<PAGE> 1
Commission File No. 1-10875
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 11-K
(Mark one)
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10875
NovaCare, Inc. 401(k) Retirement Savings Plan
(Full title of the plan and the address of the plan, if different
from that of the issuer named below)
NovaCare, Inc.
1016 West Ninth Avenue, King of Prussia, PA 19406
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
===============================================================================
<PAGE> 2
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Index to Financial Statements and Exhibits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS PAGE
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Net Assets Available for Plan Benefits, with Fund
Information, at December 31, 1994 and 1993 3-4
Changes in Net Assets Available for Plan
Benefits, with Fund Information, for the years 5-6
ended December 31, 1994 and 1993
Notes to Financial Statements 7-11
Additional Information:
Schedule of Investments at December 31, 1994 12
Schedules of Reportable Transactions:
Single Transactions in excess of 5% of
net assets for the year ended December
31, 1994 13
Series of Transactions aggregating more
than 5% of net assets for the year ended
December 31, 1994 14
<CAPTION>
EXHIBIT EXHIBIT NUMBER
<S> <C>
Consent of Independent Accountants 23
</TABLE>
1
<PAGE> 3
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of the NovaCare, Inc. 401(k) Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the NovaCare, Inc. 401(k) Retirement Savings Plan (the "Plan")
at December 31, 1994 and 1993, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Plan's administrative committee; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
the schedule of investments and the schedules of reportable transactions is
presented for purposes of additional analysis and is not a required part of the
basic financial statements but is additional information required by ERISA.
The Fund Information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan
benefits is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net assets
available for plan benefits of each fund. The schedule of investments, the
schedules of reportable transactions and the Fund Information have been
subjected to the auditing procedures applied in the audit of the basic
financial statements and in our opinion are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
June 15, 1995
<PAGE> 4
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Net Assets Available for Plan Benefits, with Fund Information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------------------------------------------------
FUND INFORMATION
--------------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity NovaCare Fidelity NovaCare
Income Puritan Magellan Stock Money Market Loan
Portfolio Fund Fund Fund Portfolio Fund Total
----------- ----------- ----------- ---------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $11,483,500 $11,631,143 $17,497,934 $3,554,261 $153,893 $205,753 $44,526,484
Receivables:
Accrued contributions 251,705 344,369 492,575 204,180 - - 1,292,829
Accrued interest - - - - - 4,231 4,231
Due from (to) other funds 207,715 234,354 (29,594) (232,818) (153,893) (25,764) -
----------- ----------- ----------- ---------- -------- -------- -----------
Net assets available
for Plan benefits $11,942,920 $12,209,866 $17,960,915 $3,525,623 $ - $184,220 $45,823,544
=========== =========== =========== ========== ======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Net Assets Available for Plan Benefits, with Fund Information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1993
----------------------------------------------------------------------------------------------
FUND INFORMATION
-------------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity NovaCare Fidelity NovaCare
Income Puritan Magellan Stock Money Market Loan
Portfolio Fund Fund Fund Portfolio Fund Total
----------- ----------- ----------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $5,525,133 $5,621,258 $ 9,676,949 $3,881,811 $736,854 $761 $25,442,766
Receivables:
Accrued contributions 795,544 1,018,183 1,444,055 182,383 - - 3,440,165
Accrued interest 6,634 328 - - 5,547 - 12,509
Due from (to) other funds (150,928) 689,648 192,488 (73,354) (657,854) - -
---------- ---------- ----------- ---------- -------- -------- -----------
Net assets available
for Plan benefits $6,176,383 $7,329,417 $11,313,492 $3,990,840 $ 84,547 $761 $28,895,440
========== ========== =========== ========== ======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 6
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Changes in Net Assets Available for Plan Benefits, with Fund Information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31, 1994
