<PAGE> 1
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section
240.14a-12
AMERICAN HOMEPATIENT, INC.
------------------- ---------------------------------------------------
(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:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:30 A.M. CENTRAL DAYLIGHT TIME
ON MAY 31, 2000
LOCATION: OFFICES OF HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
1800 AMSOUTH CENTER (FORMERLY FIRST AMERICAN CENTER)
315 DEADERICK STREET
NASHVILLE, TENNESSEE 37238
To American HomePatient, Inc. Stockholders:
The Board of Directors of American HomePatient, Inc. invites you to the
Company's Annual Meeting of Stockholders next month. At the meeting, you and
other stockholders will be able to vote on the following matters:
1. Approval of the Company's Independent Public Accountants. The Board
recommends voting in favor of approving Arthur Andersen LLP as the
Company's Independent Public Accountants. If approved, Arthur Andersen
LLP will serve as the Company's Independent Public Accountants for the
2000 fiscal year.
2. Any other business that properly comes before the Annual Meeting. The
Board does not know of any other business to be considered.
Only stockholders of record at the close of business on April 10, 2000
are entitled to vote at the meeting.
The Board urges you to exercise your right to vote at the meeting,
either personally or by proxy. Whether or not you plan to attend the meeting,
please complete the enclosed proxy card promptly and return it in the enclosed,
self-addressed, stamped envelope to ensure that your shares will be represented
and voted at the meeting as you instruct. If you attend the meeting, you may
withdraw the proxy and vote your shares if you want.
The Proxy Statement accompanying this notice describes the matters to
be acted upon at the meeting. Please review it thoroughly.
By Order of the Board of Directors,
/s/ Marilyn O'Hara, Secretary
Brentwood, Tennessee
May 4, 2000
<PAGE> 3
AMERICAN HOMEPATIENT, INC.
5200 MARYLAND WAY, SUITE 400
BRENTWOOD, TENNESSEE 37027-5018
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
SOLICITATION OF PROXIES
The Board of Directors of American HomePatient, Inc. (the "Company") is
furnishing this Proxy Statement to you in connection with its solicitation of
proxies for the 2000 Annual Meeting of Stockholders, and any adjournment
thereof. The Annual Meeting will be held at the offices of Harwell Howard Hyne
Gabbert & Manner, P.C., 1800 AmSouth Center (formerly First American Center),
315 Deaderick Street, Nashville, Tennessee 37238 on Wednesday, May 31, 2000, at
10:30 a.m. Central Daylight Time. This Proxy Statement and the accompanying
proxy card are being mailed to you and the Company's other stockholders on or
about May 4, 2000.
We encourage you to participate in voting at the Annual Meeting. You
are invited to attend the meeting and vote your shares directly by submitting a
ballot. Ballots will be provided at the meeting. You may instead vote by proxy,
which allows you to direct someone else to vote your shares at the meeting on
your behalf.
To vote by proxy, you must complete, execute and return the
accompanying proxy card before the Annual Meeting. Specific instructions are on
the proxy card. Proxies will be voted in accordance with instructions noted on
the proxy cards. If you do not complete the voting instructions, the persons
named on the proxy card will vote your shares FOR the approval of Arthur
Andersen LLP as the Company's Independent Public Accountants, all as more fully
described in this Proxy Statement. We do not know of any other matters to be
presented for action at the Annual Meeting. If any other matter does properly
come before the meeting, however, the persons named on the proxy card will vote
in accordance with their best judgment on the matter.
You may revoke your proxy at any time before it is exercised by doing
one of the following:
- Notifying the Company's Secretary in writing;
- Submitting a new proxy bearing a later date;
- Attending the Annual Meeting and properly voting in
person. (Attendance alone will not revoke your proxy.)
The Company will pay for this proxy solicitation. It is expected that
proxies will be solicited by mail only. The Company will ask banks, brokers and
other custodians to forward this Proxy Statement, with attachments, to their
customers who beneficially own the Company's stock, and the Company will
reimburse such banks, brokers and custodians for their reasonable out-of-pocket
expenses in doing so.
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<PAGE> 4
VOTING
The Annual Meeting will be held on Wednesday, May 31, 2000 in
Nashville, Tennessee. A majority of the Company's common stock, par value $.01
per-share (the "Common Stock"), must be represented at the Annual Meeting,
either in person or by proxy, in order to transact business.
At the Annual Meeting of Stockholders, you and the Company's other
stockholders will be asked to vote on the approval of Arthur Andersen LLP to
serve as the Company's Independent Public Accountants (See Proposal 1: "Approval
of the Company's Independent Public Accountants" starting on page 4 of this
Proxy Statement).
We know of no other matters to be brought before the Annual Meeting. If
any other matter is duly presented for action, the persons named on the enclosed
proxy card to vote on such matter will vote in accordance with their best
judgment, unless you direct them to do otherwise on the proxy card.
All stockholders of record on April 10, 2000 will be entitled to vote
at the Annual Meeting. You and the Company's other stockholders are entitled to
one vote for each share of the Company's Common Stock owned of record at the
close of business on April 10, 2000. The Company has no other classes of voting
stock issued. Although the Company has the authority to issue shares of
preferred stock in one or more series, it has not designated or issued any
series of preferred stock. There were 15,471,086 shares of the Common Stock
outstanding on April 25, 2000.
The approval of Arthur Andersen LLP will be by the affirmative vote of
a majority of shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting. There are no cumulative voting rights.
There is no appraisal or similar right of dissenters respecting the matter to be
voted upon. Any other matters which may be properly submitted to the
stockholders will be approved by the affirmative vote of a majority of shares of
Common Stock present or represented by proxy and entitled to vote at the Annual
Meeting.
Shares represented by a proxy will be voted in the manner directed by
the shareholder. If a shareholder returns a proxy and abstains from voting on
any matter, the shares represented by such proxy will be considered present for
purposes of determining the presence of a quorum at the Annual Meeting and as
unvoted, although present and entitled to vote, for purposes of determining the
approval of each matter as to which the shareholder has abstained or withheld
authority. If a broker submits a proxy which indicates that the broker does not
have discretionary authority as to certain shares to vote on one or more
matters, those shares will be counted as shares that are present for purposes of
determining the presence of a quorum but will not be considered as present and
entitled to vote with respect to such matters.
