SCHEDULE
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14a-101)
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________________________________Omega
Healthcare Investors, Inc.____________________________
(Name of
Registrant as Specified in Charter)
_______________________________________________________________________________________
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OMEGA
HEALTHCARE INVESTORS, INC.
9690
Deereco Road, Suite 100
Timonium,
Maryland 21093
(410)
427-1700
_______________
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
May
26, 2005
________________
To our
Stockholders:
The
Annual Meeting of Stockholders of Omega Healthcare Investors, Inc. (“Omega”)
will be held at the Holiday Inn Select, Baltimore-North, 2004 Greenspring Drive,
Timonium, Maryland on Thursday, May 26, 2005, at 10:00 A.M. EDT, for the
following purposes:
1. To elect
two members to the Board of Directors;
2. To ratify
the selection of Ernst & Young LLP as our independent auditor for the fiscal
year 2005; and
3. To
transact such other business as may properly come before the meeting or any
adjournment thereof.
The
nominees for election as directors are Harold J. Kloosterman and C. Taylor
Pickett, each of whom presently serves as a director of Omega.
The Board
of Directors has fixed the close of business on April 22, 2005 as the record
date for the determination of stockholders who are entitled to notice of and to
vote at the meeting or any adjournments thereof.
We
encourage you to attend the meeting. Whether you are able to attend or not, we
urge you to indicate your vote on the enclosed proxy card FOR
the
election of directors. Please sign, date and return the proxy card promptly in
the enclosed envelope. If you attend the meeting, you may vote in person even if
you previously have mailed a proxy card.
By order
of Omega’s Board of Directors,
C. Taylor
Pickett
Chief
Executive Officer
April 23,
2005
Timonium,
Maryland
YOUR
VOTE IS IMPORTANT. Please sign, date and mail the proxy card promptly in the
enclosed envelope whether or not you plan to attend the meeting. It is important
that you return the proxy card promptly whether or not you plan to attend the
meeting, so that your shares are properly voted.
If you
hold shares through a broker, bank or other nominee (in "street name"), you may
also have the ability to vote by telephone or the Internet in accordance with
instructions that will be included with this mailing. In either event, we urge
you to vote promptly.
OMEGA
HEALTHCARE INVESTORS, INC.
9690
Deereco Road, Suite 100
Timonium,
Maryland 21093
(410)
427-1700
PROXY
STATEMENT
FOR
ANNUAL
MEETING OF STOCKHOLDERS
May
26, 2005
The
accompanying proxy is solicited by the Board of Directors to be voted at the
Annual Meeting of Stockholders to be held at the Holiday Inn Select,
Baltimore-North, 2004 Greenspring Drive, Timonium, Maryland at 10:00 A.M. EDT on
Thursday, May 26, 2005, and any adjournments of the meeting. It is anticipated
that this proxy material will be mailed on or about April 27, 2005, to our
common stockholders of record on April 22, 2005.
A copy of
our Annual Report for the year ended December 31, 2004, including financial
statements, is enclosed.
A
stockholder giving a proxy has the power to revoke it at any time before it is
exercised. A proxy may be revoked by filing with our Secretary (i) a signed
instrument revoking the proxy or (ii) a duly executed proxy bearing a later
date. A proxy also may be revoked if the person executing the proxy is present
at the meeting and elects to vote in person. If the proxy is not revoked, it
will be voted by those named in the proxy.
VOTING
SECURITIES
As of
April 22, 2005, the record date, there were 50,966,655 of outstanding shares of
common stock, par value $.10 per share. Each holder of shares of common stock is
entitled to one vote per share on all matters properly brought before the Annual
Meeting.
VOTING
The
presence at the Annual Meeting of shares representing a majority of the voting
power associated with our issued and outstanding common stock will be necessary
to establish a quorum for the conduct of business at the Annual Meeting. Under
our Bylaws, directors are elected by a plurality of the votes cast at the Annual
Meeting. The affirmative vote of a majority of the shares of common stock in
person or by proxy at the Annual Meeting will be necessary to approve the
proposal to ratify our independent auditors.
Brokers
holding shares in “street name” may vote the shares only if the beneficial owner
provides instructions on how to vote. Brokers will provide beneficial owners
instructions on how to direct the brokers to vote the shares. The New York Stock
Exchange treats “for” votes, “against” votes and abstentions as votes cast, but
does not treat “broker non-votes” as votes cast. A so-called “broker non-vote”
occurs when a broker, holding stock as nominee, does not receive voting
instructions from the beneficial owner. With respect to all of the matters to be
voted upon at the Annual Meeting, broker non-votes and the decision to withhold
authority to vote for any, or all, of the director nominees named above or for
the proposal to ratify our independent auditors will have no impact on the
outcome of the voting.
As of the
record date, our directors and executive officers beneficially owned 1,742,715
shares of our common stock (representing 3.4% of the votes entitled to be cast
at the meeting).
There are
no rights of appraisal or similar dissenter's rights with respect to any matter
to be acted upon pursuant to this proxy statement.
We urge
stockholders to vote promptly either by signing, dating and returning the
enclosed proxy card in the enclosed envelope, or for stockholders who own their
shares in street name through a broker, in accordance with the telephone or
internet voting instructions your broker may include with this
mailing.
PROPOSAL
1 — ELECTION OF DIRECTORS
Director
Nominees and Voting Requirements
There are
currently six members of the Board of Directors. Pursuant to our Articles of
Incorporation, the directors have been divided into three groups. At this year's
Annual Meeting, two directors will be elected by the holders of our common stock
to hold office for a term of three years or, in each case, until their
respective successors have been duly elected and qualified.
Our
Nominating and Corporate Governance Committee of the Board of Directors has
nominated Harold J. Kloosterman and C. Taylor Pickett for election as
directors.
Unless
authority to vote for the election of directors has been specifically withheld,
the persons named in the accompanying proxy card intend to vote FOR the
election of the nominees named above to hold office for the term indicated above
or until their respective successors have been duly elected and
qualified.
If any
nominee becomes unavailable for any reason (which event is not anticipated), the
shares represented by the enclosed proxy may (unless the proxy contains
instructions to the contrary) be voted for such other person or persons as may
be determined by the holders of the proxies. In no event would the proxy be
voted for more than two nominees.
Information
Regarding Directors
The
following information relates to the nominees for election as directors of Omega
and the other persons whose terms as directors continue after this meeting.
Individuals not standing for election at the Annual Meeting are presented under
the heading “Continuing Directors.”
Director
Nominees
|
Directors |
Year
First
Became
a
Director |
Business
Experience During Past 5 Years |
Term
to Expire
in |
| |
|
|
|
|
Harold
J. Kloosterman (63) |
1992 |
Mr.
Kloosterman is a
Director and has served in this capacity since September 1, 1992. Mr.
Kloosterman has served as President since 1985 of Cambridge Partners,
Inc., a company he formed in 1985. He has been involved in the development
and management of commercial, apartment and condominium projects in Grand
Rapids and Ann Arbor, Michigan and in the Chicago area. Mr. Kloosterman
was formerly a Managing Director of Omega Capital from 1986 to 1992. Mr.
Kloosterman has been involved in the acquisition, development and
management of commercial and multifamily properties since 1978. He has
also been a senior officer of LaSalle Partners, Inc. |
2008 |
|
C.
Taylor Pickett (43) |
2002 |
Mr.
Pickett is
the Chief Executive Officer of our company and has served in this capacity
since June, 2001. Mr. Pickett is also a Director and has served in this
capacity since May 30, 2002. Prior to joining our company, Mr. Pickett
served as the Executive Vice President and Chief Financial Officer from
January 1998 to June 2001 of Integrated Health Services, Inc., a public
company specializing in post-acute healthcare services. He also served as
Executive Vice President of Mergers and Acquisitions from May 1997 to
December 1997 of Integrated Health Services. Prior to his roles as Chief
Financial Officer and Executive Vice President of Mergers and
Acquisitions, Mr. Pickett served as the President of Symphony Health
Services, Inc. from January 1996 to May 1997. |
2008 |
Continuing
Directors
|
Directors |
Year
First
Became
a
Director |
Business
Experience During Past 5 Years |
Term
to Expire
in |
| |
|
|
|
|
Bernard
J. Korman (73) |
1993 |
Mr.
Korman is
Chairman of the Board and has served in this capacity since March 8, 2004.
He has served as a director since October 19, 1993. Mr. Korman has been
Chairman of the Board of Trustees of Philadelphia Health Care Trust, a
private healthcare foundation, since December 1995. He was formerly
President, Chief Executive Officer and Director of MEDIQ Incorporated
(OTC:MDDQP) (health care services) from 1977 to 1995. Mr. Korman is also a
director of the following public companies: The New America High Income
Fund, Inc. (NYSE:HYB) (financial services), Kramont Realty Trust
(NYSE:KRT) (real estate investment trust), and NutraMax Products, Inc.
(OTC:NUTP) (consumer health care products). Mr. Korman also previously
served as a director of The Pep Boys, Inc. (NYSE:PBY) and served as its
Chairman of the Board from May 28, 2003 until his retirement from such
board in September 2004. Mr. Korman was previously a director of Omega
Worldwide, Inc. |
2006 |
| |
|
|
|
|
Thomas
F. Franke (75) |
1992 |
Mr.
Franke is
a Director and has served in this capacity since March 31, 1992. Mr.
Franke is Chairman and a principal owner of Cambridge Partners, Inc., an
owner, developer and manager of multifamily housing in Grand Rapids,
Michigan. He is also a principal owner of Laurel Healthcare (a private
healthcare firm operating in the United States) and is a principal owner
of Abacus Hotels LTD. (a private hotel firm in the United Kingdom). Mr.
