SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-2
(Amendment No.2 to FORM 10-K)
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended December 31, 1997
[ ] Transition Report pursuant to Section 13 or 15(d ) of the Securities
Exchange Act of 1934 For the transition period from ____ to ____
Commission File Number 0-26806
SHERIDAN HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3252967
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
4651 Sheridan Street, Suite 400, Hollywood, Florida 33021
(Address of principal executive offices, including zip code)
954/987-5822
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: Common Stock,
par value $.01
(Title of Class)
Indicate by check mark whether the Registrant 91) 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 deliquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or infomation 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 voting stock hold by non-affiliates of the
Registrant was approximately $72.8 million as of March 16, 1998. For purposes of
this determination, shares held by non-affiliates includes all outstanding
shares except for shares of non-voting Class A common stock and shares held by
officers, directors and shareholders beneficially owning 10% or more of the
Registrant's outstanding common stock. The aggregate market value was computed
based on the closing sale price of the Registrant's common stock on March 16,
1998, as reported on the NASDAQ National Market.
As of March 16, 1998, there were 7,901,098 shares of the Registrant's voting
Common Stock, $.01 par value per share outstanding and 296,638 shares of the
Registrant's non-voting Class A Common Stock, $.01 par value per share
outstanding.
<PAGE>
Part III
Items 10, 11, 12 and 13 of this report on Form 10-K are hereby amended and
restated in full by adding those items as follows:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following biographical descriptions set forth certain information
with respect to the Nominees for election as directors at the Annual Meeting,
each director who is not up for election and the executive officers who are not
directors, based on information furnished to the Company by each director and
officer. The following information is as of March 1, 1998.
Nominees for Election as Directors - Term Expiring 2001
MITCHELL EISENBERG, M.D. Dr. Eisenberg joined the Company in 1982, has
been a director of the Company since 1985, has been President since 1989, and
has been Chairman of the Board and Chief Executive Officer since 1994. Prior to
joining the Company, Dr. Eisenberg was in private practice. He is 47 years old.
NEIL A. NATKOW, D.O. Dr. Natkow was appointed to the Company's Board of
Directors in July 1996. Dr. Natkow served as Senior Vice President -- Health
Care for Precision Response Corporation, a publicly traded company, from
February 1997 until October 1997, and is currently a member of Precision
Response Corporation's Board of Directors. From December 1993 until October
1995, Dr. Natkow served as an executive officer of PCA Health Plans of Florida,
a health maintenance organization, most recently as its Chief Executive Officer.
From July 1992 to December 1993, Dr. Natkow was the President and Chief
Executive Officer of Family Health Plan, a health maintenance organization, and
from June 1987 to July 1992, Dr. Natkow was the Vice President for Professional
Affairs at Southeastern University for Health Sciences. He is 51 years old.
Incumbent Director - Term Expiring 1999
JAMIE E. HOPPING. Mrs. Hopping has been a director of the Company since
February 1998. Mrs. Hopping is currently a health care consultant. Mrs. Hopping
previously served as a Group President for Columbia/HCA Healthcare Corporation,
from January 1996 to August 1997 and as a Division President from February 1994
to January 1996. Prior to that, Mrs. Hopping served as the Chief Executive
Officer of Deering Hospital and Grant Center, an acute care hospital and
psychiatric facility, from September 1990 to January 1993. She is 44 years old.
Incumbent Directors - Term Expiring 2000
LEWIS D. GOLD, M.D. Dr. Gold joined the Company in 1985 as an
anesthesiologist and has been a director of the Company since 1988. He has
served as Executive Vice President Business Development since 1994. Dr. Gold was
also Chief of the Department of Anesthesia of Parkway Regional Medical Center
from 1990 to 1994. He is 41 years old.
HENRY E. GOLEMBESKY, M.D. Dr. Golembesky has been a director of the
Company since November 1995. Dr. Golembesky has served as a health care
consultant to APM, Inc. from January 1, 1993 to present. From 1990 to 1992, Dr.
Golembesky served as President and Chief Executive Officer of UniMed America, a
physician services division of Unihealth. He is 52 years old.
