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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
{ X } ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 000-17596
Meridian Healthcare Growth and Income Fund Limited Partnership
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1549486
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
225 East Redwood Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None
Securities registered pursuant to section 12(g) of the Act:
Assignee Units of Limited Partnership Interests
(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
As of December 31, 1996, there were 1,538,800 Units of Assignee Limited
Partnership Interests held by non-affiliates of the Registrant. Because there is
not an established public trading market for the Units, the aggregate market
value of the Units held by non-affiliates of the Registrant cannot be
calculated.
Documents Incorporated by Reference
The Annual Report for 1996 is incorporated by reference.
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
INDEX
Page (s)
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS 3
Part I.
Item 1. Business 4-5
Item 2. Properties 5-7
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Part II.
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 7-8
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 11
Part III.
Item 10. Directors and Executive Officers of Registrant 11-13
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain Beneficial Owners
and Management 13-14
Item 13. Certain Relationships and Related Transactions 14
Part IV.
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 14
Signatures 15-16
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Cautionary Statement Regarding Forward Looking Statements
Certain statements contained herein, including certain statements in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" concerning the Fund's business outlook or future economic
performances, anticipated profitability, revenues, expenses or other financial
items together with other statements that are not historical facts are
"forward-looking statements" as that term is defined under the Federal
Securities Law. Forward-looking statements are necessarily estimates reflecting
the best judgement of the party making such statements based upon correct
information and involve a number of risks, uncertainties and other factors which
could cause actual results to differ materially from those stated in such
statements. Risks, uncertainties and factors which could affect the accuracy of
such forward looking statements are identified in the Fund's Prospectus and the
Fund's Registration Statement filed by the Fund with the Securities and Exchange
Commission, and forward looking statements contained herein or in other public
statements of the Fund should be considered in light of those factors. There can
be no assurance that factors will not affect the accuracy of such forward
looking statements.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
PART I
Item 1. Business
Meridian Healthcare Growth and Income Fund Limited Partnership (the
"Fund") was organized under the laws of the State of Delaware on December 8,
1987. The Fund will continue until December 31, 2037, unless sooner terminated
under the provisions of the Partnership Agreement. The Fund was formed to
acquire 98.99% of the limited partnership interests in seven limited
partnerships, each of which owns and operates a single nursing center (the
"Facilities").
The Fund's objectives are to (i) preserve Investors' capital; (ii)
obtain capital appreciation through increases in the value of the Facilities;
and (iii) provide quarterly cash distributions to Investors from income
generated by the Facilities' operating income, the income taxation of a portion
of which is anticipated to be deferred.
The General Partners of the Fund are Brown Healthcare, Inc., a Maryland
corporation (the "Administrative General Partner") and Meridian Healthcare
Investments, Inc., a Maryland corporation (the "Development General Partner").
Pursuant to the Registration Statement, a maximum of 1,540,000 assignee
units of limited partnership interests ("Units") were registered under the
Securities and Exchange Act of 1933, as amended. During 1988 all 1,540,000 Units
were sold, and the Fund's net proceeds available for investment aggregated
$31,878,000 (gross proceeds of $38,500,000 less public offering expenses and
acquisition fees of $6,622,000).
The Fund acquired 98.99% limited partnership interests (the "Operating
Partnership Interests") in the operating limited partnerships which own and
operate seven nursing center facilities. The Facilities include four nursing
centers located in Maryland that were acquired in May and June of 1988; two
newly constructed nursing centers located in North Carolina that were acquired
in August, 1988; and one newly constructed facility in New Jersey that was
acquired in December, 1989. Each operating partnership owns the real and
personal property of its nursing center facility. (See Note 1, "Organization and
Operations", in Item 8, Financial Statements and Supplementary Data, and Item 2.
Properties, herein.)
The Fund acquired the Operating Partnership Interests with offering
proceeds and certain indebtedness.