-------------------------------------------------------------------------------------------------
FUND INFORMATION
----------------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity NovaCare Fidelity NovaCare
Income Puritan Magellan Stock Money Market Loan
Portfolio Fund Fund Fund Portfolio Fund Total
----------- ----------- ----------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Dividends and interest $ 434,222 $ 718,396 $ 443,594 - $ 19,653 $ 4,231 $ 1,620,096
Net realized and unrealized
(loss) on investments - (662,818) (688,386) $(3,438,281) - - (4,789,485)
----------- ----------- ----------- ---------- -------- -------- -----------
434,222 55,578 (244,792) (3,438,281) 19,653 4,231 (3,169,389)
----------- ----------- ----------- ---------- -------- -------- -----------
Contributions:
Employee 3,018,437 3,685,652 5,693,192 2,364,931 - - 14,762,212
Employer 590,702 714,080 1,071,086 477,413 - - 2,853,281
Plan merger (Note 7) 2,768,844 1,227,169 1,890,015 380,066 - 205,753 6,471,847
Investment transfers 208,491 222,346 (107,341) (192,771) (104,200) (26,525) -
----------- ----------- ----------- ---------- -------- -------- -----------
6,586,474 5,849,247 8,546,952 3,029,639 (104,200) 179,228 24,087,340
----------- ----------- ----------- ---------- -------- -------- -----------
Total additions/(deductions) 7,020,696 5,904,825 8,302,160 (408,642) (84,547) 183,459 20,917,951
Deductions from net assets:
Distributions to participants 1,254,159 1,024,376 1,654,737 56,575 - - 3,989,847
----------- ----------- ----------- ---------- -------- -------- -----------
Net increase/(decrease) 5,766,537 4,880,449 6,647,423 (465,217) (84,547) 183,459 16,928,104
Net assets at beginning
of year 6,176,383 7,329,417 11,313,492 3,990,840 84,547 761 28,895,440
----------- ----------- ----------- ---------- -------- -------- -----------
Net assets at end of year $11,942,920 $12,209,866 $17,960,915 $3,525,623 $ - $184,220 $45,823,544
=========== =========== =========== ========== ======== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 7
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Changes in Net Assets Available for Plan Benefits, with Fund Information
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31, 1993
------------------------------------------------------------------------------------------------
FUND INFORMATION
-----------------------------------------------------------------------------
Fidelity
Managed Fidelity Fidelity NovaCare Fidelity NovaCare
Income Puritan Magellan Stock Money Market Loan
Portfolio Fund Fund Fund Portfolio Fund Total
---------- ---------- ----------- ---------- ------- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets:
Investment income:
Dividends and interest $ 255,754 $ 667,366 $ 822,990 - $ 6,886 - $ 1,752,996
Net realized and unrealized
gain / (loss) on investments - 185,702 683,557 $ (274,193) - - 595,066
---------- ---------- ----------- ---------- ------- ------ -----------
255,754 853,068 1,506,547 (274,193) 6,886 - 2,348,062
---------- ---------- ----------- ---------- ------- ------ -----------
Contributions:
Employee 2,282,476 2,675,682 3,946,065 2,051,364 73,192 $761 11,029,540
Employer 476,726 534,058 743,518 441,225 - - 2,195,527
Investment transfers (187,476) 82,345 252,986 (152,324) 4,469 - -
---------- ---------- ----------- ---------- ------- ------ -----------
2,571,726 3,292,085 4,942,569 2,340,265 77,661 761 13,225,067
---------- ---------- ----------- ---------- ------- ------ -----------
Total additions 2,827,480 4,145,153 6,449,116 2,066,072 84,547 761 15,573,129
Deductions from net assets:
Distributions to participants 476,102 480,023 759,274 102,513 - - 1,817,912
---------- ---------- ----------- ---------- ------- ------ -----------
Net increase 2,351,378 3,665,130 5,689,842 1,963,559 84,547 761 13,755,217
Net assets at beginning
of year 3,825,005 3,664,287 5,623,650 2,027,281 - - 15,140,223
---------- ---------- ----------- ---------- ------- ------ -----------
Net assets at end of year $6,176,383 $7,329,417 $11,313,492 $3,990,840 $84,547 $761 $28,895,440
========== ========== =========== ========== ======= ====== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 8
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
GENERAL. The NovaCare, Inc. (the "Company") 401(k) Retirement Savings Plan
(the "Plan"), which was formed effective July 1, 1990, is a defined
contribution plan subject to the Employee Retirement Income Security Act of
1974 ("ERISA") and the Internal Revenue Code of 1986, as amended ("IRC"). All
full and part-time employees of the Company working a minimum of twenty hours
per week on a regularly scheduled basis may enroll beginning on the first day
of the first payroll period of the month following six months of consecutive
service.
