OMEGA HEALTH SYSTEMS, INC.
July 19, 1997
On behalf of the Board of Directors and management, I invite you to attend the
Annual Meeting of Shareholders of Omega Health Systems, Inc., to be held on
Friday, August 8, 1997 at 11:00 A.M., local time, in the corporate offices of
Omega Health Systems, Inc., 5100 Poplar Avenue, Suite 2100, Memphis, Tennessee
38137
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon. The Annual Report to Shareholders is
also included.
In addition to the specific matters to be acted upon, there will be a report on
the progress of the Company and an opportunity for questions of general interest
to shareholders.
It is important that your shares be represented at the meeting. Whether or not
you plan to attend in person, you are requested to mark, sign, date and promptly
return the enclosed proxy in the envelope provided.
Sincerely yours,
/s/ Andrew W. Miller
Andrew W. Miller
Chairman of the Board
<PAGE>
OMEGA HEALTH SYSTEMS, INC.
5100 Poplar Avenue, Suite 2100
Memphis, Tennessee 38137
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 8, 1997
Notice is hereby given that the Annual Meeting of Shareholders of Omega Health
Systems, Inc. (the "Company"), will be held on Friday, August 8, 1997, at 11:00
A.M., local time, in the corporate offices of the Company at 5100 Poplar Avenue,
Suite 2100, Memphis, Tennessee 38137, for the following
purposes:
1. To elect two directors to serve as described herein or until their
successors have been duly elected and qualified.
2. To ratify the authorization of the Audit Committee of the Board of
Directors to select the Company's independent auditors for the year
1997.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on June 30, 1997 are entitled to
notice of and to vote at the Annual Meeting of Shareholders.
By Order of the Board of Directors
/s/ Ronald L. Edmonds
Ronald L. Edmonds, Secretary
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE MARK, SIGN, DATE
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE STAMPED ENVELOPE
PROVIDED.
<PAGE>
OMEGA HEALTH SYSTEMS, INC.
5100 Poplar Avenue, Suite 2100
Memphis, Tennessee 38137
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 8, 1997
INFORMATION CONCERNING THE SOLICITATION
This statement is furnished in connection with the solicitation of proxies to be
used at the Annual Meeting of Shareholders (the "Annual Meeting") of Omega
Health Systems, Inc. (the "Company") to be held Friday, August 8, 1997 at 11:00
A.M.
At the Annual Meeting, the shareholders will vote (1) to elect two directors and
(2) to ratify the authority of the Audit Committee of the Board of Directors to
select the Company's independent auditors for 1997. The affirmative vote of a
plurality of the shares present or represented at the meeting, if a quorum
exists, is required to elect the directors. The affirmative vote of a majority
of the shares present or represented at the meeting, if a quorum exists, is
required to approve the proposal to ratify the authority of the Audit Committee
of the Board of Directors to select the Company's independent auditors for the
year 1997. The presence in person or by proxy of the holders of a majority of
the issued and outstanding shares of the Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum.
Shareholders are urged to sign the enclosed form of proxy
SHAREHOLDER'S PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders' proposals intended to be presented at the 1998 annual Meeting of
Shareholders must be received by the Company no later than February 15, 1998 for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
OUTSTANDING VOTING SECURITIES
Only shareholders of record on June 30, 1997, are entitled to notice of and to
vote at the Annual Meeting. On that date there were 7,479,582 shares of Common
Stock issued and outstanding. The holder of each share of common stock is
entitled to one vote on all matters submitted before the Annual Meeting or any
adjournments of the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 1, 1997, the Company's records indicated that the following number
of shares were beneficially owned by (i) each person known by the Company to
beneficially own more than 5% of the Company's shares; (ii) directors, persons
nominated to become directors of the Company, and executive officers; and (iii)
directors and officers of the Company as a group.
