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US Oncology Inc – ‘10-K/A’ for 12/31/02

On: Wednesday, 4/30/03, at 4:56pm ET · For: 12/31/02 · Accession #: 1193125-3-2837 · File #: 0-26190

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/30/03  US Oncology Inc                   10-K/A     12/31/02    1:40K                                    RR Donnelley/FA

Amendment to Annual Report — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amendment to Form 10-K for Year Ended December 31,    15     69K 
                          2002

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Certain Relationships and Related Transactions Directors and Executive Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 401(k) Plan
1	1st Page - Filing Submission
2	Item 10. Directors and Executive Officers of the Registrant
6	Item 11. Executive Compensation
8	401(k) Plan
10	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
12	Item 13. Certain Relationships and Related Transactions

10-K/A 1st Page of 15 TOC ↑Top Previous Next ↓Bottom Just 1st
 
================================================================================

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-K/A

Amendment No. 1 

(Mark One)                                                                      

[X]  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange   
Act of 1934                                                           

For the fiscal year ended December 31, 2002                           

OR

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities        
Exchange Act of 1934                                                  

Commission file number 0-26190

 US ONCOLOGY, INC.
(Exact name of registrant as specified in its charter)

 ---------------------------

      Delaware                                        84-1213501
(State or other jurisdiction of                       (I.R.S. Employer
  incorporation or organization)                       Identification No.)

16825 Northchase Drive, Suite 1300, Houston, Texas              77060           
(Address of principal executive offices)               (Zip Code) 

Registrant's telephone number, including area code: (832) 601-8766

 Securities registered pursuant to Section 12(b) of the Act:

None

 Securities registered pursuant to Section 12(g) of the Act:

 Common Stock ($.01 par value)
(Title of class)

Series A Preferred Stock Purchase Rights
(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. [X]                                                                  

   Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12-b of the Act). Yes [X] No [_]                                

    The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant as of June 28, 2002 was $623,455,855 (based 
upon the closing sales price of the Common Stock on The Nasdaq Stock Market on  
June 28, 2002 of $8.33 per share). For purposes of this calculation, shares held
by non-affiliates exclude only those shares beneficially owned by executive     
officers, directors and stockholders beneficially owning 10% or more of the     
outstanding Common Stock.                                                       

   There were 90,181,640 shares of the Registrant's Common Stock outstanding
on March 13, 2003. In addition, as of March 13, 2003, the Registrant had agreed 
to deliver approximately 3,262,807 shares of its Common Stock on certain future 
dates for no additional consideration.                                          

 DOCUMENTS INCORPORATED BY REFERENCE

 None.

10-K/A 2nd Page of 15 TOC 1st Previous Next ↓Bottom Just 2nd
  The registrant hereby amends the following items of its Annual Report on
Form 10-K for the year ended December 31, 2002, as set forth on the pages       
attached hereto:                                                                

Item 10. Directors and Executive Officers of the Registrant           
Item 11. Executive Compensation                                       
 Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions               

Item 10. Directors and Executive Officers of the Registrant                     

Our Directors                                                                   

 Our Board of Directors is divided into three classes. Each class serves
three years, with the terms of office of the respective classes expiring in     
successive years. The present term of office for our Class I directors expires  
at our 2003 annual meeting of stockholders, the present term of office for our  
Class II directors expires at our 2004 annual meeting of stockholders, and the  
present term of our Class III directors expires at our 2005 annual meeting of   
stockholders. The following sets forth certain information about each of our    
directors.                                                                      

                                                        [Enlarge/Download Table]

Name of Director          Age                   Principal Occupation                 Director Since
----------------         -----                  --------------------                 --------------
                                                                                                   
Russell L. Carson         59    General Partner of Welsh, Carson, Anderson & Stowe,       1992     
(Class III Director)            an investment partnership.                                         

J. Taylor Crandall        49    Managing Partner, Oak Hill Capital Management,            1999     
(Class I Director)              Inc., an investment company.                                       

James E. Dalton           60    President, Edinburgh Associates, Inc., a consulting       1998     
(Class I Director)              firm.                                                              

Lloyd K. Everson, M.D.    59    Director, Vice Chairman of the Board of Directors         2001     
(Class II Director)             and former President of US Oncology, Inc.                          

Stephen E. Jones, M.D.    61    Physician, Texas Oncology, P.A., an oncology              1999     
(Class II Director)             practice with locations throughout Texas.                          

Richard B. Mayor          69    Of Counsel, Andrews & Kurth L.L.P., a law firm.           1993     
(Class II Director)                                                                                

Robert A. Ortenzio        45    President and Chief Executive Officer, Select             1992     
(Class II Director)             Medical Corporation                                                

Boone Powell, Jr.         66    Retired President and Chief Executive Officer of          1999     
(Class III Director)            Baylor Health Care System.                                         

R. Dale Ross              56    Chairman of the Board of Directors and Chief              1992     
(Class III Director)            Executive Officer of US Oncology.                                  

