FORM 10-K/A
Securities and Exchange Commission
Washington, D.C. 20549
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended September 30, 1997
Commission File Number: 0-25176
MedCath Incorporated
(Exact name of Registrant as specified in its charter)
North Carolina 56-1635096
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
7621 Little Avenue, Suite 106
Charlotte, North Carolina 28226
(Address of Principal Executive Offices) (Zip Code)
(704) 541-3228
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Preferred Share Purchase Rights
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the 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[ ].
The aggregate market value of the Company's Common Stock (its only
voting stock) held by non-affiliates of the Registrant, as of January 23, 1998,
was $120,221,246.
As of January 23, 1998, there were 11,669,359 shares of the
Registrant's Common Stock outstanding.
Documents Incorporated by Reference
NONE
<PAGE>
MedCath Incorporated
Index to Form 10-K/A
For the Year Ended September 30, 1997
<TABLE>
<CAPTION>
Page
----
Part III
<S> <C>
Item 10 - Directors and Executive Officers of the Registrant 3
Item 11 - Executive Compensation 5
Item 12 - Security Ownership of Certain Beneficial Owners and Management 11
Item 13 - Certain Relationships and Related Transactions 13
</TABLE>
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Item 10. Directors and Executive Officers of the Registrant
The Board of Directors consists of six directors. Directors are elected
annually and serve until the next annual meeting of shareholders and their
successors are elected and qualified. The following table sets forth certain
information regarding the executive officers and directors of the Company.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Stephen R. Puckett 45 Chairman of the Board of Directors, President
and Chief Executive Officer
David Crane 41 Executive Vice President and Chief
Operating Officer
Charles W. (Todd) Johnson 40 Senior Vice President - Development and Managed Care
Richard J. Post 42 Chief Financial Officer, Secretary and Treasurer
Thomas K. Hearn III 36 President - Diagnostics Division
R. William Moore, Jr. 47 President - Hospital Division
A. Kenneth Petronis 38 President - Practice Management Division
Patrick J. Welsh 54 Director
Andrew M. Paul 41 Director
W. Jack Duncan 55 Director
John B. McKinnon 62 Director
</TABLE>
Stephen R. Puckett was a founder of the Company in 1988 and has served
as Chairman of the Board of Directors and President of the Company since that
time. From 1984 to 1989, Mr. Puckett served as Executive Vice President and
Chief Operating Officer of Charlotte Mecklenburg Hospital Authority (the
"Authority"), a 1,677-bed multi-hospital system, and from 1981 to 1983, he
served as Senior Vice President of the Authority. Carolinas Medical Center, an
853-bed hospital and the largest facility in the Authority's system, operates
one of the largest heart programs in the Southeast. While he was associated with
the Authority, Mr. Puckett was active in managing many of the additions to the
Carolinas Medical Center, including an 80,000 square foot heart institute with
four surgical suites and several cardiac diagnostic and therapeutic
laboratories. From 1976 to 1981, Mr. Puckett worked for the University of
Alabama hospital and served in a variety of management positions with increasing
responsibilities for hospital operations. Mr. Puckett serves as a director of
Cardiovascular Diagnostics, Inc. Mr. Puckett received a B.A. and an M.S. in
Health Management from the University of Alabama.
David Crane has served as a director and Chief Operating Officer of the
Company since 1989. From 1985 to 1989, Mr. Crane was employed by MediVision,
Inc., an owner/manager of ophthalmic outpatient surgery centers and private
ophthalmic surgical practices, and he served as Chief Operating Officer of
MediVision from 1987 to 1989. While he was associated with MediVision, Mr. Crane
managed the construction of several ophthalmic outpatient surgical centers. From
1982 to 1985, he was a business and health care consultant with Bain & Company,
a consulting firm. Mr. Crane received a B.A. from Yale University and an M.B.A.
from Harvard Business School.