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership (1) Percent of Class(1)
------------------------ ------------------------ -------------------
(i) The Dreyfus
Corporation
c/o Mellon Bank 650,000 8.20%
Corporation
One Mellon Bank
Center
Pittsburgh, PA 15258
1
<PAGE>
(ii) Andrew W. Miller(2) 324,992 4.10%
Herman L. Tacker, O.D.(3) 133,553 1.68%
Thomas P. Lewis(4) 152,689 1.93%
Ronald L. Edmonds(5) 15,516 0.20%
Donald A. Hood, O.D. 80,038 1.01%
Randall N. Reichle, O.D.(6) 10,393 0.18%
Cassandra T. Speier -0- -0-
(iii) Directors and Executive Officers 720,949 9.09%
as a group (seven persons)(7)
(1) Unless otherwise indicated, beneficial ownership consists of sole voting
and investing power based on 7,926,935 shares issued and outstanding, including
options and warrants to purchase 1,049,623 shares which are exercisable or
become exercisable within 60 days.
(2) Included in Mr. Miller's shares are options to purchase 10,000 shares.
(3) Of the total of 133,553 shares shown, 16,875 are held jointly by Dr.
Tacker and his wife, Wilma R. Tacker. Included in Dr. Tacker's shares are
options to purchase 11,667 shares.
(4) Included in Mr. Lewis' shares are options to purchase 21,667 shares.
(5) Included in Mr. Edmond's shares are options to purchase 12,667 shares.
(6) Included in Mr. Reichle's shares are options to purchase 3,667 shares.
(7) Included in the ownership of directors and executive officers as a group
are options to purchase 59,667 shares, which are exercisable or become
exercisable within 60 days.
Proposal 1. ELECTION OF DIRECTORS
The Company's By-laws provide for a board of directors divided into three
classes. Each class is to consist as nearly as possible of one-third of the
directors. At the Annual meeting, the following two (2) directors, both of whom
are members of the present Board, are nominees for election to hold office for a
three-year term beginning in 1997 or until their successors are elected and
qualified:
ANDREW W. MILLER
HERMAN L. TACKER, O.D.
If any nominee should be unable to accept nomination or election as a director,
which is not expected, the proxies may be voted with discretionary authority for
a substitute designated by the Board of Directors. The election of a director
requires the affirmative vote of a plurality of shares present or represented at
the meeting.
Set forth below is biographical information concerning the directors and
nominees for directors of the Company:
RONALD L. EDMONDS (41) has served as the Company's Executive Vice President
since January 1997 and Chief Financial Officer since September 1992. From
September 1992 until December 1996, he served as Senior Vice President. He was
elected a director in February 1993 and Secretary in October 1994. From 1978
until 1992, he served in various positions with KPMG Peat Marwick in Memphis,
Tennessee, Oklahoma City, Oklahoma and New York City, New York. Mr. Edmonds is a
certified public accountant and holds B.S. and M.S. degrees in accounting from
Oklahoma State University.
2
<PAGE>
DONALD A. HOOD, O.D. (52) was one of the founders of The Eye Health Network,
Inc. in 1988 and presently serves as its Chairman. He served as its
President and Chief Executive Officer until June 1997 when he was named
Chairman. He was elected to the Company's board of directors in April 1994.
Dr. Hood has maintained a private optometry practice in the Denver, Colorado
area since 1972. Dr. Hood graduated from the Pacific University College of
Optometry in 1968.
THOMAS P. LEWIS (42) has served as the Company's President since January 1990
and as its Chief Executive Officer since March 1, 1991. From June 1988 to
December 1989, he served as Executive Vice President and Chief Operating
Officer. From June 1986, until the merger with Omega Health Services, Inc., in
June 1988, he served as the Company's President and Chief Executive Officer.
From June 1985 to June 1986, Mr. Lewis served as the Company's Vice President.
He has been a director since June 1986.
ANDREW W. MILLER (53) has served as the Company's Chairman since September
1990 and has been a principal shareholder of the Company since 1986. Mr.
Miller served as the Company's Chief Executive Officer from September 30,
1990 until March 1, 1991. Since June 1996, Mr. Miller has served as chairman
and chief executive officer of Women's Health Partners, Inc., a physician
practice management company specializing in obstetrics and gynecology.
Since 1989, Mr. Miller has served as Chairman of American HealthMark, Inc., a
hospital ownership and management corporation. Mr. Miller also served as a
director of Surgical Care Affiliates, Inc. ("SCA"), an owner and operator of
outpatient health care facilities, from 1987 until its merger with
HealthSouth, Inc. in 1996. Mr. Miller served as President and Chief
Executive Officer of SCA from its founding in 1982 until May 1987 and from
May 1987 until 1990 served as its Vice Chairman and Chairman of the Executive
Committee. Mr. Miller is also a director of Healthwise of America, Inc., a
former affiliate of SCA until its acquisition by United Healthcare in 1996.