ENROLLMENT. An eligible employee participates in the Plan by authorizing the
Company to make tax-deferred contributions to the Plan on the employee's
behalf, resulting in a reduction of the employee's taxable earnings.
Tax-deferred contributions may be an amount ranging from 1% to 15% of
compensation. The employee may direct the investment of these contributions
(see "Investment Directions" below).
CONTRIBUTIONS TO THE PLAN. Participants may authorize basic contributions
ranging from 1% to 15% of their compensation. Certain highly compensated
participants may have their basic contributions limited to 6% of their
compensation. Such contributions may not exceed $9,240 and $8,994 for 1994 and
1993, respectively. The Company makes matching contributions in the amount of
30% of participant contributions up to the first 6% of compensation. No
matching contributions are made with respect to participant contributions
exceeding 6% of compensation.
Certain percentage tests ensure that contributions by or on behalf of employees
do not favor the highly compensated. If these tests are not met, contributions
and the earnings attributable thereto will be distributed to the highly
compensated employees in accordance with the Plan document. The Plan met the
401(k) non-discrimination test for the years ended December 31, 1994 and 1993.
PARTICIPANT ACCOUNT. Each account is credited with the participant's
contributions and an allocation of (a) the Company's matching contribution and
(b) Plan earnings. Company contributions are allocated based on the matching
percentage for participant contributions. Plan earnings are allocated to each
participant's account based on the respective account balances. The benefit to
which a participant is entitled is the amount that can be provided from their
account.
VESTING. Participants are fully vested in their elective deferrals plus actual
earnings thereon. Vesting in the remainder of the account is based on years of
continuous service. Participants become fully vested upon death or disability,
attainment of normal retirement age or after five years of credited service.
7
<PAGE> 9
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
INVESTMENT DIRECTIONS. Upon enrollment in the Plan, participants may direct
contributions among one or more of the following investment funds:
I. Fidelity Managed Income Portfolio - An open-end commingled
pool which invests in short- and long-term investment
contracts issued by insurance companies (GICs), investment
contracts issued by commercial banks (BICs), synthetic
investment contracts designed to simulate conventional GICs
through the purchase of securities and inclusion of a benefit
responsive feature (put feature), and cash equivalents.
II. Fidelity Puritan Fund - A mutual fund which invests in common
and preferred stocks and bonds, including lower-quality,
high-yielding debt securities.
III. Fidelity Magellan Fund - A mutual fund which invests in the
stocks of companies with an expected above-average growth
potential and a corresponding higher level of risk.
IV. NovaCare Stock Fund - Funds are invested in NovaCare, Inc.
common stock.
The Fidelity Money Market Portfolio acts as an account through which
contributions and distributions are transferred among the four
investment options and as a depository for the cash rollovers in the NovaCare
Stock Fund.
DISTRIBUTIONS AND WITHDRAWALS. Distributions are paid in the following manner:
I. Distributions from the Fidelity Managed Income Portfolio,
Fidelity Puritan Fund and Fidelity Magellan Fund are paid in
cash.
II. Distributions from the NovaCare Stock Fund are paid in cash or
shares of NovaCare, Inc. common stock at the participant's
option. Fractional shares are paid in cash.