Burton S. Schwartz, M.D.  61    Physician, Minnesota Oncology Hematology, P.A., an        1999     
(Class I Director)              oncology practice in Minneapolis, Minnesota.                       

Russell L. Carson is a director of Select Medical Corporation, a health care    
company. Mr. Carson is also a director of various privately held health care    
companies.                                                                      

J. Taylor Crandall has been Managing Partner of Oak Hill Capital Management,    
Inc. since January 1999. He is currently Vice President and Chief Operating     
Officer of Keystone, Inc., an investment company, where he has been a Managing  
Partner since 1986 and was formerly Chief Financial Officer. Mr. Crandall is a  
director of American Skiing Company, Interstate Hotels Corporation, Meristar    
Hospitality Corporation and Broadwing, Inc., a telecommunications company. Mr.  

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Crandall also services as a director of various privately held companies. Mr.   
Crandall was formerly a director of Physician Reliance Network, Inc.            

James E. Dalton was President and Chief Executive Officer and a director of     
Quorum Health Group, Inc., a health care company from 1990 until 2001, when     
Quorum was acquired by Triad Hospitals. Mr. Dalton now serves on the board of   
directors of AmSouth Bank, Select Medical Corporation and Genesis Health        
Ventures, Inc. He also serves on the Board of Trustees of Universal Health      
Realty Income Trust and American Hospital Association. Mr. Dalton is a Fellow of
the American College of Healthcare Executives and is a past chairman of the     
Federation of American Hospitals.                                               

Lloyd K. Everson was President of the Company from November 1993 until March    
2001. He received his medical degree from Harvard Medical School and his        
oncology training at Memorial Sloan Kettering and at the National Cancer        
Institute. He is board certified in internal medicine and medical oncology. Dr. 
Everson has published widely in the field of oncology and is a member of        
numerous professional associations. He also has served as President of the      
Association of Community Cancer Centers and as Associate Chairman for Community 
Programs for the Eastern Cooperative Oncology Group. Dr. Everson resigned as    
President of the Company in March 2001. In addition, in March 2001, Dr. Everson 
was appointed as a director of the Company and Vice Chairman of the Board of    
Directors. Dr. Everson previously served as a director of the Company from 1993 
until 1999.                                                                     

Stephen E. Jones, M.D. received his medical degree from Case Western Reserve    
School of Medicine and post-doctoral training and education at Stanford         
University. Dr. Jones is a board certified medical oncologist and internist and 
a member of the American Society of Clinical Oncology and the American Society  
of Hematology. Dr. Jones' practice, Texas Oncology, P.A., is managed by the     
Company.                                                                        

Richard B. Mayor was a partner in the Houston law firm Mayor, Day, Caldwell &   
Keeton, L.L.P. since its formation in February 1982 until December 1998 and of  
counsel to that firm until its merger with Andrews & Kurth L.L.P. in October    
2001. Andrews & Kurth L.L.P. serves as outside counsel to us.                   

Robert A. Ortenzio has been Chief Executive Officer of Select Medical           
Corporation since September 1999 and was President and Chief Operating Officer  
of Select Medical Corporation since February 1997. He is also a director of     
Select Medical Corporation. Prior to that time, Mr. Ortenzio was a co-founder   
and president of Continental Medical Systems, Inc., a provider of comprehensive 
medical rehabilitation programs and services, and a director of Horizon/CMS     
Healthcare Corporation, and served in various capacities at Continental Medical 
Systems, Inc. since February 1986.                                              

Boone Powell, Jr. was President and Chief Executive Officer of Baylor Health    
Care System from 1980 until 2000, and Chairman from 2000 until 2001. Mr. Powell 
serves as an active member of Voluntary Hospitals of America. He is a director  
of Abbott Laboratories, United Surgical Partners International and Comerica Bank
- Texas and is a fellow of the American College of Health Care Executives. Mr.  
Powell was previously a director of Physician Reliance Network, Inc.            

R. Dale Ross has been Chairman of the Board of Directors and Chief Executive    
Officer of US Oncology since December 1992.                                     

Burton S. Schwartz, M.D. received his medical degree from Meharry Medical       
College in 1968 and is a board certified medical oncologist. Dr. Schwartz's     
oncology group, Minnesota Oncology Hematology, P.A., has been managed by us     
since February 1995. He is the immediate past president of that group. Dr.      
Schwartz was formerly a director of Physician Reliance Network, Inc.            

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Our Executive Officers                                                          

The following is a list of our executive officers.                              

