an exercise price in excess of the fair
market value of the Company's Common Stock on that date. The Compensation
Committee was aware that many employees, including the named executive
officers, held options below market value as a result of a substantial
decrease in the Company's stock price due, in part, to changes in regulations
governing reimbursement for services provided by the Company. The
Compensation Committee concluded that these options no longer served to motivate
and retain key employees.
The Compensation Committee determined that it was important to the long-term
success of the Company to provide a meaningful incentive to its employees
holding options. Accordingly, the Compensation Committee approved an offer
to certain option holders to exchange options with an exercise price above
the current market price on December 14, 1998, for options with an exercise
price equal to the market price on that date. The terms of the new options
also varied from those of the existing options in the following manner:
Vesting of the replacement options will occur in 25% increments at each of four
six-month intervals until fully vested. Twenty-three employees, including all of
the named executive officers, exchanged options to purchase an aggregate of
305,000 shares for options to purchase the same number of shares of the
Company's common stock pursuant to the exchange offer. See "Ten-Year Option
Repricings" for details concerning the exchange of options held by the named
executive officers.
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
<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, 1994 in
the Company's Common Stock and each of the indices, and the reinvestment of
all dividends paid during the period of the securities comprising the indices.
<TABLE>
<CAPTION>
Fiscal Year-Ended March 31,
(Fiscal Year End. March 31) 1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Caretenders Health Corp. $100.00 $74.30 $84.30 $64.30 $88.60 $22.90
Self-Determined Peer Group 100.00 69.90 77.90 46.10 29.50 9.40
Nasdaq Stock Market
(US Companies) 100.00 111.20 151.00 167.90 254.50 342.80
</TABLE>
- --------------------------------------------------------------------------------
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.
<PAGE>
TEN-YEAR OPTION REPRICINGS
Set forth below is information with respect to repricing which occurred during
the previous fiscal year of options held by the named executive officers.
<TABLE>
<CAPTION>
Length of
Securities Original
Underlying Market Price Exercise Option Re-
Number of of Stock at Price at maining at
Options Time of Time of New date of
Repriced or Repricing or Repricing Exercise Repricing or
Name Date Amended Amendment Amendment Price Amendment
<S> <C> <C> <C> <C> <C> <C>
William B.
Yarmuth 12/14/98 100,000 $2.63 $8.75 $2.63 2.3
12/14/98 17,000 2.63 6.25 2.63 6.9
12/14/98 8,000 2.63 6.25 2.63 6.9
12/14/98 25,000 2.63 5.88 2.63 7.1
Mary A.
Yarmuth 12/14/98 12,000 2.63 9.38 2.63 3.1
12/14/98 12,000 2.63 9.38 2.63 4.2
12/14/98 15,000 2.63 6.25 2.63 6.9
C. Steven
Guenthner 12/14/98 20,000 2.63 9.69 2.63 3.8
12/14/98 15,000 2.63 6.25 2.63 6.9
T. Ric
Pritchard 12/14/98 20,000 2.63 7.75 2.63 9.3
Patrick
T. Lyles 12/14/98 20,000 2.63 8.50 2.63 8.9
</TABLE>
<PAGE>
ITEM 2
The Board of Directors has approved a change in the Company's name to "Almost
Family, Inc." Twelve of the Company's twenty-three adult day care centers
currently operate under the Almost Family trade name while the remaining eleven
centers operate under the Caretenders trade name. The Board determined that
this change was appropriate and advisable due to recent changes in the nature of
the Company's business which have enabled it to become a single-focus adult
day health services company.
Recommendation
The affirmative vote of a majority of the Company's outstanding Common Stock is
required to approve the name change.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE AMENDMENT OF THE FIRST
ARTICLE OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY'S
NAME TO "Almost Family, Inc."
<PAGE>
ITEM 3
RATIFICATION OF INDEPENDENT AUDITOR
The Board of Directors has appointed Arthur Andersen LLP as its independent
auditor for the fiscal year ending March 31, 2000. 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 FISCAL YEAR ENDING MARCH 31,
2000.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at the next annual meeting of
stockholders must be received by the Company by, September 13, 2000, in order to
be considered for inclusion in the Company's proxy materials for such meeting.
FORM 10-K
The Company's Annual Report on Form 10-K for the fiscal year ended March 31,
1999 accompanies 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 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
January 11, 2000
<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 at the Holiday Inn, 1325
Hurstbourne Lane, Louisville, Kentucky, on Monday, January 31,
2000, 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.
____________________________________
This Proxy is continued on the reverse side. Please sign on the
reverse side and return promptly.
<PAGE>
2. PROPOSAL TO CHANGE CORPORATE NAME TO "Almost Family, Inc."
For Against Abstain
3. 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, 2 AND 3. 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