Franke was a founder and previously a director of Principal Healthcare
Finance Limited and Omega Worldwide, Inc. |
2006 |
|
Edward
Lowenthal (60) |
1995 |
Mr.
Lowenthal is
a Director and has served in this capacity since October 17, 1995. From
January 1997 to March 2002, Mr. Lowenthal served as President and Chief
Executive Officer of Wellsford Real Properties, Inc. (AMEX:WRP) (a real
estate merchant bank), and was President of the predecessor of Wellsford
Real Properties, Inc. since 1986. Mr. Lowenthal also serves as a director
of WRP, REIS, Inc. (a private provider of real estate market information
and valuation technology), Ark Restaurants (Nasdaq:ARKR) (a publicly
traded owner and operator of restaurants), American Campus Communities
(NYSE:ACC) (a public developer, owner and operator of student housing at
the university level), Desarrolladora Homex (NYSE: HXM) (a Mexican
homebuilder) and serves as a trustee of the Manhattan School of
Music. |
2007 |
| |
|
|
|
|
Stephen
D. Plavin (45) |
2000 |
Mr.
Plavin is
a Director and has served in this capacity since July 17, 2000. Mr. Plavin
has been Chief Operating Officer of Capital Trust, Inc., (NYSE:CT) a New
York City-based mortgage real estate investment trust (“REIT”) and
investment management company and has served in this capacity since 1998.
In this role, Mr. Plavin is responsible for all of the lending, investing
and portfolio management activities of Capital Trust, Inc. |
2007 |
Integrated
Health Services, Inc. along with several other long-term care operator’s, filed
a voluntary petition under Chapter 11 of the United States Bankruptcy Code in
February 2000.
RECOMMENDATION
The Board
of Directors unanimously recommends a vote FOR the
election of Messrs. Kloosterman and Pickett.
PRINCIPAL
STOCKHOLDERS
The
following table sets forth information regarding beneficial ownership of our
capital stock as of March 31, 2005 for:
| · |
each
of our directors and the named executive officers appearing in the table
under "Executive Compensation —Compensation of Executive Officers;"
and |
| · |
all
persons known to us to be the beneficial owner of more than 5% of our
outstanding common stock. |
| |
Common
Stock |
Series
B Preferred |
Series
D Preferred |
|
Beneficial
Owner |
Number
of
Shares |
Percent
of
Class(1) |
Number
of
Shares |
Percent
of
Class(14) |
Number
of
Shares |
Percent
of
Class |
| |
|
|
|
|
|
|
|
|
C.
Taylor Pickett |
585,103 |
(2) |
1.1% |
— |
— |
— |
— |
|
Daniel
J. Booth |
134,223 |
(3) |
0.3% |
— |
— |
— |
— |
|
R.
Lee Crabill, Jr. |
90,933 |
(4) |
0.2% |
— |
— |
— |
— |
|
Robert
O. Stephenson |
159,764 |
(5) |
0.3% |
— |
— |
— |
— |
|
Thomas
F. Franke |
76,911 |
(6)
(7) |
0.2% |
5,800 |
0.3% |
— |
— |
|
Harold
J. Kloosterman |
110,420 |
(8)
(9) |
0.2% |
— |
— |
— |
— |
|
Bernard
J. Korman |
553,857 |
(10) |
1.1% |
1,300 |
0.1% |
— |
— |
|
Edward
Lowenthal |
34,403 |
(11)(12) |
* |
100 |
* |
— |
— |
|
Stephen
D. Plavin |
26,630 |
(13) |
* |
— |
— |
— |
— |
|
Directors
and executive officers as a group (9 persons) |
1,772,244 |
(14) |
3.5% |
7,200 |
0.4% |
— |
— |
|
5%
Beneficial Owners: |
| |
|
|
|
None |
|
|
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 our common stock
shown as beneficially owned by them, subject to community property laws where
applicable. The business address of the directors and executive officers is 9690
Deereco Road, Suite 100, Timonium, Maryland 21093.
___________
* Less than
0.10%
| (1) |
Based
on 50,955,656 shares of our common stock outstanding as of March 31,
2005. |
| (2) |
Includes
stock options that are exercisable within 60 days to acquire 89,740
shares. Includes shares Mr. Pickett owns jointly with his
wife. |
| (3) |
Includes
stock options that are exercisable within 60 days to acquire 14,584
shares. |
| (4) |
Includes
stock options that are exercisable within 60 days to acquire 10,209
shares. |
| (5) |
Includes
stock options that are exercisable within 60 days to acquire 18,229
shares. Includes shares Mr. Stephenson owns jointly with his wife.
|
| (6) |
Includes
47,141 shares owned by a family limited liability company (Franke Family
LLC) of which Mr. Franke is a member. |
| (7) |
Includes
stock options that are exercisable within 60 days to acquire 4,000
shares. |
| (8) |
Includes
shares owned jointly by Mr. Kloosterman and his wife, and 35,206 shares
held solely in Mr. Kloosterman's wife’s name. Mr. Kloosterman disclaims
beneficial ownership of the shares solely held by his
wife. |
| (9) |
Includes
stock options that are exercisable within 60 days to acquire 7,999
shares. |
| (10) |
Includes
stock options that are exercisable within 60 days to acquire 6,000
shares. |
| (11) |
Includes
1,400 shares owned by his wife through an IRA
plan. |
| (12) |
Includes
stock options that are exercisable within 60 days to acquire 9,001
shares. |
| (13) |
Includes
stock options that are exercisable within 60 days to acquire 12,999
shares. |
| (14) |
Includes
stock options that are exercisable within 60 days to acquire 172,761
shares |
| (15) |
Based
on 2,000,000 shares of Series B preferred stock outstanding as of March
31, 2005. |
| (16) |
Based
on 4,739,500 shares of Series D preferred stock outstanding as of March
31, 2005. |
DIRECTORS
AND OFFICERS OF OUR COMPANY
Board
of Directors and Committees of the Board
The
members of the Board of Directors on the date of this proxy statement, and the
committees of the Board on which they serve, are identified below.
| |
Audit |
Compensation |
Investment |
Nominating
and Corporate |
|
Director |
Committee |
Committee |
Committee |
Governance
Committee |
|
Thomas
F. Franke |
|
XX |
|
X |
|
Harold
J. Kloosterman |
X |
X |
XX |
XX |
|
Bernard
J. Korman * |
|
X |
X |
X |
|
Edward
Lowenthal |
X |
X |
|
X |
|
C.
Taylor Pickett |
|
|
X |
|
|
Stephen
D. Plavin |
XX |
X |
|
X |
| |
XX |
Chairman
of the Committee |
The Board
of Directors held 14 meetings during 2004. All members of the Board of Directors
attended more than 75% of the Board of Directors or Committee meetings held
during 2004. Mr. Korman, as Chairman of the Board, presides over any meeting,
including regularly scheduled executive sessions of the non-management
directors. If Mr. Korman is not present at such a session, the presiding
director is chosen by a vote of those present at the session. Except for Mr.
Pickett, all of the members of the Board of Directors meet the New York Stock
Exchange listing standards for independence. While the Board of Directors has
not adopted any categorical standards of independence, in making these
independence determinations, the Board of Directors noted that no director other
than Mr. Pickett(a) received direct compensation from our company other than
director annual retainers and meeting fees, (b) had any relationship with our
company or a third party that would preclude independence, or (c) had any other
material relationship with our company and its management. Each of the members
of the Audit Committee, Compensation Committee and Nominating and Corporate
Governance Committee meets the New York Stock Exchange listing standards for
independence. While we encourage our directors to attend our Annual Meeting of
Stockholders, we currently do not have a formal policy regarding director
attendance. None of our directors attended the 2004 Annual Meeting of
Stockholders.
Audit
Committee
The Audit
Committee met nine times in 2004. Its primary function is to assist the Board of
Directors in fulfilling its oversight responsibilities with respect to: (i) the
financial information to be provided to stockholders and the Securities and
Exchange Commission (“SEC”); (ii) the system of internal controls that
management has established; and (iii) the external independent audit process. In
addition, the Audit Committee selects our company’s independent auditors and
provides an avenue for communication between the independent auditors, financial
management and the Board of Directors. On April 20, 2004, the Board of Directors
adopted a revised Audit Committee Charter, a copy of which is attached to this
proxy statement as Appendix
A and is
also available on our website at www.omegahealthcare.com. On
April 19, 2005, the Board of Directors reviewed and ratified the Audit Committee
Charter.
Each of
the members of the Audit Committee is financially literate, as required of audit
committee members by the New York Stock Exchange. The Board has determined that
Mr. Plavin is qualified to serve as an “audit committee financial expert” as
such term is defined in Item 401 (h) of Regulation S-K promulgated by the SEC.
The Board made a qualitative assessment of Mr. Plavin’s level of knowledge and
experience based on a number of factors, including his formal education and his
experience as Chief Operating Officer of Capital Trust, Inc., a New York
City-based mortgage REIT and investment management company, where he is
responsible for all lending and portfolio management activities. Mr. Plavin
holds an M.B.A. from J.L. Kellogg Graduate School of Management at Northwestern
University.
Compensation
Committee
The
Compensation Committee met six times during 2004 and has responsibility for the
compensation of our key management personnel and administration of our 2004
Stock Incentive Plan our 2000 Stock Incentive Plan and our 1993 Deferred
Compensation Plan. The
responsibilities of the Compensation Committee are more fully described in its
charter, which is available on our website.
Investment
Committee
The
Investment Committee met one time during 2004 and has responsibility for
developing strategies in growing our portfolio.