Prior to termination of service, participants may, in the event of financial
hardship, withdraw amounts from the Plan twice in any 12-month period. In the
absence of financial hardship, a participant's contribution may not be
withdrawn prior to attainment of age 59 1/2.
Upon termination of service for reasons other than death, participants are
entitled to a lump-sum amount equal to the value of the vested balance of their
account. Participants with account balances exceeding $3,500 may defer receipt
of the lump-sum amount until reaching age 70 1/2. If a participant dies, the
entire amount in the participant's account is distributed in a lump-sum to the
participant's beneficiaries. A terminating participant's unvested account
balance is forfeited and used to reduce future employer contributions.
ADMINISTRATIVE EXPENSES. The Company may elect to pay all Plan administrative
expense. If the Company elects not to pay such expenses, the expenses shall be
paid by the Plan. During the years ended December 31, 1994 and 1993, all Plan
administrative expenses were paid by the Company.
PLAN TERMINATION. Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at any
time and terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants will become fully vested in their accounts.
8
<PAGE> 10
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
The Plan's financial statements are prepared on the accrual basis of
accounting. Investments are stated at fair value based on quoted market
prices.
Realized and unrealized gains or losses are calculated based upon historical
cost of assets for financial statement purposes. Such gains and losses are
computed on a current value basis for Form 5500. The difference may result in
a differing classification between realized and unrealized but the total gain
or loss will be unaffected.
Basic and matching contributions are recorded in the period during which the
Company makes payroll deductions from participant earnings.
3. DISTRIBUTIONS PAYABLE
Distributions requested but not paid were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1994 1993
----------- ------------
<S> <C> <C>
FIDELITY MANAGED INCOME PORTFOLIO $ 203,525 $ 395,897
FIDELITY PURITAN FUND 320,853 494,059
FIDELITY MAGELLAN FUND 274,946 759,470
NOVACARE STOCK FUND 55,498 245,917
----------- ------------
TOTAL DISTRIBUTIONS PAYABLE $ 854,822 $ 1,895,343
=========== ============
</TABLE>
Distributions are recorded as a reduction in Plan net assets when paid.
4. INVESTMENTS
The Plan's investments are held by Fidelity Institutional Retirement Services
Company, Inc. and Alex Brown & Sons, Incorporated. The cost and fair values of
investments at December 31 were as follows:
<TABLE>
<CAPTION>
1994 1993
------------------------------- -------------------------------
COST FAIR VALUE COST FAIR VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FIDELITY MANAGED INCOME PORTFOLIO $11,483,500 $11,483,500 $ 5,525,133 $ 5,525,133
FIDELITY PURITAN FUND 12,292,098 11,631,143 5,460,112 5,621,258
FIDELITY MAGELLAN FUND 18,163,562 17,497,934 9,050,519 9,676,949
NOVACARE STOCK FUND 6,992,542 3,554,261 4,150,875 3,881,811
FIDELITY MONEY MARKET PORTFOLIO 153,893 153,893 736,854 736,854
NOVACARE LOAN FUND 205,753 205,753 761 761
=========== =========== =========== ===========
$49,291,348 $44,526,484 $24,924,254 $25,442,766
=========== =========== =========== ===========
</TABLE>
9
<PAGE> 11
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
During the years ended 1994 and 1993, the Plan's investments (including gains
and losses on investments sold during the year) appreciated (depreciated) in
value as follows:
<TABLE>
<CAPTION>
1994 1993
------------- ------------
<S> <C> <C>
FIDELITY PURITAN FUND $ (662,818) $ 185,702
FIDELITY MAGELLAN FUND (688,386) 683,557
NOVACARE STOCK FUND (3,438,281) (274,193)
------------- ------------
$ (4,789,485) $ 595,066
============= ============
</TABLE>
At December 31, the number of participants in each investment fund were as
follows:
<TABLE>
<CAPTION>
1994 1993
------------- ------------
<S> <C> <C>
FIDELITY MANAGED INCOME PORTFOLIO 3,818 2,974
FIDELITY PURITAN FUND 4,226 3,463
FIDELITY MAGELLAN FUND 4,665 3,818
NOVACARE STOCK FUND 3,068 2,815
</TABLE>
At December 31, 1994 and 1993, 5,096 and 4,809 participants, respectively, were
contributing to the Plan; 1,748 and 2,931 participants, respectively, were not
contributing to the Plan.
