SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
AMERIPATH, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 65-0642485
(State or Other Jurisdiction (I.R.S. Employer
Incorporation or Organization) Identification No.)
7289 Garden Road, Suite 200, Riviera Beach, Florida 33404
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (561) 845-1850
Securities Registered Pursuant to Section 12(B) of the Act:
Securities Registered Pursuant to Section 12(G) of the Act:
Common Stock (Par Value $.01 Per Share)
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 15, 2002 was approximately $858.7 million based on the
$28.20 closing sale price for the Common Stock on the NASDAQ National Market
System on such date. For purposes of this computation, all executive officers
and directors of the Registrant have been deemed to be affiliates. Such
determination should not be deemed to be an admission that such directors and
officers are, in fact, affiliates of the Registrant.
The number of shares of Common Stock of the Registrant outstanding as of
March 15, 2002 was 30,449,989.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement relating to the
Registrant's 2002 Annual Meeting of Shareholders to be filed with the Securities
and Exchange Commission no later than 120 days after the end of the year covered
by this Report are incorporated by reference into Part III of this Report.
PART III
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the aggregate compensation paid or
earned during the prior three years to the Company's Chief Executive Officer and
each of the Company's four other most highly compensated executive officers
whose total annual salary and bonus was $100,000 or more for 2001 (the Chief
Executive Officer and such other executive officers are sometimes referred to
herein as the "Named Executive Officers").
Long-Term
Annual Compensation Compensation
---------------------------------------------- --------------
Number of
Other Annual Options
Name and Principal Position Fiscal Year Salary ($) Bonus ($) Compensation ($) Granted
------------------------------------- ------------- ------------ ------------- ------------------ --------------
James C. New 2001 425,000 255,000 -- (1) 75,000
Chairman of the Board, President and 2000 375,000 225,000 -- 61,000
Chief Executive Officer 1999 350,000 190,000 -- 50,000
Alan Levin, M.D. 2001 294,700 100,800 -- 25,000
Corporate Vice President 2000 279,394 96,900 -- 28,500
1999 270,636 84,700 -- 20,000
Brian C. Carr 2001 271,862 100,000 57,023 (2) 200,000
President
Dennis M. Smith, Jr., M.D. 2001 348,769 -- -- 25,000
Executive Vice President of Genomic 2000 252,308 -- -- 34,000
Strategies and Chief Medical Officer 1999 294,167 33,333 -- 25,000
Gregory A. Marsh 2001 180,939 100,000 -- 35,000
Vice President and Chief Financial
Officer
______________
(1) The aggregate amount of perquisites and other personal benefits provided to
the executive officer is less than the lesser of 10% of the total annual
salary and bonus of such officer or $50,000, but is not $0.
(2) Represents reimbursement of expenses in connection with Mr. Carr's
relocation to West Palm Beach, Florida from Nashville, Tennessee.
Option Grants Table
The following table sets forth certain information regarding options
granted to the Named Executive Officers during 2001.
Potential Realizable Value at
Percent of Total Assumed Annual Rates of Stock
Number of Securities Options Granted Exercise Price Appreciation for
Underlying Options to Employees in Price Per Expiration Option Term(2)
--------------
Name Granted (1) Year Share Date 5% 10%
-------------------------- -------------------- ---------------- --------- ---------- -------------- --------------
James C. New 75,000 8% 24.95 5/3/11 $ 1,176,819 $ 2,982,291
Alan Levin, M.D. 25,000 2.7% 24.95 5/3/11 $ 392,273 $ 994,097
Brian C. Carr 200,000 21.4% 24.95 5/3/11 $ 3,138,184 $ 7,952,775
Dennis M. Smith, Jr., M.D. 25,000 2.7% 24.95 5/3/11 $ 392,273 $ 994,097
25,000 2.7% 30.03 7/31/11 $ 472,143 $ 1,196,502
Gregory A. Marsh 10,000 1.1% 18.75 3/6/11 $ 117,918 $ 298,827
25,000 2.7% 24.95 5/3/11 $ 392,273 $ 994,097
__________________
(1) All options were granted under either the Company's Amended and Restated
1996 Stock Option Plan or the Company's 2001 Stock Option Plan at exercise
prices equal to or greater than the fair market value of the Common Stock
on the date of the grant, and vest over five years with a ten-year term.