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee met one time during 2004 and has
responsibility for identifying potential nominees to the Board of Directors and
reviewing their qualifications and experience. The process for identifying and
evaluating nominees to the Board is initiated by identifying candidates who meet
the criteria for selection as a nominee and have the specific qualities or
skills being sought based on input from members of the Board and, if the
Nominating and Corporate Governance Committee deems appropriate, a third-party
search firm. Nominees for director are selected based on their depth and breadth
of experience, industry experience, financial background, integrity, ability to
make independent analytical inquiries and willingness to devote adequate time to
director duties, among other criteria. The Committee also develops and
implements policies and practices relating to corporate governance.
The
Nominating and Corporate Governance Committee will consider written proposals
from stockholders for nominees as director. Any such nomination should be
submitted to the Nominating and Corporate Governance Committee through our
Secretary in accordance with the procedures and time frame described in our
Bylaws and as set forth under “Stockholder Proposals” below.
Communicating
with the Board of Directors and the Audit Committee
The Board
of Directors and our Audit Committee have established procedures to enable
anyone who has a concern about Omega’s conduct, or any employee who has a
concern about Omega’s accounting, internal controls or auditing matters, to
communicate that concern directly to the non-management members of the Board of
Directors or the Audit Committee, as applicable. These communications may be
confidential or anonymous, and may be submitted in writing or through the
Internet. The employees have been provided with direct and anonymous access to
each of the members of the Audit Committee. The Code of Business Conduct
prohibits any employee of our company from retaliating or taking adverse action
against anyone raising or helping resolve a concern about our
company.
Interested
stockholders may contact our non-management directors by writing to them at our
headquarters: Omega Healthcare Investors, Inc., 9690 Deereco Road, Suite 100,
Timonium, Maryland 21093, or by contacting them through our website at
www.omegahealthcare.com.
Communications addressed to the non-management members of the Board of Directors
will be reviewed by our corporate communications liaison, which is our outside
legal counsel, and will be directed to the appropriate director or directors for
their consideration. The
corporate communications liaison may not “filter out” any direct communications
from being presented to the non-management
members of the Board of
Directors and Audit Committee members without instruction from the directors or
committee members. The corporate
communications liaison is
required to maintain a record of all communications received that were addressed
to one or more directors, including those determined to be inappropriate
communications. Such record will include the name of the addressee, the
disposition by the corporate
communications liaison and, in
the case of communications determined to be inappropriate, a brief description
of the nature of the communication. The corporate
communications liaison is
required to provide a copy of any additions to the record upon request of any
member of the Board of Directors.
Corporate
Governance Materials
The
Corporate Governance Guidelines, Code of Business Conduct and the charters of
the Audit Committee, Compensation Committee and Nominating and Corporate
Governance Committee are available free of charge through our website at
www.omegahealthcare.com and are
available in print to any shareholder who requests them.
Compensation
of Directors
For the
year ended December 31, 2004, each non-employee director received a cash payment
equal to $20,000 per year, payable in quarterly installments of $5,000. Each
non-employee director also received a quarterly grant of shares of common stock
equal to the number of shares determined by dividing the sum of $5,000 by the
fair market value of the common stock on the date of each quarterly grant,
currently set at February 15, May 15, August 15, and November 15. At the
director’s option, the quarterly cash payment of director’s fees may be payable
in shares of common stock. In addition, each non-employee director was entitled
to receive fees equal to $1,500 per meeting for attendance at each regularly
scheduled meeting of the Board of Directors. For each teleconference or called
special meeting of the Board of Directors, each non-employee director received
$1,500 for meeting. The Chairman of the Board received an annual payment of
$25,000 for being Chairman and each Committee Chair received an annual payment
of $5,000. In addition, we reimbursed the directors for travel expenses incurred
in connection with their duties as directors. Employee directors received no
compensation for service as directors.
Each
non-employee director was awarded options with respect to 10,000 shares at the
date the plan was adopted or upon their initial election as a director. Prior to
January 1, 2005, each non-employee director was awarded an additional option
grant with respect to 1,000 shares on January 1 of each year they served as a
director. Effective January 1, 2005, each non-employee director will be awarded
restricted stock with respect to 1,000 shares on January 1 of each year they
serve as a director. Effective January 1, 2005, the Chairman of the Board will
be awarded an additional 2,000 restricted shares on January 1 of each year he
serves as Chairman. All grants have been and will be at an exercise price equal
to 100% of the fair market value of our common stock on the date of the grant.
Non-employee director options and restricted stock vest ratably over a three
year period beginning the date of grant.
EXECUTIVE
COMPENSATION
Compensation
Committee Report
The
Compensation Committee (the “Committee”) administers our 2004 Stock Incentive
Plan, our 2000 Stock Incentive Plan and 1993 Deferred Compensation Plan, and has
responsibility for other incentive and benefit plans. The Committee determines
the compensation of our executive officers and reviews with the Board of
Directors all aspects of compensation for our executive officers. The
Committee’s function is more fully described in its charter, which the Board of
Directors has adopted and a copy of which is available at our
website.
Historically,
our policy and the guidelines followed by the Committee have been directed
toward providing compensation to our executive officers in order to achieve the
following objectives:
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1) |
Assist in attracting and retaining talented and well-qualified
executives; |
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2) |
Reward performance and initiative; |
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3) |
Be competitive with other healthcare real estate investment
trusts; |
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4) |
Be significantly related to accomplishments and our short-term and
long-term successes, particularly measured in terms of growth in funds
from operations on a per share basis; and |
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5)
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Encourage
executives to achieve meaningful levels of ownership of our
stock. |
The
following is a discussion of each element of our executive
compensation:
Annual
Base Salary
Our
approach to base compensation levels has been to offer competitive salaries in
comparison with prevailing market practices. The Committee examined market
compensation levels and trends in connection with the issuance of the executive
employment contracts during 2004. Additionally, the Committee hired a consulting
firm which provided the Committee with executive base salaries of individuals
who currently are employed in similar positions in public companies, with
emphasis on salaries paid by healthcare real estate investment
trusts.
The
Committee has evaluated executive officer salary decisions in connection with an
annual review and based on input from our Chairman of the Board of Directors and
our Chief Executive Officer. In undertaking the annual review, the Committee
considered the decision-making responsibilities of each position and the
experience, work performance and team-building skills of each incumbent officer.
The Committee has viewed work performance as the single most important
measurement factor, followed by team-building skills and decision-making
responsibilities.
Annual
Cash Bonus
Our
historical compensation practices have embodied the principle that annual cash
bonuses should be based primarily on achieving objectives that enhance long-term
stockholder value, and that meaningful stock ownership by management, including
the grant of stock options or restricted stock in connection with their hiring
or contract renewals, is desirable in aligning stockholder and management
interests.
The
Committee has considered overall company performance and the performance of the
specific areas of our company under each incumbent officer’s direct control. It
was the Committee’s view that this balance supported the accomplishment of
overall objectives and rewarded individual contributions by executive officers.
Individual annual bonuses for each named executive have been consistent with
market practices for positions with comparable decision-making
responsibilities.
In 2004,
Mr. Pickett was eligible for an annual cash bonus of up to 100% of his annual
base salary and the other executive officers were eligible for a cash bonus of
up to 50% of their annual base salaries. The annual contractual bonus excludes
any special bonus that may be paid at the discretion of the Board. In
determining the amount of the annual cash bonuses, the Committee considered a
variety of factors, including sustained levels of recurring Funds from
Operations, the successful implementation of asset management initiatives,
control of expenses and satisfaction of Omega’s strategic objectives.
Considering these factors, the Committee paid each of the senior executives,
including Mr. Pickett, an annual cash bonus equal to 100.0% of such employee’s
maximum potential contractual bonus as well as a special bonus.
Restricted
Stock Incentives
In 2004,
we entered into restricted stock agreements with four executive officers under
the Omega Healthcare Investors, Inc. 2004 Stock Incentive Plan. A total of
317,500 shares of restricted stock were granted, which equated to approximately
$3.3 million of deferred compensation. The shares vest thirty-three and
one-third percent (33 ⅓%) on each of January 1, 2005, January 1, 2006 and
January 1, 2007 so long as the executive officer remains employed on the vesting
date, with vesting accelerating upon a qualifying termination of employment,
upon the occurrence of a change of control (as defined in the Restricted Stock
Agreements), death or disability. In addition, we also entered into performance
restricted stock unit agreements with our four executive officers. A total of
317,500 performance restricted stock units were granted under the Omega
Healthcare Investors, Inc. 2004 Stock Incentive Plan. The performance restricted
stock units vest upon our attaining $0.30 per share of common stock per fiscal
quarter in “Adjusted Funds from Operations” (as defined in the agreement) for
two (2) consecutive quarters. Dividend equivalents (plus an interest factor
based on our company’s cost of borrowing) accrue on unvested shares and are paid
if the performance restricted stock units vest. Dividend equivalents on vested
performance restricted stock units are paid currently. Performance restricted
stock units which have not become vested as of December 31, 2007 are
forfeited.
In 2004,
the Committee did not make any grants under its 2000 Stock Incentive Plan or its
1993 Deferred Compensation Plan.
2004
Chief Executive Officer Compensation
In
connection with retaining the services of Mr. Pickett to act as our Chief
Executive Officer, we entered into an Employment Agreement dated September 1,
2004 with Mr. Pickett. The Committee believes that the terms of the Employment
Agreement are consistent with the duties and scope of responsibilities assigned
to Mr. Pickett as Chief Executive Officer. In order to align Mr. Pickett’s
interests with the long-term interests of Omega, Mr. Pickett’s compensation
package includes significant equity-based compensation, including stock options
and restricted stock. For a detailed description of the terms of the Employment
Agreement, see “Compensation and Severance Agreements - C. Taylor Pickett
Employment Agreement” below.
For the
fiscal year ended December 31, 2004, the Committee awarded Mr. Pickett an annual
cash bonus of $600,000. This bonus was determined by the Committee substantially
in accordance with the policies described above relating to all of our executive
officers.