2
<PAGE> 5
MISCELLANEOUS MATTERS CONCERNING
THE ANNUAL MEETING
DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
There was one stockholder proposal submitted for this Annual Meeting
and it has been substantially adopted by the Company. The proposal provided for
the adoption of voluntary stock ownership guidelines by the Company's Board of
Directors. We must receive stockholder proposals for the 2001 Annual Meeting at
the Company's principal executive offices (5200 Maryland Way, Suite 400,
Brentwood, Tennessee 37027-5018) no later than January 4, 2001 in order for the
proposals to be eligible for inclusion in the Company's proxy materials for the
2001 Annual Meeting.
1999 ANNUAL REPORT
Along with this Proxy Statement, we are mailing to you and our other
stockholders a copy of the Company's 1999 Annual Report on Form 10-K.
3
<PAGE> 6
PROPOSAL 1: APPROVAL OF THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
The Company's Board of Directors has appointed the accounting firm of
Arthur Andersen LLP to serve as the Company's Independent Public Accountants for
the 1999 fiscal year, and Arthur Andersen LLP is currently serving as the
Company's Independent Public Accountants for the 2000 fiscal year. A
representative of Arthur Andersen LLP will attend the Annual Meeting, will have
the opportunity to make a statement if he or she so desires, and will be
available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT ALL STOCKHOLDERS VOTE IN FAVOR OF THE
APPROVAL OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
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<PAGE> 7
INFORMATION REGARDING THE COMPANY'S BOARD OF DIRECTORS
The Company's Board of Directors currently consists of seven members
and is divided into three classes (Class 1, Class 2 and Class 3). All Directors
generally hold office for three-year terms and then until their successors have
been duly elected and qualified. The term of Class 3 Directors Edward K.
Wissing, Allan C. Silber and Edward Sonshine is set to expire at this Annual
Meeting of Stockholders.
Class 3 Directors Allan C. Silber, Edward Sonshine and Edward K.
Wissing have informed the Company that they will not stand for re-election and
will resign immediately prior to the Annual Meeting. Class 2 Director Morris A.
Perlis has informed the Company that he will resign immediately prior to the
Annual Meeting. Directors Silber, Sonshine and Perlis are affiliated with
Counsel Corporation, the Company's largest single shareholder. Counsel
Corporation has announced that it intends to distribute all of its shares of
Company Common Stock to Counsel Corporation's shareholders prior to the Annual
Meeting. Former Class 1 Director Thomas A. Dattilo resigned from the Board in
March 2000. The Board has voted, effective upon the resignation of Directors
Silber, Sonshine, Wissing and Perlis, to reduce the number of Board seats to
three (3).
CONTINUING CLASS 1 AND 2 DIRECTORS
The following Class 1 and Class 2 Directors will continue to serve on
the Company's Board following the 2000 Annual Meeting. The term of the Class 1
Directors will expire at the 2001 Annual Meeting, and the term of the Class 2
Directors will expire at the 2002 Annual Meeting. The following table contains
biographical information of the continuing Directors.
<TABLE>
<CAPTION>
HIS PRINCIPAL OCCUPATIONS
DIRECTOR'S NAME HIS AGE DURING THE LAST FIVE YEARS
- --------------- ------- --------------------------------------------------------------------------------
<S> <C> <C>
Henry T. Blackstock (1)(4)(5)(6) 56 Mr. Blackstock has served as a Director of the Company since September 1991. He
has served as Vice President and Director of Research of SouthTrust Asset
Management, a banking institution, since January 1999. He was Chairman and Chief
Executive Officer of Tucker Management Group, a hedge fund management firm, from
July 1989 to January 1999.
Mark Manner (1) 48 Mr. Manner has served as a Director of the Company since May 1995. He has been a
shareholder of the Nashville-based law firm Harwell Howard Hyne Gabbert & Manner,
P.C. since February 1988.
Joseph F. Furlong, III (2)(3)(5) 51 Mr. Furlong has served as a Director of the Company since June 1994 and as its
President and Chief Executive Officer since November 1998. He has served as
President of Adirondack Capital Advisors, LLC, a financial advisory firm, since
May 1996. Mr. Furlong was a partner of Colman Furlong & Co., a merchant banking
firm, from February 1991 to May 1996. He served as a director of PharMerica from
December 1994 until December 1997 and as a director of Healthy Planet, Inc., an
environmentally friendly manufacturer of greeting cards, from June 1996 until May
1998.
</TABLE>
Except for Director Manner, each Class 1 and Class 2 Director is a
member of at least one of the Board's standing Committees. The footnotes
indicate Committee membership as follows:
(1) Class 1 Director
(2) Class 2 Director
(3) Member of the Executive Committee
(4) Member of the Compensation Committee
(5) Member of the Audit Committee
(6) Member of the Disinterested Stock Option Committee
5
<PAGE> 8
DIRECTOR COMPENSATION
The Company pays Directors who are not its officers or employees
(currently Directors Blackstock, Manner, Silber, Perlis, Sonshine, and Wissing)
the following fees: (i) an annual director's fee of $10,000.00, (ii) a fee of
$500.00 for each Board or Board Committee meeting attended by telephone, and
(iii) a fee of $1,000.00 for each Board or Board Committee meeting attended in
person. The Company, however, pays no fees for attendance at a Committee meeting
occurring on the same day as a meeting of the Board. In addition, the Company
reimburses all Directors for actual expenses incurred in connection with
attendance at Board or Committee meetings. In January 2000, the Board adopted a
proposal that recommends that each Director voluntarily use fifty percent (50%)
of the annual cash directors fees received by each Director to purchase shares
of the Company's Common Stock. (See "Deadline for Submitting Stockholder
Proposals for the 2001 Annual Meeting" appearing on page 3 of this Proxy
Statement.)
In 1995, the Company adopted a nonqualified stock option plan for
Directors (the "1995 Plan"). Under the 1995 Plan, as amended in February 2000,
each Director either continuing to serve on the Board after May 31, 2000 or
first elected to the Board after May 31, 2000 receives a one time option to
acquire 50,000 shares of Common Stock. Each Director also receives an additional
option to acquire 3,000 shares of Common Stock on December 31 of each year
following the year he was first elected to the Board, so long as he served as a
Director for at least six (6) months during that year. In all cases, the
per-share exercise price of the options equals the closing market price of the
Common Stock on the day immediately before the date of grant.
