SCHEDULE 14A
                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                     Exchange Act of 1934 (Amendment No. __)

Filed by Registrant [X]
Filed by a Party other than the Registrant [  ]

Check the appropriate box:
[   ]    Preliminary Proxy Statement
[   ]  Confidential, for Use of the Commission Only (as permitted by
       Rule 14a-6(e)(2))
[ X ]  Definitive Proxy Statement
[   ]  Definitive Additional Materials
[   ]  Soliciting Material Pursuant to Rule 14a-12

                        Omega Healthcare Investors, Inc.
                  (Name of Registrant as Specified in Charter)
--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

(1)  Title of each class of securities to which transaction applies:____________

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(3)  Per unit price or other underlying value of transaction  computed  pursuant
     to Exchange  Act Rule 0-11 (set forth the amount on which the filing fee is
     calculated and state how it was determined):_______________________________

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[ ]  Fee paid previously with preliminary materials.

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form of Schedule and the date of its filing.

(1)  Amount previously paid:____________________________________________________

(2)  Form, Schedule or Registration Statement No.:______________________________

(3)  Filing party:______________________________________________________________

(4)  Date filed:________________________________________________________________




                        OMEGA HEALTHCARE INVESTORS, INC.
                          9690 DEERECO ROAD, SUITE 100
                            TIMONIUM, MARYLAND 21093
                                 (410) 427-1700
                                 ---------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 3, 2004
                                ----------------

To our Stockholders:

     The Annual Meeting of  Stockholders  of Omega  Healthcare  Investors,  Inc.
("Omega")  will  be  held  at the  Holiday  Inn  Select,  Baltimore-North,  2004
Greenspring Drive, Timonium,  Maryland on Thursday,  June 3, 2004, at 10:00 A.M.
EST, for the following purposes:

     1.   To elect two members to our Board of Directors;

     2.   To  consider  and vote  upon a  proposal  to  amend  our  Articles  of
          Incorporation  to  increase  the  number of  authorized  shares of our
          preferred stock from 10,000,000 to 20,000,000 shares;

     3.   To approve the Omega Healthcare  Investors,  Inc. 2004 Stock Incentive
          Plan; and

     4.   To  transact  such other  business  as may  properly  come  before the
          meeting or any adjournment thereof.

     The nominees for election as directors are Edward  Lowenthal and Stephen D.
Plavin, each of whom presently serves as a director of Omega.

     Our Board of Directors has fixed the close of business on April 26, 2004 as
the record date for the determination of stockholders who are entitled to notice
of and to vote at the meeting or any adjournments thereof.

     We encourage  you to attend the meeting.  Whether you are able to attend or
not,  we urge you to  indicate  your  vote on the  enclosed  proxy  card FOR the
election of directors.  Please sign,  date and return the proxy card promptly in
the enclosed envelope. If you attend the meeting, you may vote in person even if
you previously have mailed a proxy card.

                                        By order of Omega's Board of Directors,

                                        /s/  C. TAYLOR PICKETT

                                        C. Taylor Pickett
                                        Chief Executive Officer

April 27, 2004
Timonium, Maryland



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

     YOUR VOTE IS IMPORTANT.  PLEASE SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
IN THE ENCLOSED  ENVELOPE  WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.  IT IS
IMPORTANT  THAT YOU RETURN THE PROXY  CARD  PROMPTLY  WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, SO THAT YOUR SHARES ARE PROPERLY VOTED.

     If you hold  shares  through a broker,  bank or other  nominee  (in "street
name"),  you may also have the ability to vote by  telephone  or the Internet in
accordance with instructions that will be included with this mailing.  In either
event, we urge you to vote promptly.

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



                        OMEGA HEALTHCARE INVESTORS, INC.

                          9690 DEERECO ROAD, SUITE 100
                            TIMONIUM, MARYLAND 21093
                                 (410) 427-1700

                                 PROXY STATEMENT
                                       FOR
                         ANNUAL MEETING OF STOCKHOLDERS
                                  JUNE 3, 2004

     The  accompanying  proxy is solicited by our Board of Directors to be voted
at the Annual  Meeting of  Stockholders  to be held at the  Holiday  Inn Select,
Baltimore-North, 2004 Greenspring Drive, Timonium, Maryland at 10:00 A.M. EST on
Thursday,  June 3, 2004, and any adjournments of the meeting.  It is anticipated
that this  proxy  material  will be mailed on or about  April 30,  2004,  to our
common stockholders of record on April 26, 2004.

     A copy of our Annual Report for the year ended December 31, 2003, including
financial statements, is enclosed.

     A stockholder  giving a proxy has the power to revoke it at any time before
it is  exercised.  A proxy may be revoked  by filing  with our  Secretary  (i) a
signed  instrument  revoking the proxy or (ii) a duly  executed  proxy bearing a
later  date.  A proxy also may be revoked if the person  executing  the proxy is
present  at the  meeting  and  elects  to vote in  person.  If the  proxy is not
revoked, it will be voted by those named in the proxy.

                                VOTING SECURITIES

     As of April 26, 2004, the record date, there were 46,327,948 of outstanding
shares of common  stock,  par value  $.10 per  share.  Each  holder of shares of
common stock is entitled to one vote per share on all matters  properly  brought
before the Annual Meeting.

                                     VOTING

     The presence at the Annual Meeting of shares representing a majority of the
voting power  associated  with our issued and  outstanding  common stock will be
necessary  to  establish  a quorum  for the  conduct of  business  at the Annual
Meeting.  Under our Bylaws,  directors  are elected by a plurality  of the votes
cast at the Annual Meeting.  The proposal to amend our Articles of Incorporation
to increase the number of shares of authorized and issuable  shares of preferred
stock must be  approved by the  affirmative  vote of a majority of the shares of
issued and outstanding common stock voting together as a class. In order for the
2004 Stock Incentive Plan to be approved,  the number of "for" votes cast at the
meeting  for  this  proposal  must be at  least a  majority  of all  votes  cast
(including both "against" votes and  abstentions)  and the total number of votes
cast with respect to this proposal  (regardless of whether they are "for" votes,
"against"  votes or  abstentions)  must  represent  more  than 50% of all of the
shares entitled to vote on the proposal.


     Brokers  holding  shares in "street  name" may vote the shares  only if the
beneficial  owner  provides  instructions  on how to vote.  Brokers will provide
beneficial owners  instructions on how to direct the brokers to vote the shares.
The New York Stock Exchange treats "for" votes,  "against" votes and abstentions
as votes cast, but does not treat "broker  non-votes" as votes cast. A so-called
"broker  non-vote"  occurs when a broker,  holding  stock as  nominee,  does not
receive  voting  instructions  from the  beneficial  owner.  With respect to the
election of directors,  broker non-votes and the decision to withhold  authority
to vote for any,  or all,  of the  director  nominees  named  above will have no
impact on the outcome of the voting. Because the proposals to amend our Articles
of  Incorporation  and to approve the 2004 Stock  Incentive Plan are non-routine
matters under New York Stock Exchange rules,  brokerage  firms,  banks and other
nominees  who hold  shares on behalf of their  clients in "street  name" are not
permitted  to vote the  shares  if their  clients  do not  provide  instructions
(either vote "for," or vote "against" or "abstain") on each of these  proposals.
Accordingly,  if a  majority  of the shares  entitled  to vote are  recorded  as
"broker  non-votes"  on any of  these  proposals,  such  proposals  will  not be
approved even if all of the shares voted are "for" votes.

     As of the record date,  our directors and executive  officers  beneficially
owned  1,713,871  shares of our  common  stock  (representing  3.7% of the votes
entitled to be cast at the meeting).

     There are no rights of appraisal or similar dissenter's rights with respect
to any matter to be acted upon pursuant to this proxy statement.

     We urge  stockholders  to vote  promptly  either  by  signing,  dating  and
returning the enclosed proxy card in the enclosed envelope,  or for stockholders
who own their shares in street name  through a broker,  in  accordance  with the
telephone  or internet  voting  instructions  your broker may include  with this
mailing.



                       PROPOSAL 1 -- ELECTION OF DIRECTORS

DIRECTOR NOMINEES AND VOTING REQUIREMENTS.

     There are currently six members of our Board of Directors.  Pursuant to our
Articles of Incorporation, the directors have been divided into three groups. At
this year's Annual Meeting,  two directors will be elected by the holders of our
common  stock to hold office for a term of three  years or, in each case,  until
their respective successors have been duly elected and qualified.

     Our Board of Directors has nominated Edward Lowenthal and Stephen D. Plavin
for election as directors.

     Unless   authority  to  vote  for  the  election  of  directors   has  been
specifically  withheld,  the persons named in the accompanying proxy card intend
to vote FOR the  election  of the  nominees  named  above to hold office for the
terms  indicated  above or until  their  respective  successors  have  been duly
elected and qualified.

     If any  nominee  becomes  unavailable  for any reason  (which  event is not
anticipated), the shares represented by the enclosed proxy may (unless the proxy
contains instructions to the contrary) be voted for such other person or persons
as may be determined by the holders of the proxies.  In no event would the proxy
be voted for more than two nominees.

INFORMATION REGARDING DIRECTORS

     The following information relates to the nominees for election as directors
of Omega and the other  persons  whose terms as  directors  continue  after this
meeting.  Individuals  not  standing  for  election  at the Annual  Meeting  are
presented under the heading "Continuing Directors."

DIRECTOR NOMINEES



                                   YEAR
                                   FIRST
                                   BECAME A                                               TERM TO
               DIRECTORS           DIRECTOR   BUSINESS EXPERIENCE DURING PAST 5 YEARS    EXPIRE IN
-----------------------------------------------------------------------------------------------------
                         
Edward Lowenthal (59).............   1995    Mr.   Lowenthal  is  a  Director  and  has    2004
                                             served in this capacity  since October 17,
                                             1995.  From  January  1997 to March  2002,
                                             Mr.  Lowenthal  served  as  President  and
                                             Chief Executive  Officer of Wellsford Real
                                             Properties,  Inc., a real estate  merchant
                                             bank,  since 1997,  and was  President  of
                                             the    predecessor   of   Wellsford   Real
                                             Properties,    Inc.    since   1986.   Mr.
                                             Lowenthal  also  serves as a  director  of
                                             REIS,  Inc.  (a  provider  of real  estate
                                             market     information    and    valuation
                                             technology),  Corporate Renaissance Group,
                                             Inc. (a mutual fund),  Equity  Residential
                                             Properties  Trust,  Great Lakes REIT and a
                                             trustee of the Manhattan School of Music.