                                                        [Enlarge/Download Table]

Name of Executive Officer     Age                  Positions and Offices            Executive Officer Since
-------------------------    -----                 ---------------------            -----------------------
                                                                                                           
R. Dale Ross                  56    Chairman of the Board of Directors and Chief              1992         
                                    Executive Officer                                                      

Joseph S. Bailes, M.D.        46    Executive Vice President for Clinical Services            1999         

Bruce D. Broussard            40    Chief Financial Officer                                   2000         

Atul Dhir, M.B.B.S., D.Phil   40    President, Cancer Information and Research                1999         

George D. Morgan,             50    Chief Operating Officer                                   2000         

Leo E. Sands                  55    Executive Vice President and Secretary                    1992         

Phillip H. Watts              37    Vice President and General Counsel                        1998         

R. Dale Ross has been Chairman of the Board and Chief Executive Officer since   
December 1992. From December 1982 until April 1990, Mr. Ross was employed by    
HMSS, Inc., a home infusion therapy company. Mr. Ross founded HMSS, Inc. and    
served as its President and Chief Executive Officer and as a director.          

Joseph S. Bailes, M.D. joined US Oncology in June 1999. Prior to that, he was   
Executive Vice President of Physician Reliance Network, Inc. from 1993 to 1999. 
Dr. Bailes was formerly a physician at Texas Oncology, P.A., our largest        
affiliated physician group. He is a past President of The American Society of   
Clinical Oncology and currently serves as a director of ILEX Oncology, Inc., a  
publicly-traded oncology pharmaceutical development company.                    

Bruce D. Broussard joined US Oncology in August 2000 with primary responsibility
for financial and accounting activities, including financial reporting, treasury
and taxation. Mr. Broussard was Chief Executive Officer of HarborDental, a      
dental development company specializing in free-standing upscale dedicated      
dental buildings, from December 1997 until July 2000. From January 1996 to      
October 1997, he was Executive Vice President and Chief Financial Officer of    
Regency Health Services, Inc., a national chain of nursing homes and provider of
long-term health services. From 1993 to 1996, he was the Chief Financial Officer
and a director of Sun Healthcare Group, a health care provider. Mr. Broussard is
a Certified Public Accountant. He currently serves as a director and Audit      
Committee member at U.S. Physical Therapy, Inc., a publicly-traded provider of  
outpatient physical and occupational therapy.                                   

Atul Dhir, M.B; B.S., D.Phil joined US Oncology in November 1999. As President  
of Cancer Information and Research Group, he is responsible for our clinical    
trial activities, cancer information services and transplant initiatives. Prior 
to joining US Oncology, Dr. Dhir was Vice President at Monsanto Corporation from
1996 to 1998; President of Health Strategies Partners, a company he founded that
provided consulting services to hospitals and physicians from 1994 to 1996; and 
a health care consultant with McKinsey & Company from 1989 until 1993. Dr. Dhir 
holds a D. Phil. in molecular biology from Oxford University, where he was a    
Rhodes Scholar.                                                                 

George D. Morgan joined US Oncology in October 2000 and has over twenty years   
experience in operational and financial management in the health care industry. 
At US Oncology, he is responsible for the operational management of our         
affiliated practices. Mr. Morgan served as Executive Vice President and Chief   
Financial Officer of Mariner Post-Acute Network from January 1999 until         
September 2000. On January 18, 2000 Mariner Post-Acute Network and substantially
all of its subsidiaries filed voluntary petitions in the United States          
Bankruptcy Court for the District of Delaware under Chapter 11, Title 11 of the 
United States Code. From September 1994 to January 1999, Mr. Morgan served as a 
senior operating and senior corporate officer with Columbia/HCA Healthcare      
Corporation. His positions of responsibility included Chief Financial Officer,  
then Chief Operating Officer of the Western Group from September 1994 through   
April 1996; President of the Ambulatory Surgery Division from April 1996 through
June 1998; and Senior Vice President--Managed Care from July 1998 until January 
1999.                                                                           

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Leo E. Sands joined US Oncology in November 1992. He is primarily responsible   
for our governmental relations and information technology activities. Mr. Sands 
is a member of the board of the National Patient Advocacy Foundation.           

Phillip H. Watts joined US Oncology in January 1998 as its General Counsel. He  
has primary responsibility for overseeing our legal operations. From September  
1991 until December 1997, Mr. Watts was an attorney at Mayor, Day, Caldwell &   
Keeton, L.L.P., a law firm in Houston, Texas, which has since merged into       
Andrews & Kurth L.L.P.                                                          

Section 16(a) Beneficial Ownership Reporting Compliance                         

Under U.S. securities laws, our directors, executive officers and any 
persons holding more than ten percent (10%) of our common stock are required to 
report their initial ownership of, and change in ownership of, our common stock 
to the Securities and Exchange Commission (SEC). Specific due dates have been   
established for the filing of these reports.                                    