Director Manner is a shareholder of the law firm Harwell Howard Hyne
Gabbert & Manner, P.C. ("Harwell Howard"). The Company engaged Harwell Howard
during 1999 to give legal advice in a variety of activities, for which the firm
was paid legal fees (exclusive of expenses and advances) of approximately
$670,000. Harwell Howard continues to give legal advice to the Company and,
during 2000, has been paid legal fees (exclusive of expenses and advances) in
excess of $239,000. Board members not affiliated with Mr. Manner's law firm
periodically review and approve the terms of Harwell Howard's engagement by the
Company.
AFFILIATIONS
Director Silber is a director and Chief Executive Officer of Counsel
Corporation, and he also serves as Chairman and President of DCAmerica Inc.
Director Sonshine is also a director and Vice Chairman of Counsel Corporation,
Chief Executive Officer of Counsel Management Services, Inc., and is a director
of Counsel Healthcare Assets, Inc. Director Perlis, the Chairman of the Board,
is also a director and President of Counsel Corporation. AHOM Holdings, Inc.,
which beneficially owns 25.7% of the Company's Common Stock, is an indirect,
wholly-owned subsidiary of Counsel Corporation.
MEETINGS AND COMMITTEES
During 1999, the Board of Directors held eight meetings and adopted
four written consent actions. Each Director attended meetings or executed
written consent actions with respect to at least 75% of the meetings and consent
actions of the Board and its Committees held or taken in 1999 while he served as
a Director.
The Board has standing Audit, Executive, Compensation and Disinterested
Stock Option Plan Committees. The Board does not have a nominating committee.
The Executive Committee is presently composed of Directors Perlis,
Silber and Furlong. The Board has the authority to designate an executive
committee to carry out any functions of the Board. Between meetings of the
Board, the Executive Committee may exercise all powers of the Board. During
1999, the Executive Committee held no meetings and adopted one written consent
action.
The Compensation Committee is presently composed of Directors
Blackstock and Silber. Former Director Thomas A. Dattilo also served on the
Compensation Committee during 1999 and until he resigned in March 2000. This
Committee approves remuneration arrangements for the Company's executive
officers and reviews
6
<PAGE> 9
compensation plans relating to executive officers, Directors and employees
generally. In 1999, the Compensation Committee held one meeting and adopted no
written consent actions.
The Audit Committee is presently composed of Directors Blackstock,
Furlong, Wissing and Sonshine. This Committee engages independent auditors,
reviews audit fees, supervises matters relating to audit functions, and reviews
and sets internal polices and procedures regarding audits, accounts and other
financial controls. In 1999, the Audit Committee held two meetings and adopted
no written consent actions.
The Disinterested Stock Option Plan Committee is presently composed of
Directors Blackstock and Sonshine. This Committee grants options to the
Company's Directors, employees and agents under the Company's 1991 Nonqualified
Stock Option Plan (the "1991 Plan"). In 1999, the Disinterested Stock Option
Plan Committee held no meetings and adopted two written consent actions.
7
<PAGE> 10
STOCK OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND PRINCIPAL HOLDERS
The following table contains stockholding information as of April 12,
2000 for (i) persons known to us to be holders of 5% or more of the Company's
Common Stock, (ii) each Director, including the those Directors resigning as of
the Annual Meeting, (iii) each of the executive officers named in the Summary
Compensation Table on page 11, and (iv) all Directors and executive officers as
a group. Unless otherwise indicated, all holdings are of record and beneficial.
Ownership of the Company's Common Stock is shown on a "beneficial"
basis. Generally, a person "beneficially owns" shares if he or she either has
the right to vote those shares or dispose of them. Consequently, more than one
person may be considered beneficially to own the same shares.
In this Proxy Statement, unless otherwise specifically noted, a person
has sole voting and dispositive power for the shares shown as beneficially owned
by him or her. For purposes of computing beneficial ownership and the
percentages of outstanding shares held by each person or group of persons on a
given date, shares which such person or group has the right to acquire within
sixty (60) days after April 12, 2000 are shares for which such person has
beneficial ownership and are deemed to be outstanding for purposes of computing
the percentage for such person, but are not deemed to be outstanding for the
purpose of computing the percentage of any other person. As of April 12, 2000,
there were 15,471,086 shares of the Company's Common Stock outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME BENEFICIALLY OWNED TOTAL SHARES
- ---- ------------------ ------------
<S> <C> <C>
Counsel Corporation(1)................................... 3,979,625 25.7%
130 King Street West, Suite 1300
Toronto, Ontario, Canada MX5 1E3
Putnam Investments Inc.(2)............................... 1,152,300 7.4
One Post Office Square
Boston, Massachusetts 02109
Thomson Horstmann & Bryant, Inc.(3)...................... 885,200 5.7
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Joseph F. Furlong, III(4)................................ 551,545 3.4
Marilyn O'Hara(5)........................................ 30,500 *
Thomas E. Mills(6)....................................... 47,500 *
Kathey S. Palmer(7)...................................... 87,070 *
Edward K. Wissing(8)..................................... 412,500 2.6
Allan C. Silber1,(9)..................................... 15,000 *
Henry T. Blackstock(10).................................. 15,000 *
Edward Sonshine(11)...................................... 15,000 *
Morris A. Perlis(12)..................................... 15,000 *
Mark Manner(13).......................................... 30,000 *
All Directors and named executive officers 1,219,115 7.3
as a group (10 persons)(14)............................
</TABLE>
- -----------------
* Indicates less than 1% ownership.
1 Counsel Corporation, a Toronto, Ontario, Canada corporation, owns 100%
of Counsel Healthcare Assets Inc., which owns 100% of Counselcare Ltd.,
which owns 100% of DCAmerica Inc., which owns 100% of AHOM Holdings,
Inc., which, as of April 12, 2000, directly beneficially owns the
shares of Common Stock listed in the table (See "Information Regarding
the Company's Board of Directors" starting on page 5 of this Proxy
Statement).
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<PAGE> 11
2 Ownership information included in the table is based on a Schedule
13G/A filed on February 17, 2000 by Putnam Investments, Inc., claiming
shared voting power of 441,100 shares and dispositive power of
1,152,300 shares directly and through its subsidiary.