Stephen D. Plavin (44)............   2000    Mr.  Plavin is a  Director  and has served    2004
                                             in this capacity  since July 17, 2000. Mr.
                                             Plavin  has been Chief  Operating  Officer
                                             of  Capital   Trust,   Inc.,  a  New  York
                                             City-based  mortgage  REIT and  investment
                                             management  company and has served in this
                                             capacity  since  1998.  In this role,  Mr.
                                             Plavin  is  responsible  for  all  of  the
                                             lending,     investing    and    portfolio
                                             management  activities  of Capital  Trust,
                                             Inc.

CONTINUING DIRECTORS

                                   YEAR
                                   FIRST
                                   BECAME A                                               TERM TO
               DIRECTORS           DIRECTOR   BUSINESS EXPERIENCE DURING PAST 5 YEARS    EXPIRE IN
-----------------------------------------------------------------------------------------------------

Bernard J. Korman (72)............   1993    Mr.  Korman is  Chairman  of the Board and    2006
                                             has served in this  capacity  since  March
                                             8, 2004.  Mr.  Korman has been Chairman of
                                             the  Board  of  Trustees  of  Philadelphia
                                             Health  Care Trust,  a private  healthcare
                                             foundation,   since   December   1995  and
                                             Chairman  of the  Board  of The Pep  Boys,
                                             Inc.  since May 28, 2003.  He was formerly
                                             President,  Chief  Executive  Officer  and
                                             Director  of  MEDIQ  Incorporated  (health
                                             care  services)  from  1977 to  1995.  Mr.
                                             Korman   is   also  a   director   of  the
                                             following   public   companies:   The  New
                                             America High Income Fund, Inc.  (financial
                                             services),   The  Pep  Boys,   Inc.  (auto
                                             supplies),   Kramont  Realty  Trust  (real
                                             estate  investment  trust),  and  NutraMax
                                             Products,   Inc.   (consumer  health  care
                                             products).  Mr.  Korman was  previously  a
                                             director of Omega Worldwide, Inc.


Thomas F. Franke (74)...........     1992    Mr.  Franke is a  Director  and has served    2006
                                             in this  capacity  since  March 31,  1992.
                                             Mr.   Franke  is  Chairman  and  principal
                                             owner  of  Cambridge  Partners,  Inc.,  an
                                             owner,    developer    and    manager   of
                                             multifamily  housing  in Grand  Rapids and
                                             Ann  Arbor,   Michigan.  He  is  also  the
                                             principal  owner of a  private  healthcare
                                             firm  operating  in the United  States and
                                             is a  principal  owner of a private  hotel
                                             firm in the  United  Kingdom.  Mr.  Franke
                                             was a founder  and  previously  a director
                                             of Principal  Healthcare  Finance  Limited
                                             and Omega Worldwide, Inc.


Harold J. Kloosterman (62)......     1992    Mr.  Kloosterman  is a  Director  and  has    2005
                                             served in this  capacity  since  September
                                             1,  1992.  Mr.  Kloosterman  has served as
                                             President    since   1985   of   Cambridge
                                             Partners,  Inc.,  a  company  he formed in
                                             1985.   He  has  been   involved   in  the
                                             development  and management of commercial,
                                             apartment  and  condominium   projects  in
                                             Grand  Rapids and Ann Arbor,  Michigan and
                                             in the Chicago area. Mr.  Kloosterman  was
                                             formerly  a  Managing  Director  of  Omega
                                             Capital    from   1986   to   1992.    Mr.
                                             Kloosterman   has  been  involved  in  the
                                             acquisition,  development  and  management
                                             of commercial and  multifamily  properties
                                             since  1978.  He has  also  been a  senior
                                             officer of LaSalle Partners, Inc.


C. Taylor Pickett (42)..........     2002    Mr.   Pickett   is  the  Chief   Executive    2005
                                             Officer  and has  served in this  capacity
                                             since  June 12,  2001.  He has  served  on
                                             the  Board  of  Directors  since  May  30,
                                             2002.  Prior to joining our  company,  Mr.
                                             Pickett   served  as  the  Executive  Vice
                                             President  and  Chief  Financial   Officer
                                             from   January   1998  to  June   2001  of
                                             Integrated   Health   Services,   Inc.,  a
                                             public company  specializing in post-acute
                                             healthcare  services.  He also  served  as
                                             Executive  Vice  President  of Mergers and
                                             Acquisitions  from  May  1997 to  December
                                             1997 of Integrated Health Services.  Prior
                                             to his  roles as Chief  Financial  Officer
                                             and  Executive  Vice  President of Mergers
                                             and  Acquisitions,  Mr.  Pickett served as
                                             the    President   of   Symphony    Health
                                             Services,  Inc.  from  January 1996 to May
                                             1997.  Mr.  Pickett was also  previously a
                                             director of Omega Worldwide, Inc.


                                 RECOMMENDATION

Our Board of Directors unanimously recommends a vote FOR the election of Messrs.
Lowenthal and Plavin.

                             PRINCIPAL STOCKHOLDERS

     The following table sets forth information  regarding  beneficial ownership
of our capital stock as of March 31, 2004:

     o    each of our directors and the named  executive  officers  appearing in
          the table under  "Executive  Compensation--Compensation  of  Executive
          Officers;" and

     o    all persons known to us to be the beneficial  owner of more than 5% of
          our outstanding common stock.

        Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all shares of
our common stock shown as beneficially owned by them, subject to community
property laws where applicable. The business address of the directors and
executive officers is 9690 Deereco Road, Suite 100, Timonium, Maryland 21093.



                                          COMMON STOCK         SERIES A PREFERRED       SERIES B PREFERRED       SERIES D PREFERRED
                                                    PERCENT                PERCENT                  PERCENT                  PERCENT
                                       NUMBER OF       OF     NUMBER OF      OF        NUMBER OF        OF      NUMBER OF       OF
        BENEFICIAL OWNER                SHARES      CLASS(1)   SHARES     CLASS(13)     SHARES     CLASS(14)     SHARES    CLASS(15)
------------------------------------------------------------------------------------------------------------------------------------
                         
C. Taylor Pickett.............        656,518 (2)       1.4%      --           --          --           --          --           --
Daniel J. Booth...............         79,069 (3)       0.2%      --           --          --           --          --           --
R. Lee Crabill, Jr............         91,861 (4)       0.2%      --           --          --           --          --           --
Robert O. Stephenson..........        109,841 (5)       0.2%      --           --          --           --          --           --
Thomas F. Franke..............         67,834 (6)(7)    0.1%   3,400          0.1%      2,000          0.1%         --           --
Harold J. Kloosterman.........        106,594 (8)(9)    0.2%      --           --          --           --          --           --
Bernard J. Korman.............        548,080 (7)       1.2%     200            *       1,300          0.1%         --           --
Edward Lowenthal..............         31,221 (10)        *       --           --         100            *          --           --
Stephen D. Plavin.............         22,853 (11)        *       --           --          --           --          --           --
Directors and executive
officers as a group (9
persons)......................      1,713,871 (12)      3.7%   3,600          0.2%      3,400          0.2%         --           --

5% BENEFICIAL OWNERS:

None


-----------
    *    Less than 0.10%

(1)  Based on 46,327,624  shares of our common stock outstanding as of March 31,
     2004.

(2)  Includes  stock  options  that are  exercisable  within 60 days to  acquire
     267,296 shares.

(3)  Includes stock options that are exercisable within 60 days to acquire 8,333
     shares.

(4)  Includes stock options that are exercisable within 60 days to acquire 5,833
     shares.

(5)  Includes stock options that are exercisable within 60 days to acquire 2,604
     shares.

(6)  Includes 47,141 shares owned by a family limited  liability company (Franke
     Family LLC) of which Mr. Franke is a member.

(7)  Includes stock options that are exercisable within 60 days to acquire 5,000
     shares.

(8)  Includes  shares owned jointly by Mr.  Kloosterman and his wife, and 35,206
     shares held solely in Mr. Kloosterman's wife's name.

(9)  Includes stock options that are exercisable within 60 days to acquire 6,999
     shares.

(10) Includes stock options that are exercisable within 60 days to acquire 8,001
     shares.

(11) Includes  stock  options  that are  exercisable  within 60 days to  acquire
     11,999 shares.

(12) Includes  stock  options  that are  exercisable  within 60 days to  acquire
     321,065 shares.

(13) Based on 2,300,000 shares of Series A preferred stock  outstanding on March
     31, 2004.

(14) Based on 2,000,000 shares of Series B preferred stock  outstanding on March
     31, 2004.

(15) Based on 4,739,500 shares of Series D preferred stock  outstanding on March
     31, 2004.


                      DIRECTORS AND OFFICERS OF OUR COMPANY

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

     In  connection  with the sale of  Explorer  Holdings,  L.P.'s  ("Explorer")
shares of Omega  common  stock in March 2004,  we  terminated  the  Stockholders
Agreement with Explorer, pursuant to which Explorer had the right to designate a
certain  number of  directors  to our Board.  Following  the sale of  Explorer's
shares of Omega common stock, Messrs. Decker,  Erickson,  Mahowald and McNamara,
each of whom were  designees of Explorer,  resigned from our Board of Directors.
As a  result  of the  resignations  of the  foregoing  directors,  our  Board of
Directors  reduced the size of our Board from ten  members to six and  appointed
Mr. Korman to serve as the non-executive Chairman of our Board of Directors. Mr.
Decker previously served in that capacity.

     The members of our Board of Directors on the date of this proxy  statement,
and the committees of our Board on which they serve, are identified below.