    Based solely on a review of Forms 3 and 4 and amendments thereto furnished
to us during 2002 and Forms 5 and amendments thereto with respect to 2002, we   
believe that during 2002, our officers, directors and 10% shareholders complied 
with requirements for reporting ownership and ownership changes in US Oncology  
common stock pursuant to Section 16(a) of the Securities Exchange Act of 1934.  

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Item 11. Executive Compensation                                                 

Compensation of Executive Officers                                            

The following tables set forth (i) the remuneration paid by us for the
three fiscal years ended December 31, 2002 to the Chief Executive Officer and   
the four most highly compensated executive officers other than the Chief        
Executive Officer, (ii) the number of shares of our common stock that are       
subject to options granted to such individuals during the last fiscal year and  
the hypothetical value thereof assuming specified annual rates of common stock  
price appreciation and (iii) the amount realized upon the exercise of stock     
options during the last fiscal year and the value at the end of the last fiscal 
year of all stock options held by such individuals.                             

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                                     Long Term   
                                                   Annual Compensation              Compensation 
                                       ------------------------------------------  --------------
                                                                                    Securities   
                               Fiscal                                               Underlying   
Name and Principal Position     Year     Salary            Bonus         Other        Options    
---------------------------    ------  ----------        ----------    ----------  --------------
                                                                                                 
R. Dale Ross                    2002   $  701,217        $  400,680         $0        600,000    
     Chairman of the Board,     2001   $  672,150        $  184,501         $0        125,000    
     Chief Executive Officer,   2000   $  618,694        $  172,939         $0      1,572,754    
     and Director                                                                                

Joseph S. Bailes, M.D.          2002   $  330,762        $  127,575         $0        300,000    
     Executive Vice President   2001   $  318,943        $   61,626         $0         75,000    
                                2000   $  308,126        $   34,891         $0         50,000    

Bruce D. Broussard              2002   $  346,512        $  132,000         $0        365,000    
     Chief Financial Officer    2001   $  335,046        $   49,154         $0        100,000    
                                2000   $  123,921        $        0    $86,581(1)     200,000    

George D. Morgan                2002   $  353,347        $ 127,000          $0        365,000    
     Chief Operating Officer    2001   $  317,505        $       0          $0        100,000    
                                2000   $   62,501        $ 100,000     $82,758(1)     200,000    

  Leo E. Sands                  2002   $  390,247        $ 140,700         $0         365,000    
     Executive Vice President   2001   $  343,913        $  67,625         $0         100,000    
     and Secretary              2000   $  344,941        $  49,640         $0          50,000    

------------------------                                                        
(1) Relocation expenses                                                         

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 OPTION GRANTS DURING YEAR ENDED DECEMBER 31, 2002

                                                        [Enlarge/Download Table]

                          Individual Grants                                                                         
                     -------------------------                                                                      
                                    % of Total                                                  Potential Value     
                       Number of      Options                                               at Assumed Annual Rates 
                      Securities    Granted to                                             Stock Price Appreciation 
                      Underlying     Employees  Exercise   Market Value                         for Option Term     
                       Options      in Fiscal   Price Per    Per Share     Expiration    ---------------------------
                       Granted         Year       Share    On Grant Date      Date             5%           10%     
                     -----------    ----------  ---------  -------------   ----------    ------------    -----------
                                                                                                                    
R. Dale Ross            600,000        13.9%       $6.99       $6.99      July 26, 2012    $2,637,584    $6,684,156 

Joseph S. Bailes, M.D.  300,000        7.0%        $6.99       $6.99      July 26, 2012    $1,318,792    $3,342,078 

Bruce D. Broussard      365,000        8.5%        $6.99       $6.99      July 26, 2012    $1,604,530    $4,066,195 

George D. Morgan        365,000        8.5%        $6.99       $6.99      July 26, 2012    $1,604,530    $4,066,195 

Leo E. Sands            365,000        8.5%        $6.99       $6.99      July 26, 2012    $1,604,530    $4,066,195 

2002 OPTION EXERCISES AND DECEMBER 31, 2002 OPTION VALUE TABLE

                                                        [Enlarge/Download Table]

                                                        Number of Securities                                       
                                                       Underlying Unexercised     Value of Unexercised In-the-Money
                                                     Options at Fiscal Year End     Options at Fiscal Year End(1)  
                       Shares Acquired      Value   ----------------------------  ---------------------------------
                         On Exercise      Realized  Exercisable    Unexercisable    Exercisable      Unexercisable 
                       ----------------  ---------  -----------    -------------  ---------------  ----------------
                                                                                                                   
R. Dale Ross                  0          $   0       2,397,754        900,000        $7,129,749       $1,455,880   

Joseph S. Bailes, M.D.        0          $   0         607,007        463,333        $1,093,935       $  799,565   

Bruce D. Broussard            0          $   0         106,667        558,333        $  386,835       $1,236,865   

George D. Morgan              0          $   0         106,667        558,333        $  354,835       $1,188,865   

Leo E. Sands                  0          $   0         460,667        558,333        $  725,495       $  944,205   

(1)  Based upon a closing price of the Company's common stock on December 31,   
2002, as reported by The Nasdaq Stock Market, of $8.67 per share.     