Tax
Deductibility of Executive Compensation
The SEC
requires that this report comment upon our policy with respect to Section 162(m)
of the Internal Revenue Code. Section 162(m) disallows a federal income tax
deduction for compensation over $1.0 million to any of the named executive
officers unless the compensation is paid pursuant to a plan which is
performance-related, non-discretionary and has been approved by our
stockholders. We did not pay any compensation during 2004 that would be subject
to Section 162(m). We believe that, because we qualify as a REIT under the
Internal Revenue Code and therefore are not subject to federal income taxes on
our income to the extent distributed, the payment of compensation that does not
satisfy the requirements of Section 162(m) will not generally affect our net
income, although to the extent that compensation does not qualify for deduction
under Section 162(m), a larger portion of stockholder distributions may be
subject to federal income taxation as dividend income rather than return of
capital. We do not believe that Section 162(m) will materially affect the
taxability of stockholder distributions, although no assurance can be given in
this regard due to the variety of factors that affect the tax position of each
stockholder. For these reasons, Section 162(m) does not directly govern the
Compensation Committee’s compensation policy and practices.
Compensation
Committee of the Board of Directors
/s/
Thomas F. Franke
/s/
Harold J. Kloosterman
/s/
Bernard J. Korman
/s/
Edward Lowenthal
/s/
Stephen D. Plavin
Compensation of Executive
Officers
The
following table sets forth, for the years ended December 31, 2004, 2003 and
2002, the compensation for services in all capacities to us of each person who
served as chief executive officer during the year ended December 31, 2004 and
the four most highly compensated executive officers serving at December 31,
2004.
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Long-Term
Compensation |
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Annual
Compensation |
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Award
(s) |
Payouts |
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Name
and
Principal
Position |
Year |
Salary($)(1) |
Bonus($) |
Other
Annual Compen-sation ($) |
Restricted
Stock
Award(s)
($)(2) |
Securities
Underlying
Options/
SARs
(#) |
LTIP
Payouts
($) |
All
Other
Compensation
($) |
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C.
Taylor Pickett
Chief
Executive Officer |
2004
2003
2002 |
480,000
463,500
450,000 |
600,000
463,500
191,250 |
—
—
— |
1,317,500
(3)
—
— |
—
—
— |
—
—
— |
6,150
(7)
6,000
(7)
6,000
(7) |
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Daniel
J. Booth
Chief
Operating Officer |
2004
2003
2002 |
295,000
283,250
275,000 |
221,250
141,625
58,438 |
—
—
— |
790,500
(4)
—
— |
—
—
— |
—
—
— |
6,150
(7)
6,000
(7)
4,125
(7) |
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R.
Lee Crabill, Jr.
Senior
Vice President |
2004
2003
2002 |
230,000
221,450
215,000 |
172,500
110,750
45,688 |
—
—
— |
606,050
(5)
—
— |
—
—
— |
—
—
— |
6,150
(7)
6,000
(7)
19,285
(8) |
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Robert
O. Stephenson
Chief
Financial Officer |
2004
2003
2002 |
235,000
221,450
215,000 |
176,250
110,750
45,688 |
—
—
— |
632,400
(6)
—
— |
—
—
— |
—
—
— |
6,150
(7)
6,000
(7)
4,300
(7) |
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________
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(1) |
Includes
amounts deferred under our 401(k) Profit-Sharing
Plan. |
(2) In 2004,
each of the named executive officers received awards of restricted stock, which
vest thirty-three and one-third percent (33 1/3%) on each of January 1, 2005,
January 1, 2006, and January 1, 2007. In addition, each of the named executive
officers also received performance restricted stock units that will fully vest
when our company attains $.030 per share of our common stock in adjusted funds
from operations (as defined in the restricted stock unit agreements) for two (2)
consecutive quarters. All restricted stock and all performance restricted stock
units vest upon the employee’s death, disability, termination of employment by
us without cause (as defined in the executive’s employment agreements), or if
the executive voluntarily quits for good reason (as defined in the executive’s
employment agreement) or upon the occurrence of a change in control (as defined
in the restricted stock unit agreement). Performance restricted stock units that
have not vested as of December 31, 2007 will be forfeited. In the Restricted
Stock Award column above, the value of the restricted stock award and the
performance restricted stock unit is based on a closing price of Omega’s common
stock of $10.54 on September 10, 2004. Dividends are paid currently on unvested
and vested restricted shares. If unvested shares are forfeited, dividends that
are declared after the date of the forfeiture are not paid on such shares.
Dividend equivalents accrue on unvested performance restricted stock units
beginning as of July 30, 2004, and unpaid dividend equivalents accrue interest
at a quarterly rate of interest equal to our average borrowing rate for the
preceding quarter. Accrued dividend equivalents plus interest are paid to the
executive as soon as possible, but only if, the performance restricted stock
units vest. Dividend equivalents on vested performance restricted stock units
are paid currently.
|
(3) |
Represents
a restricted stock award of 125,000 shares of our common stock and a
performance restricted stock unit award of 125,000 shares of our common
stock to Mr. Pickett on September 10, 2004. |
|
(4) |
Represents
a restricted stock award of 75,000 shares of our common stock and a
performance restricted stock unit award of 75,000 shares of our common
stock to Mr. Booth on September 10, 2004. |
|
(5) |
Represents
a restricted stock award of 57,500 shares of our common stock and a
performance restricted stock unit award of 57,500 shares of our common
stock to Mr. Crabill on September 10, 2004. |
|
(6) |
Represents
a restricted stock award of 60,000 shares of our common stock and a
performance restricted stock unit award of 60,000 shares of our common
stock to Mr. Stephenson on September 10,
2004. |
|
(7) |
Consists
of Employer contributions to our 401(k) Profit-Sharing
Plan. |
|
(8) |
Consists
of Employer contributions to our 401(k) Profit-Sharing Plan and
compensation to Mr. Crabill for reimbursement of moving
expenses. |
Compensation
and Severance Agreements
C.
Taylor Pickett Employment Agreement
We
entered into an employment agreement with C. Taylor Pickett dated as of
September 1, 2004, to be our Chief Executive Officer, which agreement supercedes
his previous employment agreement with Omega. The term of the agreement expires
on December 31, 2007.
At the
date of this filing, Mr. Pickett's base salary is $495,000 per year,
subject to increase by us and provides that he will be eligible for an annual
bonus of up to 100% of his base salary based on criteria determined by the
Compensation Committee of the Board of Directors.
In
connection with this employment agreement, we issued Mr. Pickett 125,000 shares
of our restricted common stock on September 10, 2004, which vest 33 ⅓% on each
of January 1, 2005, January 1, 2006, and January 1, 2007, provided Mr. Pickett
continues to work for us on the applicable vesting date. Dividends are paid
currently on unvested shares and a dividend equivalent per share was paid in an
amount equal to the dividend per share payable to stockholders of record as of
July 30, 2004. Also in connection with this employment agreement, we issued Mr.
Pickett 125,000 performance restricted stock units on September 10, 2004,
which
vest upon our attaining $0.30 per share of common stock per fiscal quarter in
“Adjusted Funds from Operations” (as defined in the agreement) for two (2)
consecutive quarters. Dividend equivalents (plus an interest factor based on
Omega’s cost of borrowing) accrue on unvested shares and are paid if the
performance restricted stock units vest. Dividend equivalents on vested
performance restricted stock units are paid currently. Performance restricted
stock units which have not become vested as of December 31, 2007 are
forfeited.
If we
terminate Mr. Pickett’s employment without “cause” or if he resigns for “good
reason”, he will be entitled to payment of his cash compensation (the sum of his
then current annual base salary plus average annual bonus payable based on the
three completed fiscal years prior to termination of employment) for a period of
three (3) years. “Cause” is defined in the employment agreement to include
events such as willful refusal to perform duties, willful misconduct in
performance of duties, unauthorized disclosure of confidential company
information, or fraud or dishonesty against Omega. “Good reason” is defined in
the employment agreement to include events such as Omega’s material breach of
the employment agreement or Omega relocating the Mr. Pickett’s employment to
more than 50 miles away without his consent. Mr.
Pickett is required to execute a release of claims against us as a condition to
the payment of severance benefits. Severance is not paid if the term of the
employment agreement expires. Mr. Pickett’s restricted common stock and
performance restricted stock units will become fully vested upon the occurrence
of Mr. Pickett’s death, disability, termination of employment without cause or
resignation for good reason, or a “change in control” (as defined in the
agreement). In the event of a change in control, severance and other change in
control benefits are grossed up to cover federal excise taxes and taxes on the
gross up. If Mr. Pickett dies during the term of the employment agreement, his
estate is entitled to a prorated bonus for the year of his death.
Mr.
Pickett is restricted from using any of our confidential information during his
employment and for two years thereafter and from using any trade secrets
obtained during his employment for as long thereafter as permitted by applicable
law. During the period of employment and for one year thereafter, Mr. Pickett is
obligated not to provide managerial services or management consulting services
to a competing business. Competing businesses is defined to include a specified
list of competitors and any other business with the primary purpose of leasing
assets to healthcare operators or financing ownership or operation of senior,
retirement or healthcare related real estate. In addition, during the period of
employment and for one year thereafter, Mr. Pickett agrees not to solicit
clients or customers with whom he had material contact or to solicit our
management level or key employees. If the term of the employment agreement
expires at December 31, 2007 and as a result no severance is paid, then these
provisions, other than those regarding trade secrets, also expire at December
31, 2007.
Daniel
J. Booth Employment Agreement
We
entered into an employment agreement with Daniel J. Booth, dated as of September
1, 2004, to be our Chief Operating Officer, which
agreement supercedes his previous employment agreement with Omega. The
term of the agreement expires on December 31, 2007.