-------------------------------------------------------------------------------------------------------------
                                                                                           NOMINATING AND
                                                                                              CORPORATE
DIRECTOR                           AUDIT            COMPENSATION          INVESTMENT         GOVERNANCE
                                 COMMITTEE            COMMITTEE           COMMITTEE           COMMITTEE
-------------------------------------------------------------------------------------------------------------
                         
Thomas F. Franke........                                XX                                        X
-------------------------------------------------------------------------------------------------------------
Harold J. Kloosterman...            X                    X                   XX                  XX
-------------------------------------------------------------------------------------------------------------
Bernard J. Korman *.....                                 X                   X                    X
-------------------------------------------------------------------------------------------------------------
Edward Lowenthal........            X                    X                                        X
-------------------------------------------------------------------------------------------------------------
C. Taylor Pickett.......                                                     X
-------------------------------------------------------------------------------------------------------------
Stephen D. Plavin.......           XX                    X                                        X
-------------------------------------------------------------------------------------------------------------


  *     Chairman of the Board
  XX    Chairman of the Committee
  X     Member

     Our Board of Directors  held nine meetings  during 2003. All members of our
Board of Directors attended more than 75% of our Board of Directors or Committee
meetings  held during  2003. A majority of the members of the Board of Directors
meets the New York Stock Exchange listing  standards for  independence.  Each of
the members of the Audit  Committee,  Compensation  Committee and Nominating and
Corporate  Governance  Committee  meets  the New  York  Stock  Exchange  listing
standards  for  independence.  While we  encourage  our  directors to attend our
Annual  Meeting  of  Stockholders,  we  currently  do not have a  formal  policy
regarding  director  attendance.  None of our directors attended the 2003 Annual
Meeting of Stockholders.

AUDIT COMMITTEE

     The Audit  Committee  met four times in 2003.  Its  primary  function is to
assist our Board of Directors in fulfilling its oversight  responsibilities with
respect to: (i) the financial information to be provided to stockholders and the
Securities and Exchange Commission ("SEC"); (ii) the system of internal controls
that  management  has  established;  and (iii) the external  audit  process.  In
addition, the Audit Committee selects our company's independent  accountants and
provides  an avenue  for  communication  between  the  independent  accountants,
financial management and our Board of Directors. On April 20, 2004, our Board of
Directors adopted a revised Audit Committee Charter, a copy of which is attached
to this proxy  statement  as Appendix A and will be  available on our website at
www.omegahealthcare.com.

     Each of the members of the Audit  Committee  is  financially  literate,  as
required of audit committee  members by the New York Stock  Exchange.  Our Board
has  determined  that Mr.  Plavin is qualified  to serve as an "audit  committee
financial  expert"  as such term is defined  in Item 401 (h) of  Regulation  S-K
promulgated by the SEC. The Board made a qualitative  assessment of Mr. Plavin's
level of knowledge and  experience  based on a number of factors,  including his
formal education and his experience as Chief Operating Officer of Capital Trust,
Inc., a New York  City-based  mortgage REIT and investment  management  company,
where his is responsible  for all lending and portfolio  management  activities.
Mr. Plavin holds an M.B.A.  from J.L.  Kellogg  Graduate School of Management at
Northwestern University.

COMPENSATION COMMITTEE

     The   Compensation   Committee   met  four  times   during   2003  and  has
responsibility  for  the  compensation  of  our  key  management  personnel  and
administration   of  our  2000  Stock  Incentive  Plan  and  our  1993  Deferred
Compensation Plan. The  responsibilities of the Compensation  Committee are more
fully described in its charter, which will be made available on our website.

     On March 26,  2004,  our Board of  Directors  selected  the  members of the
Compensation Committee for the coming year, as shown in the table above.

INDEPENDENT DIRECTORS COMMITTEE

     The  Independent  Directors  Committee  met six times  during  2003 and has
responsibility  for passing  upon those  issues with respect to which a conflict
may have existed between us and Explorer.  Since Explorer is no longer a related
party,  the  Independent  Directors  Committee  no longer  exists as a  separate
committee. See "Nominating and Corporate Governance Committee" below.

INVESTMENT COMMITTEE

     Our Board of  Directors  did not have a standing  Investment  Committee  in
2003.  On March  26,  2004,  our  Board of  Directors  selected  members  of the
Investment  Committee  for the coming  year,  as shown in the table  above.  Its
primary function is to assist our Board of Directors in developing strategies in
growing our portfolio.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

     Our Board of Directors  did not have a standing  Nominating  and  Corporate
Governance Committee in 2003 and the functions that would typically be performed
by this Committee  were performed by the entire Board of Directors.  On February
18,  2004,  our  Board of  Directors  selected  members  of the  Nominating  and
Corporate Governance Committee for the coming year, as shown in the table above.
This  Committee  identifies  potential  nominees to our Board of  Directors  and
reviews their  qualifications  and  experience.  The process for identifying and
evaluating nominees to our Board is initiated by identifying candidates who meet
the  criteria  for  selection  as a nominee and have the  specific  qualities or
skills  being  sought  based on input  from  members  of our Board  and,  if the
Nominating and Corporate Governance  Committee deems appropriate,  a third-party
search firm. Nominees for director are selected based on their depth and breadth
of experience, industry experience, financial background,  integrity, ability to
make independent analytical inquiries and willingness to devote adequate time to
director  duties,  among  other  criteria.   The  Committee  also  develops  and
implements policies and practices relating to corporate governance.

     The Nominating  and Corporate  Governance  Committee will consider  written
proposals from stockholders for nominees as director. Any such nomination should
be submitted to the Nominating and Corporate  Governance  Committee  through our
Secretary in  accordance  with the  procedures  and time frame  described in our
Bylaws and as set forth under "Stockholder Proposals" below.

COMMUNICATING WITH THE BOARD OF DIRECTORS

     Our Board of Directors  provides a process for  stockholders to communicate
with them. Interested  stockholders may contact our directors by writing to them
at our headquarters:  Omega Healthcare Investors, Inc., 9690 Deereco Road, Suite
100,  Timonium,  Maryland  21093,  or by contacting  them through our website at
www.omegahealthcare.com. Communications addressed to our Board of Directors will
be reviewed by our  Secretary  or Chief  Financial  Officer and  directed to the
appropriate director or directors for their consideration.

CORPORATE GOVERNANCE MATERIALS

     Our  Corporate  Governance  Guidelines,  Code of  Business  Conduct and the
charters of the Audit  Committee,  Compensation  Committee  and  Nominating  and
Corporate  Governance  Committee will be made  available  through our website at
www.omegahealthcare.com.


COMPENSATION OF DIRECTORS

     For the year ended December 31, 2003, each non-employee director received a
cash payment  equal to $15,000 per year,  payable in quarterly  installments  of
$3,750. Each non-employee  director also received a quarterly grant of shares of
common  stock equal to the number of shares  determined  by dividing  the sum of
$3,750  by the  fair  market  value  of the  common  stock  on the  date of each
quarterly  grant,  currently set at February 15, May 15, August 15, and November
15. At the director's  option, the quarterly cash payment of director's fees may
be payable in shares of common stock. In addition,  each  non-employee  director
was entitled to receive fees equal to $1,500 per meeting for  attendance at each
regularly  scheduled meeting of our Board of Directors.  For each teleconference
or called special meeting of our Board of Directors,  each non-employee director
received  $1,500 for  meetings.  In addition,  we  reimbursed  the directors for
travel expenses incurred in connection with their duties as directors.  Employee
directors received no compensation for service as directors.

     Each  non-employee  director  was awarded  options  with  respect to 10,000
shares at the date the plan was  adopted or upon  their  initial  election  as a
director.  Each non-employee director is also awarded an additional option grant
with respect to 1,000 shares on January 1 of each year they serve as a director.
All grants have been and will be at an exercise  price equal to 100% of the fair
market value of our common stock on the date of the grant. Non-employee director
options vest one-third after each year for three years.


                             EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT

     The  Compensation  Committee (the  "Committee")  administers our 2000 Stock
Incentive Plan and 1993 Deferred  Compensation  Plan, and has responsibility for
other incentive and benefit plans. The Committee  determines the compensation of
our  executive  officers and reviews with the Board of Directors  all aspects of
compensation for our executive officers.

     Historically,  our policy and the guidelines followed by the Committee have
been directed toward providing  compensation to our executive  officers in order
to achieve the following objectives:

     1)   Assist  in  attracting  and  retaining   talented  and  well-qualified
          executives;

     2)   Reward performance and initiative;

     3)   Be competitive with other healthcare real estate investment trusts;

     4)   Be  significantly  related to  accomplishments  and our short-term and
          long-term successes, particularly measured in terms of growth in funds
          from operations on a per share basis; and

     5)   Encourage  executives to achieve meaningful levels of ownership of our
          stock.

     The   following  is  a  discussion   of  each  element  of  our   executive
compensation:

ANNUAL BASE SALARY

     Our  approach  to base  compensation  levels has been to offer  competitive
salaries in comparison with prevailing market practices.  The Committee examined
market  compensation  levels  and  trends in  connection  with the hiring of the
executives during 2001. Additionally, the Committee has also considered the pool
of  executives  who  currently  are  employed  in  similar  positions  in public
companies,  with emphasis on salaries paid by healthcare real estate  investment
trusts.

     The  Committee  has  evaluated   executive   officer  salary  decisions  in
connection  with an annual  review and based on input from our  Chairman  of the
Board of Directors and our Chief  Executive  Officer.  In undertaking the annual
review, the Committee  considered the  decision-making  responsibilities of each
position and the experience,  work performance and team-building  skills of each
incumbent.  The  Committee  has  viewed  work  performance  as the  single  most
important   measurement   factor,   followed   by   team-building   skills   and
decision-making responsibilities.

ANNUAL CASH BONUS

     Our  historical  compensation  practices  have embodied the principle  that
annual cash  bonuses  should be based  primarily on  achieving  objectives  that
enhance  long-term  stockholder  value,  and that meaningful  stock ownership by
management, including the grant of stock options in connection with their hiring
and as  part  of  our  company's  rights  offering,  is  desirable  in  aligning
stockholder and management interests.

     The  Committee  has  considered   overall   company   performance  and  the
performance  of the specific areas of the company under the  incumbent's  direct
control.   It  was  the  Committee's  view  that  this  balance   supported  the
accomplishment of overall  objectives and rewarded  individual  contributions by
executive officers. Individual annual bonuses for each named executive have been
consistent with market  practices for positions with comparable  decision-making
responsibilities.

     In 2003,  Mr.  Pickett was  eligible  for a cash bonus of up to 100% of his
annual base salary and the other  executive  officers  were  eligible for a cash
bonus of up to 50% of their annual base salaries.  In determining  the amount of
the  annual  cash  bonuses,  the  Committee  considered  a variety  of  factors,
including  sustained levels of recurring Funds from  Operations,  the successful
implementation  of  asset  management  initiatives,   control  of  expenses  and
satisfaction of Omega's strategic  objectives.  Considering  these factors,  the
Committee  paid each of the senior  executives,  including Mr.  Pickett,  a cash
bonus equal to 100.0% of such employee's maximum potential bonus.