Director Compensation                                                           

During 2002, each non-employee member of the Board was paid $6,000 per
quarter and $1,500 for each board meeting attended and was reimbursed for his   
reasonable expenses in connection with attending board and committee meetings.  
During 2002, each Audit Committee member received $1,500 for each Audit         
Committee meeting he attended. Non-employee directors are also eligible to      
participate in US Oncology's 1993 Non-Employee Director Stock Option Plan. Under
that plan, in 2002 each director other than R. Dale Ross and Lloyd K. Everson,  
M.D. was automatically granted an option to purchase 5,000 shares of US Oncology
common stock. In addition, each director other than Mr. Ross and Dr. Everson was
automatically granted an option to purchase 1,000 shares of US Oncology common  
stock for each committee on which such director served.                         

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401(k) Plan                                                                     

   Effective January 1, 1994, US Oncology adopted a 401(k) plan (the "401(k)
Plan") covering substantially all employees who have completed at least 1,000   
hours of service. We administer the 401(k) Plan. The plan permits covered       
employees to contribute up to 15% of their annual compensation up to the maximum
legally allowable contribution per year, as adjusted for inflation, through     
salary reduction on a pre-tax basis in accordance with Section 401(k) of the    
Internal Revenue Code, as amended. We may make contributions to the 401(k) Plan 
but are not required to do so. During 2001, we elected to match 50% of employee 
contributions in cash, up to a maximum of 3% of an employee's salary and subject
to salary ceiling rules imposed by the Internal Revenue Service.                

Limitation of Liability; Indemnification of Officers and Directors              

    Our certificate of incorporation provides that none of our directors shall
be personally liable to us or our stockholders for monetary damages for breach  
of fiduciary duty as a director, except for liability (i) for any breach of the 
director's duty of loyalty to us or our stockholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a knowing violation 
of law, (iii) in respect of unlawful dividend payments or stock redemptions or  
repurchases as provided in Section 174 of the Delaware General Corporation Law  
(the law of the Company's state of incorporation) or (iv) for any transaction   
from which the director derived an improper personal benefit. The effect of     
these provisions is to eliminate our rights and the rights of our stockholders  
(through stockholders' derivative suits on behalf of US Oncology) to recover    
monetary damages against a director for breach of fiduciary duty as a director  
(including breaches resulting from grossly negligent behavior), except in the   
situations described above. The Securities and Exchange Commission has taken the
position that the provision will have no effect on claims arising under federal 
securities laws.                                                                

     Our bylaws provide that we will indemnify our directors and officers to the
fullest extent permissible under Delaware law. These indemnification provisions 
require us to indemnify such persons against certain liabilities and expenses to
which they may become subject by reason of their service as a director or       
officer of US Oncology or any of its affiliated enterprises. The provisions also
set forth certain procedures, including the advancement of expenses, that apply 
in the event of a claim for indemnification. The Company maintains director and 
officer liability insurance.                                                    

Employment Contracts and Change in Control Agreements                           

We have entered into employment agreements with each of the executive 
officers named in the summary compensation table above. Generally, the          
employment agreements have three-year terms, establish the executive's base     
salary and contain a noncompetition agreement for a period of one year following
termination. We can terminate each employment agreement at any time for "cause,"
as defined in the employment agreement. The employee can terminate upon 30 days 
written notice. Each agreement can also be terminated if the employee is        
disabled or unable to perform his assigned duties for a continuous period of six
months. In the event we terminate the employee without cause or the employee    
terminates for cause, we will continue to pay the employee a salary for a period
of the greater of the remaining term of employment or one year following such   
termination. Upon a "change in control" the term of employment would be extended
for an additional three years from the date of the change in control. The       
employee may terminate without cause, between three and six months after a      
"change in control", and receive one year's severance. A "change of control"    
occurs for purposes of the employment agreements if (i) the transfer of         
beneficial ownership of a majority of the outstanding US Oncology shares to any 
person, entity, or group (as defined in Section 13(d)(3)of the Securities       
Exchange Act of 1934, as amended); (ii) our stockholders prior to any merger,   
consolidation or other transaction do not continue to own at least fifty percent
(50%) of the surviving entity following such merger, consolidation or other     
transaction; (iii) we sell all or substantially all of our assets to another    
entity that is not our subsidiary; (iv) we are materially or completely         
liquidated; or (v) during any consecutive two-year period, individuals who      
constituted our Board of Directors (together with any new directors whose       
election by the Board of Directors or whose nomination for election by our      
stockholders was approved by a vote of at least three quarters of the directors 
still in office who were either directors at the beginning of such period or    
whose election or nomination for election was previously so approved) cease for 
any reason to constitute a majority of the Board of Directors then in office. A 
"change of control" shall not be deemed to have occurred in the event of a      
tender offer, leveraged buyout, leveraged recapitalization or similar           
transaction in which the then Chief Executive Officer participates directly or  
indirectly as an investor or participant in such transaction.                   