The Fund completed a sixty-bed expansion on its Salisbury, North
Carolina facility during 1991. Construction costs for the expansion were
$1,354,000, slightly below the $1.5 million budget, and were funded from
existing capital reserves.
The Fund completed construction of its sixty-bed expansion at the
Mooresville, North Carolina facility during the first quarter of 1992. The total
cost of the addition, including the cost of obtaining the Certificate of Need,
was slightly less than the $2 million budget. Funding for this expansion was
provided from equity capital and capital generated from operations.
The nursing centers owned by the operating partnerships are managed by,
and certain of the nursing center facilities also purchase drugs, medical
supplies and agency nursing and rehabilitation services from, affiliates of the
Development General Partner. (See Note 3, "Related Party Transactions" in Item
8. Financial Statements and Supplementary Data, herein.)
On November 30, 1993, Genesis Health Ventures, Inc. ("Genesis") acquired
substantially all of the assets of Meridian Inc., Meridian Healthcare, Inc. and
their affiliated entities, including all of the stock of the Development General
Partner. See Item 10. Directors and Executive Officers of Registrant, herein.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 1. Business (continued)
The Fund's sole business is its investment in partnerships which own
and operate nursing centers that are healthcare facilities licensed by
individual states to provide long-term healthcare within guidelines established
by the appropriate state health agencies and as directed by each patient's
physician. Healthcare and related services from private pay and Medicaid and
Medicare patients accounted for approximately 99% of revenues during each of the
years in the three-year period ended December 31, 1996.
Healthcare facilities, including those owned by the operating
partnerships, are subject to extensive federal, state and in some cases, local
regulatory licensing and inspection requirements. In addition, government
revenue sources, particularly Medicaid and Medicare programs, are subject to
statutory and regulatory changes due to administrative rulings, interpretations
of policy and determination by fiscal intermediaries, and to government funding
restrictions, all of which may materially affect the rate of program payments to
nursing facilities.
The nursing center Facilities face competition with similar facilities
in their general locations as well as the development of other nursing centers
that are able to obtain Certificates of Need and to meet certain other
requirements.
Item 2. Properties
The Fund owns Operating Partnership Interests in operating partnerships
that own four nursing facilities in the State of Maryland, two nursing
facilities in the State of North Carolina, and one nursing facility in New
Jersey. The Facilities are described below:
Property & Equipment Patient
(before depreciation) Revenues
at December 31, 1996 1996
(Dollars in thousands)
Name, Location and Description
Facility 1. Hamilton $ 4,529 $ 3,929
6040 Harford Road
Baltimore City,
Maryland
A 104-bed nursing facility located on 1.06 acres, constructed in 1972 consisting
of a "T" shaped two-story plus partial basement masonry structure containing
22,082 square feet. The facility contains 104 comprehensive care beds of which
14 are Medicare-certified. There are two private rooms, 15 semi-private rooms, 4
three-person rooms and 15 four-person rooms.
Facility 2.
Randallstown 10,432 9,679
9109 Liberty Road
Randallstown,
Maryland
A 250-bed nursing facility located on 2.83 acres, constructed in 1971 consisting
of a rectangularly-shaped two-story plus partial basement masonry structure
containing a total of 72,780 square feet. The facility contains 246
comprehensive care beds of which 38 are Medicare-certified and four domiciliary
care beds. There are 111 semi-private rooms and 28 private rooms.
-5-
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 2. Properties (continued)
Property & Equipment Patient
(before depreciation) Revenues
at December 31, 1996 1996
(Dollars in thousands)
Name, Location and Description
Facility 3. 7,219 7,128
Caton Manor
3330 Wilkens Avenue
Baltimore City,
Maryland
A 184-bed nursing facility located on 0.92 acres, constructed in 1972 consisting
of an "L" shaped four-story plus basement masonry structure containing a total
of 48,660 square feet. All 184 beds are comprehensive care beds of which 20 are
Medicare-certified. All rooms are semi-private.