At the
date of this filing, Mr. Booth’s base salary is $305,000 per year, subject to
increase by us and provides that he will be eligible for an annual bonus of up
to 50% of his base salary based on criteria determined by the Compensation
Committee of the Board of Directors.
In
connection with this employment agreement, we issued Mr. Booth 75,000 shares of
our restricted common stock on September 10, 2004, which vest 33 ⅓% on each of
January 1, 2005, January 1, 2006, and January 1, 2007, provided Mr. Booth
continues to work for us on the applicable vesting date. Dividends are paid
currently on unvested shares and a dividend equivalent per share was paid in an
amount equal to the dividend per share payable to stockholders of record as of
July 30, 2004. Also in connection with this employment agreement, we issued Mr.
Booth 75,000 performance restricted stock units on September 10, 2004, which
vest upon our attaining $0.30 per share of common stock per fiscal quarter in
“Adjusted Funds from Operation” (as defined in the agreement) for two (2)
consecutive quarters. Dividend equivalents (plus an interest factor based on
Omega’s cost of borrowing) accrue on unvested shares and are paid if the
performance restricted stock units vest. Dividend equivalents on vested
performance restricted stock units are paid currently. Performance restricted
stock units which have not become vested as of December 31, 2007 are
forfeited.
If we
terminate Mr. Booth’s employment without “cause” or if he resigns for “good
reason,” he will be entitled to payment of his cash compensation (the sum of his
then current annual base salary plus average annual bonus payable based on the
three completed fiscal years prior to termination of employment) for a period of
two (2) years. “Cause” is defined in the employment agreement to include events
such as willful refusal to perform duties, willful misconduct in performance of
duties, unauthorized disclosure of confidential company information, or fraud or
dishonesty against Omega. “Good reason” is defined in the employment agreement
to include events such as Omega’s material breach of the employment agreement or
Omega relocating the Mr. Booth’s employment to more than 50 miles away without
his consent. Mr. Booth
is required to execute a release of claims against us as a condition to the
payment of severance benefits. Severance is not paid if the term of the
employment agreement expires. Mr. Booth’s restricted common stock and
performance restricted stock units will become fully vested upon the occurrence
of Mr. Booth’s death, disability, termination of employment without cause or
resignation for good reason, or a “change in control” (as defined in the
agreement). In the event of a change in control, severance and other change in
control benefits are grossed up to cover federal excise taxes and taxes on the
gross up. If Mr. Booth dies during the term of the employment agreement, his
estate is entitled to a prorated bonus for the year of his death.
Mr. Booth
is restricted from using any of our confidential information during his
employment and for two years thereafter and from using any trade secrets
obtained during his employment for as long thereafter as permitted by applicable
law. During the period of employment and for one year thereafter, Mr. Booth is
obligated not to provide managerial services or management consulting services
to a competing business. Competing businesses is defined to include a specified
list of competitors and any other business with the primary purpose of leasing
assets to healthcare operators or financing ownership or operation of senior,
retirement or healthcare related real estate. In addition, during the period of
employment and for one year thereafter, Mr. Booth agrees not to solicit clients
or customers with whom he had material contact or to solicit our management
level or key employees. If the term of the employment agreement expires at
December 31, 2007 and as a result no severance is paid, then these provisions,
other than those regarding trade secrets, also expire at December 31,
2007.
Robert
O. Stephenson Employment Agreement
We
entered into an employment agreement with Robert O. Stephenson, dated as of
September 1, 2004, to be our Chief Financial Officer, which
agreement supercedes his previous employment agreement with Omega. The
term of the agreement expires on December 31, 2007.
At the
date of this filing, Mr. Stephenson’s base salary is $245,000 per year, subject
to increase by us and provides that he will be eligible for an annual bonus of
up to 50% of his base salary based on criteria determined by the Compensation
Committee of the Board of Directors.
In
connection with this employment agreement, we issued Mr. Stephenson 60,000
shares of our restricted common stock on September 10, 2004, which vest 33 ⅓% on
each of January 1, 2005, January 1, 2006, and January 1, 2007, provided Mr.
Stephenson continues to work for us on the applicable vesting date. Dividends
are paid currently on unvested shares and a dividend equivalent per share was
paid in an amount equal to the dividend per share payable to stockholders of
record as of July 30, 2004. Also in connection with this employment agreement,
we issued Mr. Stephenson 60,000 performance restricted stock units on September
10, 2004, which vest upon our attaining $0.30 per share of common stock per
fiscal quarter in “Adjusted Funds from Operation” (as defined in the agreement)
for two (2) consecutive quarters. Dividend equivalents (plus an interest factor
based on Omega’s cost of borrowing) accrue on unvested shares and are paid if
the performance restricted stock units vest. Dividend equivalents on vested
performance restricted stock units are paid currently. Performance restricted
stock units which have not become vested as of December 31, 2007 are
forfeited.
If we
terminate Mr. Stephenson’s employment without “cause” or if he resigns for “good
reason”, he will be entitled to payment of his cash compensation (the sum of his
then current annual base salary plus average annual bonus payable based on the
three completed fiscal years prior to termination of employment) for a period of
one and one half (1.5) years. “Cause” is defined in the employment agreement to
include events such as willful refusal to perform duties, willful misconduct in
performance of duties, unauthorized disclosure of confidential company
information, or fraud or dishonesty against Omega. “Good reason” is defined in
the employment agreement to include events such as Omega’s material breach of
the employment agreement or Omega relocating the Mr. Stephenson’s employment to
more than 50 miles away without his consent. Mr.
Stephenson is required to execute a release of claims against us as a condition
to the payment of severance benefits. Severance is not paid if the term of the
employment agreement expires. Mr. Stephenson’s restricted common stock and
performance restricted stock units will become fully vested upon the occurrence
of Mr. Stephenson’s death, disability, termination of employment without cause
or resignation for good reason, or a “change in control” (as defined in the
agreement). In the event of a change in control, severance and other change in
control benefits are grossed up to cover federal excise taxes and taxes on the
gross up. If Mr. Stephenson dies during the term of the employment agreement,
his estate is entitled to a prorated bonus for the year of his death.
Mr.
Stephenson is restricted from using any of our confidential information during
his employment and for two years thereafter and from using any trade secrets
obtained during his employment for as long thereafter as permitted by applicable
law. During the period of employment and for one year thereafter, Mr. Stephenson
is obligated not to provide managerial services or management consulting
services to a competing business. Competing businesses is defined to include a
specified list of competitors and any other business with the primary purpose of
leasing assets to healthcare operators or financing ownership or operation of
senior, retirement or healthcare related real estate. In addition, during the
period of employment and for one year thereafter, Mr. Stephenson agrees not to
solicit clients or customers with whom he had material contact or to solicit our
management level or key employees. If the term of the employment agreement
expires at December 31, 2007 and as a result no severance is paid, then these
provisions, other than those regarding trade secrets, also expire at December
31, 2007.
R.
Lee Crabill, Jr. Employment Agreement
We
entered into an employment agreement with R. Lee Crabill, Jr. dated as of
September 1, 2004, to be our Senior Vice President of Operations, which
agreement supercedes his previous employment agreement with Omega. The
term of the agreement expires on December 31, 2007.
At the
date of this filing, Mr. Crabill’s base salary is $237,000 per year, subject to
increase by us and provides that he will be eligible for an annual bonus of up
to 50% of his base salary based on criteria determined by the Compensation
Committee of the Board of Directors.
In
connection with this employment agreement, we issued Mr. Crabill 57,500 shares
of our restricted common stock on September 10, 2004, which vest 33 ⅓% on each
of January 1, 2005, January 1, 2006, and January 1, 2007, provided Mr. Crabill
continues to work for us on the applicable vesting date. Dividends are paid
currently on unvested shares and a dividend equivalent per share was paid in an
amount equal to the dividend per share payable to stockholders of record as of
July 30, 2004. Also in connection with this employment agreement, we issued Mr.
Crabill 57,500 performance restricted stock units on September 10, 2004, which
vest upon our attaining $0.30 per share of common stock per fiscal quarter in
“Adjusted Funds from Operations” (as defined in the agreement) for two (2)
consecutive quarters. Dividend equivalents (plus an interest factor based on
Omega’s cost of borrowing) accrue on unvested shares and are paid if the
performance restricted stock units vest. Dividend equivalents on vested
performance restricted stock units are paid currently. Performance restricted
stock units which have not become vested as of December 31, 2007 are
forfeited.
If we
terminate Mr. Crabill’s employment without “cause” or if he resigns for “good
reason”, he will be entitled to payment of his cash compensation (the sum of his
then current annual base salary plus average annual bonus payable based on the
three completed fiscal years prior to termination of employment) for a period of
one and one half (1.5) years. “Cause” is defined in the employment agreement to
include events such as willful refusal to perform duties, willful misconduct in
performance of duties, unauthorized disclosure of confidential company
information, or fraud or dishonesty against Omega. “Good reason” is defined in
the employment agreement to include events such as Omega’s material breach of
the employment agreement or Omega relocating the Mr. Crabill’s employment to
more than 50 miles away without his consent. Mr.
Crabill is required to execute a release of claims against us as a condition to
the payment of severance benefits. Severance is not paid if the term of the
employment agreement expires. Mr. Crabill’s restricted common stock and
performance restricted stock units will become fully vested upon the occurrence
of Mr. Crabill’s death, disability, termination of employment without cause or
resignation for good reason, or a “change in control” (as defined in the
agreement). In the event of a change in control, severance and other change in
control benefits are grossed up to cover federal excise taxes and taxes on the
gross up. If Mr. Crabill dies during the term of the employment agreement, his
estate is entitled to a prorated bonus for the year of his death.
Mr.