Severance Arrangement                                                           

Effective March 2001, Dr. Lloyd Everson resigned his position as our  
President. In connection with the resignation, Dr. Everson became a part-time   
employee and will continue to provide leadership over physician communications  
and public                                                                      

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policy initiatives. He was also appointed as a director and as Vice Chairman of 
the Board of Directors. In connection with the resignation, we agreed to pay Dr.
Everson the severance benefits available under his employment agreement in      
effect at the time of resignation, which entitled him to continue to receive his
base salary in effect on his date of resignation through January 1, 2003.       

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Item 12. Security Ownership of Certain Beneficial Owners and Management and     
Related Stockholder Matters                                                     

    The following table shows how much US Oncology common stock is owned as of
April 25, 2003 by each director, each executive officer named in the Summary    
Compensation Table, all directors and executive officers as a group, and each   
holder of 5% or more of US Oncology's common stock.                             

                                                        [Enlarge/Download Table]


                                           Number of Shares Owned                                                 
                                         (including shares that may   Number of Shares that May be  Percentage of 
                                          be acquired within 60 days    Acquired Within 60 Days       Outstanding 
                    Name                  through option exercises)     Through Option Exercises     Common Stock 
                    ----                 ----------------------------  ------------------------    ---------------
                                                                                                                  
R. Dale Ross                                    2,637,754                  2,637,754                      2.8%    
Lloyd K. Everson, M.D.                          1,027,833                    964,531                      1.1%    
Bruce D. Broussard                                189,667                    189,667                         *    
Joseph S. Bailes, M.D.                            787,000                    722,007(1)                      *    
George D. Morgan                                  189,667                    189,667                         *    
Leo E. Sands                                      603,667                    603,667                         *    
Russell L. Carson                              13,068,877(2)                  50,000                     14.5%    
J. Taylor Crandall                              3,750,288(3)                  65,938                      4.2%    
James E. Dalton, Jr.                               47,848                     47,000                         *    
Stephen E. Jones, M.D.                             42,577                     39,000                         *    
Richard B. Mayor                                  176,454                     43,000                         *    
Robert A. Ortenzio                                 78,203                     45,000                         *    
Boone Powell, Jr.                                 124,729                     71,930                         *    
Burton S. Schwartz, M.D.                           53,719                     30,000                         *    
All directors and executive officers                                                                              
   as a group (16 persons)                     23,277,617(2)(3)            6,198,495(1)                  24.1%    
Welsh, Carson, Anderson & Stowe IX, L.P.       12,447,744                          0                     13.8%    
   320 Park Avenue, Suite 2500                                                                                    
   New York, NY  10022                                                                                            
Dimensional Fund Advisors                       6,001,561                          0                      6.6%    
   1299 Ocean Avenue, 11th Floor                                                                                  
   Santa Monica, CA  90491                                                                                        

------------------                                                              
*    Less than one percent                                                      
1    Includes 10,000 options granted by Texas Oncology, P.A. to Dr. Bailes.     
2    Includes 18,000 shares held by family trusts. Mr. Carson disclaims         
 beneficial ownership of such shares. Includes 12,447,744 shares held by
Welsh, Carson, Anderson & Stowe IX and WCAS Management Corp.          
3    All shares (other than options) are beneficially owned by FW Physicians    
   Investors, L.P., an investment limited partnership ("FW Physicians"). Mr.
   Crandall serves as President of Group 31, Inc., the general partner of FW
Physicians.                                                           

10

10-K/A 11th Page of 15 TOC 1st Previous Next ↓Bottom Just 11th
Securities authorized for issuance under equity compensation plans              

    The following table sets forth, as of December 31, 2002, (i) the number of
our shares of common stock that are issuable under options granted pursuant to  
our various equity compensation plans, (ii) the weighted average exercise price 
of those options and (iii) the number of shares of our common stock that remain 
available for grants under those plans.                                         