(2) These assumed annual rates of appreciation were used in compliance with
the rules of the Securities and Exchange Commission and are not intended
to forecast future price appreciation of the Common Stock.
Option Exercises in Last Year and Year-End Option Value Table
The following table sets forth information regarding exercise of
options during 2001 and the options held at December 31, 2001 by each of the
Named Executive Officers.
Number of Value of Unexercised
Unexercised Options In-The-Money Options
Number at Year End at 2001 Year End (1)
of Options Amount ---------------------------- --------------------------
Name Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
---------------- --------- -------- ----------- ------------- ----------- -------------
James C. New 150,000 $2,845,294 266,211 169,800 $7,217,322 $2,489,084
Alan Levin, M.D. 47,300 $ 510,412 7,200 67,800 $ 160,272 $1,185,474
Brian C. Carr 2,008 $ 20,761 -- 200,000 -- $1,462,000
Dennis M. Smith, -- -- 22,800 96,200 $ 506,184 $1,325,486
Jr., M.D.
Gregory A. Marsh 9,500 $ 162,025 10,500 59,200 $ 232,739 $ 900,562
______________
(1) The indicated value of the options is a computation of the difference
between the applicable option exercise price and the closing market price
of the Common Stock as of December 31, 2001 ($32.26) multiplied by the
number of shares of Common Stock underlying such option.
Employment Agreements
The Company entered into an employment agreement with Mr. New effective
April 1, 2001, pursuant to which Mr. New is eligible to receive an annual bonus
of up to 50% of his base salary upon attaining mutually agreed upon objectives
relating to the Company's performance, and a potential additional amount of
bonus for exceeding the objectives. For the year ended December 31, 2001, the
Compensation Committee of the Board of Directors determined that Mr. New
exceeded his performance objectives for 2001 and awarded a bonus to Mr. New that
exceeded 50% of his base salary. Upon termination of his employment by the
Company for reasons other than disability, death or cause, Mr. New will receive
a pro rata portion of his bonus for the year in which the termination occurs,
his base salary and prior years' bonus for a period of 24 months, and his
benefits for a period of 18 months. In the event of a "change-in-control" of the
Company, the Company will pay Mr. New a bonus equal to two times his annual base
salary and bonus, if either the Board of Directors approves such payment or if
the per share selling price is greater than average market price for the prior
six months, and accelerate the vesting of all the unvested options held by Mr.
New. If Mr. New's employment is terminated in connection with a
change-in-control or within one year after a change-in-control, the Company will
also pay Mr. New a pro rata portion of his bonus for the year in which the
termination occurs, make a lump sum payment to Mr. New equal to two times his
annual base salary and bonus plus the cost of 18 months of benefits, and
accelerate the vesting of all of the unvested options held by Mr. New. On the
other hand, if Mr. New is still employed by the Company on the one-year
anniversary of the change-in-control, the Company will pay him a bonus equal to
one times his annual base salary and bonus. Following the termination of his
employment with the Company, Mr. New has agreed not to compete with the Company
or solicit the Company's employees or customers for two years.
The Company entered into an employment agreement with Mr. Carr on
November 30, 2000 and amended it on April 1, 2001. Under this agreement, Mr.
Carr is eligible to receive an annual bonus of up to 35% of his base salary upon
attaining mutually agreed upon objectives relating to the Company's performance,
and a potential additional amount of bonus for exceeding the objectives. Upon
termination of his employment by the Company for reasons other than disability,
death or cause, Mr. Carr will receive a pro rata portion of his bonus for the
year in which the termination occurs and his base salary for a period of 12
months. If the Company experiences a change-in-control, the Company will pay Mr.
Carr a bonus equal to one times his base salary and accelerate the vesting of
all of the unvested options held by Mr. Carr. If
Mr. Carr's employment is terminated within one year after a change-in-control,
the Company will also pay Mr. Carr a pro rata portion of his bonus for the year
in which the termination occurs plus a lump sum payment equal to two times his
annual base salary and accelerate the vesting of all of the unvested options
held by Mr. Carr. On the other hand, if Mr. Carr is still employed by the
Company on the one year anniversary of the change-in-control the Company will
pay him a bonus equal to one times his base salary. Following the termination of
his employment with the Company, Mr. Carr has also agreed to neither compete
with the Company for one year nor solicit its employees or customers for two
years.
The Company assumed obligations of an employment agreement with Dr.