Executive Officers Who Are Not Directors
MICHAEL F. SCHUNDLER. Mr. Schundler joined the Company in July 1996 as
Chief Operating Officer and currently serves as both Chief Operating Officer and
Chief Financial Officer. Previously, Mr. Schundler served as Vice President --
Operations at American Health Network from 1994 to 1996 and as Chief Financial
Officer of AdminiStar, Inc. from 1991 to 1994. Prior to that, Mr. Schundler was
Senior Vice President -- Finance of Merrill Lynch Life Insurance Co. and Family
Life Insurance Co. He is 42 years old.
2
<PAGE>
GILBERT L. DROZDOW, M.D., M.B.A. Dr. Drozdow joined the Company in 1987
as an anesthesiologist and was a director of the Company from 1990 to 1994. He
served the Company as Vice President Medical Affairs from 1994 to February 1996
and has served as Vice President Hospital Based Services since February 1996. He
was also Chairman of the Department of Anesthesia at Westside Regional Medical
Center in 1994. He is 40 years old.
JAY A. MARTUS, ESQ. Mr. Martus joined the Company in 1994 as Vice
President, Secretary and General Counsel. Prior to joining the Company, he was a
partner with the law firm of Levey & Martus, P.A. Mr. Martus represented the
Company as outside general counsel from 1989 to 1994. He is 42 years old.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Exchange Act, requires the Company's executive
officers and directors, and persons who beneficially own (directly or
indirectly) more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and NASDAQ. Officers, directors and
greater than 10% stockholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
or with respect to the fiscal year ended December 31, 1997, all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than 10% stockholders were satisfied, except that Dr. Natkow inadvertently
failed to file on a timely basis two reports relating to transactions which took
place in March 1997 and May 1997, respectively and Dr. Drozdow inadvertently
failed to file on a timely basis one report relating to a transaction which took
place in December 1997. Each of these individuals subsequently filed the
required forms.
ITEM 11. EXECUTIVE COMPENSATION
Directors. Directors of the Company who are also employees receive no
additional compensation for their services as a director. Non-employee directors
receive an annual director's fee of $5,000 for their service as directors. Each
non-employee director also receives $1,000 for personal attendance at any
meeting of the Board of Directors and $500 for each committee meeting attended
and each meeting of the full Board of Directors attended by telephone
conference. All directors of the Company are reimbursed for travel related
expenses incurred in attending meetings of the Board of Directors and its
committees.
The Company's Second Amended and Restated 1995 Option Plan (the " Option
Plan") provides that each new non-employee director of the Company will receive,
on the date he or she first becomes a director, an option not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") (a "Non-Qualified Option"), to purchase up
to 7,500 shares of Common Stock. In addition, the Option Plan provides that each
non-employee director serving in such capacity on the fifth business day after
each annual meeting of stockholders will also receive, on such date, a
Non-Qualified Option to purchase up to 2,500 shares of Common Stock. Pursuant to
this provision, Mr. Robert W. Daly, a former member of the Board of Directors
who resigned on December 12, 1997, and Drs. Golembesky and Natkow received
grants of such Non-Qualified Options on May 22, 1997. All options granted to
directors under the Option Plan vest in three equal installments, with one-third
vesting on the date of grant and an additional one-third vesting on each of the
two successive anniversaries thereof. All such options are granted with an
exercise price per share equal to the fair market value per share of Common
Stock on the date of grant and expire on the tenth anniversary of such date of
grant.
Executive Officers. The following table sets forth the compensation
awarded to the Company's Chief Executive Officer, the four other most highly
compensated executive officers of the Company who were serving as executive
officers at the end of 1997 and an additional individual who held an executive
officer position during 1997 but who was not serving as an executive officer
following 1997, each of whose total salary and bonus exceeded $100,000 during
1997 (collectively, the "Named Executive Officers").