Mr. Miller was a Senior Vice President of Hospital Corporation of America
("HCA") and President of HCA Management Company ("HMC"), a division of HCA,
prior to leaving HCA and founding SCA in 1982. Mr. Miller was with HCA for
12 years starting in 1970. Mr. Miller is a certified public accountant and
prior to his association with HCA, he was employed by a national accounting
firm.
HERMAN L. TACKER, O.D. (58) has served as a director of the Company since May
1989. Previously, he was a director of Omega Health Services, Inc. from October
1985, until it merged with the Company in June 1988. From 1972 to the present,
Dr. Tacker has conducted a private optometric practice in Memphis, Tennessee,
and has served as a Professor at the Southern College of Optometry. He graduated
from Southern College of Optometry in 1965 and in 1969 earned a M.S. Degree in
Education from Indiana University.
OTHER EXECUTIVE OFFICERS
The following persons also serve as executive officers of the Company:
Name Age Position
- ---- --- --------
Randall N. Reichle, O.D. 44 National Optometric Director
and Vice President
Cassandra T. Speier 38 Senior Vice President - Center Operations
INFORMATION REGARDING MEETINGS OF DIRECTORS
During the last fiscal year, the Board of Directors held four Board of Directors
meetings. All directors attended no less than 75% of the meetings held during
1996.
3
<PAGE>
The Board of Directors has four committees - an Executive Committee, a Quality
Assurance Committee, a Compensation Committee and an Audit Committee. Members of
the Executive Committee during 1996 were Messrs. Miller, Lewis, and Tacker. The
Executive Committee is authorized by the Board of Directors to take any action,
as individually approved by the Board, which may be taken by the Board of
Directors, except the power to alter or amend the Bylaws; submit to shareholders
any action that needs shareholders' authorization; fill vacancies on the Board
of Directors or any committee thereof; or declare dividends or make any other
distributions. The Executive Committee held four meetings during 1996.
Members of the Quality Assurance Committee during 1996 were Messrs. Miller,
Lewis and Tacker. The Quality Assurance Committee was appointed by the Board of
Directors to establish and monitor risk management policies. The Quality
Assurance Committee held four meetings during 1996.
Members of the Compensation Committee during 1996 were Messrs. Miller and
Tacker. The Compensation Committee was appointed by the Board of Directors to
administer its employee benefit plans. The Compensation Committee held two
meetings during 1996.
Members of the Audit Committee during 1996 were Messrs. Miller and Tacker. The
Audit Committee was appointed to engage independent auditors and review audit
fees, supervise matters relating to audit functions, review audit results with
the auditors, and review the scope and results of the Company's internal
auditing procedures and the adequacy of the internal controls. The audit
committee held two meetings during 1996.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table shows the aggregate cash compensation paid by the Company to
(i) the chief executive officer, and (ii) the executive officers of the Company
for the years ended December 31, 1996, 1995, and 1994.
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Long Term
Other Annual Compensation
Name and Position Year Salary ($) Bonus ($) Compensation ($) Options (#)
- ----------------- ---- ---------- --------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Thomas P. Lewis 1996 123,167 14,426 -0- 100,000
President and Chief Executive 1995 104,000 6,000 8,335(1) -0-
Officer 1994 96,000 8,500 8,335(1) -0-
Ronald L. Edmonds 1996 92,000 9,617 -0- 25,000
Executive Vice President and 1995 92,000 4,000 -0- -0-
Chief Financial Officer 1994 85,000 7,000 -0- -0-
Cassandra T. Speier 1996 89,000 -0- -0- 25,000
Senior Vice President - 1995 86,833 1,250 -0- -0-
Center Operations 1994 38,958 -0- -0- 15,000
Randall N. Reichle, O.D. 1996 84,000 52,115 -0- 5,000
Vice President and 1995 84,000 46,333 -0- -0-
National Optometric Director 1994 82,500 37,765 -0- -0-
Donald A. Hood, O.D. 1996 85,000 54,959 -0- -0-
The Eye Health Network 1995 85,000 25,000 -0- -0-
President and Chief Executive 1994 85,000 39,654 -0- 50,000
Officer
(1) In January 1990, the Company entered into a stock bonus arrangement with Mr. Lewis, pursuant
to which Mr. Lewis was issued 1,667 shares on each January 1, for five years, commencing January
1, 1991, provided Mr. Lewis was an employee of the Company on such dates. The stock bonus
arrangement was partial compensation for Mr. Lewis' relocation to Memphis, Tennessee.