3 Ownership information included in the table is based on a Schedule
13G/A filed on January 22, 1999 by Thomson Horstmann & Bryant, Inc.,
claiming sole voting power of 614,200 shares and dispositive power of
885,200 shares.
4 The amount shown includes 15,000 shares purchasable upon exercise of
options at $10.04 per-share, 7,500 shares purchasable upon exercise of
options at $16.50 per-share, 300,000 shares purchasable upon exercise
of options at $2.125 per-share and 200,000 shares purchasable upon
exercise of options at $0.56 per-share, all such options being issued
under the 1991 Nonqualified Stock Option Plan (the "1991 Plan"). The
amount also includes shares purchasable upon exercise of options issued
under the 1995 Nonqualified Stock Option Plan for Directors (the "1995
Plan"), being 3,000 shares at a $19.67 per-share exercise price, 3,000
shares at a $26.25 per-share exercise price, 3,000 shares at a $21.06
per-share exercise price, 3,000 shares at a $1.69 per-share exercise
price and 3,000 shares at a $0.53 per-share exercise price.
5 The amount shown includes shares purchasable upon exercise of options
issued under the 1991 Plan: 17,500 shares at a $2.125 per-share
exercise price and 12,500 shares at a $0.56 per-share exercise price.
6 The amount shown includes shares purchasable upon exercise of options
issued under the 1991 Plan: 35,000 shares at a $2.125 per-share
exercise price and 12,500 shares at a $0.56 per-share exercise price.
7 The amount shown includes shares purchasable upon exercise of options
issued under the 1991 Plan: 7,500 shares at a $10.00 per-share exercise
price, 9,000 shares at a $16.50 per-share exercise price, 7,500 shares
at a $17.50 per-share exercise price, 8,000 shares at a $21.50
per-share exercise price, 15,000 shares at a $18.125 per-share exercise
price and 35,000 at a $2.125 per-share exercise price.
8 The amount shown includes shares purchasable upon exercise of options
issued under the 1991 Plan and additional shares purchasable upon
exercise of options issued under the 1995 Plan. Such number of shares
and respective per-share exercise prices are as follows: Under the 1991
Plan - 37,500 shares at $15.83, 75,000 shares at $16.50, 225,000 shares
at $17.50 and 50,000 shares at $18.125. Under the 1995 Plan - 3,000
shares at $19.67, 3,000 shares at $26.25, 3,000 shares at $21.06, 3,000
shares at $1.69 and 3,000 shares at $0.53.
9 The amount shown excludes options issued under the 1991 Plan to
purchase 350,000 shares voluntarily surrendered in December 1998 and
includes shares purchasable upon exercise of options issued under the
1995 Plan. Such number of shares and respective per-share exercise
prices under the 1995 Plan are as follows: 3,000 shares at a $19.67
per-share exercise price, 3,000 shares at a $26.25 per-share exercise
price, 3,000 shares at a $21.06 per- share exercise price, 3,000 shares
at a $1.69 per-share exercise price and 3,000 shares at a $0.53
per-share exercise price. The amount shown does not include shares of
Common Stock beneficially owned by Counsel. See footnote (1) above.
10 The amount shown includes shares purchasable upon exercise of options
issued under the 1995 Plan, being 3,000 shares at a $19.67 per-share
exercise price, 3,000 shares at a $26.25 per-share exercise price,
3,000 shares at a $21.06 per-share exercise price, 3,000 shares at a
$1.69 per-share exercise price and 3,000 shares at a $0.53 per-share
exercise price.
11 The amount shown includes shares purchasable upon exercise of options
issued under the 1995 Plan, being 3,000 shares at a $19.67 per-share
exercise price, 3,000 shares at a $26.25 per-share exercise price,
3,000 shares at a $21.06 per-share exercise price, 3,000 shares at a
$1.69 per-share exercise price and 3,000 shares at a $0.53 per-share
exercise price.
12 The amount shown excludes options issued under the 1991 Plan to
purchase 350,000 shares voluntarily surrendered in December 1998 and
includes shares purchasable upon exercise of options issued under the
1995 Plan, 3,000 shares at a $19.67 per-share exercise price, 3,000
shares at a $26.25 per-share exercise price, 3,000 shares at a $21.06
per-share exercise price, 3,000 shares at a $1.69 per-share exercise
price and 3,000 shares at a $0.53 per-share exercise price.
13 The amount shown includes 7,500 shares purchasable upon exercise of
options at $20.67 issued under the 1991 Plan and additional shares
purchasable upon exercise of options issued under the 1995 Plan, being
7,500 shares at a $20.67 per-share exercise price, 3,000 shares at a
$19.67 per-share exercise price, 3,000 shares at a $26.25 per-share
exercise price, 3,000 shares at a $21.06 per-share exercise price,
3,000 shares at a $1.69 per-share exercise price and 3,000 shares at a
$0.53 per-share exercise price.
14 The amount shown includes 1,069,500 shares purchasable upon exercise of
options issued under the 1991 Plan and 120,000 shares purchasable upon
exercise of options issued under the 1995 Plan.
9
<PAGE> 12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers, its Directors, and
persons who own more than 10% of its Common Stock to file reports regarding
their stockholdings in the Company with the Securities and Exchange Commission
("SEC"). They are required to send the Company copies of all Section 16(a)
reports they file.
Based solely on representations of the Company's Directors and
executive officers and our review of reports on file, we believe that all such
reports were timely filed.
EXECUTIVE OFFICERS
This table provides biographical information regarding the Company's
executive officers:
PRINCIPAL OCCUPATIONS
OFFICER'S NAME AGE DURING THE LAST FIVE YEARS
- -------------- --- -------------------------------------------
Joseph F. Furlong 51 Mr. Furlong has served as a Director of
the Company since June 1994 and as its
President and Chief Executive Officer since
November 1998.
He has served as President of Adirondack
Capital Advisors, LLC, a financial advisory
firm, since May 1996. Mr. Furlong was a
partner of Colman Furlong & Co., a merchant
banking firm, from February 1991 to May
1996. He served as a director of Pharmerica
from December 1994 until December 1997 and
as a director of Healthy Planet, Inc., an
environmentally friendly manufacturer of
greeting cards, from June 1996 until May
1998.