Levin, in his capacity as an Affiliated Physician, as of June 30, 1996 in
connection with the Company's acquisition of Derrick and Associates. On August
12, 1999, the Company entered into an Executive Retention Agreement with Dr.
Levin. On June 1, 2001, the Company entered into an Amendment to Employment and
Retention Agreements with Dr. Levin that amended the first two agreements.
Pursuant to the Company employment agreements with Dr. Levin, he is eligible to
receive an annual bonus of up to 35% of his base salary upon attaining mutually
agreed upon objectives relating to the Company's performance, and a potential
additional amount of bonus for exceeding the objectives. Upon termination of his
employment by the Company for reasons other than disability, death or cause, Dr.
Levin will receive a pro rata portion of his bonus earned for the year in which
the termination occurs and his base salary for a period of 12 months and
benefits for a period of 18 months. If the Company experiences a
change-in-control, the Company will pay Dr. Levin a bonus equal to two times his
base salary and accelerate the vesting of all of the unvested options held by
Dr. Levin. If Dr. Levin's employment is terminated in connection with a
change-in-control or within one year after a change-in-control, the Company will
also pay Dr. Levin a pro rata portion of his bonus for the year in which the
termination occurs plus a lump sum equal to one times his base salary plus the
cost of 18 months of benefits and accelerate the vesting of all of the unvested
options held by Dr. Levin. On the other hand, if Dr. Levin is still employed by
the Company on the one year anniversary of the change-in-control, the Company
will pay him a bonus equal to one times his base salary. Following the
termination of his employment with the Company, Dr. Levin has also agreed not to
compete with the Company or solicit its employees or customers for two years. In
November 2001, Dr. Levin resigned his position as Chief Operating Officer and
became the Corporate Vice President and a practicing pathologist at one of the
Company's operations.
The Company entered into an employment agreement with Mr. Marsh
effective April 1, 2001, pursuant to which Mr. Marsh is eligible to receive an
annual bonus of up to 35% of his base salary upon attaining mutually agreed upon
objectives relating to the Company's performance, and a potential additional
amount of bonus for exceeding the objectives. Upon termination of his employment
by the Company for reasons other than disability, death or cause, Mr. Marsh will
receive a pro rata portion of his bonus for the year in which the termination
occurs and his base salary and benefits for a period of 12 months. If the
Company experiences a change-in-control, the Company will pay Mr. Marsh a bonus
equal to one and a half times his base salary and accelerate the vesting of all
of the unvested options held by Mr. Marsh. If Mr. Marsh's employment is
terminated within one year after a change-in-control, the Company will also pay
Mr. Marsh a pro rata portion of his bonus for the year in which the termination
occurs plus a lump sum equal to one and a half times his base salary plus the
cost of 12 months of benefits and accelerate the vesting of all of the unvested
options held by Mr. Marsh. On the other hand, if Mr. Marsh is still employed by
the Company on the one year anniversary of the change-in-control, the Company
will pay him a bonus equal to one times his base salary. Following the
termination of his employment with the Company, Mr. Marsh has also agreed to
neither compete with the Company for one year nor solicit its employees or
customers for two years.
The Company entered into an employment agreement with Dr. Smith, in his
capacity as an Affiliated Physician, as of December 1, 1997, in connection with
the Company's acquisition of Laboratory Physicians in Jacksonville, Florida. On
June 1, 2001, the Company and Dr. Smith amended this agreement to change his
title from "Medical Director of the Jacksonville Division" to "Executive Vice
President of Genomic Strategies and Chief Medical Officer." Upon his termination
because of death or disability, the Company will pay Dr. Smith 60 days salary.
If Dr. Smith is terminated without cause, the Company will pay him one year
salary. If the Company experiences a change-in-control, all of Dr. Smith's
unvested options shall become vested. If Dr. Smith's employment is terminated
within one year after a change-in-control, the Company will pay Dr. Smith a lump
sum equal to one times his base salary and accelerate the vesting of all of the
unvested options held by Dr. Smith. Dr. Smith has agreed not to compete with the
Company or solicit employees or customers from the Company for two years
following the termination of his employment unless the Company terminates him
without cause.
The Company entered into an employment agreement with Mr. Billington on
November 30, 2000 and amended it on April 1, 2001. Under this agreement, Mr.