                                                        [Enlarge/Download Table]

                                                                                                             (c)          
                                                                                                     Number of Securities 
                                                                                                      Remaining Available 
                                                                 (a)                    (b)           for Future Issuance 
                                                         Number of Securities    Weighted-Average        under Equity     
                                                          to be Issued Upon     Exercise Price of     Compensation Plans  
                                                             Exercise of            Outstanding     (excluding securities 
                                                         Outstanding Options,   Options, Warrants        reflected in     
                     Plan Category                       Warrants and Rights        and Rights            column (a))     
                 ----------------------                  --------------------  -------------------  ----------------------
                                                                                                                          
Equity Compensation Plans approved by security                                                                            
holders:                                                                                                                  
      .  2002 Key Executive Performance Stock Option           3,850,000              $ 7.01                     1,150,000
         Plan                                                                                                             
      .  1993 Key Employee Stock Option Plan                   8,501,942              $ 7.55                     1,098,509
      .  1993 Affiliate Stock Option Plan                      1,743,450              $ 8.76                     1,095,600
      .  1993 Non-Employee Director Stock Option Plan            350,000              $ 8.63                       186,000
      .  1993 Everson Stock Option Plan                          220,092              $ 4.77                             0
      .  Physician Reliance Network Stock Option Plan                                                                     
         for outside directors                                    64,868              $11.79                             0
      .  Physician Reliance Network Stock Option Plan            533,285              $10.88                             0
Equity Compensation Plan not approved by security                                                                         
holders:                                                                                                                  
      .  2000 Chief Executive Officer Stock Option Plan        1,000,000              $ 4.96                             0
                                                              ----------                                         ---------
                                     Total                    16,263,637              $ 7.50                     3,530,109
                                                              ==========                                         =========

    The 2000 Chief Executive Officer Stock Option Plan provided for a one-time
grant of an option to purchase 1,000,000 shares of our common stock issued to   
our chief executive officer, R. Dale Ross. The option was granted on December   
14, 2000. The options vested in their entirety six months after the grant date  
and remain exercisable until the tenth anniversary of the grant date. The 2000  
Chief Executive Officer Stock Option Plan was approved by our board of          
directors, but was not submitted for stockholder approval.                      

11

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Item 13. Certain Relationships and Related Transactions                         

     We do not believe that any of the transactions described below were made on
terms less favorable to us than those that would have been available from       
unaffiliated parties. We do not anticipate entering into transactions with      
affiliated parties in the future on terms less favorable than those that would  
be available from unaffiliated parties.                                         

 Dr. Rogoff, a former director of US Oncology, is a practicing physician
with Arizona Oncology Associates, P.C., a physician group managed by us since   
January 1995. During 2002, Arizona Oncology Associates, P.C. paid us management 
fees of $5.5 million, excluding reimbursement for direct expenses of that       
physician group. Dr. Rogoff resigned from the Board in February 2002.           

Dr. Jones, who is one of our directors, and Dr. Bailes, who is our    
Executive Vice President, are employed by Texas Oncology, P.A. We and Texas     
Oncology, P.A. are parties to a service agreement pursuant to which we provide  
Texas Oncology, P.A. with comprehensive management and development services.    
During 2002, Texas Oncology, P.A. paid us aggregate fees of approximately $389  
million pursuant to the service agreement. That fee amount is equal to 33.5% of 
the earnings before interest and taxes of Texas Oncology, P.A., subject to      
certain adjustments, plus direct expenses of Texas Oncology, P.A. Texas         
Oncology, P.A. beneficially owns approximately 1.5% of our outstanding common   
stock. At December 31, 2002, Texas Oncology, P.A. was indebted to us in the     
aggregate amount of approximately $6.3 million. This indebtedness was incurred  
when we advanced working capital to Texas Oncology, P.A. for various uses,      
including the development of new markets and physician salaries and bonuses.    
This indebtedness bears interest at a rate negotiated by us and Texas Oncology, 
P.A. that approximates the published prime lending rate (4.25% at December 31,  
2002).                                                                          

   Mr. Powell, one of our directors, is the former Chairman of Baylor Health
Care System, of which Baylor University Medical Center ("BUMC") is a part. We   
lease facilities from affiliates of BUMC. Additionally, affiliates of BUMC      
provide us various services, including telecommunications and maintenance       
services. In 2002, payments by us to BUMC totaled an aggregate of approximately 
$3.0 million for these services. In addition, during the second quarter of 2002,
we terminated a service agreement as it related to certain radiology sites and  
sold the related assets to BUMC, including the right to future revenues         
attributable to radiology technical fee revenue at those sites, in exchange for 
BUMC delivering to us 1.1 million shares of our common stock. In connection with
that sale, we also made a cash payment to BUMC of $0.6 million to reflect       
purchase price adjustments during the third quarter. The transaction resulted in
a $3.9 million gain to us, based upon the market price of our common stock as of
the date of the transaction.                                                    