LONG TERM INCENTIVES

     In 2003,  the  Committee  did not  make any  grants  under  its 2000  Stock
Incentive Plan or its 1993 Deferred Compensation Plan.

2003 CHIEF EXECUTIVE OFFICER COMPENSATION

     In  connection  with  retaining  the services of Mr.  Pickett to act as our
Chief Executive Officer, we entered into an Employment  Agreement dated June 12,
2001, with Mr. Pickett.  The Committee believes that the terms of the Employment
Agreement are consistent with the duties and scope of responsibilities  assigned
to Mr.  Pickett  as Chief  Executive  Officer.  In order to align Mr.  Pickett's
interests  with the long-term  interests of Omega,  Mr.  Pickett's  compensation
package includes significant equity-based compensation,  including stock options
and restricted stock. For a detailed  description of the terms of the Employment
Agreement  see  "Compensation  and  Severance  Agreements  - C.  Taylor  Pickett
Employment Agreement" below.

        For the fiscal year ended December 31, 2003, the Committee awarded Mr.
Pickett an annual cash bonus of $463,500, an amount equal to 100.0% of his
potential bonus. This bonus was determined by the Committee substantially in
accordance with the policies described above relating to all of our executive
officers.

TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION

     The SEC requires  that this report  comment upon our policy with respect to
Section 162(m) of the Internal  Revenue Code. From time to time during 2003, Mr.
McNamara recused himself from the Compensation  Committee meetings to enable the
Committee to qualify as a committee of outside directors as set forth in Section
162(m) of the Internal  Revenue Code.  Section 162(m) disallows a federal income
tax deduction for  compensation  over $1.0 million to any of the named executive
officers  unless  the   compensation  is  paid  pursuant  to  a  plan  which  is
performance-related,   non-discretionary   and   has   been   approved   by  our
stockholders.  We did not pay any compensation during 2002 that would be subject
to  Section  162(m).  We  believe  that,  because we qualify as a REIT under the
Internal  Revenue Code and therefore are not subject to federal  income taxes on
our income to the extent distributed,  the payment of compensation that does not
satisfy the  requirements  of Section  162(m) will not generally  affect our net
income,  although to the extent that compensation does not qualify for deduction
under  Section  162(m) a larger  portion  of  stockholder  distributions  may be
subject to federal  income  taxation  as dividend  income  rather than return of
capital.  We do not  believe  that  Section  162(m) will  materially  affect the
taxability of stockholder  distributions,  although no assurance can be given in
this regard due to the variety of factors  that affect the tax  position of each
stockholder.  For these  reasons,  Section  162(m) does not directly  govern the
Compensation Committee's compensation policy and practices.

                               Compensation Committee of the Board of Directors

                               /s/ Thomas F. Franke
                               /s/ Harold J. Kloosterman
                               /s/ Bernard J. Korman
                               /s/ Edward Lowenthal
                               /s/ Stephen D. Plavin


COMPENSATION OF EXECUTIVE OFFICERS

     The following table sets forth, for the years ended December 31, 2003, 2002
and 2001, the  compensation  for services in all capacities to us of each person
who served as chief  executive  officer  during the year ended December 31, 2003
and the four most highly compensated  executive officers serving at December 31,
2003.


                                                                                  LONG-TERM COMPENSATION
                                           ANNUAL COMPENSATION                   AWARD(S)               PAYOUTS
                                           -------------------                   -------                -------
                                                                        RESTRICTED      SECURITIES        ALL
                                                                          STOCK         UNDERLYING       LTIP           OTHER
          NAME AND                                                       AWARD(S)        OPTIONS/       PAYOUTS      COMPENSATION
     PRINCIPAL POSITION        YEAR      SALARY($)       BONUS($)          ($)            SARS(#)         ($)           ($)(1)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    

C. Taylor Pickett..........    2003       463,500        463,500             --               --          --            6,000 (1)
Chief Executive Officer        2002       450,000        191,250             --               --          --            6,000 (1)
(from June 12, 2001)           2001       250,673        250,500        116,000 (2)    1,120,000          --               --

Daniel J. Booth............    2003       283,250        141,625             --               --          --            6,000 (1)
Chief Operating Officer        2002       275,000         58,438             --               --          --            4,125 (1)
(from October 15, 2001)        2001        58,349         30,000             --          350,000          --               --

R. Lee Crabill, Jr.........    2003       221,450        110,750             --               --          --            6,000 (1)
Senior Vice President          2002       215,000         45,688             --               --          --           19,285 (4)
(from July 30, 2001)           2001        91,237         45,500             --          245,000          --           21,851 (3)

Robert O. Stephenson.......    2003       221,450        110,750             --               --          --            6,000 (1)
Chief Financial Officer        2002       215,000         45,688             --               --          --            4,300 (1)
(from August 1, 2001)          2001        89,583         45,500             --          325,000          --               --

-----------

(1)  Consists of contributions to our 401(k) Profit-Sharing Plan.

(2)  Represents a restricted stock award of 50,000 shares of our common stock to
     Mr. Pickett on June 12, 2001, which vested on June 12, 2003.

(3)  Represents   compensation  to  Mr.  Crabill  for  reimbursement  of  moving
     expenses.

(4)  Consists  of   contributions   to  our  401(k)   Profit-Sharing   Plan  and
     compensation to Mr. Crabill for reimbursement of moving expenses.


COMPENSATION AND SEVERANCE AGREEMENTS

C. TAYLOR PICKETT EMPLOYMENT AGREEMENT

     We entered into an employment  agreement with C. Taylor Pickett dated as of
June 12, 2001,  to be our Chief  Executive  Officer.  The term of the  agreement
expires on June 12, 2005.

     Mr.  Pickett's base salary is $450,000 per year,  subject to increase by us
and  provides  that he will be eligible for an annual bonus of up to 100% of his
base salary based on criteria  determined by the  Compensation  Committee of our
Board of Directors.  In connection with this employment agreement, we issued Mr.
Pickett  50,000 shares of our  restricted  common stock on June 12, 2001,  which
vested during 2003. In connection with the employment agreement, Mr. Pickett was
granted an incentive stock option to purchase 172,413 shares of our common stock
and a nonqualified  stock option to purchase 627,587 shares of our common stock.
The  incentive  stock  option has vested as to 25% of the shares on December 31,
2002; as to an additional 25% after Mr. Pickett  completes two years of service;
as to an additional  25% ratably on a monthly basis in 2004; and as to the final
25%  ratably on a monthly  basis in the first six  months of 2005,  in each case
provided Mr. Pickett  continues to work for us on the  applicable  vesting date.
The  nonqualified  stock option will become vested as to 50% of the shares after
Mr. Pickett  completes two years of service and will become ratably vested as to
the  remainder  of the  shares  on a  monthly  basis  over the next 24 months of
service following that two year anniversary.

     If we terminate Mr.  Pickett's  employment  without cause, or if he resigns
for good reason,  he will be entitled to payment of his base salary for a period
of 12 months or, if shorter,  for the  remainder  of the term of the  agreement.
Additionally,  Mr. Pickett will be entitled to payment of an amount equal to the
bonus paid in the prior year, payable in 12 monthly installments. Mr. Pickett is
required to execute a release of claims against us as a condition to the payment
of severance  benefits.  The vesting of Mr. Pickett's  options may be subject to
acceleration  upon the occurrence of certain events such as termination  without
cause or resignation for good reason and will become fully vested if, within one
year  following a change of control,  he is terminated  without cause or resigns
for good reason.

     Mr. Pickett is restricted  from using any of our  confidential  information
during  his  employment  and for two years  thereafter  or from  using any trade
secrets  during  his  employment  and for as long  thereafter  as  permitted  by
applicable  law.  Mr.  Pickett is subject to covenants  which  prohibit him from
competing  with us and from  soliciting  our customers or employees  while he is
employed by us and for 12 months following his termination of employment.

DANIEL J. BOOTH EMPLOYMENT AGREEMENT

     We entered into an employment  agreement with Daniel J. Booth  effective as
of  October  15,  2001,  to be our  Chief  Operating  Officer.  The  term of the
agreement expires on January 1, 2006.

     Mr.  Booth's base salary is $275,000  per year,  subject to increase by us,
and he is eligible  for an annual bonus of up to 50% of his base salary based on
criteria  determined  by the  Compensation  Committee.  In  connection  with his
employment  agreement,  Mr.  Booth was  granted  an  incentive  stock  option to
purchase  166,666 shares of our common stock and a nonqualified  stock option to
purchase  83,334  shares of our common  stock.  The  incentive  stock option has
vested as to 40% of the shares on December 31, 2003;  and will vest as to 20% of
the shares on each of October 1, 2004,  October 1, 2005 and January 1, 2006, and
the nonqualified stock option vested on October 1, 2003, provided that Mr. Booth
continues to work for us on the applicable vesting date.

     Our agreement  with Mr. Booth  contains  severance and  accelerated  option
vesting provisions similar to those in Mr. Pickett's  agreement described above.
Mr.  Booth is required to execute a release of claims  against us as a condition
to the payment of severance benefits.  He is also subject to restrictions on his
use of confidential information and our trade secrets that are the same as those
in our agreement with Mr. Pickett described above.

ROBERT O. STEPHENSON EMPLOYMENT AGREEMENT

     We entered into an employment agreement with Robert O. Stephenson effective
as of August  30,  2001,  to be our  Chief  Financial  Officer.  The term of the
agreement expires on January 1, 2006.

     Mr.  Stephenson's base salary is $215,000 per year,  subject to increase by
us, and he is eligible for an annual bonus of up to 50% of his base salary based
on criteria  determined by the  Compensation  Committee.  In connection with his
employment  agreement,  Mr.  Stephenson was granted an incentive stock option to
purchase  181,155 shares of our common stock and a nonqualified  stock option to
purchase  18,845  shares of our common  stock.  The  incentive  stock option has
vested as to 40% of the shares on December 31, 2003;  and will vest as to 20% of
the shares on each of August 1, 2004,  August 1, 2005 and  January 1, 2006,  and
the  nonqualified  stock  option  vested on August 1,  2003,  provided  that Mr.
Stephenson continues to work for us on the applicable vesting date.