3
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS(1) COMPENSATION(2)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- --------------------------- ---- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Mitchell Eisenberg, M.D..................... 1997 274,999 -- 170,000 950
Chairman of the Board of Directors,...... 1996 275,712 -- 30,000 --
President and Chief Executive Officer.... 1995 290,157 -- 26,956 20,760
Valerio J. Toyos, M.D., M.B.A............... 1997 279,076 -- -- --
Former Vice President Primary Care......... 1996 296,022 -- 28,500(3) --
Services(4).............................. 1995 137,846(5) -- 8,500 --
Lewis D. Gold, M.D.......................... 1997 249,999 -- 122,500 950
Director and Executive Vice.............. 1996 251,712 -- 20,000 --
President Business Development........... 1995 256,534 -- 26,956 20,760
Gilbert L. Drozdow, M.D., M.B.A............. 1997 249,999 -- 55,000 950
Vice President Hospital Based............ 1996 250,512 -- 20,000 --
Services................................. 1995 254,473 -- 5,392 20,760
Jay A. Martus, Esq.......................... 1997 200,000 -- 55,000 --
Vice President, Secretary................ 1996 199,677 -- 20,000 --
and General Counsel...................... 1995 200,000 -- 16,174 --
Michael F. Schundler........................ 1997 199,999 -- 122,500 --
Chief Financial Officer.................. 1996 84,615(6) -- 50,000 --
and Chief Operating Officer.............. 1995 -- -- -- --
<FN>
- ------------
(1) Includes stock options granted on February 4, 1998 in lieu of cash
bonuses under the Company's 1997 Executive Incentive Plan as follows:
Dr. Eisenberg - 20,000; Dr. Gold - 17,500; Mr. Schundler - 17,500; Dr.
Drozdow - 10,000 and Mr. Martus - 10,000. The options vested fully on
March 31, 1998 at an exercise price of $14.25 (the fair market value of
the Common Stock on the date of grant).
(2) Represents contributions by the Company under its 401(k) Plan on behalf
of each of Drs. Eisenberg, Gold and Drozdow during 1995 and 1997.
(3) Includes options to purchase up to 8,500 shares of Common Stock granted
during 1995 for which the exercise price was adjusted during 1996.
(4) Dr. Toyos held the position of Vice President Primary Care Services
until December 31, 1997.
(5) Represents salary paid to Dr. Toyos from June 1995, when he began
employment with the Company, to December 31, 1995.
(6) Represents salary paid to Mr. Schundler from July 1996, when he began
employment with the Company, to December 31, 1996.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1997
Individual Grants
-------------------------
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT ASSUMED
SECURITIES TOTAL OPTIONS ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK PRICE
OPTIONS EMPLOYEES EXERCISE OR APPRECIATION
GRANTED IN FISCAL BASE PRICE EXPIRATION FOR OPTION TERM(1)
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
---- -------- -------------- ------------ ------------ ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Mitchell Eisenberg, M.D............60,673(2) 13.1% $ 9.00 2/26/07 $ 343,412 $ 870,050
89,327(3) 19.3% $ 9.50 5/15/07 $ 533,684 $ 1,352,460
20,000(4) 4.3% $ 14.25 02/4/08 $ 179,200 $ 454,200
Valerio J. Toyos, M.D., M.B.A...... -- -- -- -- -- --
Lewis D. Gold, M.D.................42,471(2) 9.2% $ 9.00 2/26/07 $ 240,388 $ 609,191
62,529(3) 13.5% $ 9.50 5/15/07 $ 373,579 $ 946,724
17,500(4) 3.8% $ 14.25 02/4/08 $ 156,800 $ 397,425
Gilbert L. Drozdow, M.D., M.B.A....18,202(2) 3.9% $ 9.00 2/26/07 $ 103,024 $ 261,084
26,798(3) 5.8% $ 9.50 5/15/07 $ 160,105 $ 405,737
10,000(4) 2.2% $ 14.25 02/4/08 $ 87,100 $ 224,600
Jay A. Martus, Esq.................18,202(2) 3.9% $ 9.00 2/26/07 $ 103,024 $ 261,084
26,798(3) 5.8% $ 9.50 5/15/07 $ 160,105 $ 405,737
10,000(4) 2.2% $ 14.25 02/4/08 $ 87,100 $ 224,600
Michael Schundler..................42,471(2) 9.2% $ 9.00 2/26/07 $ 240,388 $ 609,191
62,529(3) 13.5% $ 9.50 5/15/07 $ 373,579 $ 946,724
17,500(4) 3.8% $ 14.25 02/4/08 $ 156,800 $ 397,425
<FN>
- ------------------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based upon assumed rates of stock price appreciation set by
the SEC of five percent and ten percent compounded annually from the
date the respective options were granted. Actual gains, if any, are
dependent on the performance of the Common Stock. There can be no
assurance that the amounts reflected will be achieved.