Facility 4. Frederick
(Collegeview) 6,887 7,208
400 North Avenue
Frederick,
Maryland
A 166-bed nursing facility located on 1.13 acres, originally constructed in 1966
consisting of a two-story plus partial basement masonry structure, the second
floor added in 1968, containing a total of 52,661 square feet. The facility
contains 156 comprehensive care beds of which 28 are Medicare-certified. There
are 10 domiciliary care beds and two non-licensed residential apartments which
are leased to persons who do not require nursing care.
Facility 5. Mooresville
550 Glenwood Road 5,707 5,880 Mooresville, North Carolina A 160-bed nursing
facility located on 11.38 acres, originally constructed with 100 beds in 1988
with a 60-bed addition completed in 1992 consisting of a one-story slab on grade
building containing a total of 47,657 square feet. The facility contains 130
beds for skilled care and intermediate care residents, of which 14 are Medicare
certified. There are 30 beds in the Home for the Aged (HA) wing. There are 8
private rooms and 76 semi-private rooms.
Facility 6. Salisbury
710 Julian Road 5,544 6,901 Salisbury, North Carolina A 180-bed nursing facility
located on 6.02 acres, originally constructed with 120 beds in 1988 with a
60-bed addition completed in 1991 consisting of a one-story slab on grade
building containing a total of 50,500 square feet. The facility contains 160
beds for skilled care and intermediate care residents, of which 28 are Medicare
certified. There are 20 beds in the Home for the Aged (HA) wing. There are 16
private rooms and 82 semi-private rooms.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 2. Properties (continued)
Property & Equipment Patient
(before depreciation) Revenues
at December 31, 1996 1996
(Dollars in thousands)
Name, Location and Description
Facility 7. Woodlands
1400 Woodland Avenue 8,096 6,749
Plainfield,
New Jersey
A 140-bed nursing facility located on 6.52 acres, constructed in 1989 consisting
of a two-story slab on grade building containing a total of 54,000 square feet.
The facility contains 120 comprehensive nursing home beds, of which 27 are
Medicare certified, and 20 residential care beds. There are 12 private rooms, 46
semi-private rooms and 9 four-bed rooms. The facility also provides space for a
child day-care program.
Totals $48,414 $47,474
Item 3. Legal Proceedings
The Fund is a party to litigation arising in the ordinary course of
business. The Fund does not believe the results of such litigation, even if the
outcome is unfavorable to the Fund, would have a material adverse effect on its
consolidated financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to the security holders for a vote
during the last quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
An established public trading market for the Units does not exist and
the Fund does not anticipate that a public market will develop. Transfer of
Units by an investor and purchase of Units by the Fund may be accommodated under
certain terms and conditions. The Partnership Agreement imposes certain
limitations on the transfer of Units and may restrict, delay or prohibit a
transfer primarily if:
o the transfer of Units would result in 50% or more of all Units
having been transferred by assignment or otherwise within a
12-month period;
o such a transfer would be a violation of any federal or state
securities laws that may cause the Fund to be classified other than
as a partnership for federal income tax purposes;
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters (continued)
o such transfers would cause the Fund to be treated as a "publicly
traded partnership" under Sections 7704 and 469(k) of the Internal
Revenue Code; and
o the transfer of Units would cause a technical termination of the
Partnership within meaning of Section 708(b)(1)(A) of the Internal
Revenue Code.
As of December 31, 1996, there were 1,831 holders of Units of the
registrant, owning an aggregate of 1,540,040 Units, including 40 Units held by
the Assignor Limited Partner. The Fund made four quarterly distributions
totaling approximately $3,306,000 in each of the years in the three-year period
ended December 31, 1996. See Note 5, "Distributions to Partners and Allocation
of Net Income", in Item 8. Financial Statements and Supplementary Data, herein.