Crabill is restricted from using any of our confidential information during his
employment and for two years thereafter and from using any trade secrets
obtained during his employment for as long thereafter as permitted by applicable
law. During the period of employment and for one year thereafter, Mr. Crabill is
obligated not to provide managerial services or management consulting services
to a competing business. Competing businesses is defined to include a specified
list of competitors and any other business with the primary purpose of leasing
assets to healthcare operators or financing ownership or operation of senior,
retirement or healthcare related real estate. In addition, during the period of
employment and for one year thereafter, Mr. Crabill agrees not to solicit
clients or customers with whom he had material contact or to solicit our
management level or key employees. If the term of the employment agreement
expires at December 31, 2007 and as a result no severance is paid, then these
provisions, other than those regarding trade secrets, also expire at December
31, 2007.
Option
Grants/SAR Grants
There
were no options or stock appreciation rights (“SARs”) granted to the named
executive officers during 2004.
Aggregated
Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR
Values
The
following table summarizes options and SARs exercised during 2004 and presents
the value of unexercised options and SARs held by the named executive officers
at December 31, 2004.
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Name |
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Shares
Acquired
on
Exercise
(#) |
|
Value
Realized
($) |
|
Number
of Securities
Underlying
Unexercised
Options/
SARs at
Fiscal
Year-End (#)
Unexercisable
(U)
Exercisable
(E) |
|
Value
of Unexercised In-the-Money
Options/SARs
at
Fiscal
Year-End
($)
Unexercisable
(U)
Exercisable
(E) |
|
| |
|
|
|
|
|
|
|
|
|
C.
Taylor Pickett |
|
|
872,300 |
|
|
6,460,881 |
|
|
188,220(U |
) |
$ |
1,703,190(U |
) |
|
|
|
|
|
|
|
|
|
39,480(E) |
|
$ |
357,805(E |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
J. Booth |
|
|
258,333 |
|
|
1,963,081 |
|
|
87,500(U |
) |
$ |
755,083(U |
) |
|
|
|
|
|
|
|
|
|
4,167(E) |
|
$ |
35,420(E |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Lee Crabill, Jr. |
|
|
194,166 |
|
|
1,481,909 |
|
|
47,917(U |
) |
$ |
412,961(U |
) |
|
|
|
|
|
|
|
|
|
2,917(E) |
|
$ |
24,795(E |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
O. Stephenson |
|
|
221,288 |
|
|
1,639,880 |
|
|
98,504(U |
) |
$ |
866,993(U |
) |
|
|
|
|
|
|
|
|
|
5,208(E) |
|
$ |
44,268(E |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Incentive Plan
For the
period from August 14, 1992, the date of commencement of our operations, through
December 31, 2004, we have had no long-term incentive plans.
Equity
Compensation Plan Information
The
following table provides information about all equity awards under our company’s
2004 Stock Incentive Plan, 2000 Stock Incentive Plan and 1993 Amended and
Restated Stock Option and Restricted Stock Plan as of December 31,
2004.
| |
|
(a) |
|
(b) |
|
(c) |
|
|
Plan
category |
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights |
|
Weighted-average
exercise price of outstanding options, warrants and rights |
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a)) |
|
|
Equity
compensation plans approved by security holders |
|
|
1,205,183(1 |
) |
$ |
3.89 |
|
|
2,920,400 |
|
|
Equity
compensation plans not approved by security holders |
|
|
— |
|
|
— |
|
|
— |
|
|
Total |
|
|
1,205,183(1 |
) |
$ |
3.89 |
|
|
2,920,400 |
|
(1)
Reflects
317,000 shares of restricted common stock and 317,000 shares of common stock
issuable upon vesting of performance restricted stock units
Defined
Benefit or Actuarial Plan
For the
period from August 14, 1992, the date of commencement of our operations, through
December 31, 2004, we have had no pension plans.
COMPARISON
OF CUMULATIVE TOTAL RETURN*
Among:
Omega Healthcare Investors, Inc.
Hybrid
REIT Index**
S&P
500 Index
| |
OHI
INDEX |
|
S&P
INDEX
|
|
12/31/99
|
100
|
100
|
100
|
|
3/31/00
|
54
|
97
|
102
|
|
6/30/00
|
38
|
114
|
100
|
|
9/30/00
|
55
|
118
|
99
|
|
12/31/00
|
35
|
112
|
91
|
|
3/31/01
|
20
|
135
|
80
|
|
6/30/01
|
28
|
162
|
85
|
|
9/30/01
|
30
|
158
|
72
|
|
12/31/01
|
56
|
168
|
80
|
|
3/31/02
|
49
|
193
|
80
|
|
6/30/02
|
70
|
202
|
70
|
|
9/30/02
|
53
|
199
|
58
|
|
12/31/02
|
35
|
207
|
62
|
|
3/31/03
|
21
|
214
|
60
|
|
6/30/03
|
49
|
272
|
70
|
|
9/30/03
|
71
|
296
|
72
|
|
12/31/03
|
88
|
324
|
80
|
|
3/31/04
|
105
|
358
|
82
|
|
6/30/04
|
99
|
338
|
83
|
|
9/30/04
|
108
|
358
|
82
|
|
12/31/04
|
120
|
401
|
89
|
__________
* Total
return assumes reinvestment of dividends.
** The
Hybrid REIT Index is published by National Association of Real Estate Investment
Trusts, Inc. ("NAREIT"), Washington, D.C. It is comprised of Hybrid REITs (REITs
who both own properties and make loans to real estate owners and operators)
traded on the New York Stock Exchange and the American Stock Exchange. A list of
those REITs is available by request to us or NAREIT.
THIS
GRAPH REPRESENTS HISTORICAL STOCK PRICE PERFORMANCE AND IS NOT NECESSARILY
INDICATIVE OF ANY FUTURE STOCK PRICE PERFORMANCE.
THE
REPORTS OF THE COMPENSATION COMMITTEE AND THE AUDIT
COMMITTEE
AND THE PERFORMANCE GRAPH THAT APPEARS ABOVE SHALL NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR
INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
AUDIT
COMMITTEE MATTERS
The Audit
Committee’s purpose is to oversee the accounting and financial reporting
processes of Omega, the audits of our financial statements, the qualifications
of the public accounting firm engaged as Omega’s independent auditor to prepare
and issue an audit report on our financial statements and the related internal
control over financial reporting, and the performance of our independent
auditors. The Audit Committee has the sole authority and responsibility to
select, determine the compensation of, evaluate and, when appropriate, replace
our company’s independent auditors. The Audit Committee’s function is more fully
described in its revised charter, which the Board of Directors adopted on April
20, 2004, and reviewed and ratified on April 20, 2005, a copy of which is
attached to this proxy statement as Appendix
A and is
also available on our website. The Board of Directors reviews the Audit
Committee Charter annually.
The Audit
Committee has three independent directors, and the Board of Directors has
determined that each Audit Committee member is independent under the standards
of director independence established under our corporate governance policies and
the New York Stock Exchange listing requirements and is also “independent” for
purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934.. In
addition, the Board of Directors has determined that Steven Plavin is an “audit
committee financial expert,” as defined by SEC rules.
Management
is responsible for the preparation, presentation, and integrity of Omega’s
financial statements, accounting and financial reporting principles, internal
control over financial reporting, and procedures designed to ensure compliance
with accounting standards, applicable laws, and regulations. Our company’s
independent auditor, Ernst & Young LLP, is responsible for auditing and
expressing opinions on the conformity of our company’s consolidated financial
statements to accounting principles generally accepted in the United States,
management’s assessment of our company’s internal control over financial
reporting, and the effectiveness of our company’s internal control over
financial reporting.
Audit
Committee Report
The Audit
Committee, with respect to the audit of Omega’s 2004 audited consolidated
financial statements, reports as follows:
| 1) |
The
Audit Committee has reviewed and discussed Omega’s 2004 audited
consolidated financial statements with Omega’s
management; |
| 2) |
The
Audit Committee has discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards No. 61, as
amended, “Communication with Audit Committees” and SEC Regulation S-X,
Rule 2-07, which include, among other items, matters related to the
conduct of the audit of Omega’s consolidated financial
statements,
and the PCAOB Auditing Standard No. 2, (“An Audit of Internal Control
Over Financial Reporting Performed in Conjunction with an Audit of
Financial Statements”); |
| 3) |
The
Audit Committee has received written disclosures and the letter from Ernst
& Young LLP required by Independence Standards Board Standard No. 1,
“Independence Discussion with Audit Committees,” (which relates to the
auditor’s independence from Omega and its related entities) and has
discussed with Ernst & Young LLP its independence from Omega;
|
| 4) |
Based
on reviews and discussions of Omega’s 2004 audited consolidated financial
statements with management and discussions with Ernst & Young LLP, the
Audit Committee recommended to the Board of Directors that Omega’s 2004
audited consolidated financial statements be included in our company’s
Annual Report on Form 10-K; |
| 5) |
During
the course of 2004, management completed the documentation, testing and
evaluation of Omega’s system of internal control over financial reporting
in response to the requirements set forth in Section 404 of the
Sarbanes-Oxley Act of 2002 and related regulations. The Audit Committee
was kept apprised of the progress of the evaluation and provided oversight
and advice to management during the process. In connection with this
oversight, the Committee received periodic updates provided by management
and Ernst & Young LLP at each regularly scheduled Committee
meeting. The Committee also held a number of special meetings to discuss
issues as they arose. At the conclusion of the process, management
provided the Committee with and the Committee reviewed a report on the
effectiveness of Omega’s internal control over financial
reporting; |
| 6) |
The
Audit Committee has policies and procedures that require the pre-approval
by the Audit Committee of all fees paid to, and all service performed by,
our company’s independent auditor. At the beginning of each year, the
Audit Committee approves the proposed services, including the nature, type
and scope of service contemplated and the related fees, to be rendered by
the firm during the year. In addition, Audit Committee pre-approval is
also required for those engagements that may arise during the course of
the year that are outside the scope of the initial services and fees
approved by the Audit Committee. For each category of proposed service,
the independent accounting firm is required to confirm that the provision
of such services does not impair its independence. Pursuant to the
Sarbanes-Oxley Act of 2002, the fees and services provided as noted in the
table below were authorized and approved by the Audit Committee in
compliance with the pre-approval policies and procedures described herein.
|
| 7) |
The
Committee has also reviewed the services provided by Ernst & Young LLP
discussed below and has considered whether provision of such services is
compatible with maintaining auditor
independence. |
Audit
Committee of the Board of Directors
/s/
Stephen D. Plavin
/s/
Harold J. Kloosterman
/s/
Edward Lowenthal
RELATIONSHIP
WITH INDEPENDENT AUDITORS
Independent
Auditors
Ernst
& Young LLP audited our financial statements for each of the years ended
December 31, 2002, 2003 and 2004. Representatives of Ernst & Young LLP are
expected to be present at the Annual Meeting and will be given the opportunity
to make a statement if they desire to do so. It is also expected that they will
be available to respond to appropriate questions from stockholders at the Annual
Meeting. Approval of our independent auditors is not a matter required to be
submitted to stockholders; however, the Board considers the selection of the
independent auditor to be an important matter of stockholder concern and is
submitting the selection of Ernst & Young LLP for ratification by
stockholders as a matter of good corporate practice.