(2) These options vest in full on February 26, 2007 so long as the
applicable option holder is employed by the Company or one of its
subsidiaries as of the respective date. The vesting of such options will
be accelerated upon a change in control of the Company or in accordance
with the following schedule in the event that the last reported sale
price of the Common Stock on the Nasdaq National Market (the "Closing
Price") reaches the following thresholds and remains at or above such
thresholds each day for a period of one calendar month: (i) 33.3% of the
options will vest at a Closing Price of $18.00 per share, (ii) 66.66% of
the options will vest at a Closing Price of $24.00 per share and (iii)
100% of the options will vest at a Closing Price of $30.00 per share.
(3) These options vest in full on May 15, 2007 so long as the applicable
option holder is employed by the Company or one of its subsidiaries as
of the respective date. The vesting of such options will be accelerated
in the same manner as the options which are described in footnote 2
above.
(4) These options were granted in Fiscal Year 1998, but reflect bonuses
earned in Fiscal Year 1997. These options vested in full on
March 31, 1998.
</FN>
</TABLE>
5
<PAGE>
Option Exercises and Year-End Holdings. The following table sets forth
the aggregate number of options exercised in 1997 and the value of options held
at the end of 1997 by the Named Executive Officers.
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997 AND
FISCAL YEAR-END 1997 OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL AT FISCAL
SHARES YEAR-END (#) YEAR-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
- ---------------------- --------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Mitchell Eisenberg, M.D........ 26,956 $331,424(2) 10,000/170,000 $ 62,500/$980,337
Valerio J. Toyos, M.D., M.B.A.. 0 0 3,400/25,000 $ 31,450/$197,175
Lewis D. Gold, M.D............. 26,956 $331,424(2) 6,667/118,333 $ 41,669/$682,067
Gilbert L. Drozdow, M.D.,
M.B.A........................ 4,314 $ 51,693(3) 0/66,078 $ 0/$422,146
Jay A. Martus, Esq............. 0 0 12,939/68,235 $186,580/$453,250
Michael F. Schundler........... 0 0 10,000/145,000 $ 92,500/$599,106
<FN>
- ------------------
(1) Based on $15.00 per share, the price of the last reported trade of the
Common Stock on the National Market on December 31, 1997.
(2) Based on $12.875 per share, the price of the last reported trade of the
Common Stock on the Nasdaq National Market on November 28, 1997, the
date the options were exercised.
(3) Based on $12.56 per share, the price of the last reported trade of the
Common Stock on the Nasdaq National Market on December 23,1997, the date
the options were exercised.
</FN>
</TABLE>
EXECUTIVE INCENTIVE PLAN
The Company has established an Executive Incentive Plan (the "Incentive
Plan") pursuant to which the Compensation Committee has the discretion to
determine those officers and key employees of the Company who will be eligible
for bonuses if certain financial and business objectives are achieved. The
formula for determining bonuses under the Incentive Plan is established annually
by the Compensation Committee. The Compensation Committee bases these formulas
upon the achievement of financial goals (such as earnings per share, specified
revenue levels, maintenance of positive cash flow or addition of economic value)
and business objectives. The Compensation Committee may change formulas during a
particular year and may, from time to time, designate additional employees as
participants in the Incentive Plan. The terms of the Incentive Plan may be
amended by the Board of Directors at any time.
EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into employment agreements with each of Drs.
Eisenberg, Gold, Toyos and Drozdow and Messrs. Martus and Schundler. Dr. Toyos
held the position of Vice President Primary Care Services until December 31,
1997 and remains employed with the Company under the terms of such employment
agreement in the position of Panel Services Director. The term of each of the
agreements with Drs. Eisenberg, Gold and Drozdow and Mr. Martus ends on December
31, 1999. The term of the agreement with Mr. Schundler ends on June 30, 2001.
Thereafter each agreement is renewable for a one-year term. The term of the
agreement with Dr. Toyos ends on June 5, 2000.