Charles W. (Todd) Johnson has served as a Vice President of the Company
since April 1995 when the Company acquired all of the outstanding shares of
HealthTech Corporation. Mr. Johnson was the founder and President of HealthTech
Corporation, a company whose principal business was the ownership and operation
of mobile cardiac catheterization laboratories. Prior to founding HealthTech
Corporation in July 1991, Mr. Johnson was a partner in Paragon Group, a national
real estate development and investment company. Mr. Johnson
3
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received a B.A. from the University of North Carolina and an M.B.A. from Wake
Forest University.
Richard J. Post joined MedCath in September 1996 as Chief Financial
Officer, Secretary and Treasurer. From 1986 to 1996, Mr. Post was employed as an
investment banker, assisting clients in the execution of a wide variety of
public and private debt and equity financings and merger and acquisition
transactions. He served as a Senior Vice President, Corporate Finance with Price
Waterhouse LLP from 1994 to 1996. From 1992 to 1994, he was a Senior Manager in
the Corporate Finance Department of Ernst & Young LLP and from 1988 to 1992, he
was a Vice President in the Investment Banking Department of Bear, Stearns & Co.
Inc. From 1986 to 1988, he was an Associate in the Corporate Finance Group at
The First Boston Corporation. Mr. Post served as a Military Intelligence Officer
in the United States Army from 1977 to 1986. He received a B.A. in English and
Philosophy from the University of Notre Dame and an M.B.A. from Harvard Business
School.
Thomas K. Hearn III, has served as President - Diagnostics Division
since joining the Company in November 1995. From August 1993 until he joined the
Company, Mr. Hearn served as President of Decision Support Systems, Inc., a
health care software and consulting firm that he co-founded. Prior to
co-founding that company, he was employed from 1987 to 1993 by the Charlotte
Mecklenburg Hospital Authority where he served as Vice President of
Administration and Administrator of the Authority's Carolinas Heart Institute,
one of the busiest centers for the treatment of cardiovascular disease in the
Southeast. From 1985 to 1987 Mr. Hearn developed managed care products for VHA.
Mr. Hearn received a B.A. from the College of William and Mary, and the M.P.H.
and M.B.A. degrees from the University of Alabama at Birmingham.
R. William Moore, Jr. has served as President - Hospital Division of
the Company since November 1995. He joined the Company in April 1994 and from
that date until he was appointed to his current position, he served as President
of the Company's first specialty heart hospital, the McAllen Heart Hospital in
McAllen, Texas. From 1989 until he joined the Company, Mr. Moore was
Administrator of University Hospital, a 130-bed hospital in the Charlotte
Mecklenburg Hospital Authority multi-hospital system. Prior thereto, he held
other top management positions for eight years in the Charlotte Mecklenburg
Hospital Authority system and with Memorial Mission Hospital in Asheville, North
Carolina. Mr. Moore received a B.A. from Ohio Northern University and an M.B.A.
from Western Carolina University.
A. Kenneth Petronis, joined MedCath in August 1997 as President -
Practice Management Division. Prior to joining MedCath, Mr. Petronis was a Vice
President of PHP, Inc., a subsidiary of United HealthCare, where he was
responsible for all physician provider network negotiations and interface and
was instrumental in contracting with over 2,000 physicians. From 1990 to 1993 he
was Chief Executive Officer of a large, cardiology-focused, multi-specialty
physician group practice. From 1983 to 1990, Mr. Petronis was employed by Ernst
& Young LLP where he served in a number of capacities, including a Senior
Manager in the Healthcare Consulting Group.
Patrick J. Welsh, a director of the Company since 1991, has been a
general partner of the sole general partner of WCAS since its formation. Mr.
Welsh has been a general partner of the sole general partner of associated
limited partnerships since 1979. Prior to 1979, Mr. Welsh was President and a
director of Citicorp Venture Capital, Ltd., an affiliate of Citicorp engaged in
venture capital investing. Mr. Welsh serves as a director of Walsh
International, Inc., Pharmaceutical Marketing Services Inc. and several
privately-held companies.