Because many participants direct their contributions to more than one
investment fund, the total number of participants in the Plan is less than the
sum of the number of participants in each investment fund.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500 at December 31, 1994:
<TABLE>
<S> <C>
Net assets available for benefits per the financial statements $45,823,544
Less: Amounts allocated to withdrawing participants (854,822)
-----------
Net assets available for benefits per the Form 5500 $44,968,722
===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
6. PLAN AMENDMENT
The company amended the plan effective July 1, 1994. Under the amendment,
eligible employees may enroll in the Plan beginning on the first day of the
first payroll period of the month following six months of consecutive service
and may begin vesting in the Company's matching contribution after two years of
service.
10
<PAGE> 12
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Notes to Financial Statements
- -------------------------------------------------------------------------------
7. PLAN MERGER
Effective January 1, 1994, the net assets available for plan benefits of the
Rehabilitation Hospital Corporation of America 401(k) Profit Sharing Plan
totaling $846,515 were transferred to the Plan.
Effective September 1, 1994, the net assets available for plan benefits of the
NovaCare Orthotics & Prosthetics 401(k) Profit Sharing Plan totaling $5,625,332
were transferred to the Plan. Included in the transfer were amounts relating
to sixty participant loans totaling $205,753.
Except for loans which were outstanding as of the date of the NovaCare
Orthotics & Prosthetics Plan merger into the NovaCare Plan, the NovaCare Plan
does not provide for participant loans.
8. INCOME TAXES
On May 14, 1992 the Internal Revenue Service ruled that the Plan qualifies
under Section 401(a) of IRC and is exempt from federal income taxes under
Section 501(a) of IRC. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
is not aware of any course of action or series of events that have occurred
that might adversely affect the Plan's qualified status. A request for a tax
determination letter for the July 1, 1994 amendment has been filed and is
currently being considered by the Internal Revenue Service.
9. SUBSEQUENT EVENTS
Effective January 1, 1995, the net assets available for plan benefits of
RehabClinics, Inc. 401 (k) Plan totaling $6,126,289 were transferred to the
Plan. Included in this transfer were amounts relating to fifteen participant
loans totaling $67,079.
On May 19, 1995, NovaCare, Inc. sold its Medical Rehabilitation Hospitals
division to HEALTHSOUTH Corporation. Due to this sale, former NovaCare
employees now employed by HEALTHSOUTH were fully vested in the matching
contributions made by NovaCare, and their net assets will be transferred to the
HEALTHSOUTH 401(k) Profit Sharing Plan as soon as practicable during 1995.
11
<PAGE> 13
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1994
-----------------------------------------------------------------------
Number of Fair
Name of issuer and title of issue shares Cost Value
- ---------------------------------------------------- -------------- ------------------------ ---------------------------
<S> <C> <C> <C>
Mutual Funds:
Fidelity Managed Income Portfolio 11,483,500 $ 11,483,500 $ 11,483,500
Fidelity Puritan Fund 785,357 12,292,098 11,631,143
Fidelity Magellan Fund 261,945 18,163,562 17,497,934
Fidelity Money Market Portfolio 153,893 153,893 153,893
------------------------ ---------------------------
42,093,053 40,766,470
NovaCare Stock Fund:
NovaCare Inc. Common Stock (1) 490,243 6,992,542 3,554,261
NovaCare Loan Fund - 205,753 205,753
------------------------ ---------------------------
$ 49,291,348 $ 44,526,484
======================== ===========================
</TABLE>
(1) Non - income producing security.
12
<PAGE> 14
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Schedule of Reportable Transactions for the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
Single transactions in excess of 5% of the January 1, 1994
current value of Plan assets.