     Our agreement with Mr. Stephenson contains severance and accelerated option
vesting provisions similar to those in Mr. Pickett's  agreement described above.
Mr.  Stephenson  is  required  to  execute a release  of claims  against us as a
condition  to  the  payment  of  severance  benefits.  He  is  also  subject  to
restrictions on his use of  confidential  information and our trade secrets that
are the same as those in our agreement with Mr. Pickett described above.

R. LEE CRABILL, JR. EMPLOYMENT AGREEMENT

     We entered into an employment  agreement with R. Lee Crabill, Jr. effective
as of July 30, 2001, to be our Senior Vice President of Operations.  The term of
the agreement expires on July 30, 2005.

     Mr. Crabill's base salary is $215,000 per year,  subject to increase by us,
and he is eligible  for an annual bonus of up to 50% of his base salary based on
criteria  determined  by the  Compensation  Committee.  In  connection  with his
employment  agreement,  Mr.  Crabill was granted an  incentive  stock  option to
purchase  133,333 shares of our common stock and a nonqualified  stock option to
purchase  41,667  shares of our common  stock.  The  incentive  stock option has
vested as to 50% of the shares on December 31, 2003;  and will vest as to 25% of
the shares on each of August 1, 2004 and August 1,  2005,  and the  nonqualified
stock option will vest as to 50% of the shares after Mr.  Crabill  completes two
years of service  and will  become  ratably  vested as to the  remainder  of the
shares on a monthly basis over the next 24 months of service  following that two
year  anniversary,  provided  Mr.  Crabill  continues  to  work  for  us on  the
applicable vesting date.

     Our agreement with Mr. Crabill  contains  severance and accelerated  option
vesting provisions similar to those in Mr. Pickett's  agreement described above.
Mr. Crabill is required to execute a release of claims against us as a condition
to the payment of severance benefits.  He is also subject to restrictions on his
use of confidential information and our trade secrets that are the same as those
in our agreement with Mr. Pickett described above.

OPTION GRANTS/SAR GRANTS

     There were no options or stock appreciation  rights ("SARs") granted to the
named executive officers during 2003.

AGGREGATED  OPTIONS/SAR  EXERCISES  IN LAST  FISCAL  YEAR  AND  FISCAL  YEAR-END
OPTION/SAR VALUES

     The following table  summarizes  options and SARs exercised during 2003 and
presents the value of unexercised  options and SARs held by the named  executive
officers at December 31, 2003.


                                                              NUMBER OF              VALUE OF
                                                             SECURITIES             UNEXERCISED
                                                             UNDERLYING            IN-THE-MONEY
                               SHARES                        UNEXERCISED          OPTIONS/SARS AT
                              ACQUIRED                    OPTIONS/ SARS AT            FISCAL
                                 ON          VALUE       FISCAL YEAR-END (#)       YEAR-END ($)
                              EXERCISE     REALIZED      UNEXERCISABLE (U)       UNEXERCISABLE (U)
    NAME                         (#)          ($)          EXERCISABLE (E)        EXERCISABLE (E)
----------------------------------------------------------------------------------------------------
                         
C. Taylor Pickett...........   20,000      110,000          468,219(U)          $ 3,157,548(U)
                                   --           --          631,781(E)          $ 4,281,452(E)

Daniel J. Booth.............       --           --          145,833(U)          $   915,331(U)
                                   --           --          204,167(E)          $ 1,283,169(E)

R. Lee Crabill, Jr..........       --           --           98,750(U)          $   619,633(U)
                                   --           --          146,250(E)          $   919,317(E)

Robert O. Stephenson........       --           --          165,985(U)          $  1,067,032(U)
                                   --           --          159,015(E)          $  1,016,968(E)


LONG-TERM INCENTIVE PLAN

     For the  period  from  August 14,  1992,  the date of  commencement  of our
operations, through December 31, 2003, we have had no long-term incentive plans.

EQUITY COMPENSATION PLAN INFORMATION

     The following table provides  information about all equity awards under our
company's  2000 Stock  Incentive Plan and 1993 Amended and Restated Stock Option
and Restricted Stock Plan as of December 31, 2003.


                         
------------------------------------------------------------------------------------------------------------
                                       (a)                     (b)                         (c)
------------------------------------------------------------------------------------------------------------
                                                                                  Number of securities
                              Number of securities                               remaining available for
                                to be issued upon        Weighted-average         future issuance under
                                   exercise of           exercise price of      equity compensation plans
        Plan category         outstanding options,     outstanding options,       (excluding securities
                               warrants and rights      warrants and rights     reflected in column (a))
------------------------------------------------------------------------------------------------------------
     Equity compensation
      plans approved by
      security holders                     2,282,630                    $3.20                      566,332
------------------------------------------------------------------------------------------------------------
     Equity compensation
    plans not approved by
      security holders                            --                       --                           --
------------------------------------------------------------------------------------------------------------
            Total                          2,282,630                    $3.20                      566,332
------------------------------------------------------------------------------------------------------------


DEFINED BENEFIT OR ACTUARIAL PLAN

     For the  period  from  August 14,  1992,  the date of  commencement  of our
operations, through December 31, 2003, we have had no pension plans.



                     COMPARISON OF CUMULATIVE TOTAL RETURN*

Among: Omega Healthcare Investors, Inc.
Hybrid REIT Index**
S&P 500 Index


                                         OHI INDEX  HYBRID REITS S&P INDEX
                                         ---------  ------------ ---------
                                 12/31/98   100         100         100
                                 3/31/99     78          85         105
                                 6/30/99     91          94         112
                                 9/30/99     76          80         105
                                 12/31/99    48          64         121
                                 3/31/00     26          62         124
                                 6/30/00     18          73         121
                                 9/30/00     26          75         119
                                 12/31/00    17          72         110
                                 3/31/01     10          86          97
                                 6/30/01     13         104         103
                                 9/30/01     15         102          88
                                 12/31/01    27         108          97
                                 3/31/02     23         124          97
                                 6/30/02     34         129          84
                                 9/30/02     26         127          70
                                 12/31/02    17         133          76
                                 3/31/03     10         137          73
                                 6/30/03     23         174          84
                                 9/30/03     13         189          87
                                 12/31/03    16         208          79
----------

*    Total return assumes reinvestment of dividends.

**   The Hybrid REIT Index is published by National  Association  of Real Estate
     Investment Trusts,  Inc.  ("NAREIT"),  Washington,  D.C. It is comprised of
     Hybrid REITs (REITs who both own  properties  and make loans to real estate
     owners  and  operators)  traded  on the New  York  Stock  Exchange  and the
     American Stock  Exchange.  A list of those REITs is available by request to
     us or NAREIT.

     THIS  GRAPH  REPRESENTS  HISTORICAL  STOCK  PRICE  PERFORMANCE  AND  IS NOT
NECESSARILY INDICATIVE OF ANY FUTURE STOCK PRICE PERFORMANCE.

     THE REPORTS OF THE  COMPENSATION  COMMITTEE AND THE AUDIT COMMITTEE AND THE
PERFORMANCE  GRAPH  THAT  APPEARS  ABOVE  SHALL NOT BE  DEEMED TO BE  SOLICITING
MATERIAL OR TO BE FILED WITH THE  SECURITIES AND EXCHANGE  COMMISSION  UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY
REFERENCE IN ANY DOCUMENT SO FILED.



    PROPOSAL 2 - PROPOSAL TO AMEND OUR ARTICLES OF INCORPORATION TO INCREASE
                 NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK

     Our Board of Directors has approved,  deems  advisable and recommends  that
our stockholders  vote in favor of, an amendment to Article IV, Section 1 of the
Articles  of  Incorporation  increasing  the  authorized  preferred  stock  from
10,000,000 to 20,000,000 shares (the "Preferred Stock Amendment"). The full text
of the  Preferred  Stock  Amendment  is set forth as part of  Appendix  B and is
incorporated by reference.

     We presently have outstanding or reserved for issuance the following series
of non-voting preferred stock:

                          Shares         Shares        Liquidation
            Series        Authorized   Outstanding     Preference
      -------------------------------------------------------------
       Series A(1)        3,000,000     2,300,000         $25
       Series B           2,000,000     2,000,000         $25
       Series D           4,739,500     4,739,500         $25

     (1)  We have notified  holders of our Series A Cumulative  Preferred  Stock
          that,  effective April 30, 2004, we will redeem such shares at the per
          share  redemption  price  of  $25.00,  plus  all  accrued  and  unpaid
          dividends.

     Following  the  redemption  of the Series A Cumulative  Preferred  Stock on
April 30,  2003,  we  intend to  re-classify  the  3,000,000  shares of Series A
Cumulative Preferred Stock as preferred stock without designation as to class or
series,  and such shares would be available for  designation and issuance in the
future.

PURPOSE AND EFFECT OF THE PREFERRED STOCK AMENDMENT

     Our  Board of  Directors  has  authority  to  issue  shares  of  authorized
preferred  stock  in one or more  classes  or  series  having  such  rights  and
preferences as may be determined by the Board, subject to the limits provided by
Maryland law,  including  dividend rights and rights upon  liquidation,  and any
conversion,  redemption,  sinking fund or voting rights. No stockholder approval
is required for the issuance of authorized  shares of preferred  stock except to
the  extent  mandated  by rules  of the New York  Stock  Exchange  or any  other
exchange  on which our common  stock is then listed for  trading.  All shares of
preferred  stock must be senior to all common  stock in the payment of dividends
and/or upon  liquidation.  Holders of  preferred  stock are not  entitled,  as a
matter of right,  to  preemptive  rights or rights to subscribe for any other of
our securities. Prior to the issuance of shares of any class or series, Articles
Supplementary  establishing  the class or series and  determining  its  relative
rights and  preferences  must be filed with the  Maryland  State  Department  of
Assessments  and Taxation as part of an Articles of Amendment to the Articles of
Incorporation.  If the  Preferred  Stock  Amendment  is adopted,  it will become
effective  upon filing of the  Articles of  Amendment  with the  Maryland  State
Department of Assessments and Taxation.

     The ability of our Board of Directors to issue  separate  classes or series
of preferred stock provides  flexibility to tailor senior securities in response
to terms specifically negotiated by investors.  Our Board of Directors wishes to
preserve maximum  flexibility to issue preferred stock in public  offerings,  in
private  transactions  with  institutional  investors or in the  acquisition  of
income-producing  properties when the investor wishes to hold a senior security.
In order to maintain  its status as a real estate  investment  trust for federal
income tax  purposes,  we are  required to  distribute  90% of its REIT  taxable
income.  Accordingly,  our  ability  to grow  depends  on our  ability to access
external sources of capital at attractive rates. Our Board of Directors believes
that our  ability to raise  capital  will be  enhanced  by having as  flexible a
capital structure as possible. Our Board of Directors intends to issue preferred
stock for the  purpose of raising  capital  and not for the  purpose of making a
takeover of our company more difficult.