Fees
The
following table presents fees for professional audit services rendered by Ernst
& Young LLP for the audit of our company’s annual financial statements for
the fiscal years 2003 and 2004, and fees billed for other services rendered by
Ernst & Young LLP during those periods, all of which were pre-approved by
the Audit Committee.
| |
|
|
|
|
|
|
Year
Ended December 31 |
|
2003 |
|
2004 |
|
| |
|
|
|
|
|
|
|
Audit
Fees |
|
$ |
172,000 |
|
$ |
804,000 |
|
Audit-Related
Fees |
|
|
0 |
|
|
0 |
|
Tax
Fees |
|
|
40,000 |
|
|
7,000 |
|
|
All
Other Fees |
|
|
0 |
|
|
0 |
|
|
Total |
|
$ |
212,000 |
|
$ |
811,000 |
|
| |
|
|
|
|
|
|
|
Audit
Fees
The
aggregate fees billed by Ernst & Young LLP for professional services
rendered to our company for the audit of our company’s annual financial
statements for fiscal years 2003 and 2004, the reviews of the financial
statements included in our company’s Forms 10-Q for fiscal years 2003 and 2004,
and services relating to securities and other filings with the SEC, including
comfort letters and consents, were approximately $172,000 and $804,000,
respectively. For fiscal year 2004, audit fees include $104,000 of fees for the
audit of the effectiveness of our company’s internal control over financial
reporting related to Section 404 of the Sarbanes-Oxley Act of 2002.
Audit
Related Fees
Ernst
& Young LLP was not engaged to perform services to our company relating to
employee benefit audits, due diligence related to mergers and acquisitions,
accounting consultations and audits in connection with acquisitions, internal
control reviews, attest services that are not required by statute or regulation,
or consultation concerning financial accounting and reporting standards for
fiscal years 2003 and 2004.
Tax Fees
The
aggregate fees billed by Ernst & Young LLP for professional services to our
company relating to tax compliance, tax planning and tax advice taken as a whole
were approximately $40,000 and $7,000 for fiscal years 2003 and 2004,
respectively. Tax
compliance, planning and advice includes fees billed for professional services
related to federal and state tax compliance, including qualification and
maintenance of our status as a real estate investment trust, and assistance
related to the impact of acquisitions and divestitures on tax return
preparation.
All
Other Fees
There
were no fees billed by Ernst & Young LLP for professional services to our
company rendered other than as stated under the captions “Audit Fees,”
“Audit-Related Fees,”and “Tax Fees” above for fiscal years 2003 and
2004.
Determination
of Auditor Independence
The Audit
Committee has considered the provision of non-audit services by our principal
accountants and has determined that the provision of such services was
consistent with maintaining the independence of Ernst & Young
LLP.
Audit
Committee’s
Pre-Approval Policies
The Audit
Committee’s current practice is to pre-approve all audit services and all
permitted non-audit services to be provided to our Company by our independent
auditor; provided, however pre-approval requirements for non-audit services are
not required if all such services: (1) do not aggregate to more than five
percent of total revenues paid by us to our accountant in the fiscal year when
services are provided; (2) were not recognized as non-audit services at the time
of the engagement; and (3) are promptly brought to the attention of the Audit
Committee and approved prior to the completion of the audit by the Audit
Committee.
PROPOSAL
2 — PROPOSAL TO
RATIFY THE SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITOR FOR THE
FISCAL YEAR 2005
The Audit
Committee has selected Ernst & Young LLP as our company’s independent
auditor for the current fiscal year, and the Board is asking stockholders to
ratify that selection. Although current law, rules, and regulations, as well as
the charter of the Audit Committee, require our company’s independent auditor to
be engaged, retained, and supervised by the Audit Committee, the Board considers
the selection of the independent auditor to be an important matter of
stockholder concern and is submitting the selection of Ernst & Young LLP for
ratification by stockholders as a matter of good corporate practice. However, if
the stockholders do not ratify the selection, the Board of Directors and the
Audit Committee will reconsider whether or not to retain Ernst & Young, LLP
but may retain such independent auditors. Even if the selection is ratified, the
Board of Directors and the Audit Committee in their discretion may change the
appointment at any time during the year if they determine that such a change
would be in the best interest of Omega and its stockholders.
Information
concerning Ernst & Young's services for Omega can be found beginning on page
19. The
affirmative vote of holders of a majority of the shares of common stock
represented at the meeting is required to approve the ratification of the
selection of Ernst & Young LLP as our company’s independent auditor for the
current fiscal year. The Board of Directors and the members of the Audit
Committee recommend a vote FOR this
proposal.
STOCKHOLDER
PROPOSALS
December
28, 2005 is the
date by which proposals of stockholders intended to be presented at the 2006
Annual Meeting of Stockholders must be received by us for inclusion in our proxy
statement and form of proxy relating to that meeting.
In
addition, our Bylaws provide that in order for business to be brought before the
Annual Meeting, a stockholder must deliver or mail written notice to our
Secretary at our principal executive office not less than 60 days nor more than
90 days prior to the first anniversary of the preceding year’s Annual Meeting,
provided, however, that if the date of the Annual Meeting is advanced by more
than 30 days or delayed by more than 60 days from such anniversary date, notice
must be delivered not more than 90 days prior to such Annual Meeting nor less
than 60 days prior to such Annual Meeting or if later, not later than the close
of business on the tenth day following the day on which the date of such meeting
is publicly announced. The notice must state the stockholder’s name, address,
class and number of shares of our stock and briefly describe the business to be
brought before the meeting, the reasons for conducting such business at the
meeting and any material interest of the stockholder and of the beneficial
owner, if any, on whose behalf the proposal is made. If the stockholder intends
to nominate a candidate for election as a director, in addition to the
requirements set forth above, the notice should include the name of the nominee
for election as a director, the age of the nominee, the nominee’s business
address and experience during the past five years, the number of shares of our
stock beneficially held by the nominee, and such other information concerning
the nominee as would be required to be included in a proxy statement soliciting
proxies for the election of the nominee. The notice must also include a
description of all arrangements or understandings between such stockholder and
each proposed nominee and any other person pursuant to which the nominations are
to be made by such stockholder, a representation that such stockholder intends
to appear in person or by proxy at the meeting to nominate the person named in
the notice, and the consent of the nominee to serve as a director.
ANNUAL
REPORT
A copy of
our annual report for the year ended December 31, 2004 accompanies this proxy
statement and is incorporated herein by reference. Additional copies may be
obtained by writing to Robert O. Stephenson at our principal executive offices,
at the address set forth below.
A copy of
our annual report on Form 10-K will be provided, without charge, upon written
request addressed to Mr. Stephenson at our principal executive offices at
9690
Deereco Road, Suite 100, Timonium, Maryland 21093.
Our
annual report to stockholders and Form 10-K are also available on our website at
www.omegahealthcare.com.
EXPENSES
OF SOLICITATION
The total
cost of this solicitation will be borne by us. In addition to use of the mails,
proxies may be solicited by our directors, officers and regular employees of
Omega personally and by telephone, telex or facsimile. We may reimburse persons
holding shares in their own names or in the names of the nominees for expenses
such persons incur in obtaining instructions from beneficial owners of such
shares.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers, directors and persons who beneficially own more than 10% of our
company common stock to file initial reports of ownership and reports of changes
in ownership with the SEC. SEC regulations require these individuals to give us
copies of all Section 16(a) forms they file.
Based
solely on our review of forms that were furnished to us and written
representations from reporting persons, we believe that the executive officers,
directors and more than 10% stockholders complied with all filing requirements
related to Section 16(a), except for the following:
On
January 1, 2004, we issued each of our non-employee directors a stock option for
1,000 shares of our common stock as part of the annual compensation payments to
directors. On May 17, 2004, we issued Mr. Kloosterman 422 shares of our common
stock as part of his quarterly compensation payment. The Forms 4 for these stock
options and Mr. Kloosterman’s stock compensation were filed with the SEC on
March 8, 2005, outside the two-day reporting requirement enacted under the
Sarbanes-Oxley Act of 2002 In making these statements, we have relied on the
representations of the persons involved and on copies of their reports filed
with the SEC.
OTHER
MATTERS
The Board
of Directors knows of no other business that may be validly presented at the
Annual Meeting, but if other matters do properly come before the Annual Meeting,
it is intended that the persons named in the proxy will vote on said matters in
accordance with their best judgment.