The agreements with Drs. Eisenberg and Gold may be terminated (i) by the
Company without cause (as defined in the agreements) upon 30 days written
notice, (ii) upon the death or permanent disability of the executive, and (iii)
by the executive upon the occurrence of certain events including the failure of
the Company to pay the
6
<PAGE>
executive's salary or provide certain benefits to which the executive is
entitled, certain relocations of the Company's offices, and a material breach of
the employment agreement by the Company. The employment agreements provide for a
continuation of base salary and certain benefits for a period of one year
following any such termination, as well as the pro rata portion of any bonus to
which the executive would otherwise have been entitled if such executive had
remained employed by the Company for the remainder of the calendar year of his
termination. Each employment agreement also provides for termination upon mutual
consent, for cause, and by the executive upon 90 days' written notice (60 days'
notice following certain reductions in medical malpractice liability insurance),
in which event the Company has no further obligation to the executive other than
the obligations to pay accrued but unpaid salary, provide certain continuing
medical malpractice insurance coverage and make salary payments pursuant to a
non-competition provision in the employment agreement, as described below. Each
agreement also requires the Company to continue to provide each of Drs.
Eisenberg and Gold with medical malpractice insurance coverage for claims
arising during the term of the agreement, to the extent the executive was
covered prior to his termination, for a period of two years from the date of
termination for any reason other than by the executive following specified
reductions in insurance coverage by the Company. Each of Drs. Eisenberg and Gold
are subject to certain restrictions on competition with the Company for a period
of three years following termination of such executive's employment for any
reason, provided that the Company continues to pay such executives their
salaries during such three year period.
The agreements with Dr. Drozdow and Messrs. Schundler and Martus may be
terminated (i) by the Company without cause (as defined in the agreements) upon
30 days written notice, (ii) upon the death or permanent disability of the
executive, and (iii) by the executive upon the occurrence of certain events
including the failure of the Company to pay the executive's salary or to provide
certain benefits to which the executive is entitled, certain relocations of the
Company's offices, and material breach of the employment agreement by the
Company. The employment agreements provide for a continuation of base salary and
certain benefits for a period of six months following any such termination. Each
employment agreement also provides for termination upon mutual consent, for
cause, and by the executive upon 90 days' written notice (60 days' notice
following certain reductions in medical malpractice liability insurance in the
case of Dr. Drozdow), in which event the Company has no further obligation to
the executive other than the payment of accrued but unpaid salary. The agreement
with Dr. Drozdow also requires the Company to continue to provide Dr. Drozdow
with medical malpractice insurance coverage for claims arising during the term
of the agreement, to the extent Dr. Drozdow was covered prior to his
termination, for a period of two years from the date of termination for any
reason other than by Dr. Drozdow following specified reductions in insurance
coverage by the Company. Each of Dr. Drozdow and Messrs. Martus and Schundler
are subject to certain restrictions on competition with the Company for a period
of one year following termination of such executive's employment for any reason.
The agreement with Dr. Toyos may be terminated by the Company (i) upon
the death or permanent disability of Dr. Toyos, and (ii) for cause (as defined
in the agreement) upon 30 days written notice. In the event of termination
pursuant to either of those provisions, the Company has no further obligation to
Dr. Toyos other than the obligation to pay accrued but unpaid salary. The
agreement may be terminated by Dr. Toyos upon 30 days written notice if the
Company fails to perform its obligations under the agreement, in which event the
Company has no further obligation to Dr. Toyos other than the obligation to pay
accrued but unpaid salary. The agreement requires the Company to continue to
provide Dr. Toyos with medical malpractice insurance coverage for claims arising
during the term of the agreement, to the extent Dr. Toyos was covered prior to
his termination, for a period of four years from the date of termination. Dr.
Toyos is subject to certain restrictions on competition with the Company for a
period of one year following termination of his employment; provided, however,
that if the agreement expires pursuant to its terms on the anticipated
expiration date, the restrictions on competition do not apply to Dr. Toyos
unless the Company agrees to pay Dr. Toyos the sum of $250,000 within 30 days of
such expiration.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's executive compensation is determined by the Compensation
Committee of the Company's Board of Directors, which consists of Drs. Eisenberg
and Natkow and Mrs. Hopping. Dr. Eisenberg serves as Chief Executive Officer of
the Company.