Option Grants in 1996(1)
------------------------
Potential Realizable
Value at Assumed Rates of
% of Total Options Exercise Stock Appreciation for
Options Granted to Price Option Term
Name Granted Employees in 1996 ($/Sh) Expiration Date 5%($) 10%($)
- ---- ------- ----------------- ------ --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Thomas P. Lewis 100,000 44% $5.75 August, 2002 195,556 443,648
Ronald L. Edmonds 25,000 11% $5.75 August, 2002 48,889
110,912
Cassandra T. Speier 25,000 11% $5.75 August, 2002 48,889 110,912
Randall N. Reichle 5,000 2% $5.75 August, 2002 9,778 22,182
5
<PAGE>
Aggregated Option Exercises in 1996(1) and Year end Option Values(2)
--------------------------------------------------------------------
Number of Unexercised Options Value of Unexercised In-The-Money Options
at Year End at Year End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable (2)
- ---- ------------------------- -----------------------------
<S> <C> <C>
Thomas P. Lewis 21,667/18,333 $78,650/$66,550
Ronald L. Edmonds 12,667/35,333 $45,980/$59,510
Randall N. Reichle, O.D. 3,667/12,333 $13,310/$31,020
Donald A. Hood, O.D. 0/50,000 $0/$140,000
Cassandra T. Speier 0/40,000 $0/$53,950
(1) During 1996, no options were exercised by any executive officer.
(2) Option values are based on a December 31, 1996 market price per share of $6.63.
</TABLE>
Compensation Committee Report on Executive Compensation
-------------------------------------------------------
The compensation of the Company's executive officers is reviewed and approved by
the Compensation Committee. The Compensation Committee is currently composed of
Mr. Miller and Dr. Tacker, neither of whom at any time has been an officer or
employee of the Company, except that Mr. Miller did serve as the Company's chief
executive officer, not as an employee, from September 30, 1990 until March 1,
1991. In addition to reviewing and approving executive officers' salary and
bonus arrangements, the Compensation Committee administers the awards of stock
options pursuant to the Company's Stock Option Plan.
Compensation Policies Applicable to Executive Officers for 1996
- ---------------------------------------------------------------
The objectives of the Company's executive compensation program are to (1)
attract, motivate and retain key executives responsible for the success of the
Company, (2) reward key executives based on corporate and individual
performance, and (3) provide incentives designed to maximize shareholder value.
The three primary components of the executive officer compensation program are
base salaries, cash bonuses, and equity awards in the form of stock options.
The base salary of each of the Company's executive officers is established
pursuant to an employment agreement that is approved by the Compensation
Committee. Base salaries are reviewed by the Compensation Committee and may be
increased in the Committee's discretion. For 1996, one executive officer's base
salary was increased by approximately 2.5% based on the recommendation of the
Chief Executive Officer to bring that officer's base salary to a level deemed
appropriate for the position. There was no adjustment for 1996 in the base
compensation of any other executive officer.
Each executive officer is entitled to receive such bonuses or other incentive
compensation as the Compensation Committee determines in its sole discretion. In
determining bonuses, the Committee considers overall company performance and the
performance of the individual executive in contributing to the overall company
performance. Dr. Reichle and Dr. Hood have specific bonus arrangements based on
the performance, in terms of earnings and, in the case of Dr. Reichle, revenues,
of the business units of the Company to which they give leadership.
In order to align long-term interests of executive officers with those of
shareholders, the Compensation Committee, in its subjective discretion, from
time to time considers the award of stock options. The terms of these options,
including the sizes of the grants, are determined by the Compensation Committee
based on its subjective judgment and without regard to any specific performance
criteria. Awards of stock options to executive officers have historically been
for a term of six years at then-current market prices with vesting in the third,
fourth and fifth years of the option term.