Marilyn O'Hara 54 Ms. O'Hara has been the Company's Executive
Vice President, Chief Financial Officer and
Secretary since January 1999.
Ms. O'Hara was Chief Financial Officer for
U.S. Laboratory Corp., a clinical
laboratory, from May 1996 to December 1998.
Ms. O'Hara was the Treasurer of Medicalab,
Inc., a clinical laboratory, from October
1988 to April 1996.
Thomas E. Mills 45 Mr. Mills rejoined the company as Executive
Vice President and Chief Operating Officer
in November 1998.
Mr. Mills served as President of Mills and
Associates, a consulting company, during
portions of 1998. Mr. Mills was the
Company's Senior Vice President-Strategic
Alliances from February 1996 until December
1997. He was the Company's Senior Vice
President and Chief Operating Officer from
May 1994 to February 1996, and its Secretary
from May 1994 to June 1994. Mr. Mills was
Chief Operating Officer and Vice President
of AHPT from August 1992 to May 1994, and
Senior Vice President of AHPT from February
1992 to August 1992.
Kathey S. Palmer 42 Ms. Palmer has been the Company's Senior
Vice President of Marketing, Investor
Relations and Sales Support since August
1997. From December 1994 to August 1997, she
served as Vice President of Marketing and
Investor Relations, and from November 1991
to December 1994 she was Vice President of
Marketing.
10
<PAGE> 13
EXECUTIVE COMPENSATION
The following table provides compensation information for the 1999,
1998 and 1997 fiscal years regarding the Company's chief executive officer and,
on December 31, 1999, the Company's three other named executive officers.
The principal positions given in the table are as of December 31, 1999.
The Company did award annual bonuses to management personnel for 1997
and 1999 performance but did not award annual bonuses to management personnel
for 1998 performance.
Perquisites for each executive officer are in amounts which do not
require disclosure.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------------------------- -------------------------------------------------
Awards Payouts
----------------------- --------
Securities Long-Term
Other Restricted Underlying Incentive
Annual Stock Options/ Plan All Other
Name and Principal Salary Bonus Compensation Award(s) SARs Payouts Compensation(1)
Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------------------------ ---- ---------- -------- --------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph F. Furlong III 1999 360,000 200,000 -0- -0- 203,000(2) -0- -0-
President and CEO 1998 55,000 -0- -0- -0- 303,000(2) -0- -0-
1997 -0- -0- -0- -0- 3,000(3) -0- -0-
Marilyn O'Hara 1999 160,000 70,000 -0- -0- 50,000 -0- -0-
Executive Vice 1998 -0- -0- -0- -0- 35,000 -0- -0-
President, Chief 1997 -0- -0- -0- -0- -0- -0- -0-
Financial Officer and
Secretary
Thomas E. Mills 1999 190,000 85,000 -0- -0- 50,000 -0- -0-
Executive Vice 1998 27,972 -0- -0- -0- 70,000(4) -0- -0-
President and Chief 1997 156,000 -0- -0- -0- -0- -0- 9,360
Operating Officer
Kathey S. Palmer 1999 130,000 29,575 -0- -0- -0- -0- -0-
Senior Vice President 1998 122,597 -0- -0- -0- 35,000(4) -0- 6,744
of Marketing, Investor 1997 100,000 10,150 -0- -0- 15,000(5) -0- 16,487(6)
Relations and Sales
Support
</TABLE>
- ---------------------
1 Except as noted below in footnote 6, amounts listed reflect matching
contributions made by the Company under its Supplemental Executive
Retirement Plan ("SERP") in 1998 and 1997. The Company terminated the
SERP in 1999.
2 Amounts include options granted under 1991 Plan upon employment and
1995 Plan for services as a Director.
3 Amounts reflect options granted under the 1995 Plan for services as a
Director.
4 Amounts include options granted in the last fiscal quarter of 1998 that
relate to 1998 performance.
5 Amounts include options granted in the first fiscal quarter of 1998
that relate to 1997 performance.
6 Amount includes $10,150 of benefits based on split-dollar life
insurance premiums paid, at the option of the executive officer, in
lieu of one- half (1/2) of her annual incentive bonus.
11
<PAGE> 14
EMPLOYMENT AND OTHER AGREEMENTS
Joseph F. Furlong, III
Mr. Furlong assumed the positions of President and Chief Executive
Officer of the Company on November 6, 1998. Under the terms of Mr. Furlong's
Employment Agreement, amended as of January 1, 2000, he receives an annual base
salary of $420,000. Additionally, the Company granted him options pursuant to
the 1991 Plan to acquire 300,000 shares of the Company's Common Stock, subject
to the conditions of that Plan.
Both Mr. Furlong and the Company can terminate the Employment Agreement
without cause at any time upon four (4) weeks prior written notice to the other.
The Company may also terminate the Employment Agreement at any time upon written
notice for "cause" which is defined as (i) gross or willful misconduct, (ii)
being charged or convicted of either a felony or a misdemeanor involving moral
turpitude, (iii) disability to such an extent that Mr. Furlong is unable to
perform services hereunder for a period of one month, or (iv) Mr. Furlong's
death.
Marilyn O'Hara
On January 1, 1999, the Company entered into an Employment Agreement
with Ms. O'Hara. Under the terms of Ms. O'Hara's Employment Agreement, amended
as of January 1, 2000, she receives an annual base salary of $190,000.
The Company can terminate the Employment Agreement at any time without
stated cause. In such event, Ms. O'Hara will receive a severance payment in an
amount equal to the following: (i) her monthly base salary as in effect at the
time of termination multiplied by the lesser of (y) the number of months
remaining in the then current term of the Employment Agreement, or (z) twelve
(12), plus (ii) the annual incentive compensation Ms. O'Hara received for
performance during the Company's immediately preceding fiscal year, multiplied
by a fraction, the numerator of which is the total number of full calendar
months during which Ms. O'Hara was employed by the Company during the Company's
current fiscal year prior to termination and the denominator of which is twelve
(12).
