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FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 0-19283
OMEGA HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 13-3220466
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
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5100 POPLAR AVENUE, SUITE 2100
MEMPHIS, TENNESSEE 38137
(Address of principal executive offices and Zip Code)
Issuer's telephone number, including area code: (901) 683-7868
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Title of each class
----------------------
COMMON STOCK, $.06 PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
---
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-K contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, COMPLIANCE WITH
SECTION 16(A) OF THE ACT
Set forth below is biographical information concerning the directors of the
Company:
DONALD H. BEISNER, M.D. (59) has served as a director of the Company
since January 1998. Dr. Beisner was in private ophthalmic practice from 1975
through 1995. He serves as secretary of the Board of Directors of the Hawaiian
Eye Foundation. Dr. Beisner received his medical degree from the University of
Iowa College of Medicine and completed his ophthalmology residency at the
University of Iowa Hospital and Clinics.
DAVID M. DILLMAN, M.D. (46) has served as a director of the Company
since August 1997, and at that date became the Company's National Medical
Director. Dr. Dillman has been in private ophthalmic practice since 1981 and is
currently the Medical Director of Dillman Eye Care, an Omega Affiliated
Practice, in Danville, Illinois. He serves on the Scientific Advisory Board for
the American Society of Cataract and Refractive Surgery and on the board of
directors for the American College of Eye Surgeons. Dr. Dillman is a graduate of
the University of Notre Dame, received his medical degree from Indiana
University and completed his ophthalmology residency at the Mayo Clinic in
Rochester, Minnesota.
RONALD L. EDMONDS (42) 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.
DONALD A. HOOD, O.D. (53) was one of the founders of The Eye Health
Network, Inc. in 1988 and presently serves as its President and Chief Executive
Officer. 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 (43) 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. Mr. Lewis has been the Company's Secretary since June 1986.
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. He has been a
director since June 1986. From June 1985 to June 1986, Mr. Lewis served as the
Company's Vice President.
ANDREW W. MILLER (54) has served as the Company's Chairman of the Board
of Directors since September 30, 1990 and has been a principal stockholder 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. Formerly Mr. Miller was
affiliated with Surgical Care Affiliates, Inc. ("SCA"), an owner and operator of
outpatient health care facilities, Hospital Corporation of America ("HCA") and
HCA Management Company ("HMC"), a division of HCA. Mr. Miller is a certified
public accountant and prior to his association with HCA was employed by a
national accounting firm.
HERMAN L. TACKER, O.D. (59) has served as a director of the Company
since October 1985. Since 1972, 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 the Southern College of Optometry and
earned a M.S. Degree in Education from Indiana University.
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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, 1997, 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.
ITEM 11. 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, 1997, 1996, and 1995.
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Annual Compensation
------------------- Long Term
Other Annual Compensation
Name and Position Year Salary ($) Bonus ($) Compensation ($) Options (#)
- ----------------- ---- ---------- --------- ---------------- -----------
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Thomas P. Lewis 1997 186,506 -0- -0- -0-
President and Chief Executive 1996 104,000 14,426 -0- -0-
Officer 1995 104,000 6,000 8,335(1) -0-
Ronald L. Edmonds 1997 110,595 5,074 -0- 25,000
Executive Vice President and 1996 92,000 9,617 -0- 25,000
Chief Financial Officer 1995 92,000 4,000 -0- -0-
Donald A. Hood, O.D. 1997 141,833 -0- -0- -0-
Senior Vice President - 1996 85,000 54,959 -0- -0-
Managed Care 1995 85,000 25,000 -0- -0-
Allen D. Leck 1997 75,519 14,885 -0- -0-
Senior Vice President-
Optometric Practice Services
Cassandra T. Speier 1996 91,540 -0- -0- -0-
Senior Vice President - Development 1995 89,000 -0- -0- 25,000
And Chief Compliance Officer 1994 86,833 1,250 -0- -0-
Randall N. Reichle, O.D. 1997 98,875 32,713 -0- -0-
Vice President and 1996 84,000 52,115 -0- 5,000
National Optometric Director 1995 84,000 46,333 -0- -0-
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(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.