Billington is eligible to receive an annual bonus of up to 30% of his base
salary upon attaining mutually agreed upon objectives relating to the Company's
performance, and a potential additional amount of bonus for exceeding the
objectives. Upon termination of his employment by the Company for reasons other
than disability, death or cause, Mr. Billington will receive a pro rata portion
of his bonus for the year in which the termination occurs and his base salary
for a period of 12 months. If the Company experiences a change-in-control, the
Company will pay Mr. Billington a bonus equal to one times his base salary and
accelerate the vesting of all of the unvested options held by Mr. Billington. If
Mr. Billington's employment is terminated within one year after a
change-in-control, the Company will also pay Mr. Billington a pro rata portion
of his bonus for the year in which the termination occurs plus a lump sum
payment equal to one times his annual base salary and accelerate the vesting of
all of the unvested options held by Mr. Billington. Following the termination of
his employment with the Company, Mr. Billington has also agreed to neither
compete with the Company for one year nor solicit its employees or customers for
two years.
The Company entered into an employment agreement with Mr. Fuller
effective April 1, 2001, pursuant to which Mr. Fuller is eligible to receive an
annual bonus of up to 35% of his base salary upon attaining mutually agreed upon
objectives relating to the Company's performance, and a potential additional
amount of bonus for exceeding the objectives. Upon termination of his employment
by the Company for reasons other than disability, death or cause, Mr. Fuller
will receive a pro rata portion of his bonus for the year in which the
termination occurs and his base salary and benefits for a period of 12 months.
If the Company experiences a change-in-control, the Company will pay Mr. Fuller
a bonus equal to one times his base salary and accelerate the vesting of all of
the unvested options held by Mr. Fuller. If Mr. Fuller's employment is
terminated in connection with a change-in-control or within one year after a
change-in-control, the Company will also pay Mr. Fuller a pro rata portion of
his bonus for the year in which the termination occurs plus a lump sum payment
equal to one times his annual base salary plus the cost of 12 months of benefits
and accelerate the vesting of all the unvested options held by Mr. Fuller. On
the other hand, if Mr. Fuller is still employed by the Company on the one-year
anniversary of the change-in-control, the Company will pay him a bonus equal to
one times his base salary. Following the termination of his employment with the
Company, Mr. Fuller has also agreed to neither compete with the Company for one
year nor solicit its employees or customers for two years.
Each of the Named Executive Officers holds options to purchase Common
Stock granted under either the Company's Amended and Restated 1996 Stock Option
Plan or the Company's 2001 Stock Option Plan. In addition to other events, such
options generally become fully exercisable upon: (i) a merger, consolidation,
reorganization, liquidation, or dissolution in which the Company does not
survive; (ii) a sale, lease, exchange or other disposition of all or
substantially all of the Company's property or other assets; (iii) certain
specified changes in control of the Company.
Long-Term Incentive and Pension Plans
The Company does not have any long-term incentive or pension plans.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
From the beginning of 2001 through March 2001, Messrs. Roberts and
Stamps were the members of the Compensation Committee of the Board of Directors.
From March 2001 to December 2001, Messrs. Gibson and Stamps were the members of
the Compensation Committee. In December 2001, Mr. Stamps resigned from the Board
of Directors, and Mr. Kelly joined the Board of Directors and the Compensation
Committee with Mr. Gibson for the remainder of 2001. All compensation decisions
affecting Mr. New were approved by the Compensation Committee and by the
Company's Board of Directors, except for Mr. New.
Director Compensation
The Company pays each director who is not an employee a retainer of
$10,000 per year plus $1,500 for each meeting of the Board of Directors, and
$500 for each meeting of a committee of the Board of Directors, attended in
person. In addition, each director who is not an employee of the Company
receives an option to purchase 5,000 shares of Common Stock under the Company's
1996 Director's Stock Option Plan in connection with his or her initial election
to the Board of Directors and is eligible to receive discretionary grants of
options to purchase additional shares from time to time thereafter. During 2001,
the Company made a discretionary grant of 4,000 stock options, at an exercise
price of $24.95, to Dr. A. Renschler. The Company also reimburses all directors
for out-of-pocket expenses incurred in connection with the rendering of services
as a director.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amended Report to be
signed on its behalf by the undersigned, thereunto duly authorized, in Riviera
Beach, Florida, on June 28, 2002.
AMERIPATH, INC.
/s/ Gregory A. Marsh
--------------------------------
Gregory A. Marsh,
Vice President, Chief Financial Officer
and Secretary