Andrew M. Paul has been a director of the Company since 1991. He joined
Welsh, Carson, Anderson & Stowe in 1984, where he currently serves as a general
partner of the sole general partner of WCAS. From 1983 to 1984, he was an
associate in Hambrecht & Quist's venture capital group. From 1978 to 1981, he
was a systems engineer and then a marketing representative for IBM. Mr. Paul
received a B.A. from Cornell University and an M.B.A. from Harvard Business
School. Mr. Paul serves as a director of Lincare, Inc., Centennial Healthcare,
Inc., Housecall Medical Resources, Inc. and several privately-held companies.
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W. Jack Duncan has served as a director of the Company since September
1994. Since 1987, he has been a Professor and University Scholar in Management
in the Graduate School of Management and Professor of Health Care Organization
and Policy and a Senior Scholar in the Lister Hill Center for Health Policy in
the School of Public Health at the University of Alabama at Birmingham. He is
the author of 14 books on management and over 100 articles and published papers
in management journals. Dr. Duncan received a B.S. in Economics from Howard
College and an M.B.A. and a Ph.D. from Louisiana State University.
John B. McKinnon has been a director of the Company since February
1996. From 1989 until his retirement in 1995, he served as the Dean of the
Babcock Graduate School of Management at Wake Forest University. From 1986 to
1988 he served as President of Sara Lee Corporation. Mr. McKinnon also serves as
a director of Premark International, Morrison's Health Care, Inc., Ruby Tuesday,
Inc., Integon Corporation and two privately-held companies. He received an A.B.
from Duke University and an M.B.A. from Harvard Business School.
Item 11. Executive Compensation
The table on the following page sets forth certain information for each
of the last three fiscal years concerning the compensation of the Company's
President and Chief Executive Officer and the Company's other four most highly
compensated executive officers who were serving as executive officers at
September 30, 1997 (the "Named Executive Officers").
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Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Number of
Securities All Other
Underlying Compensation
Annual Compensation Options (#)(1) ($)(2)
Name and Principal Position Year Salary ($) Bonus ($) -------------- ------------
- --------------------------- ---- ---------- ---------
<S> <C> <C> <C> <C> <C>
Stephen R. Puckett 1997 $ 259,980 $127,500 52,143 $ 2,250
President and Chief Executive 1996 192,344 67,247 77,671 2,461
Officer....................... 1995 183,185 116,000 100,000 2,481
David Crane 1997 $ 204,972 $100,000 30,000 $ 2,250
Executive Vice President and 1996 160,287 56,039 51,276 2,439
Chief Operating Officer...... 1995 152,654 84,000 60,000 2,435
Charles W. (Todd) Johnson 1997 $ 170,904 $ 90,000 8,306 $ 2,370
Senior Vice President - 1996 155,925 54,511 29,001 3,086
Development and Managed Care 1995(3) 65,058 47,000 20,000 400
Richard J. Post 1997 $ 147,372 $ 72,500 50,000 $ 184
Chief Financial Officer, 1996 -------- -------- -------- --------
Secretary and Treasurer....... 1995 -------- -------- -------- --------
R. William Moore, Jr. 1997 $148,800 $ 50,000 -------- $ 22,893
President-Hospital Division... 1996 141,639 14,000 7,500 2,125
1995 115,000 52,500 -------- 1,688
- --------------------
</TABLE>
(1) The Company's executive compensation program consists of three
principal components: base salary, cash bonuses and long-term incentive
compensation in the form of stock options. Stock options granted in a
particular fiscal year may in fact be based upon each Named Executive
Officer's contributions to the Company's performance in the prior
fiscal year. The number of options granted are based upon (i)
provisions of each Named Executive Officer's respective employment
agreement or (ii) an evaluation by the Chief Executive Officer or the
Compensation Committee. For example, options to purchase 89,318;
53,591; 44,659; 15,000; and 10,000 shares were granted to Messrs.
Puckett, Crane, Johnson, Post and Moore, respectively, in October 1997
based upon an evaluation of their respective contributions to the
Company's performance in the prior fiscal year. See the table on the
following page providing information about stock options granted during
the fiscal year ended September 30, 1997.