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Option Grants in 1997(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%($)
- ---- ------- ----------------- ------ --------------- ----- ------
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Ronald L. Edmonds 25,000 28% $6.50 January, 2003 55,266 125,379
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Aggregated Option Exercises in 1997(1) and Year end Option Values(2)
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Number of Unexercised Options Value of Unexercised In-The-Money
at Year End Options at Year End ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable (2)
- ---- ------------------------- -----------------------------
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Thomas P. Lewis 35,000/55,000 $157,500/$110,000
Ronald L. Edmonds 20,333/52,667 $91,500/$80,750
Donald A. Hood, O.D. 16,667/33,333 $61,167/$122,333
Robert C. Kelly 0/15,000 $0/$3,750
Cassandra T. Speier 5,000/35,000 $15,000/$73,750
Randall N. Reichle, O.D. 7,333/8,667 $33,000/$25,250
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(1) During 1997, no options were exercised by any executive officer.
(2) Option values are based on a December 31, 1997 market price per share of
$7.50.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of March 1, 1998, 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 and
persons nominated to become directors of the Company and executive officers; and
(iii) directors and officers of the Company as a group.
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Name of Beneficial Owner Amount and Nature of Percent of Class(1)
------------------------ Beneficial Ownership(1) -------------------
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(i) The Dreyfus Corporation
c/o Mellon Bank Corporation
One Mellon Bank Center 470,000 4.91%
Pittsburgh, PA 15258
(ii) Andrew W. Miller(2) 334,992 3.50%
Herman L. Tacker, O.D.(3) 130,219 1.36%
David M. Dillman, M.D. 66,667 0.70%
Donald H. Beisner, M.D. -0- -0-
Thomas P. Lewis(4) 167,272 1.75%
Ronald L. Edmonds(5) 23,600 0.25%
Donald A. Hood, O.D.(6) 97,541 1.02%
Robert C. Kelly -0- -0-
Allen D. Leck 383 -0-
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Cassandra T. Speier(7) 5,000 0.05%
Randall N. Reichle, O.D.(8) 18,079 0.19%
(iii) Directors and Executive Officers as a group 843,753 8.81%
(11 persons)(9)
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(1) Unless otherwise indicated, beneficial ownership consists of sole voting and
investing power based on 9,576,014 shares issued and outstanding, including
options and warrants to purchase 860,324 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 8,333 shares.
(4) Included in Mr. Lewis' shares are options to purchase 35,000 shares.
(5) Included in Mr. Edmond's shares are options to purchase 20,333 shares.
(6) Included in Dr. Hood's shares are options to purchase 16,667 shares.
(7) Included in Ms. Speier's shares are options to purchase 5,000 shares.
(8) Included in Mr. Reichle's shares are options to purchase 7,333 shares.
(9) Included in the ownership of directors and executive officers as a group are
options to purchase 102,666 shares, which are exercisable or become exercisable
within 60 days.
ITEM 13. 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 $453,000 in 1997 pursuant
to the management agreement.
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SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the Exchange Act,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OMEGA HEALTH SYSTEMS, INC.
By /s/ Ronald L. Edmonds
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Ronald L. Edmonds
Executive Vice President and
Chief Financial Officer
Date April 30, 1998
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CROSS REFERENCE SHEET FOR OMEGA HEALTH SYSTEMS, INC.
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Index to Form 10-K/A Page
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Part I:
Item 1. Business 3
Item 2. Properties 16
Item 3. Legal Proceedings 16
Item 4. Submission of Matters to Vote of Security Holders 16
Part II:
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 17
Item 6. Selected Financial Data 19
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 20
Item 8. Financial Statements and Supplementary Data 27
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 28
Part III:
Item 10. Directors and Officers of the Registrant 29
Item 11. Executive Compensation 30
Item 12. Security Ownership of Certain Beneficial Owners 31
Item 13. Certain Relationships and Related Transactions 32
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