     Our Board of Directors has no present  commitments,  plans or proposals for
the issuance of any shares of preferred stock.  Issuance of classes or series of
preferred stock could result in one or more of the following detriments:

     o    The  preferred  stock will have  priority over the common stock in the
          payment of dividends and/or liquidating distributions.

     o    The  issuance  of  preferred  stock  bearing  preferential  dividends,
          whether at fixed or floating rates, could reduce funds from operations
          available for distribution to holders of our common stock.

     o    Conversion of shares of any class or series of preferred stock that is
          convertible  into our  common  stock  could  result  in  diluting  the
          interests of holders of common stock.

     o    In addition,  class  voting  rights  (whether  granted by the specific
          terms of the  preferred  stock or by law)  could  delay or  prevent  a
          change of control of our company.

     The affirmative vote of a majority of the total votes cast on this proposal
is required for  approval of the  proposal to increase the number of  authorized
shares of preferred stock from 10,000,000 to 20,000,000.

     Our Board of Directors unanimously  recommends a vote "FOR" Proposal 2. All
proxies solicited by our Board of Directors will be so voted unless stockholders
specify in their proxies a contrary choice.


                          PROPOSAL 3 - APPROVAL OF THE
                        OMEGA HEALTHCARE INVESTORS, INC.
                            2004 STOCK INCENTIVE PLAN

     On April 20,  2004,  our Board of Directors  approved the Omega  Healthcare
Investors,  Inc. 2004 Stock  Incentive Plan, the full text of which is set forth
as Appendix C and is made a part hereof.

     The 2004 Stock  Incentive  Plan provides us with  increased  flexibility to
grant equity-based compensation to certain employees,  directors and consultants
for the  purpose  of giving  them a  proprietary  interest  in our  company  and
providing  us with a means to attract  and retain  key  personnel.  Our Board of
Directors  has  approved  and  seeks  stockholder  approval  of the  2004  Stock
Incentive  Plan.  Our Board of Directors  has reserved  3,000,000  shares of our
common  stock for  issuance  pursuant  to awards that may be made under the 2004
Stock Incentive Plan, subject to adjustment as provided therein. Shares of stock
as to stock  incentives that are forfeited,  canceled,  expired or terminate are
again available for issuance under the 2004 Stock Incentive Plan.


     The following  description of the 2004 Stock Incentive Plan is qualified in
its entirety by reference to the applicable provisions of the plan document.

ELIGIBILITY

     Stock  incentives  may  be  granted  to  our  employees,   directors,   and
consultants,  or any of our  affiliates;  provided,  however,  that an incentive
stock  option  may  only  be  granted  to  our  employees  or  employees  of our
subsidiaries.

ADMINISTRATION

     Awards  under  the 2004  Stock  Incentive  Plan will be  determined  by the
Compensation  Committee  of our Board of  Directors,  the  members  of which are
selected by our Board of Directors.

AWARDS

     The 2004 Stock  Incentive Plan permits the  Compensation  Committee to make
awards of shares of our common stock and awards of derivative securities related
to the value of our common stock. These  discretionary  awards may be made on an
individual  basis,  or pursuant to a program  approved by the  Committee for the
benefit of a group of eligible persons.

     The 2004 Stock  Incentive Plan permits the  Compensation  Committee to make
awards of a variety  of stock  incentives,  including  equity-based  incentives,
including stock awards,  restricted  stock units,  options to purchase shares of
our common stock, stock appreciation rights, phantom shares, dividend equivalent
rights and similar rights.

     The 2004 Stock Incentive Plan provides that each non-employee director will
receive an  initial  grant of an option to  purchase  10,000  shares  when first
elected.  Annually  thereafter,  each  non-employee  director  will  receive  an
additional grant of an option to purchase 1,000 shares. Each option granted to a
non-employee director will vest on a three-year graded vesting schedule.

     The number of shares of our common  stock as to which a stock  incentive is
granted and to whom any stock  incentive is granted  shall be  determined by the
Compensation  Committee,  subject to the provisions of the 2004 Stock  Incentive
Plan.  Stock  incentives  issuable  may be made  exercisable  or settled at such
prices and may be made  terminable  under such terms as are  established  by the
Compensation  Committee, to the extent not otherwise inconsistent with the terms
of the 2004  Stock  Incentive  Plan.  The  Compensation  Committee  may make the
vesting  or  payment  of stock  incentives  subject  to the  performance  goals.
Performance  goals may be described in terms of  company-wide  objectives  or in
terms of objectives that are related to performance of the division,  affiliate,
department or function within our company or an affiliate. The performance goals
established by the Compensation  Committee for any performance  period under the
2004 Stock Incentive Plan will consist of one or more of the following:

     o    earnings per share and/or  growth in earnings per share in relation to
          target   objectives,   excluding  the  effect  of   extraordinary   or
          nonrecurring items;

     o    operating  cash flow and/or growth in operating  cash flow in relation
          to target objectives;

     o    cash available in relation to target objectives;

     o    net  income  and/or  growth  in  net  income  in  relation  to  target
          objectives,  excluding  the effect of  extraordinary  or  nonrecurring
          items;

     o    revenue and/or growth in revenue in relation to target objectives;

     o    total shareholder return (measured as the total of the appreciation of
          and  dividends  declared  on our common  stock) in  relation to target
          objectives;

     o    return on invested capital in relation to target objectives;

     o    return on shareholder equity in relation to target objectives;

     o    return on assets in relation to target objectives; and

     o    return on common book equity in relation to target objectives.

     The  maximum  number of shares of our common  stock  with  respect to which
options or stock appreciation rights may be granted during any fiscal year as to
any eligible recipient shall not exceed 1,100,000 shares, to the extent required
by  Section  162(m) of the  Internal  Revenue  Code for the grant to  qualify as
qualified performance-based compensation.

     Stock incentives generally shall not be transferable or assignable during a
holder's lifetime.

OPTIONS

     Options  may be made  exercisable  at a price not less than the fair market
value of our  common  stock on the date that the  option is  awarded or the last
business day preceding.  The  Compensation  Committee  shall  determine the fair
market value of our common stock until such time as our common stock is publicly
traded.  Except for  adjustments in the event of a  recapitalization  or similar
event,  the option  exercise price may not be reduced after the date of grant of
an option and no option may be  cancelled  or  surrendered  in  exchange  for an
option with a lower exercise price.

     The  Compensation  Committee may permit an option exercise price to be paid
in cash or by the delivery of previously-owned shares of our common stock, or to
be satisfied  through a cashless exercise executed through a broker or by having
a number  of  shares  of our  common  stock  otherwise  issuable  at the time of
exercise  withheld.  The 2004 Stock  Incentive  Plan  permits  the grant of both
incentive and non-qualified stock options.

STOCK APPRECIATION RIGHTS

     Stock  appreciation  rights may be granted separately or in connection with
another stock incentive,  and the  Compensation  Committee may provide that they
are  exercisable  at the discretion of the holder or that they will be paid at a
time or times  certain  or upon the  occurrence  or  non-occurrence  of  certain
events.  Stock appreciation  rights may be settled in shares of our common stock
or in cash,  according to terms  established by the Compensation  Committee with
respect to any particular award.

STOCK AWARDS

     The  Compensation  Committee  may  grant  shares  of our  common  stock  or
restricted  stock  units to a  participant,  subject  to such  restrictions  and
conditions, if any, as the Compensation Committee shall determine.

OTHER STOCK INCENTIVES

     Dividend equivalent rights,  performance units,  restricted stock units and
phantom  shares may be  granted  in such  numbers or units and may be subject to
such conditions or restrictions  as the  Compensation  Committee shall determine
and shall be payable in cash or shares of our common stock, as the  Compensation
Committee may determine.

     The terms of particular  stock  incentives may provide that they terminate,
among other reasons, upon the holder's termination of employment or other status
with respect to our company,  upon a specified  date, upon the holder's death or
disability,  or upon the occurrence of a change in control of our company. Stock
incentives  may also include  exercise,  conversion  or  settlement  rights to a
holder's estate or personal representative in the event of the holder's death or
disability.  At the Compensation  Committee's discretion,  stock incentives that
are  held  by an  employee  who  suffers  a  termination  of  employment  may be
cancelled,  accelerated,  paid  or  continued,  subject  to  the  terms  of  the
applicable  stock  incentive  agreement and to the  provisions of the 2004 Stock
Incentive Plan.

BENEFITS TO NAMED EXECUTIVE OFFICERS AND OTHERS

     The Compensation  Committee has not yet made any  determination as to which
eligible  participants  will be granted options and dividend  equivalent  rights
under the 2004 Stock  Incentive Plan in the future.  Consequently,  the benefits
and or amounts  that will be  received  in the  future by the  persons or groups
shown in the table  below  pursuant  to the 2004  Stock  Incentive  Plan are not
presently determinable.


                                                                                DIVIDEND
                                                   NUMBER OF OPTIONS           EQUIVALENT
NAME AND POSITION                                       GRANTED                  RIGHTS
-----------------------------------------------------------------------------------------------
                         
C. Taylor Pickett, Chief Executive Officer                --                       --
Daniel J. Booth, Chief Operating Officer                  --                       --
R. Lee Crabill,  Jr.,  Senior Vice  President             --                       --
of Operations
Robert O. Stephenson, Chief Financial Officer             --                       --
Executive Group                                           --                       --
Non-Executive Director Group                              --                       --
Non-Executive Officer Employee Group                      --                       --



RECAPITALIZATIONS AND REORGANIZATIONS

     The  number  of  shares  of our  common  stock  reserved  for  issuance  in
connection with the grant or settlement of stock  incentives or to which a stock
incentive is subject,  as the case may be, and the exercise price of each option
are subject to adjustment in the event of any recapitalization of our company or
similar event effected without receipt of consideration by us.

     In the event of certain corporate reorganizations,  stock incentives may be
substituted,  cancelled,  accelerated,  cashed-out or otherwise  adjusted by the
Compensation  Committee,  provided such adjustment is not inconsistent  with the
express terms of the 2004 Stock Incentive Plan or the applicable stock incentive
agreement.