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(2) For fiscal year 1997, consists of (i) matching contributions to the
Company's 401(k) Plan and (ii) life insurance premiums paid in the
amount of $1,110 on behalf of Mr. Johnson and (iii) a moving allowance
in the amount of $21,093 paid to Mr. Moore. For fiscal year 1996,
consists of matching contributions to the Company's 401(k) Plan and
(ii) life insurance premiums paid in the amount of $1,000 on behalf of
Mr. Johnson. For fiscal year 1995, consists of (i) matching
contributions to the Company's 401(k) Plan and (ii) life insurance
premiums in the amounts of $60, $41 and $24 paid on behalf of Messrs.
Puckett, Crane and Johnson, respectively.
(3) For fiscal year 1995, represents compensation earned for the period
from April 24, to September 30, 1995, the date Mr. Johnson became an
executive officer of the Company.
Stock Options Granted During the Fiscal Year Ended September 30, 1997
The following table provides certain information concerning grants of
options to purchase shares of Common Stock made during the fiscal year ended
September 20, 1997 to the Named Executive Officers.
These option grants were made under the Company's Omnibus Stock Plan,
and represented, in each instance, a replacement grant upon cancellation of
previously-granted stock options. In connection with these replacement grants,
the exercise prices of the stock options previously awarded to these executive
officers were adjusted to reflect the replacement grant-date market price. The
vesting provisions of these replacement stock options did not, however, provide
the Named Executive Officers with any credit for the periods of time they held
the stock options that were cancelled in connection with the replacement grants.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
IndividualGrants
----------------
% of Total
Number of Options
Securities Granted to Potential Realizable Value
Underlying Employees Exercise at Assumed Annual Rates
Options in Fiscal Price Expiration of Stock Price Appreciation
Granted (#) Year (1) ($/sh) Date for Option Term (2)
----------- ------------ ---------- ----- ------------------------------
Name 5% ($) 10% ($)
---- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Stephen R. Puckett 4,553(3) 1.7% $14.44 4/28/02 $ 10,523 $ 30,496
47,590(4) 17.9 13.13 4/28/07 392,819 995,481
David Crane 30,000(5) 11.3% $13.13 4/28/07 $ 247,627 $ 627,536
Charles W. (Todd) Johnson 8,306(6) 3.1% $13.13 4/28/07 $ 68,560 $ 173,744
Richard J. Post 50,000(7) 18.8% $13.13 4/28/07 $ 412,712 $ 1,045,893
R. William Moore, Jr. ------ ---- ---- ---- ---- ----
- --------------------
</TABLE>
(1) In fiscal 1997, options to purchase an aggregate of 266,449 shares of
Common Stock were granted to all employees.
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(2) Represents potential net gain of the exercise price before income taxes
associated with the exercise of the options. The 5% and 10% assumed
annual rates of compounded stock price appreciation are mandated by the
Securities and Exchange Commission (the "Commission") and do not
represent the Company's estimates or projections of the future Common
Stock price. For the options expiring on April 28, 2002 assumes a stock
price per share of $16.75 for the 5% rate and of $21.14 for the 10%
rate. For the options expiring on April 28, 2007, assumes a stock price
per share of $21.38 for the 5% rate and of $34.04 for the 10% rate. The
Common Stock price on April 28, 1997 (the date of grant for all options
granted to the Named Executive Officers during the year) was $13.13.
(3) These shares of Common Stock are issuable upon exercise of incentive
stock options that vest and become exercisable as follows: 1,294 and
3,259 shares in equal monthly installments over January, 2000 through
December, 2000, and January, 2001 through March, 2001, respectively.
(4) These shares of Common Stock are issuable upon exercise of
non-qualified stock options that vest and become exercisable as
follows: 35,848 and 11,742 shares in equal monthly installments over
April, 1997 through December, 1999, and January, 2000 through December,
2000, respectively.