Item 6. Selected Financial Data
Years Ended December 31,
1996 1995 1994 1993 1992
(Dollars in thousands - except per Unit amounts)
Statement of Income Data
Net revenue $47,885 $45,398 $42,852 $38,524 $36,764
Operating income before capital costs** 5,735 5,937 6,834 5,752 6,652
Net income 1,722 1,891 2,903 1,842 2,106
Net income per assignee Unit $ 1.12 $ 1.23 $ 1.88 $ 1.20 $ 1.37
Operating Data
Payor mix (as a percent of revenue):
Medicaid and Medicare 77% 75% 75% 72% 67%
Private 23% 25% 25% 28% 33%
Occupancy percentage 94.3% 94.8% 94.4% 95.8% 94.9%
Patient Days Available 431,000 430,000 433,000 433,000 434,000
Balance Sheet Data
Total assets $52,255 $51,107 $52,494 $50,580 $52,581
Property and equipment, net of
accumulated depreciation 35,680 36,625 37,714 38,761 39,869
Long-term debt, including loan
payable to Development General
Partner, less current portion 25,955 25,528 25,797 26,217 26,582
Partners' capital 17,389 18,973 20,388 20,791 22,255
Cash distributions paid per Unit:
from operations $2.12 $ 1.88 $ 2.12 $ 1.89 $ 2.12
from return of capital - .24 - .23 -
**Capital costs include depreciation, amortization and interest expense.
-8-
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Fund has sufficient liquid assets and other available credit resources
to satisfy its operating expenditures and anticipated routine capital
improvements at each of the seven nursing home facilities.
At December 31, 1996, the Randallstown facility did not meet its required
ratio of cash flow to debt service as a result of measures taken in response to
the unfavorable State survey received earlier in the year. To date, the bank has
not issued a formal waiver to the Fund. Based upon the 1997 operating budget,
operations at Randallstown are expected to improve and the facility should meet
its ratio of cash flow to debt service as required under its loan agreement. The
lender has agreed under a Limited Forbearance Agreement to refrain and forbear
temporarily from exercising and enforcing any of its remedies for a period of
time ending on and including May 15, 1997. The agreement provides that should
Randallstown meet all its covenants for the quarter ended March 31, 1997, the
lender will waive the earlier events of default. If all the covenants are not
met, the lender shall require that certain partnerships and/or the Fund become
either joint and several co-obligors or guarantors of the obligation, note and
the loan.
Between 1988 and 1989 the Development General Partner loaned the Fund
$597,000 to support operating deficits generated by the Mooresville, Salisbury
and Woodlands nursing centers during each center's first two years of
operations. Loans outstanding under this arrangement, including interest at 9%
per annum, were $984,000 at December 31, 1996. The Fund is obligated to repay
these loans when certain specified financial criteria are met, the most
significant of which is the payment of a preferred return to the assignee
limited partners, as defined in the Fund's Partnership Agreement.
Effective July 29, 1996 the Fund modified the revolving credit facility
("The Facility") by increasing the maximum amount to $4,000,000 and extending
the maturity date until February 28, 1998. The Facility is designated for
working capital needs and issuance of letters of credit. The Facility is
primarily secured by the accounts receivable of the Fund. Any outstanding cash
borrowings under the Facility bear interest at LIBOR plus 1.75%. At December 31,
1996 the outstanding borrowings under this Facility totaled $1,000,000.
The State of North Carolina has again delayed the effective date of
elimination in its Medicaid methodology of the current reimbursement rate
component for equity until July 1, 1997. Fund management had projected the
effective date of this elimination to be July 1, 1996. As a result of this
action, Medicaid reimbursements from North Carolina during the second half of
1996 were approximately $129,000 over budget. Future action by the North
Carolina Medicaid Agency could affect the reimbursement component for equity and
therefore reduce Medicaid reimbursement for the Fund by up to $234,000 annually.
On February 14, 1997, the Fund made a distribution of $826,410 of which
approximately $534,853, or 65%, was funded from nursing center operations
generated during the fourth quarter of 1996 after payment of approximately
$68,000 of upper tier expenses. During 1996, nursing center operations generated
approximately 77% of the total distributions after payment of upper-tier
expenses totaling approximately $277,000.