In the event there is a change in control and the Company terminates
Ms. O'Hara's employment within twelve (12) months following such change in
control, Ms. O'Hara will be entitled to receive as a severance payment in a lump
sum upon such termination an amount equal to the sum of (i) her monthly base
salary as in effect at the time of such termination multiplied by twelve (12),
plus (ii) the annual incentive compensation Ms. O'Hara received for performance
during the immediately preceding fiscal year, multiplied by a fraction, the
numerator of which is the total number of full calendar months during which Ms.
O'Hara was employed by the Company during the Company's current fiscal year
prior to termination and the denominator of which is twelve (12). Additionally,
the Company will continue certain of Ms. O'Hara's employee benefits for one year
and Ms. O'Hara will be entitled to receive her vested account balances, if any,
under the Company's Stock Purchase Plan. Whether or not Ms. O'Hara's employment
is terminated, upon a change of control, any stock options granted to Ms. O'Hara
will be fully vested, subject to the terms of the governing stock option plan.
Ms. O'Hara can terminate the Employment Agreement without cause at any
time upon thirty (30) days written notice to the Company and upon fifteen (15)
days written notice in the event the Company willfully breaches any material
terms of the Employment Agreement. The Company may also terminate the Employment
Agreement at any time upon written notice for "cause" which is defined as (i)
insubordination, malfeasance, misconduct, (ii) charge or conviction of a felony
or of a misdemeanor involving moral turpitude, (iii) the inability of Ms. O'Hara
to perform her duties under the Employment Agreement for a period of thirty (30)
consecutive days (or sixty (60) total days in any ninety (90) consecutive day
period) by reason of illness or mental or physical disability, (iv) death, and
(v) other circumstances deemed by the Company to be materially detrimental to
the Company.
Upon termination of employment, Ms. O'Hara is prohibited from competing
with the Company for one year.
Thomas E. Mills
On December 31, 1999, the Company entered into an Employment Agreement
with Thomas E. Mills. Under the terms of Mr. Mills's Employment Agreement, he
receives an annual base salary of $220,000.
The Company can terminate the Employment Agreement at any time without
stated cause. In such event, Mr. Mills will receive a severance payment in an
amount equal to the following: (i) his monthly base salary as in effect at the
time of termination multiplied by the lesser of (y) the number of months
remaining in the then current term of the Employment Agreement, or (z) twelve
(12), plus (ii) the annual incentive compensation Mr. Mills received for
performance during the Company's immediately preceding fiscal year, multiplied
by a fraction, the numerator of which is the total number of full calendar
months during which Mr. Mills was employed by the Company during the Company's
current fiscal year prior to termination and the denominator of which is twelve
(12).
12
<PAGE> 15
In the event there is a change in control and the Company terminates
Mr. Mills's employment within twelve (12) months following such change in
control, Mr. Mills will be entitled to receive as a severance payment in a lump
sum upon such termination an amount equal to the sum of (i) his monthly base
salary as in effect at the time of such termination multiplied by twelve (12),
plus (ii) the annual incentive compensation Mr. Mills received for performance
during the immediately preceding fiscal year, multiplied by a fraction, the
numerator of which is the total number of full calendar months during which Mr.
Mills was employed by the Company during the Company's current fiscal year prior
to termination and the denominator of which is twelve (12). Additionally, the
Company will continue certain of Mr. Mills's employee benefits for one year and
Mr. Mills will be entitled to receive his vested account balances, if any, under
the Company's Stock Purchase Plan. Whether or not Mr. Mills's employment is
terminated, upon a change of control, any stock options granted to Mr. Mills
will be fully vested, subject to the terms of the governing stock option plan.
Mr. Mills can terminate the Employment Agreement without cause at any
time upon thirty (30) days written notice to the Company and upon fifteen (15)
days written notice in the event the Company willfully breaches any material
terms of the Employment Agreement. The Company may also terminate the Employment
Agreement at any time upon written notice for "cause" which is defined as (i)
insubordination, malfeasance, misconduct, (ii) charge or conviction of a felony
or of a misdemeanor involving moral turpitude, (iii) the inability of Mr. Mills
to perform his duties under the Employment Agreement for a period of thirty (30)
consecutive days (or sixty (60) total days in any ninety (90) consecutive day
period) by reason of illness or mental or physical disability, (iv) death, and
(v) other circumstances deemed by the Company to be materially detrimental to
the Company.
Upon termination of employment, Mr. Mills is prohibited from competing
with the Company for one year.
Kathey S. Palmer
On December 23, 1997, the Company entered into a confidentiality,
non-competition and severance pay agreement with Kathey S. Palmer, which
agreement was amended on February 15, 1999. If the Company terminates Ms.
Palmer's employment either (i) "without cause" or (ii) within one year after a
change in control, Ms. Palmer will receive a severance payment in an amount
equal to the following: (i) her annual base salary (currently $130,000), plus
$6,000, the amount of her annual vehicle allowance, plus (ii) an amount equal to
the annual incentive bonus she received during the last fiscal year ($29,575 in
1999) multiplied by a fraction, the numerator of which is the number of months
Ms. Palmer is employed by the Company during the current year, and the
denominator of which is twelve. In addition, upon termination resulting from a
change in control of the Company, the Company will continue certain of Ms.
Palmer's employee benefits for one year. Upon a change in control, Ms. Palmer
will be entitled to receive her vested account balances, if any, under the
Company's Stock Purchase Plan.
Upon a change in control of the Company, any stock options granted to
Ms. Palmer will be fully vested, whether or not she is terminated, subject to
the terms of the 1991 Plan.
Termination "without cause" shall not include: (i) termination "for
cause," (ii) resignation by Ms. Palmer or (iii) her death or disability. "Cause"
shall mean: (i) insubordination, malfeasance or misconduct by Ms. Palmer, (ii)
Ms. Palmer being charged with or conviction of felony offense or misdemeanor
involving moral turpitude, and (iii) material breach of her employment
agreement. Upon termination of employment, Ms. Palmer is prohibited from
competing with the Company for one year.
Pursuant to a Letter Agreement between Ms. Palmer and the Company dated
February 9, 2000, Ms. Palmer's employment will be terminated "without cause"
effective June 1, 2000.
13
<PAGE> 16
OPTION GRANTS
The following table provides information concerning stock option grants
made in 1999 under both the 1991 Plan and the 1995 Plan to each of the executive
officers named in the Summary Compensation Table. In 1999, the Company granted
to employees options to purchase a total of 424,750 shares of Common Stock under
the 1991 Plan and under the 1995 Plan options to purchase a total of 24,000
shares of Common Stock, for a total of options to purchase 448,750 shares of
Common Stock. The Company grants no stock appreciation rights.