7
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 31, 1998 (except as noted
below) certain information regarding the beneficial ownership of Common Stock by
(i) each person or "group" (as that term is defined in Section 13(d)(3) of the
Exchange Act) known by the Company to be the beneficial owner of more than 5% of
the Company's Common Stock, (ii) the Named Executive Officers, (iii) each
director and nominee for director of the Company and (iv) all directors and
executive officers of the Company as a group (nine (9) persons). Except as
otherwise indicated, each person listed below has sole voting and investment
power over the shares of Common Stock shown as beneficially owned.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NAME BENEFICIALLY OWNED COMMON STOCK(1)
- ---- ------------------ ---------------
<S> <C> <C>
TA Associates, Inc.
125 High Street
Boston, MA 02110.............................. 1,890,882(2) 23.1%
Chestnut Investors
c/o MVP Ventures
45 Milk Street
Boston, MA 02109.............................. 213,339(3) 2.6
NationsBank Investment Corporation
c/o NationsBank Leveraged Capital
NationsBank Corporate Center, 10th Floor
100 North Tryon Street
Charlotte, North Carolina 28202-4006.......... 438,695(4) 5.4
Kaufmann Fund, Inc.
140 E. 45th Street, 43rd Floor
New York, New York 10017...................... 900,000(5) 11.0
Kenneth J. Trimmer
6228 Castle Pines Drive
Plano, TX 75093............................... 446,040 5.4
Mitchell Eisenberg............................... 248,041(6) 3.0
Valerio J. Toyos ............................... 41,400(7) *
Lewis D. Gold ............................... 199,659(8) 2.4
Gilbert L. Drozdow............................... 77,459(9) *
Jay A. Martus ............................... 53,721(10) *
Michael F. Schundler............................. 61,700(11) *
Henry E. Golembesky.............................. 11,667(12) *
Neil A. Natkow ............................... 30,667(13) *
Jamie Hopping ............................... 2,500(14) *
All directors and executive officers
as a group (9 persons)........................... 726,814 8.6
<FN>
- ----------------------------
* Less than one percent
(1) The number of shares of Common Stock outstanding used in calculating the
percentage for each listed person includes the shares of Common Stock
underlying the options held by such person or entity that are
exercisable within 60 days of March 1, 1998, but excludes shares of
Common Stock underlying options held by any other person.
(2) Includes 1,031,130 shares owned by Advent VII L.P., 526,099 shares owned
by Advent Atlantic and Pacific II L.P., 103,105 shares owned by Advent
New York L.P., 210,456 shares owned by Advent Industrial II Limited
Partnership, and 20,029 shares owned by TA Venture Investors Limited
Partnership.
(3) Includes 105,189 shares owned by Chestnut III Limited Partnership and
100,521 shares owned by Chestnut Capital International III Limited
Partnership.
(4) Includes 296,638 shares of Non-voting Common which are convertible into
Common Stock at the option of NationsBank Investment Corporation upon
the occurrence of certain events. As a result, NationsBank Investment
Corporation may be deemed to beneficially own the number of shares of
Common Stock into which the shares of Class A Common Stock so held are
convertible.
8
<PAGE>
(5) The indicated ownership is as of February 18, 1998 and is based solely
on a Schedule 13G provided by this entity to the Company.
(6) Includes 151,015 shares owned by the Eisenberg Family Limited
Partnership, a Florida limited partnership. Dr. Eisenberg acts as the
sole general partner of this limited partnership and exercises sole
voting and investment power with respect to such shares. Also includes
570 shares owned by Dr. Eisenberg's wife, of which shares Dr. Eisenberg
disclaims beneficial ownership. Also includes 30,000 currently vested
options and 10,000 options which vest within 60 days of March 31, 1998.
(7) Includes 20,000 currently vested options.
(8) Includes 107,870 shares owned by the Gold Family Limited Partnership,
Ltd., a Florida limited partnership. Dr. Gold acts as the sole general
partner of this limited partnership and exercises sole voting and
investment power with respect to such shares. Also includes 32,000
shares owned by Dr. Gold's wife, of which shares Dr. Gold disclaims
beneficial ownership. Also includes 24,167 currently vested options and
6,666 options which vest within 60 days of March 31, 1998.