Based on a preliminary review of the 1997 operating budget, results are
projected to improve over 1996. Distributions to partners are expected to remain
at current levels and operating cash flow is expected to fund over 90% of the
distributions, while the balance is funded by reserves. The major challenge to
the Fund in the foreseeable future is to control operating expenses while
maximizing revenues through strategic admissions policies.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Results of Operations
December 31, 1996 vs. December 31, 1995
Patient revenues for the Fund's seven operating partnerships increased by
approximately $2,632,000 (or 6%) for the year ended December 31, 1996 as
compared to the year ended December 31, 1995. The increase is primarily
attributable to increased Medicare census as well as increased room rates which
resulted in an effective rate increase of 4.1% (or $1,652,000) over 1995.
Continued efforts in Medicare maximization resulted in an increase of the
Medicare population at the seven facilities from 8.6% of total patient days for
1995 to 9.8% of total patient days in 1996. As a result, ancillary consumption
increased by $847,000 in 1996 as compared to 1995. In addition, revenues were
further increased by recognition of retroactive cost settlement adjustments that
were $366,000 higher than those recognized in 1995. These positive variances in
revenue were offset by an overall census decline of 1,806 patient days in 1996,
as compared to 1995, which accounted for a negative variance in revenue of
$233,000. Private census also declined in 1996 when compared to 1995.
Profitability for the Fund declined approximately $169,000 (or 8.9%) from
$1,891,000 in 1995 to $1,722,000 in 1996. The decline in profitability was
primarily attributable to increased operating expenses which were not completely
covered by the Medicare and Medicaid reimbursement programs. Operating expenses
as a percentage of patient revenues increased to 81% in 1996 from 80% in 1995.
With the continued increase in Medicare census, the overall acuity level of the
residents was higher than in 1995 resulting in increased salaries, benefits and
ancillary costs. Additionally, maintenance costs in 1996 were $100,000 higher
than in 1995 due to the continued aging of the buildings. The four Maryland
facilities were built in the late 1960's and early 1970's and are beginning to
need increasing levels of repair and maintenance.
Also contributing to the decline in profitability was an increase of
$172,000 (or 34%) in general and administrative expenses in 1996 as compared to
1995. The majority of this increase was due to higher professional and
consulting costs incurred.
Interest expense decreased $84,000 (or 3.8%) in 1996 versus 1995.
Approximately $5.7 million of the Fund's debt bears interest at floating rates
which were, on average, lower in 1996 than in 1995.
December 31, 1995 vs. December 31, 1994
Patient revenues for the Fund's seven operating partnerships increased by
approximately $2,198,000 (or 5%) for the year ended December 31, 1995 as
compared to the year ended December 31, 1994. The increase is primarily
attributable to increased Medicare and Private census as well as increased room
rates which resulted in an effective rate increase of 3.8% (or $1,383,000) over
1994. For the first time in several years, private pay census at the facilities
increased from 21% of total patient days in 1994 to 23% of total patient days in
1995. As a result of continued efforts to increase the Medicare population in
the seven facilities, Medicare census has increased from 7.8% of total patient
days for the year ended December 31, 1994 to 8.6% of total patient days for
1995. This resulted in increased ancillary consumption of $588,000 for 1995 over
1994. This contributed to the increase in revenues. In addition, revenues were
further increased by the recognition of $227,000 in retroactive cost settlement
adjustments.
Profitability for the Fund declined approximately $1,012,000 (or 35%) to
$1,891,000 in 1995 from $2,903,000 in 1994. The decline in profitability was
primarily attributable to increased operating expenses which were not completely
covered by the Medicare and Medicaid reimbursement programs. Operating expenses,
as a percentage of patient revenues, increased to approximately 80% in 1995 as
compared to 77% in 1994. As a result of the higher acuity level of the residents
in 1995, salaries, employee benefits and ancillary costs increased. Also
contributing to the reduced profitability in 1995 was very poor Medicaid rate
increases in the State of Maryland for nursing costs.