6
<PAGE>
CEO COMPENSATION
In evaluating the compensation of Thomas P. Lewis, the Company's chief executive
officer, the Compensation Committee utilized the same compensation policies
applicable to executive officers in general. As of August 1, 1996, the Company
entered into an Employment Agreement with Mr. Lewis. The Agreement increased Mr.
Lewis' annual base salary to $150,000 and provides for a salary increase of
$50,000 upon the Company achieving a specific earnings per share performance
goal. The Agreement granted Mr. Lewis qualified options to purchase 100,000
shares of Company stock at $5.75 per share, which options do not vest the first
two years and vest 1/3 per year beginning August 1, 1999. The options terminate
August 1, 2002. The Company also agreed to grant Mr. Lewis options to purchase
an additional 100,000 shares of Company common stock, which grant is contingent
upon the Company achieving a specific earnings per share performance goal. As
part of the Agreement, Mr. Lewis agreed to certain non-competition and
confidentiality provisions that would continue after the termination of his
employment. In the event of Mr. Lewis' termination of employment related to a
change in control of the Company, Mr. Lewis shall be paid by the Company a lump
sum payment of one year's salary, and the Company shall provide for two years
certain insurance benefits.
OTHER EXECUTIVE EMPLOYMENT ARRANGEMENTS
Effective January 1, 1997, the Company entered into an Employment Agreement with
Ronald L. Edmonds, its Executive Vice President and Chief Financial Officer. The
Agreement increased Mr. Edmonds' annual base salary to $115,000 on January 1,
1997 and provides for a $15,000 increase effective January 1, 1998. The
Agreement granted Mr. Edmonds qualified options to purchase 25,000 shares of
Company common stock at $6.50 per share, which options do not vest the first two
years and vest 1/3 per year beginning January 1, 2000. The options terminate
January 1, 2003. As part of the Agreement, Mr. Edmonds agreed to certain
non-competition and confidentiality provisions that would continue after the
termination of his employment. In the event of Mr. Edmonds' termination of
employment related to a change in control of the Company, Mr. Edmonds shall be
paid by the Company a lump sum payment of one year's salary, and the Company
shall provide for up to one year certain insurance benefits.
Effective January 1, 1997, the Eye Health Network, Inc., a wholly-owned
subsidiary of the Company entered into an Employment Agreement with Donald A.
Hood, O.D. Under the terms of the Agreement, Dr. Hood's annual base salary
during the first phase of the Agreement is $125,000. During the second phase of
the Agreement, Dr. Hood's base salary will be $80,000. During the first phase,
Dr. Hood will serve as President and Chief Executive Officer of The Eye Health
Network, Inc. and during phase two as its Chairman. The Agreement granted Dr.
Hood qualified options to purchase 25,000 shares of Company common stock at
$6.50 per share, which options do not vest the first two years and vest 1/3 per
year beginning January 1, 2000. The options terminate January 1, 2003. As part
of the Agreement, Mr. Edmonds agreed to certain non-competition and
confidentiality provisions that would continue after the termination of his
employment. In the event of Dr. Hood's termination of employment related to a
change in control of the Company, Dr. Hood shall be paid by the Company a lump
sum payment of one year's salary, and the Company shall provide for up to two
years certain insurance benefits. In June 1997, Dr. Hood was named Chairman.
ANDREW W. MILLER HERMAN L. TACKER, O.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Mr. Miller and Dr. Tacker,
neither of whom at any time has been an officer or employee of the Company,
except that Mr. Miller did serve as the Company's chief executive officer, not
as an employee, from September 30, 1990 until March 1, 1991. No executive
officer of the Company served during 1996 as a member of a compensation
committee or as a director of any entity of which any of the Company's directors
serves as an executive officer. During 1996, an affiliate of Mr. Miller provided
bridge financing in connection with an acquisition. This transaction is
described under "Certain Relationships and Transactions."
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has, and expects to have, transactions in the ordinary course of its
business with directors and officers of the Company and their affiliates,
including members of their families or corporations, partnerships or other
organizations in which such officers or directors have a controlling interest,
on substantially the same terms (including price, or interest rates and
collateral) as those prevailing at the time for comparable transactions with
unrelated parties. The Company has an agreement to perform management services
for Cathleen M. Schanzer, M.D., the Medical Director for the Company's Memphis
Center. Dr. Schanzer is the wife of the Company's president, Thomas P. Lewis.