(9) Includes 43,145 shares owned by the Drozdow Family Limited Partnership,
a Florida limited partnership. Drozdow Family GP Corp., a Florida
corporation owned by Dr. Drozdow and his wife as tenants by the
entireties, is the general partner of this limited partnership. Dr.
Drozdow, in his capacity as the sole director and officer of the general
partner of the limited partnership, exercises sole voting and investment
power with respect to such shares. Includes 30,000 currently vested
options.
(10) Includes 42,939 currently vested options.
(11) Includes 27,500 currently vested options.
(12) Includes 10,000 currently vested options and 1,667 options which vest
within 60 days of March 31, 1998.
(13) Includes 1,000 shares owned by Dr. Natkow's wife and minor children, of
which shares Dr. Natkow disclaims beneficial ownership. Also includes
5,834 currently vested options and 833 options which vest within 60 days
of March 31, 1998.
(14) Represents 2,500 currently vested options.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SHERIDAN MEDICAL HEALTHCORP, P.C.
As a result of certain prohibitions on the practice of medicine by
business corporations in New York, Sheridan Medical Healthcorp, P.C.
("Sheridan-NY") was organized under the laws of the State of New York on October
28, 1993. Dr. Drozdow is the only stockholder of Sheridan-NY. The Company has
maintained an affiliation with Sheridan-NY through a management services
agreement pursuant to which the Company provides all physician management
services to the physicians affiliated with Sheridan-NY in exchange for a
management fee. During 1997, the Company received approximately $2,753,000 in
fees from Sheridan-NY under this agreement.
SHERIDAN HEALTHCARE OF TEXAS, P.A.
As a result of certain prohibitions on the practice of medicine by
business corporations in Texas, Sheridan Healthcare of Texas, P.A.
("Sheridan-Texas") was organized under the laws of the State of Texas on August
18, 1995. Dr. Drozdow is the only stockholder of Sheridan-Texas. The Company has
entered into a management services agreement with Sheridan-Texas pursuant to
which the Company provides all physician management services to the physicians
affiliated with Sheridan-Texas in exchange for a management fee. During 1997,
the Company received approximately $47,000 in fees from Sheridan-Texas under
this arrangement.
9
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SHERIDAN HEALTHCARE OF CALIFORNIA MEDICAL GROUP, INC.
As a result of certain prohibitions on the practice of medicine by
business corporations in California, Sheridan Healthcare of California Medical
Group, Inc. ("Sheridan-California") was organized under the laws of the state of
California on August 18, 1995. Dr. Drozdow is the only stockholder of
Sheridan-California.
SHERIDAN CHILDREN'S HEALTHCARE SERVICES OF PENNSYLVANIA, P.C.
The Company also maintains an affiliation with Sheridan Children's
Healthcare Services of Pennsylvania, P.C. ("Sheridan Children's"), under which
Sheridan Children's provides certain physician management services to the
Company. Sheridan Children's is also wholly-owned by Dr. Drozdow. The Company
provided management services to Sheridan Children's during 1997, but the
management fees were deferred.
10
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Sheridan Healthcare, Inc.
Date: April 30, 1998 By: /s/ Michael F. Schundler
------------------------
Michael F. Schundler
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature Title Date
/s/ Mitchell Eisenberg, M.D. Chairman of the Board of, April 30, 1998
- ---------------------------- Directors, President and
Mitchell Eisenberg, M.D. Chief Executive Officer
(Principal Executive Officer)
/s/ Lewis D. Gold, M.D. Executive Vice President April 30, 1998
- ------------------------- Director
Lewis D. Gold
/s/ Henry E. Golembesky, M.D. Director April 30, 1998
- -----------------------------
Henry E. Golembesky, M.D.
/s/ Jamie Hopping Director April 30, 1998
- -----------------------------
Jamie Hopping
/s/ Neil A. Natkow, D.O. Director April 30, 1998
- -----------------------------
Neil A. Natkow, D.O.
/s/ Michael F. Schundler Chief Financial Officer April 30, 1998
- ----------------------------- (Principal Financial and
Michael F. Schundler Accounting Officer)
11
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