-10-
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Results of Operations (continued)
These rates only increased, on average, 1% for the Fund's facilities in
Maryland. Additionally, the Medicare routine cost limits were frozen for the
second consecutive year. This resulted in an additional $360,000 being lost in
1995 as compared to 1994 to the cost limited under the Medicare and Medicaid
programs.
Interest expense increased $222,000 (or 11.1%) in 1995 versus 1994 as a
result of line of credit borrowings during the year and higher average borrowing
costs. Approximately $5.9 million of the Fund's debt bears interest at floating
rates of interest which were, on average, higher in 1995 than 1994.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements:
Page(s)
Annual Report
Independent Auditors' Report 3
Consolidated Balance Sheets 4
Consolidated Statements of Earnings 5
Consolidated Statements of Partners' Capital (Deficit) 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8-15
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of Registrant
The General Partners of the Fund are Meridian Healthcare Investments, Inc.,
the Development General Partner, and Brown Healthcare, Inc., the Administrative
General Partner. The Fund's principal executive offices are located at 225 East
Redwood Street, Baltimore, Maryland 21202. The General Partners had primary
responsibility for the selection and negotiation of terms concerning the
acquisition of the Operating Partnership Interests, selecting a manager for the
interim investments and the structure of the Offering and the Fund. The General
Partners have primary responsibility for overseeing the performance of those who
contract with the Fund as well as making decisions with respect to the
financing, sale and liquidation of the Fund's or the operating partnerships'
assets. The General Partners are responsible for all reports to and
communications with investors and others, all distributions and allocations to
investors, the administration of the Fund's business and all filings with the
Securities and Exchange Commission and other Federal or State regulatory
authorities. The Fund's Partnership Agreement provides certain rights for
investors, which are incorporated herein by reference.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 10. Directors and Executive Officers of Registrant (continued)
The Development General Partner
Meridian Healthcare Investments, Inc., the Development General Partner, is
a Maryland corporation. On November 30, 1993, Genesis acquired substantially all
the assets of Meridian, Inc., Meridian Healthcare (" MHC") and their affiliated
entities, including all the stock of the Fund's Development General Partner. As
part of the acquisition, MHC, the manager of the Fund's seven nursing centers,
continues to operate the facilities pursuant to management agreements. Since
completion of the Meridian transaction, Genesis operates 156 geriatric care
facilities (75 wholly owned, 3 jointly owned, 34 leased and 44 managed). The
four geographic markets that Genesis principally serves are: New England Region
(Massachusetts/Connecticut/New Hampshire); Mid-Atlantic Region (Greater
Philadelphia/Delaware Valley); Chesapeake Region (Southern Delaware, Eastern
Shore of Maryland; Baltimore, Maryland/Washington D.C./Virginia); and Southern
Region (Central Florida/North Carolina)
The following individuals are the directors and principal officers of
Meridian Healthcare Investments, Inc.:
Michael R. Walker, age 48, is President and a Director of the Development
General Partner and is a co-founder of Genesis and has served as Chairman and
Chief Executive Officer of Genesis since its inception in 1985. In 1981, Mr.
Walker co-founded Health Group Care Centers ("HGCC"). At HGCC, he served as
Chief Financial Officer and, later, as President and Chief Operating Officer.
Prior to its sale in 1985, HGCC operated nursing homes with 4,500 nursing beds
in 12 states. From 1978 to 1981, Mr. Walker was the Vice President and Treasurer
of AID Healthcare Centers, Inc. ("AID"). AID, which owned and operated 20
nursing centers, was co-founded in 1977 by Mr. Walker as the nursing home
division of Hospital Affiliates International ("HAI"). Mr. Walker holds a Master
of Business Administration degree from Temple University and a Bachelor of Arts
in Business Administration from Franklin and Marshall College. Mr. Walker serves
on the Board of Directors of Renal Treatment Centers, Inc. and the Board of
Trustees of Universal Health Realty and Income Trust.