AMENDMENT OR TERMINATION

     Although  the 2004  Stock  Incentive  Plan may be  amended  by our Board of
Directors  without  stockholder  approval,  our  Board  of  Directors  also  may
condition any such amendment upon stockholder  approval if stockholder  approval
is deemed necessary or appropriate in consideration of tax,  securities or other
laws.

TAX CONSEQUENCES

     The  following   discussion  outlines  generally  the  federal  income  tax
consequences  of  participation  in the 2004 Stock  Incentive  Plan.  Individual
circumstances  may vary and each  participant  should rely on his or her own tax
counsel for advice  regarding  federal income tax treatment under the 2004 Stock
Incentive Plan.

NON-QUALIFIED OPTIONS

     A participant  will not recognize  income upon the grant of an option or at
any time prior to the exercise of the option or a portion  thereof.  At the time
the participant  exercises a non-qualified  option or portion thereof, he or she
will recognize compensation taxable as ordinary income in an amount equal to the
excess of the fair  market  value of our common  stock on the date the option is
exercised over the price paid for our common stock, and we will then be entitled
to a corresponding deduction.

     Depending  upon the  period  shares  of our  common  stock  are held  after
exercise,  the sale or other taxable  disposition of shares acquired through the
exercise  of a  non-qualified  option  generally  will  result  in a  short-  or
long-term  capital  gain or loss  equal to the  difference  between  the  amount
realized on such  disposition  and the fair market value of such shares when the
non-qualified option was exercised.

INCENTIVE STOCK OPTIONS

     A participant  who exercises an incentive stock option will not be taxed at
the time he or she exercises the option or a portion thereof. Instead, he or she
will be taxed at the time he or she sells our common stock purchased pursuant to
the option. The participant will be taxed on the difference between the price he
or she paid for our  common  stock and the  amount for which he or she sells our
common stock. If the participant does not sell the stock prior to two years from
the date of  grant  of the  option  and one  year  from  the  date the  stock is
transferred to him or her, the  participant  will be entitled to capital gain or
loss  treatment  based upon the  difference  between the amount  realized on the
disposition and the aggregate exercise price and we will not get a corresponding
deduction.  If the participant sells the stock at a gain prior to that time, the
difference  between the amount the participant paid for the stock and the lesser
of the fair  market  value on the date of  exercise  or the amount for which the
stock is sold,  will be taxed as  ordinary  income and we will be  entitled to a
corresponding  deduction;  if the  stock is sold for an  amount in excess of the
fair market value on the date of exercise, the excess amount is taxed as capital
gain. If the participant sells the stock for less than the amount he or she paid
for the stock prior to the one or two year periods indicated,  no amount will be
taxed as ordinary income and the loss will be taxed as a capital loss.

     Exercise of an incentive option may subject a participant to, or increase a
participant's liability for, the alternative minimum tax.

OTHER STOCK INCENTIVES

     A participant  will not recognize  income upon the grant of certain  equity
incentives  such as a  stock  appreciation  right,  dividend  equivalent  right,
performance  unit award or phantom share.  Generally,  at the time a participant
receives  payment  under  any  equity  incentive,   he  or  she  will  recognize
compensation  taxable as ordinary  income in an amount  equal to the cash or the
fair market value of our common stock received,  and we will then be entitled to
a corresponding deduction.

     A  participant  will not be taxed  upon the grant of a stock  award if such
award is not  transferable  by the  participant  or is subject to a "substantial
risk of forfeiture," as defined in the Internal Revenue Code. However,  when the
shares of our common stock that are subject to the stock award are  transferable
by  the  participant  and  are  no  longer  subject  to a  substantial  risk  of
forfeiture,  the  participant  will recognize  compensation  taxable as ordinary
income in an amount equal to the fair market  value of the stock  subject to the
stock award,  less any amount paid for such stock,  and we will then be entitled
to a corresponding deduction. However, if a participant so elects at the time of
receipt of a stock  award,  he or she may include  the fair market  value of the
stock subject to the stock award, less any amount paid for such stock, in income
at that time and we also will be entitled to a  corresponding  deduction at that
time.

     The 2004 Stock  Incentive Plan is not qualified under Section 401(a) of the
Code.

VOTING REQUIRED FOR APPROVAL

     In order for the 2004 Stock  Incentive  Plan to be approved,  the number of
"for" votes cast at the meeting for this proposal must be at least a majority of
all votes cast (including both "against"  votes and  abstentions)  and the total
number of votes cast with respect to this proposal  (regardless  of whether they
are "for" votes, "against" votes or abstentions) must represent more than 50% of
all of the shares  entitled to vote on the proposal.  Our Board of Directors has
approved the 2004 Stock  Incentive  Plan and believes it is advisable and in the
best interest of our company.  Accordingly,  our Board of Directors  unanimously
recommends that the stockholders vote "FOR" the 2004 Stock Incentive Plan.


                             AUDIT COMMITTEE MATTERS

     The  Board of  Directors  has  adopted  a  written  charter  for the  Audit
Committee,  a copy of which is included with our definitive  proxy statement for
the 2001 Annual Meeting of Stockholders,  which was filed on April 18, 2001 with
the Securities and Exchange  Commission pursuant to Regulation 14A. The Board of
Directors reviews the Audit Committee  Charter annually.  On April 20, 2004, the
Board of Directors adopted a revised Audit Committee Charter, a copy of which is
attached  to this proxy  statement  as Appendix A and will be  available  at our
website.

     Each of the  members  of our Audit  Committee  meets the  requirements  for
independence as defined by the standards of the New York Stock Exchange.

AUDIT COMMITTEE REPORT

     The Audit  Committee,  with  respect to the audit of Omega's  2003  audited
consolidated financial statements, reports as follows:

     1)   The Audit  Committee has reviewed and  discussed  Omega's 2003 audited
          consolidated financial statements with the company's management;

     2)   The Audit  Committee has discussed  with Ernst & Young LLP the matters
          required to be discussed by SAS 61, which include,  among other items,
          matters  related to the  conduct of the audit of Omega's  consolidated
          financial statements;

     3)   The Audit  Committee has received  written  disclosures and the letter
          from  Ernst & Young  LLP  required  by  Independence  Standards  Board
          Standard No. 1 (which relates to the auditor's independence from Omega
          and its related entities) and has discussed with Ernst & Young LLP its
          independence from Omega; and

     4)   Based on reviews and discussions of Omega's 2003 audited  consolidated
          financial  statements  with  management and  discussions  with Ernst &
          Young LLP, the Audit  Committee  recommended to the Board of Directors
          that  Omega's  2003  audited  consolidated   financial  statements  be
          included in the company's Annual Report on Form 10-K.

                                      Audit Committee of the Board of Directors

                                      /s/ Bernard J. Korman
                                      /s/ Harold J. Kloosterman
                                      /s/ Stephen D. Plavin


                     RELATIONSHIP WITH INDEPENDENT AUDITORS

INDEPENDENT AUDITORS

     Ernst & Young LLP audited our  financial  statements  for each of the years
ended December 31, 2001, 2002 and 2003. Representatives of Ernst & Young LLP are
expected to be present at the Annual  Meeting and will be given the  opportunity
to make a statement if they desire to do so. It is also  expected that they will
be available to respond to appropriate questions from stockholders at the Annual
Meeting.  Approval of our  independent  auditors is not a matter  required to be
submitted to stockholders.

AUDIT FEES

     The aggregate  fees billed by Ernst & Young LLP for  professional  services
rendered  to our  company  for  the  audit  of the  company's  annual  financial
statements  for  fiscal  year  2002 and 2003 and the  reviews  of the  financial
statements  included in the company's  Forms 10-Q for fiscal years 2002 and 2003
were approximately $216,000 and $167,000, respectively.

AUDIT RELATED FEES

     There were no fees billed by Ernst & Young LLP for professional services to
our company  relating to  employee  benefit  audits,  due  diligence  related to
mergers and acquisitions, accounting consultations and audits in connection with
acquisitions, internal control reviews, attest services that are not required by
statute or regulation  and  consultation  concerning  financial  accounting  and
reporting standards for fiscal years 2002 and 2003.

TAX FEES

     The aggregate fees billed by Ernst & Young LLP for professional services to
our company  relating to tax compliance,  tax planning and tax advice taken as a
whole were  approximately  $149,000  and $33,000 for fiscal years 2002 and 2003,
respectively.

OTHER FEES

     The aggregate fees billed by Ernst & Young LLP for professional services to
our company  rendered  other than as stated  under the  captions  "Audit  Fees,"
"Audit-Related  Fees" and "Tax Fees"  above for fiscal  years 2002 and 2003 were
approximately  $71,000 and $0,  respectively.  We  reimbursed  certain  fees and
expenses of an  investment  banking firm  selected to act as placement  agent in
connection  with  a  planned  commercial   mortgage-backed  securities  ("CMBS")
transaction pursuant to our agreement with the placement agent. In 2002, we were
unable to  complete  the  proposed  CMBS  transaction  due to the  impact on our
operators resulting from reductions in Medicare reimbursement and concerns about
potential  Medicaid  rate  reductions.  In  connection  with the  proposed  CMBS
transaction,  the placement agent engaged the transaction support group based in
a different  office of Ernst & Young LLP, which does not provide services to our
company,  to provide the placement agent with certain  procedures agreed upon by
Ernst & Young LLP and the placement  agent.  Among the placement  agent expenses
that were reimbursed by us in connection with the proposed CMBS transaction were
$1.2 million for due  diligence  and other  services  provided to the  placement
agent by this transaction support group of Ernst & Young LLP.

DETERMINATION OF AUDITOR INDEPENDENCE

     The Audit  Committee has considered the provision of non-audit  services by
our principal accountants and has determined that the provision of such services
was consistent with maintaining the independence of Ernst & Young LLP.

AUDIT COMMITTEE'S PRE-APPROVAL POLICIES

     The Audit Committee's current practice is to pre-approve all audit services
and all  permitted  non-audit  services  to be  provided  to our  company by our
independent auditor;  provided,  however pre-approval requirements for non-audit
services are not  required if all such  services:  (1) do not  aggregate to more
than five percent of total  revenues paid by us to our  accountant in the fiscal
year when services are provided;  (2) were not recognized as non-audit  services
at the time of the engagement;  and (3) are promptly brought to the attention of
the Audit  Committee  and approved  prior to the  completion of the audit by the
Audit Committee.