/s/ C.
TAYLOR PICKETT
Chief
Executive Officer
April 23,
2005
Timonium,
Maryland
Appendix
A
As part
of the commitment of our company and the Board of Directors to good governance
practices, the Audit Committee regularly reviews its charter and recommends to
the Board changes to the charter. The Board adopted changes to the charter in
April 2004 that were effective April 20, 2004.
Audit
Committee Charter
Omega
Healthcare Investors, Inc.
April
20, 2004
I.
Purpose
The Board
of Directors (the “Board”) of Omega Healthcare Investors, Inc. (the “Company”)
has established the Audit Committee (the “Committee”) to assist the Board in
fulfilling its oversight responsibilities of (1) the integrity of the Company’s
financial statements, (2) the Company’s compliance with legal and regulatory
requirements, (3) the independent auditor’s qualifications and independence, and
(4) the performance of the Company’s internal audit function and independent
auditors.
II.
Composition
The
Committee will be comprised of at least three members of the Board. Each member
will be both independent and financially literate. The Board must determine that
at least one member has the level of accounting and financial expertise as
required by the applicable rules and regulations of the principal trading market
for the Company’s common stock. Each member will be free of any relationship
that, in the opinion of the Board, would interfere with his or her individual
exercise of independent judgment. Applicable laws and regulations will be
followed in evaluating a member’s independence.
No
committee member will simultaneously serve on the audit committees of more than
three public companies unless the Board affirmatively determines that such
simultaneous service would not impair the ability of such member to serve on the
Committee. The members of the Committee will be elected annually at the
organizational meeting of the full Board and will be listed in the annual report
to stockholders.
III.
Responsibilities
A. Scope
of Responsibility and Authority. The
primary responsibility of the Committee is to oversee the Company’s financial
reporting process on behalf of the Board and report the results of its
activities to the Board. The Committee will be directly responsible for the
appointment and dismissal, compensation and oversight of the Company’s
independent auditors and may not delegate such responsibilities to others. The
Committee does not prepare financial statements on behalf of the Company or
perform the Company’s audits, and its members are not the Company’s auditors and
do not certify the Company’s financial statements. These functions are performed
by the Company’s management and independent auditors.
The
Committee may retain (and determine and receive from the Company the appropriate
funding for) experts to advise or assist it, including outside counsel,
accountants, financial analysts or others.
In
addition to the matters set forth herein, the Committee will perform such other
functions as required by law, the Company’s Articles of Incorporation or Bylaws,
or the Board.
B. Responsibilities
and Duties.
The
Committee will meet at least four times a year, with authority to convene
additional meetings as circumstances require.
In
carrying out its oversight responsibilities, the Committee will:
| 1. |
Meet
at the request of the Chief Financial Officer or the independent auditors
and will meet at least once every quarter or more frequently as
circumstances dictate. |
| 2. |
Meet
separately, periodically with (a) management, (b) the Company’s internal
auditors (whether in-house or out-sourced), and (c) the Company’s
independent auditors to discuss issues and concerns warranting Committee
attention. |
| 3. |
Recommend
to the Board whether the Company’s financial statements should be included
in the Company’s annual report on Form
10-K. |
| 4. |
Prepare
the Committee report to be included in the Company’s annual proxy
statement. |
| 5. |
Review
and discuss with management the policies and guidelines for earnings press
releases and financial information and earnings guidance provided to
analysts and ratings agencies. |
| 6. |
Review
and discuss with management the policies and guidelines for risk
assessment and management. |
| 7. |
Report
its actions to the Board. |
C. Relationships
with Independent Auditors. In
order to retain independent auditors to review the records and accounts of the
Company, the Committee will:
| 1. |
Have
the sole authority to appoint, retain, compensate, evaluate and terminate
the independent auditors to conduct Company audits or to perform
permissible non-audit services, with the independent auditors ultimately
accountable to the Committee with respect to audit and related
work. |
| 2. |
Review
the independent auditors’ scope and audit plan prior to the commencement
of the audit. |
| 3. |
Pre-approve
any services to be performed by the independent auditors, or establish
policies pursuant to which services to be performed by the independent
auditor will be pre-approved. |
| 4. |
Determine
the scope of the audit and the associated fees to be paid to the
independent auditors (for both audit and permissible non-audit
work). |
| 5. |
Discuss
with the independent auditors any relationships that may affect the
auditors’ independence and confirm and oversee the independence of the
auditors. |
| 6. |
Pre-approve
the Company’s hiring of any employees or former employees of the
independent auditors or establish policies with respect to any such
hiring. |
| 7. |
Obtain
and review annually a report by the independent auditors describing (a)
the auditing firm’s internal quality control procedures, (b) any material
issues raised by its most recent quality control review, or peer review,
or any inquiry or investigation within the preceding five years and steps
taken to resolve those issues, and (c) all relationships between the
independent auditors and the Company. |
In its
review of the independent auditors, the Committee will direct the independent
auditors to provide the Committee with timely reports of:
| (a) |
all
critical accounting policies and practices, |
| (b) |
all
alternative treatments of financial information within generally accepted
accounting principles that have been discussed with management, effects of
using such alternatives, and the treatment preferred by the independent
auditing firm, and |
| (c) |
other
material written communications between the independent auditors and
management. |
D. Company
Financial Statements. Prior to
the release or filing of the Company’s financial statements, the Committee will
review with management and the independent auditors the Company’s annual and
quarterly financial statements and related footnotes as well as disclosures
under “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.” The Committee will also review at least annually:
| 1. |
With
the independent auditors and management, their processes for assessment of
material misstatements, identification of the notable risk areas, and
their response to those risks. |
| 2. |
The
independent auditors’ qualitative judgment about the quality, not just the
acceptability, of accounting principles, use of estimates, bases for
determining the amounts of estimates, and financial
disclosures. |
| 3. |
With
the independent auditors any significant difficulties or disputes with
management encountered during the course of the audit, including
management’s response. |
| 4. |
With
the independent auditors the management letter provided by the independent
auditors and the Company’s response. |
| 5. |
Any
financial or non-financial arrangements of the Company that do not appear
on the financial statements of the Company and their related
risks. |
| 6. |
With
management and the independent auditors the effect of regulatory and
accounting initiatives as well as accounting principles and their
alternatives that have a significant effect on the Company’s financial
statements. |
| 7. |
Any
transactions or courses of dealing with parties related to the
Company. |
| 8. |
Any
other matters related to the annual Company audit, including those matters
that are required to be communicated to the Committee under applicable law
and generally accepted auditing standards. |
E. Oversight
of Corporate Compliance Function. The
Committee will:
| 1.1.a.i.1.1 |
E.Oversight
of Corporate Compliance Function.
The Committee will: |
| 1. |
Establish
procedures whereby employees can confidentially and anonymously submit to
the Committee concerns or issues regarding the Company’s accounting or
auditing matters. |
| 2. |
Establish
procedures for the receipt, retention and treatment of complaints
regarding accounting or auditing matters, including their
controls. |
| 3. |
Discuss
with the independent auditors whether they believe or have any reason to
believe that an illegal act has occurred, regardless
of whether they believe it will materially affect the Company’s financial
statements. |
| 4. |
Review
any transactions with related parties and the procedures used to identify
related parties. |
| 5. |
Perform
an evaluation of its performance at least annually to determine whether it
is functioning effectively. |
F. Audit
Committee Formalities and Charter.
The
Committee will:
| 1. |
Review
and reassess annually the adequacy of this Charter and recommend any
changes to the Board. |
| 2. |
Report
periodically to the Board on the Committee’s activities and findings,
including any issues regarding the quality or integrity of the Company’s
financial statements, the Company’s compliance with legal or regulatory
requirements, the performance and independence of the Company’s
independent auditors or the performance of the internal auditors.
|
| 3. |
Cause
appropriate minutes of the Committee’s meetings to be
kept. |
OMEGA HEALTHCARE
INVESTORS, INC.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
The
undersigned hereby appoints Robert O. Stephenson and Thomas H. Peterson and each
of them, as proxies, each with the power to appoint his substitute to represent
and to vote as designated below, all the shares of common stock of Omega
Healthcare Investors, Inc. ("Omega") held of record by the undersigned on April
22, 2005 at the Annual Meeting of Stockholders to be held on May 26, 2005 or any
adjournment thereof.
This
Proxy, when properly executed, will be voted in the manner directed herein by
the undersigned. If no specification is made, this Proxy will be voted
FOR:
| 1. |
The
Election of Directors |
NOMINEES:
Harold J. Kloosterman
and C. Taylor Pickett
| 2. |
Ratification
of Independent Auditors |
Ernst
& Young LLP
In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the meeting and at any adjournment thereof.
(Continued,
and to be marked, dated and signed, on the other side)
SEE
REVERSE SIDE
-- FOLD
AND DETACH HERE --
[X] (Please
mark your
votes as
in this
example.)
The
Directors recommend a vote "FOR" Proposal
1 and Proposal 2.
FOR AGAINST ABSTAIN
1. The
Election of Directors [ ] [ ]
[ ]
NOMINEES:
Harold J.
Kloosterman and C. Taylor Pickett
(Instruction:
To withhold authority to vote for any individual nominee,
write
that nominee’s name here.)
2. Ratification
of Independent Auditors [
] [
] [
]
Ernst
& Young LLP
-------------------------------------------------------------------------------------------------------------
NOTE: Please
sign exactly as your name appears on this Proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Please
check the box if you plan to attend the Annual Meeting in person. [
]
SIGNATURE(S) DATE
|
NOTE: |
Please
sign exactly as your name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. This proxy will not be used if you attend
the meeting in person and so request. |
--------------------------------------------------------------------------------
-- FOLD
AND DETACH HERE --