Mr. Furlong's option to acquire 3,000 shares of Common Stock was
granted automatically on December 31, 1999 under the 1995 Plan.
(See the "Summary Compensation Table" appearing on page 11 and
"Employment and Other Agreements" appearing on page 12 of this Proxy Statement.)
The dollar amounts appearing in the table's last two columns are the
result of calculations at the 5% and 10% rates as required by the SEC. These
amounts are not intended to forecast possible future appreciation, if any, of
the Company's Common Stock price.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rate
of Stock Price Appreciation
Individual Grants For Option Term
-------------------------------------------------------------------------- ----------------------------
Number % of Total
of Securities Options/SARs
Underlying Granted to Exercise or
Options/SARS Employees Base Price Expiration
Name Granted (#) in Fiscal Year ($/SH) Date 5% ($) 10%($)
- -------------------------- ---------------------- ------------------ ------------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph F. Furlong III 3,000 .7% .53 12/31/2009 999.94 2,534.05
200,000 47.1 .56 11/10/2009 70,436.20 178,499.16
Marilyn O'Hara 50,000 11.8 .56 11/10/2009 17,609.05 44,624.79
Thomas E. Mills 50,000 11.8 .56 11/10/2009 17,609.05 44,624.79
Kathey S. Palmer -- -- -- -- -- --
</TABLE>
14
<PAGE> 17
OPTION EXERCISES AND VALUES
The following table provides information concerning exercise of options
during 1999 by the executive officers named in the Summary Compensation Table
and the year-end value of unexercised options held by each such officer. No
named executive officer exercised any options during 1999. The Company grants no
stock appreciation rights.
Options are classified as "in-the-money" (a term used in the last column of
the table) if the market value of the underlying Common Stock exceeds the
exercise price of the option. The value of such in-the-money options is the
difference between the option exercise price and $0.54, the per-share market
value of the underlying Common Stock as of December 31, 1999. Such amounts may
not necessarily be realized. Actual values realized, if any, upon the exercise
of options will be based on the market price of shares of Common Stock at the
time of exercise, and are thus dependent upon future performance of the Common
Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Underlying Value of Unexercised
on Exercise Value Realized Unexercised Options/SARs at In-the-Money Options/SARs at
Name (#) ($) 1999 Fiscal Year-End(#) 1999 Fiscal Year End ($)
- ---------------------- ----------- --------------- ------------------------------ ------------------------------
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Joseph F. Furlong III -0- -0- 537,500/-0- 30.00/-0-
Marilyn O'Hara -0- -0- 30,000/55,000 -0-/-0-
Thomas E. Mills -0- -0- 47,500/72,500 -0-/-0-
Kathey S. Palmer -0- -0- 57,500/24,500 -0-/-0-
</TABLE>
15
<PAGE> 18
COMPENSATION COMMITTEE REPORT
This Compensation Committee Report is not deemed to be part of any document
filed with the SEC pursuant to the Securities Act of 1933 (the "Securities Act")
or the Exchange Act and is not to be deemed incorporated by reference in any
documents filed under the Securities Act or the Exchange Act without the express
written consent of the members of the Compensation Committee named below.
The Compensation Committee of the Board of Directors makes decisions on
compensation of the Company's senior executives, except for decisions related to
awards under the 1991 Plan (which are made by a separate committee of the
Board). The Committee's task is to establish reasonable and appropriate
executive compensation guidelines which meet their stated purposes and
effectively serve the needs of the Company and its stockholders. The Committee's
current members are Henry T. Blackstock and Allan C. Silber.
Compensation Philosophy and Policies for Executive Officers
The Company's primary goal is to provide high quality patient care while
maximizing stockholder value. The Company believes the best way to achieve this
goal is twofold: (i) to be a leader in providing relevant, high quality health
services, and (ii) to establish a reputation as a desirable employer and
responsible corporate citizen. The Compensation Committee seeks to link this
goal and the Company's compensation programs by aligning the interests of its
stockholders and management personnel, including its executive officers, and
believes this alignment increases the likelihood of the Company's success on
both a short-term and long-term basis.
The Company's executive compensation program is consistent with its
compensation program for all management levels. For example, all key employees,
including executive officers, are eligible to participate in the 1991 Plan, and
the Company has an Employee Stock Purchase Plan in which approximately 13% of
the Company's eligible employees participate.
The Company's executive compensation program supports the Company's
objective of creating stockholder value by:
- Emphasizing pay for performance by making a significant portion of
executive compensation "at risk."
- Aligning the interest of executives with the long-term interest of
stockholders by awarding stock options at current market prices which
can only have value to the executives through long-term stock
appreciation.
- Providing compensation opportunities that attract and retain talented
and committed executives on a long-term basis.
- Balancing the Company's short-term and long-term business, financial
and strategic goals.
The Company's executive compensation program is comprised of three principal
components: base salary, annual incentive bonus, and long-term incentive
opportunity through nonqualified stock options. The combination of these various
compensation elements is designed to encourage management to balance the
Company's short-term and long-term goals.
The Company intends the annual executive pay targets (base salary plus
incentive bonus) to be competitive with executive compensation of other U.S.
public health care companies. The Compensation Committee compares the Company's
executive pay targets with the annual executive pay of those companies which are
included in the Home Health Care Services Group, the peer group used for
comparison purposes in the Stock Performance Graph appearing on page 20 of this
Proxy Statement. Because the Home Health Care Services Group is small and
complete information is not available, the Compensation Committee also compares
the Company's executive pay targets with those of companies outside of this
group. Since the Company's competitors for executive talent are more numerous
than the entities included in the Home Health Care Services Group, such
broader-based comparison is appropriate. By analyzing competing compensation
packages, the Compensation Committee hopes to attract and retain talented and
committed executives on a long-term basis.
Base Salary
With the help of the Chief Executive Officer, the Compensation Committee
evaluates all management salaries, including executive salaries, on a regular
basis. In these evaluations, the Compensation Committee considers levels of
responsibility, individual performance, internal equity, external pay practices,
and achievement of the Company's strategic goals. Regarding external pay
practices, the Compensation Committee seeks to set base salaries for executive
officers at approximately the market rate of the Company's competitors for
executive talent, as determined based on information gathered from outside
sources.