(5) These shares of Common Stock are issuable upon exercise of incentive
and non-qualified stock options that vest and become exercisable as
follows: 2,923 and 1,875 incentive stock options in equal monthly
installments from January, 2000 through December, 2000, and January,
2001 through March, 2001, respectively; and 20,625 and 4,577
non-qualified stock options in equal monthly installments from April,
1997 through December, 1999, and January, 2000 through December, 2000,
respectively.
(6) These shares of Common Stock are issuable upon exercise of incentive
and non-qualified stock options that vest and become exercisable as
follows: 1,558, 3,046 and 520 incentive stock options in equal monthly
installments from April, 1997 through December, 1997, January, 1998
through December, 1999 and January, 2001 through March, 2001,
respectively; and 1,106 and 2,076 non-qualified stock options in equal
monthly installments from January, 1998 through December, 1999, and
January, 2000 through December, 2000, respectively.
(7) These shares of Common Stock are issuable upon exercise of incentive
and non-qualified stock options that vest and become exercisable as
follows: 7,619, 22,857 and 3,125 incentive stock options in equal
monthly installments from April, 1997 through December, 1997, January,
1998 through December, 2000 and January, 2001 through March, 2001,
respectively; and 1,756 and 14,643 non-qualified stock options in equal
monthly installments from April, 1997 through December, 1997, and
January, 1998 through December, 2000, respectively.
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Option Exercises and Year-end Values for Fiscal Year Ended September 30, 1997
The following table provides certain information concerning shares
acquired and value realized on exercise of options, the number of shares of
Common Stock underlying unexercised options held by each of the Named Executive
Officers and the value of such officers' unexercised options at September 30,
1997.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options at
at Fiscal Year-End (#) Fiscal Year-End ($)(1)
---------------------- ---------------
Shares
Acquired
on Value
Name Exercise (#) Realized($)(2) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen R. Puckett ------- ------- 30,095 147,596 $ 88,580 $ 557,489
David Crane ------- ------- 89,995 128,259 1,089,034 752,953
Charles W. (Todd) Johnson ------- ------- 5,746 43,255 4,022 128,164
Richard J. Post ------- ------- 6,249 43,751 24,215 169,535
R. William Moore, Jr. ------- ------- 11,925 23,229 111,688 80,224
- --------------------
</TABLE>
(1) The value of the unexercised in-the-money options is based on the
difference between the closing sales price of the Common Stock on
September 30, 1997 of $17.00 per share and the exercise price of the
options.
(2) The value realized upon exercise of stock options is based on the
difference between the fair market value of the shares of Common Stock
underlying the options and the exercise price of the options at the
date of exercise.
Employment Agreements
Pursuant to employment agreements dated October 1, 1997, Messrs.
Puckett, Crane and Johnson are entitled to base annual salaries of $250,000,
$200,000, and $180,000, respectively (the "Employment Agreements"). Under the
Employment Agreements, Messrs. Puckett, Crane and Johnson are also entitled to
receive annual cash bonuses if the Company's actual earnings per share equals or
exceeds 80% of the target earnings per share for the year established in advance
by the Board of Directors. The amount of the cash bonus is, in each case, an
amount equal to the comparative percentage of the Company's actual earnings per
share to the target earnings per share (subject to a cap of 120%) times an
amount equal to 50% of the executive officer's base salary.
Messrs. Puckett, Crane and Johnson are also entitled to awards of
incentive stock options annually with the number of shares issuable upon
exercise thereof to be determined in accordance with a formula designed to
increase the number of shares issuable when the actual rate of growth in
earnings per share exceeds the percentage growth target established in advance
by the Board of Directors. Any incentive stock options awarded pursuant to the
Employment Agreements will vest 25% in the year awarded and 25% in each year for
the following three years. Each of the Employment Agreements provides that the
executive officer may receive such increases to his base salary and his cash
bonus as the Board of Directors may determine from time to time based upon
recommendations of the Compensation Committee of the Board of Directors. The
initial term of each of the Employment Agreements is three years, and each of
the agreements is renewable automatically upon expiration for consecutive one
year terms unless either party gives notice of nonrenewal at lease 90 days in
advance of the end of the current term.