Richard R. Howard, age 48, is a Director of the Development General Partner
and has served as a Director of Genesis since its inception in 1985 and as
President and Chief Operating Officer of Genesis since June, 1986. He joined
Genesis in September, 1985 as Vice President of Development. Mr. Howard's
background in healthcare includes two years as the Chief Financial Officer of
HGCC. Mr. Howard's experience also includes over ten years with Fidelity Bank,
Philadelphia, Pennsylvania and one year with Equibank, Pittsburgh, Pennsylvania.
Mr. Howard is a graduate of the Wharton School, University of Pennsylvania,
where he received a Bachelor of Science degree in Economics in 1971.
George V. Hager, Jr., age 41, is Vice President and Treasurer of the
Development General Partner and is Senior Vice President and Chief Financial
Officer of Genesis. Mr. Hager was previously partner in charge of the healthcare
practice for KPMG Peat Marwick LLP in the Philadelphia office. Mr. Hager began
his career at KPMG Peat Marwick LLP in 1979 and has over ten years of experience
in the healthcare industry. Mr. Hager received a Bachelor of Arts degree in
Economics from Dickinson College in 1978 and a Master of Business Administration
degree from Rutgers Graduate School of Management. He is a certified public
accountant and a member of the AICPA and PICPA.
Administrative General Partner
Brown Healthcare, Inc., the Administrative General Partner, is a Maryland
corporation, and is wholly-owned by Alex. Brown Realty, Inc. The Administrative
General Partner is responsible for administering the business of the Fund,
including providing clerical services, communications, services and reports to
investors, and making all reports and filings to securities regulatory
authorities.
-12-
MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 10. Directors and Executive Officers of Registrant (continued)
Administrative General Partner (continued)
The following individuals are the directors and principal officers of the
Administrative General Partner:
John M. Prugh, age 48, has been a Director and President of the
Administrative General Partner since 1988, and of Alex. Brown Realty, Inc. and
Armata Financial Corp. since 1984. Mr. Prugh graduated from Gettysburg College
in 1970, and was designated a Certified Property Manager by the Institute of
Real Estate Management in 1979. He has worked in property management for H. G.
Smithy Co., in Washington, D.C., and Dreyfuss Bros., Inc. in Bethesda, Maryland.
Since 1977, Mr. Prugh has been involved in managing, administering, developing
and selling real estate investment projects sponsored by Alex. Brown Realty,
Inc. and its subsidiaries.
Peter E. Bancroft, age 44, has been a Director and Vice President of the
Administrative General Partner since 1988 and a Senior Vice President of Alex.
Brown Realty, Inc. and Armata Financial Corp. since 1983. Mr. Bancroft graduated
from Amherst College in 1974, attended the University of Edinburgh, and received
a J.D. degree from the University of Virginia School of Law in 1979. Prior to
joining Alex. Brown Realty, Inc. in 1983, Mr. Bancroft held legal positions with
Venable, Baetjer and Howard and T. Rowe Price Associates, Inc.
Terry F. Hall, age 50, has been the Secretary of the Administrative General
Partner and a Vice President and Secretary of, and Legal Counsel for, Alex.
Brown Realty, Inc. since 1989. Mr. Hall graduated from the University of
Nebraska-Lincoln in 1968, and received a J.D. degree from the University of
Pennsylvania Law School in 1973. Prior to joining Alex. Brown Realty, Inc. in
1986, Mr. Hall was a Partner at the law firm of Venable, Baetjer and Howard from
1981 to 1986 and an associate at the same firm from 1973 to 1981.
Timothy M. Gisriel, age 40, has been the Treasurer of the Administrative
General Partner and of Alex. Brown Realty, Inc. and Armata Financial Corp. since
1990. He was Controller of Alex. Brown Realty, Inc. and Armata Financial Corp.
from 1984 through 1990. Mr. Gisriel graduated from Loyola College in 1978 and
received his Masters of Business Administration degree from the Robert G.