16
<PAGE> 19
Annual Incentives
Annual incentive bonus awards are designed to focus management attention on
key operational goals for the current fiscal year. In this way the Company
strives to meet the objective of emphasizing performance-based compensation. The
key operational goals are specific to each executive's area of responsibility.
Specific weighting is assigned for identified financial, strategic and
management practices goals. Up to 50% of the available bonus percentage for each
executive officer is tied to the Company's overall profitability, generally
defined by achievement of the annual budget as approved by the Board.
Generally, Company executives may earn a bonus equal to between 20% and 50%
of their annual base salaries based upon achievement of their specific
operational goals and achievement by the Company or business unit of its
financial targets. At the end of each fiscal year, the Compensation Committee
evaluates performance in light of these goals on an arithmetic scale with
pre-established weighting, and has the discretion to adjust these calculations
if circumstances warrant.
Criteria for the Company's 1999 annual incentive bonus awards were based
upon certain operational and financial goals. Upon evaluation of the operational
and financial performance of the Company during 1999, the Compensation Committee
determined to award annual bonuses to the Company's executive officers.
Long-Term Incentives
The Company's long-term incentive compensation program consists of
nonqualified stock options which are related to improvement in long-term
stockholder value. Options are the right to purchase shares of Common Stock at
their fair market value on the trading day immediately preceding the date the
option is granted. Options thus will only have value if the Company's stock
price increases. Stock option grants are designed to align executive interests
with the long-term interest of stockholders.
The Board of Directors' Disinterested Stock Option Committee grants stock
options, not the Compensation Committee. The Disinterested Stock Option
Committee selects the number of shares covered by each grant based on an
executive's level of responsibility and past and anticipated contributions to
the Company.
Chief Executive Officer Compensation
Mr. Furlong is the Company's Chief Executive Officer. Pursuant to the terms
of his Employment Agreement, Mr. Furlong does not receive the same employee
benefits as other senior executive officers of the Company. Mr. Furlong receives
$35,000 per month in compensation for his services under the Employment
Agreement. The Employment Agreement provides for an annual incentive bonus of up
to 100% of his annual base salary based upon the Company's operational and
financial performance measured against agreed upon goals and objectives (See
"Employment and other Agreements" appearing on page 12 in this Proxy Statement).
17
<PAGE> 20
Tax Regulations
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to public companies for executive compensation in
excess of $1 million. It is not anticipated that the Company will pay any of its
executive officers compensation in excess of $1 million in the 2000 fiscal year
and, accordingly, to date the Company has not adopted a policy in this regard.
Report Submitted By:
Henry T. Blackstock
Allan C. Silber
18
<PAGE> 21
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the Compensation Committee is currently composed of
Directors Blackstock and Silber. Former Director Thomas A. Dattilo also served
on the Compensation Committee during 1999 and until he resigned in March 2000.
No member of the Compensation Committee is or has been an employee of the
Company.
19
<PAGE> 22
STOCK PERFORMANCE GRAPH
The stock performance graph shown below is not deemed to be part of any
document filed with the SEC pursuant to the Securities Act or the Exchange Act
and is not to be deemed incorporated by reference in any documents filed under
the Securities Act or the Exchange Act without the express written consent of
the Company.
The following graph compares the cumulative total returns of the Company's
Common Stock with those of NASDAQ Market Index and the Home Health Care Services
Group (SIC Number 8082) Index, a peer group index compiled by Media General
Financial Services. The peer group includes approximately 25 companies,
excluding the Company.
Cumulative return assumes $100.00 invested in the Company or respective
indices on January 1, 1995 with dividend reinvestment through December 31, 1999.
The comparisons in this table are required by the SEC and are not indicative
of possible future performance of the Company's Common Stock.
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
AMERICAN HOMEPATIENT, INC. 100.00 124.21 257.90 222.41 17.15 5.11
SIC CODE INDEX 100.00 96.77 87.80 89.86 135.55 210.28
NASDAQ MARKET INDEX 100.00 129.71 161.18 197.16 278.08 490.46
</TABLE>
The graph presents information since January 1, 1995. The Company does not
directly tie executive compensation to stock performance. The Board's
Compensation Committee will determine the future impact, if any, of stock
performance on executive compensation.
20
<PAGE> 23
INFORMATION INCORPORATED BY REFERENCE
The Company has incorporated certain financial information by reference to
the Annual Report on Form 10-K, a copy of which is included with this Proxy
Statement. The financial information incorporated by reference includes (i)
Selected Consolidated Financial Data; (ii) Management's Discussion and Analysis
of Financial Condition and Results of Operations; (iii) Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure; and (iv)
Quantitative and Qualitative Disclosures about Market Risk.
21
<PAGE> 24
PROXY AMERICAN HOMEPATIENT, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS, MAY 31, 2000
THE BOARD OF DIRECTORS SOLICITS THIS PROXY
The Annual Meeting will be held on May 31, 2000, at 10:30 a.m. Central
Daylight Time, at 1800 AmSouth Center (formerly First American Center), 315
Deaderick Street, Nashville, Tennessee 37238. The undersigned hereby appoints
Thomas E. Mills and Marilyn O'Hara, or either of them, as proxies, with power of
substitution, to vote all shares of the undersigned at the Annual Meeting, and
at any adjournments or postponements thereof, in accordance with the following
instructions:
PROPOSAL 1 APPROVAL OF THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS
<TABLE>
<S> <C> <C> <C>
[ ] FOR the approval of [ ] WITHHOLD AUTHORITY to vote
the entity listed below for the approval of the entity listed below
</TABLE>
Arthur Andersen LLP
PROPOSAL 2 In the discretion of the proxies on such other matters as may
properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on reverse side)
(Continued from other side)
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR PROPOSAL 1, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT, AND IN THE DISCRETION OF THE
PROXIES, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY.
Dated: ---------------- , 2000
------------------------------
Dated: ---------------- , 2000
------------------------------
Signatures of stockholder(s)
should correspond exactly with
the name printed hereon. Joint
owners should each sign
personally. Executors,
administrators, trustees,
etc., should give full title
and authority.