  Dr. Schwartz, one of our directors, is president and medical director of
Minnesota Oncology Hematology, P.A. ("Minnesota Oncology"). We and Minnesota    
Oncology entered into a service agreement effective July 1, 1996. During 2002,  
Minnesota Oncology paid us an aggregate of approximately $5.7 million, excluding
reimbursement for direct expenses of Minnesota Oncology, pursuant to its service
agreement.                                                                      

12

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this Amended report to be  
signed on its behalf by the undersigned, thereunto duly authorized 29th day of  
April, 2003.                                                                    

               US ONCOLOGY, INC.

                        By: /s/ Bruce D. Broussard
                                           -------------------------------------
                        Bruce D. Broussard
                                           Chief Financial Officer and Treasurer

13

10-K/A 14th Page of 15 TOC 1st Previous Next ↓Bottom Just 14th
 CERTIFICATION

I, R. Dale Ross, Chief Executive Officer of US Oncology, Inc., certify that:    

        1. I have reviewed this annual report on Form 10-K/A (Amendment No. 1)
of US Oncology, Inc.;                                                           

   2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary  
to make the statements made, in light of the circumstances under which such     
statements were made, not misleading with respect to the period covered by this 
annual report;                                                                  

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material      
respects the financial condition, results of operations and cash flows of the   
registrant as of, and for, the periods presented in this annual report;         

        4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in  
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:           

                 a) designed such disclosure controls and procedures to ensure
     that material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
being prepared;                                               

                 b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and       

                c) presented in this annual report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                         

    5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit 
committee of registrant's board of directors (or persons performing the         
equivalent function):                                                           

                 a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
  to record, process, summarize and report financial data and have
     identified for the registrant's auditors any material weaknesses in
internal controls; and                                        

        b) any fraud, whether or not material, that involves
  management or other employees who have a significant role in the
registrant's internal controls; and                           

      6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal    
controls or in other factors that could significantly affect internal controls  
subsequent to the date of our most recent evaluation, including any corrective  
actions with regard to significant deficiencies and material weaknesses.        

Date: April 29, 2003                                                            

  /s/ R. Dale Ross
                                 -----------------------------------------------
R. Dale Ross  
                              Chief Executive Officer of US Oncology, Inc.

14

10-K/A Last Page of 15 TOC 1st Previous Next ↓Bottom Just 15th
 CERTIFICATION

I, Bruce D. Broussard, Chief Financial Officer of US Oncology, Inc., certify    
that:                                                                           

       1. I have reviewed this Annual Report on Form 10-K/A (Amendment No.1)
of US Oncology, Inc.;                                                           

   2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary  
to make the statements made, in light of the circumstances under which such     
statements were made, not misleading with respect to the period covered by this 
annual report;                                                                  

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material      
respects the financial condition, results of operations and cash flows of the   
registrant as of, and for, the periods presented in this annual report;         

        4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in  
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:           

                 a) designed such disclosure controls and procedures to ensure
     that material information relating to the registrant, including its
       consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
being prepared;                                               

                 b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and       

                c) presented in this annual report our conclusions about the
      effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                         

    5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit 
committee of registrant's board of directors (or persons performing the         
equivalent function):                                                           

                 a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
  to record, process, summarize and report financial data and have
     identified for the registrant's auditors any material weaknesses in
internal controls; and                                        

        b) any fraud, whether or not material, that involves
  management or other employees who have a significant role in the
registrant's internal controls; and                           

      6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in internal    
controls or in other factors that could significantly affect internal controls  
subsequent to the date of our most recent evaluation, including any corrective  
actions with regard to significant deficiencies and material weaknesses.        

Date: April 29, 2003                                                            

        /s/ Bruce D. Broussard
                                 -----------------------------------------------
    Bruce D. Broussard
                              Chief Financial Officer of US Oncology, Inc.

15

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-K/A’ Filing	Date	First	Last	Other Filings

	7/26/12	7
Filed on:	4/30/03
	4/29/03	14	15
	4/25/03	10
	3/13/03	1
	1/1/03	9
For Period End:	12/31/02	1	12	10-K
	6/28/02	1
	12/14/00	11
	1/18/00	4
	7/1/96	12
	1/1/94	8
				List all Filings

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US Oncology Inc – ‘10-K/A’ for 12/31/02

On: Wednesday, 4/30/03, at 4:56pm ET · For: 12/31/02 · Accession #: 1193125-3-2837 · File #: 0-26190

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Dates Referenced Herein and Documents Incorporated by Reference

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