Merrick School of Business, University of Baltimore. Prior to joining Alex.
Brown Realty, Inc. in 1984, Mr. Gisriel was an audit supervisor in the Baltimore
office of Coopers & Lybrand. He is a Maryland Certified Public Accountant.
There is no family relationship among the officers and directors of the
General Partner.
Item 11. Executive Compensation
The officers and directors of the Administrative General Partner and
Development General Partner received no compensation from the Fund.
The General Partners are entitled to receive a share of cash distributions
and a share of profits and losses as described in the Agreement of Limited
Partnership. (See Note 5, "Distributions to Partners and Allocation of Net
Income" in Item 8. Financial Statements, herein.)
For a discussion of compensation and fees to which the General Partners are
entitled, see Item 13. Certain Relationships and Related Transactions, herein.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Fund to own beneficially more than 5% of the
outstanding Units of the Fund.
The General Partners each have a .5% interest in the Fund as General
Partners, but do not hold any Units.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
Item 12. Security Ownership of Certain Beneficial
Owners and Management (continued)
The Assignor Limited Partner, Brown Healthcare Holding Co., Inc., an
affiliate of the Administrative General Partner, owns for its benefit 40 Units.
The Units held by the Assignor Limited Partner have all rights attributable to
such Units under the Limited Partnership Agreement except that these Units are
non-voting.
There are no arrangements, known to the Fund, the operation of which may at
a subsequent date, result in a change of control of the registrant.
Item 13. Certain Relationships and Related Transactions
The General Partners and their affiliates have and are permitted to engage
in transactions with the Fund. For a summarization of fees paid during 1996,
1995 and 1994, and to be paid to the General Partners and their affiliates at
December 31, 1996, see Note 3, "Related Party Transactions" in Item 8. Financial
Statements, herein.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements: see Index to Financial Statements and
Supplementary Data in Item 8 on Page 11.
2. Financial Statement Schedules: see Index to Financial Statements
and Supplementary Data in Item 8 on page 11.
3. Exhibits:
(3, 4) Limited Partnership Agreement on pages 1 through 41 of
Exhibit A to the Fund's Prospectus, and the Fund's
Registration Statement on Form S-1 (File No. 33-19277)
included herein by reference.
(13) Annual Report for 1996.
(b) Reports on Form 8-K: None.
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MERIDIAN HEALTHCARE GROWTH AND INCOME
FUND LIMITED PARTNERSHIP
DATE: 3/19/97 BY: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Healthcare, Inc.
Administrative General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934 as amended,
this report has been signed by the following in the capacities and on the dates
indicated.
DATE: 3/19/97 By: /s/ John M. Prugh
John M. Prugh
President and Director
Brown-Healthcare, Inc.
Administrative General Partner
DATE: 3/19/97 By: /s/ Peter E. Bancroft
Peter E. Bancroft
Vice President and Director
Brown-Healthcare, Inc.
Administrative General Partner
DATE: 3/19/97 By: /s/ Terry F. Hall
Terry F. Hall
Secretary
Brown-Healthcare, Inc.
Administrative General Partner
DATE: 3/19/97 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Brown-Healthcare, Inc.
Administrative General Partner
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MERIDIAN HEALTHCARE GROWTH AND INCOME FUND LIMITED PARTNERSHIP
SIGNATURES (continued)
DATE: 3/24/97 BY: /s/ Michael R. Walker
Michael R. Walker
President and Director
Meridian Healthcare Investments, Inc.
Development General Partner
DATE: 3/24/97 BY: /s/ Richard R. Howard
Richard R. Howard
Director
Meridian Healthcare Investments, Inc.
Development General Partner
DATE: 3/24/97 BY: /s/ George V. Hager, Jr.
George V. Hager, Jr.
Vice President and Treasurer
Meridian Healthcare Investments, Inc.
Development General Partner
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