The management agreement includes payments to Dr. Schanzer equal to 35% of the
cash receipts of the practice, but with minimum payments to her totaling
$200,400 per year. Dr. Schanzer received approximately $389,000 in 1996 pursuant
to the management agreement.
On March 13, 1996, the Company acquired the assets of an ophthalmology practice
known as Capital Eye Center located in Tallahassee, Florida and entered into a
long-term management agreement with the selling physician's professional
corporation. In addition, the Company acquired all of the stock of an ambulatory
surgery center associated with the practice known as Capital Eye Surgery Center.
The total consideration for these transactions included cash of $2 million and a
$1.4 million 7% convertible subordinated note due in 60 monthly installments. In
connection with this transaction, the Company obtained bridge financing in the
form of a 12% $2.5 million subordinated note. The financing was obtained from an
affiliate of the Company's chairman of the board, Andrew W. Miller. The note was
repaid June 12, 1996 with the proceeds of the sale of preferred stock.
PERFORMANCE GRAPH
The following graph compares the cumulative returns of $100 invested on December
31, 1992 in (a) the Company, (b) the CRSP Index for the Nasdaq Stock Market
("The Nasdaq Stock Market"), and (3) the CSRP Index for Nasdaq Health Services
Stocks ("Nasdaq health Services Stocks"), assuming reinvestment of all
dividends.
FIVE-YEAR CUMULATIVE TOTAL RETURNS
VALUE OF $100 INVESTED ON DECEMBER 31,1992
[ID: Graphic -- Performance Graph]
<TABLE>
<CAPTION>
Value at December 31, 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
Omega Health Systems, Inc. $100.00 $ 25.58 $ 37.21 $ 41.86 $ 48.84 $ 61.63
The Nasdaq Stock Market $100.00 $116.38 $133.59 $130.59 $184.67 $227.16
Nasdaq Health Services Stocks $100.00 $103.60 $119.52 $128.24 $162.89 $163.11
</TABLE>
8
<PAGE>
Proposal 2. RATIFICATION OF THE AUTHORIZATION FOR THE AUDIT COMMITTEE
TO SELECT 1996 INDEPENDENT AUDITORS
The Board of Directors has authorized the Audit Committee to select the
Company's independent auditors for the year 1997. The empowering of the Audit
Committee is subject to approval by the shareholders not later than the date of
the annual meeting of shareholders. KPMG Peat Marwick LLP served as independent
auditors of the Company for the year ended December 31, 1996. Representatives of
the firm will be present at the Annual Meeting, have an opportunity to make a
statement if they so desire and are expected to be available to respond to
appropriate questions.
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present or represented at the meeting, if a quorum exists, is
required to ratify the authority of the Audit Committee to select the Company's
independent auditors for 1997.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" RATIFICATION OF THE AUTHORITY OF
THE AUDIT COMMITTEE TO SELECT THE COMPANY'S INDEPENDENT AUDITORS FOR 1997.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The federal securities laws require the Company's directors and 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 ownership and reports of changes in ownership of any securities of
the Company. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and representations that no other reports
were required, during the fiscal year ended December 31, 1996, all of the
Company's officers and directors made all required filings, except that each
director and officer filed one late annual report on Form 5.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy Statement,
knows of no business to come before the meeting other than that referred to
herein. If any other business should come before the meeting, the persons named
in the enclosed Proxy will have discretionary authority to vote all proxies in
accordance with their best judgment.
Upon the written request of any record holder or beneficial owner of Common
Stock entitled to vote at the Annual Meeting, the Company, without charge, will
provide a copy of its Annual Report on Form 10-K for the year ended December 31,
1996, as filed with the Securities and Exchange Commission. Requests should be
directed to Ronald L. Edmonds, Secretary, Omega Health Systems, Inc., 5100
Poplar Avenue, Suite 2100, Memphis, Tennessee 38137, which is the address of the
Company's principal executive offices.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Thomas P. Lewis
Memphis, Tennessee Thomas P. Lewis
July 19, 1996 President and Chief Executive Officer
9