<TABLE>
<CAPTION>
Number of Purchase Selling
Party Involved Description of Asset Transactions Price Price
- ------------------------------------ --------------------------------- ------------ ---------- -------
<S> <C> <C> <C> <C>
Fidelity Management Trust Company Fidelity Managed Income Portfolio 1 $2,252,415 -
Fidelity Investments Fidelity Magellan Fund 1 1,559,929 -
Fidelity Investments Fidelity Magellan Fund 1 2,084,592 -
</TABLE>
<TABLE>
<CAPTION>
Current Value
Expense Cost of at Transaction Net Gain
Party Involved Incurred Asset (1) Date (Loss)
- ------------------------------------- -------- ----------- -------------- --------
<S> <C> <C> <C> <C>
Fidelity Management Trust Company - $2,252,415 $2,252,415 -
Fidelity Investments - 1,559,929 1,559,929 -
Fidelity Investments - 2,084,592 2,084,592 -
</TABLE>
(1) Current value at beginning of year or purchase cost if
acquired during the year.
13
<PAGE> 15
NOVACARE, INC. 401(k) RETIREMENT SAVINGS PLAN
Schedule of Reportable Transactions for the Year Ended December 31, 1994
- --------------------------------------------------------------------------------
Series of transactions in the same issue aggregating more than 5% of the
January 1, 1994 current value of Plan assets.
<TABLE>
<CAPTION>
Number of Purchase Selling
Party Involved Description of Asset Transactions Price Price
- --------------------------------- --------------------------------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Fidelity Management Trust Company Fidelity Managed Income Portfolio 78 $7,122,978 -
Fidelity Management Trust Company Fidelity Managed Income Portfolio 13 - $ 1,164,610
Fidelity Investments Fidelity Magellan Fund 61 9,935,599 -
Fidelity Investments Fidelity Magellan Fund 12 - 1,426,227
Fidelity Investments Fidelity Puritan Fund 49 7,571,785 -
Fidelity Investments Fidelity Puritan Fund 12 - 899,082
NovaCare, Inc. NovaCare, Inc. Common Stock 14 3,173,150 -
NovaCare, Inc. NovaCare, Inc. Common Stock 6 - 56,595
</TABLE>
<TABLE>
<CAPTION>
Current Value
Expense Cost of at Transaction Net Gain
Party Involved Incurred Asset (1) Date (Loss)
- --------------------------------- -------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
Fidelity Management Trust Company - $7,122,978 $7,122,978 -
Fidelity Management Trust Company - 1,164,610 1,164,610 -
Fidelity Investments - 9,935,599 9,935,599 -
Fidelity Investments - 1,448,798 1,426,227 $ (22,571)
Fidelity Investments - 7,571,785 7,571,785 -
Fidelity Investments - 900,946 899,082 (1,864)
NovaCare, Inc. - 3,173,150 3,173,150 -
NovaCare, Inc. - 62,552 56,595 (5,957)
</TABLE>
(1) Current value at beginning of year or purchase cost
if acquired during the year.
14
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
"NovaCare, Inc. 401(k) Retirement Savings Plan" has duly caused this
annual report to be signed on its behalf by the Undersigned thereunto duly
authorized.
NovaCare, Inc. 401(k) Retirement Savings Plan
---------------------------------------------
Date: June 28, 1995 By: /s/ Robert E. Healy, Jr.
------------------------
Robert E. Healy, Jr.
Trustee
By: /s/ Bernard F. Thompson
-----------------------
Bernard F. Thompson
Trustee
<PAGE> 1
NOVACARE, INC. 401(K) RETIREMENT SAVINGS PLAN
- ---------------------------------------------------------------------------
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-36889 and No. 33-88746) of NovaCare, Inc.
of our report dated June 15, 1995 appearing on Page 2 of this Form 11-K.
PRICE WATERHOUSE LLP
Philadelphia, Pennsylvania
June 26, 1995