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The Company may terminate the Employment Agreements at any time for
cause. After April 1, 1998, the Company may also terminate them without cause
for any reason but must pay the terminated executive officer, upon termination,
an amount equal to two times the total cash compensation earned by him during
the immediately preceding fiscal year plus an amount equal to the then present
value of two years of normal health, life insurance and retirement benefits. The
Employment Agreements further provide for automatic termination of employment
upon a "change of control" of the Company, and in such event, for Messrs.
Puckett, Crane and Johnson to receive the same payments they would have received
if the Company had terminated their employment without cause. In the event of an
automatic termination upon a "change of control" of the Company, all incentive
stock options previously granted to Messrs. Puckett, Crane and Johnson will vest
immediately. The Employment Agreements, which may be terminated by the executive
officers on 90 day's notice to the Company, also contain geographically-broad,
one-year covenants not to compete and provisions restricting the right of the
executive officers to use confidential information gained while in the employ of
the Company.
Pursuant to an employment agreement dated September 24, 1996, as
amended April 29, 2997, Richard J. Post is entitled to a base annual salary of
$145,000 and is eligible to participate in an annual bonus compensation plan
each year in accordance with the Company's senior executive compensation formula
plan as implemented from time to time by the Compensation Committee of the Board
of Directors. The employment agreement does not have a fixed term. The
termination provisions of Mr. Post's employment agreement are the same as the
termination provisions of the Employment Agreements with Messrs. Puckett, Crane
and Johnson, including a provision with respect to a payment in the event of
automatic termination of employment upon a "change of control" of the Company.
Mr. Post's employment agreement also contains a geographically- broad, one-year
covenant not to compete and provisions restricting his use of confidential
information gained while in the employ of the Company
Pursuant to an employment agreement dated March 9, 1994, R. William
Moore, Jr. Is entitled to an annual salary of $100,000, which amount is to be
reviewed and adjusted from time to time. Mr. Moore is also entitled to
participate in an annual bonus compensation plan each year of his employment.
The employment agreement with Mr. Moore does not have a fixed term. If the
Company terminates his employment for any reason other than cause, the Company
must continue to pay his salary on a monthly basis and all accrued bonus for a
period of nine months following the date of termination unless he shall become
employed during such nine-month period and begin earning an amount equal to at
least 75% of his annual salary under the agreement. Mr. Moore's employment
agreement contains a 18-month covenant not to compete and provisions restricting
his use of confidential information gained while in the employ of the Company.
Directors' Compensation
With the exception of Messrs. Duncan and McKinnon, who each receives
$1,000 for each Board or Committee meeting attended, directors do not receive
any cash compensation from the Company for their service as members of the Board
of Directors. All directors are reimbursed for reasonable expenses incurred by
them in attending Board and Committee meetings. Upon his appointment to the
Board, Dr. Duncan was granted an option to purchase 3,531 shares of Common Stock
at an exercise price of $7.51 per share 2,354 of which has been exercised.
Directors who are not employees of the Company (excluding Messrs. Welsh
and Paul) are entitled to participate in the Company's Outside Directors' Stock
Option Plan (the "Directors' Plan"). On the date of each annual meeting, the
Company grants an option under the Directors' Plan to purchase 2,000 shares of
Common Stock to each of W. Jack Duncan and John B. McKinnon at an exercise price
per share equal to the fair market value on such date.
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Compensation Committee Members
Messrs. Duncan, McKinnon, Welsh and Paul served on the Compensation
Committee of the Board of Directors for the fiscal year ended September 30,
1997. The principal functions of the Compensation Committee are to review and
recommend annual salaries and bonuses for all corporate officers and management
personnel, review and recommend to the Board of Directors modifications in
employee benefit plans and administer the Company's 1992 Incentive Stock Option
Plan and Omnibus Stock Plan.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of January 23, 1998 by: (i) each
person known to the Company to beneficially own more than 5% of the Common
Stock; (ii) each director and nominee for director of the Company; (iii) each
executive officer named in the Summary Compensation Table; and (iv) all
executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Common
Name of Beneficial Owner Beneficial Ownership(1) Stock
------------------------ ----------------------- -----
<S> <C> <C>
Stephen R. Puckett (2)..................................... 1,221,472 10.4 %
Patrick J. Welsh (3)....................................... 966,177 8.3
Andrew M. Paul (3)......................................... 908,267 7.8
Welsh, Carson, Anderson & Stowe, V, L.P. (4)............... 884,829 7.6
The TCW Group, Inc. (5).................................... 827,400 7.1
The Northwestern Mutual Life Insurance Company (6)......... 679,305 5.8
Crown Advisors, Ltd. (7)................................... 710,263 6.1
Charles W. (Todd) Johnson (8).............................. 251,186 2.1
David Crane (9)............................................ 230,557 2.0
John B. McKinnon (10)...................................... 61,999 *
R. William Moore (11)...................................... 20,041 *
Richard J. Post (12)....................................... 13,021 *
W. Jack Duncan (13)........................................ 5,530 *
All Executive Officers and Directors as
a Group (11 persons) (14)................................ 2,798,831 24.0
- --------------------------
</TABLE>
* Less than 1%
(1) Except as indicated in the footnotes to this table, the
persons named in the table have sole voting and investment
power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws
where applicable.
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(2) The address of Mr. Puckett is 7621 Little Avenue, Suite 106,
Charlotte, North Carolina 28226. Includes 1,165,650 shares
held by two limited partnerships of which Mr. Puckett is the
sole general partner and 55,822 shares issuable upon exercise
of options that are exercisable within 60 days of January 23,
1998.
(3) Includes 884,829 shares of Common Stock held by Welsh, Carson,
Anderson & Stowe, V, L.P. ("WCAS"). Each of Messrs. Welsh and
Paul is a general partner of the sole general partner of WCAS.
The address of Messrs. Welsh and Paul is 320 Park Avenue,
Suite 2500, New York, New York 10022.
(4) The address of WCAS is 320 Park Avenue, Suite 2500, New York,
New York 10022. Messrs. Welsh and Paul each serve as a general
partner of the sole general partner of WCAS.
(5) The address of the TCW Group, Inc. is 865 South Figueroa
Street, Los Angeles, CA 90017. The number of shares shown as
beneficially owned is based upon a statement on Schedule 13G
filed February 12, 1997, which indicates the reporting person
has sole voting and dispositive power over 827,400 shares
(6) The address of The Northwestern Mutual Life Insurance Company
is 720 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202. The
number of shares shown as beneficially owned is based upon a
statement on Schedule 13G filed February 2, 1997, which
indicates the reporting person has sole voting and dispositive
power over 379,305 shares and shared voting and dispositive
power over an additional 300,000 shares.
(7) The address of Crown Advisors Ltd. is 60 East 42nd Street, New
York, New York 10165. The number of shares shown as
beneficially owned is based information provided to the
Company by Crown Advisors Ltd. Includes 402,400 shares held by
certain investment partnerships for which Crown Advisors Ltd.
serves as investment advisor, and as to which Crown Advisors
Ltd. has shared voting and investment power, 294,100 shares
held by a co-advisor to such partnerships and 13,763 shares
held by an affiliate of Crown Advisors Ltd.
(8) Includes 14,316 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
(9) Includes 128,440 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
(10) Includes 1,999 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
(11) Includes 18,591 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
(12) Includes 13,021 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
(13) Includes 3,176 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
<PAGE>
PART III
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(14) Includes 240,775 shares issuable upon exercise of options that
are exercisable within 60 days of January 23, 1998.
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<PAGE>
PART III
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Item 13. Certain Relationships and Related Transactions
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to its
report on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized.
MEDCATH INCORPORATED
By /s/ Richard J. Post
--------------------------------
Richard J. Post, Chief Financial
Officer, Secretary and Treasurer
14