                              STOCKHOLDER PROPOSALS

     January 1, 2005 is the date by which proposals of stockholders  intended to
be presented at the 2005 Annual Meeting of  Stockholders  must be received by us
for inclusion in our proxy statement and form of proxy relating to that meeting.

     In  addition,  our Bylaws  provide that in order for business to be brought
before the Annual Meeting,  a stockholder must deliver or mail written notice to
our Secretary at our principal  executive  office not less than 60 days nor more
than 90 days  prior to the first  anniversary  of the  preceding  year's  Annual
Meeting,  provided,  however, that if the date of the Annual Meeting is advanced
by more than 30 days or delayed by more than 60 days from such anniversary date,
notice must be delivered not more than 90 days prior to such Annual  Meeting nor
less than 60 days prior to such Annual  Meeting or if later,  not later than the
close of business on the tenth day  following  the day on which the date of such
meeting is publicly  announced.  The notice must state the  stockholder's  name,
address,  class and  number of shares  of our  stock and  briefly  describe  the
business to be brought  before the  meeting,  the reasons  for  conducting  such
business at the meeting and any material  interest of the stockholder and of the
beneficial  owner,  if any,  on  whose  behalf  the  proposal  is  made.  If the
stockholder  intends to nominate a  candidate  for  election  as a director,  in
addition to the requirements set forth above, the notice should include the name
of the nominee for election as a director, the age of the nominee, the nominee's
business address and experience during the past five years, the number of shares
of our  stock  beneficially  held by the  nominee,  and such  other  information
concerning the nominee as would be required to be included in a proxy  statement
soliciting proxies for the election of the nominee. The notice must also include
a description of all arrangements or understandings between such stockholder and
each proposed nominee and any other person pursuant to which the nominations are
to be made by such stockholder,  a representation  that such stockholder intends
to appear in person or by proxy at the meeting to nominate  the person  named in
the notice, and the consent of the nominee to serve as a director.

                                  ANNUAL REPORT

     A copy  of  our  annual  report  for  the  year  ended  December  31,  2003
accompanies  this  proxy  statement  and is  incorporated  herein by  reference.
Additional  copies may be  obtained  by writing to Robert O.  Stephenson  at our
principal executive offices, at the address set forth below.

     A copy of our annual report on Form 10-K will be provided,  without charge,
upon written  request  addressed to Mr.  Stephenson at our  principal  executive
offices at 9690 Deereco Road, Suite 100, Timonium, Maryland 21093.

     Our annual report to  stockholders  and Form 10-K are also available on our
website at www.omegahealthcare.com.


                            EXPENSES OF SOLICITATION

     The total cost of this solicitation will be borne by us. In addition to use
of the mails,  proxies may be solicited by our  directors,  officers and regular
employees of Omega  personally  and by  telephone,  telex or  facsimile.  We may
reimburse  persons  holding  shares  in their  own  names or in the names of the
nominees  for  expenses  such  persons  incur  in  obtaining  instructions  from
beneficial  owners of such shares.  We have also engaged  Georgeson  Shareholder
Communications,  Inc. to solicit proxies for a fee not to exceed  $10,000,  plus
out-of-pocket expenses.

             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     To our knowledge,  all filings  required under Section 16 of the Securities
Exchange Act of 1934 were made on a timely basis.

                                  OTHER MATTERS

The Board of Directors knows of no other business that may be validly  presented
at the Annual  Meeting,  but if other matters do properly come before the Annual
Meeting,  it is intended  that the persons  named in the proxy will vote on said
matters in accordance with their best judgment.


                                         /s/ C. TAYLOR PICKETT
                                             Chief Executive Officer


April 27, 2004
Timonium, Maryland


                                                                      APPENDIX A


                             AUDIT COMMITTEE CHARTER
                        OMEGA HEALTHCARE INVESTORS, INC.
                                 APRIL 20, 2004


                                   I. PURPOSE

     The Board of Directors (the "Board") of Omega  Healthcare  Investors,  Inc.
(the "Company") has established the Audit Committee (the  "Committee") to assist
the Board in fulfilling its oversight  responsibilities  of (1) the integrity of
the Company's financial statements,  (2) the Company's compliance with legal and
regulatory  requirements,  (3)  the  independent  auditor's  qualifications  and
independence,  and (4) the performance of the Company's  internal audit function
and independent auditors.

                                 II. COMPOSITION

     The  Committee  will be comprised  of at least three  members of the Board.
Each member will be both  independent and financially  literate.  The Board must
determine  that at least one member has the level of  accounting  and  financial
expertise as required by the applicable  rules and  regulations of the principal
trading market for the Company's  common stock.  Each member will be free of any
relationship  that, in the opinion of the Board, would interfere with his or her
individual  exercise of independent  judgment.  Applicable  laws and regulations
will be followed in evaluating a member's independence.

     No committee  member will  simultaneously  serve on the audit committees of
more than three public companies unless the Board affirmatively  determines that
such  simultaneous  service would not impair the ability of such member to serve
on the Committee.  The members of the Committee will be elected  annually at the
organizational meeting of the full Board and will be listed in the annual report
to shareholders.

                              III. RESPONSIBILITIES

     A. SCOPE OF RESPONSIBILITY AND AUTHORITY. The primary responsibility of the
Committee is to oversee the Company's  financial  reporting process on behalf of
the Board and report the results of its  activities to the Board.  The Committee
will be directly responsible for the appointment and dismissal, compensation and
oversight  of the  Company's  independent  auditors  and may not  delegate  such
responsibilities to others. The Committee does not prepare financial  statements
on behalf of the Company or perform the  Company's  audits,  and its members are
not  the  Company's  auditors  and  do  not  certify  the  Company's   financial
statements.  These  functions  are  performed by the  Company's  management  and
independent auditors.

     The  Committee  may retain (and  determine and receive from the Company the
appropriate  funding  for)  experts  to advise or assist it,  including  outside
counsel, accountants, financial analysts or others.

     In addition to the matters set forth  herein,  the  Committee  will perform
such other functions as required by law, the Company's Articles of Incorporation
or Bylaws, or the Board.

     B. RESPONSIBILITIES AND DUTIES. The Committee will meet at least four times
a year, with authority to convene additional meetings as circumstances require.

     In carrying out its oversight responsibilities, the Committee will:

     1.   Meet at the request of the Chief Financial  Officer or the independent
          auditors and will meet at least once every quarter or more  frequently
          as circumstances dictate.

     2.   Meet separately,  periodically with (a) management,  (b) the Company's
          internal  auditors  (whether  in-house  or  out-sourced),  and (c) the
          Company's   independent   auditors  to  discuss  issues  and  concerns
          warranting Committee attention.

     3.   Recommend  to the Board  whether the  Company's  financial  statements
          should be included in the Company's annual report on Form 10-K.

     4.   Prepare the Committee  report to be included in the  Company's  annual
          proxy statement.

     5.   Review and discuss with  management  the policies and  guidelines  for
          earnings  press  releases  and  financial   information  and  earnings
          guidance provided to analysts and ratings agencies.

     6.   Review and discuss with  management  the policies and  guidelines  for
          risk assessment and management.

     7.   Report its actions to the Board.

     C. RELATIONSHIPS WITH INDEPENDENT  AUDITORS. In order to retain independent
auditors to review the records and accounts of the Company, the Committee will:

     1.   Have the sole authority to appoint, retain,  compensate,  evaluate and
          terminate the  independent  auditors to conduct  Company  audits or to
          perform permissible non-audit services,  with the independent auditors
          ultimately  accountable  to the  Committee  with  respect to audit and
          related work.

     2.   Review  the  independent  auditors'  scope and audit plan prior to the
          commencement of the audit.

     3.   Pre-approve any services to be performed by the independent  auditors,
          or establish  policies  pursuant to which  services to be performed by
          the independent auditor will be pre-approved.

     4.   Determine the scope of the audit and the associated fees to be paid to
          the  independent  auditors (for both audit and  permissible  non-audit
          work).

     5.   Discuss  with the  independent  auditors  any  relationships  that may
          affect  the  auditors'   independence  and  confirm  and  oversee  the
          independence of the auditors.

     6.   Pre-approve the Company's  hiring of any employees or former employees
          of the independent  auditors or establish policies with respect to any
          such hiring.

     7.   Obtain  and  review  annually  a report  by the  independent  auditors
          describing  (a)  the  auditing   firm's   internal   quality   control
          procedures,  (b) any material issues raised by its most recent quality
          control review, or peer review, or any inquiry or investigation within
          the preceding five years and steps taken to resolve those issues,  and
          (c)  all  relationships  between  the  independent  auditors  and  the
          Company.

     In its review of the  independent  auditors,  the Committee will direct the
independent auditors to provide the Committee with timely reports of:

     (a)  all critical accounting policies and practices,

     (b)  all alternative  treatments of financial  information within generally
          accepted   accounting   principles   that  have  been  discussed  with
          management,  effects of using  such  alternatives,  and the  treatment
          preferred by the independent auditing firm, and

     (c)  other material written communications between the independent auditors
          and management.

     D.  COMPANY  FINANCIAL  STATEMENTS.  Prior to the  release or filing of the
Company's  financial  statements,  the Committee will review with management and
the independent auditors the Company's annual and quarterly financial statements
and related footnotes as well as disclosures under "Management's  Discussion and
Analysis of Financial  Condition and Results of Operations."  The Committee will
also review at least annually:

     1.   With the  independent  auditors and  management,  their  processes for
          assessment of material  misstatements,  identification  of the notable
          risk areas, and their response to those risks.

     2.   The independent  auditors' qualitative judgment about the quality, not
          just the acceptability,  of accounting  principles,  use of estimates,
          bases  for  determining  the  amounts  of  estimates,   and  financial
          disclosures.

     3.   With the independent auditors any significant difficulties or disputes
          with management  encountered during the course of the audit, including
          management's response.

     4.   With the  independent  auditors the management  letter provided by the
          independent auditors and the Company's response.

     5.   Any financial or non-financial arrangements of the Company that do not
          appear on the  financial  statements  of the Company and their related
          risks.

     6.   With management and the independent  auditors the effect of regulatory
          and accounting  initiatives as well as accounting principles and their
          alternatives that have a significant effect on the Company's financial
          statements.

     7.   Any  transactions  or courses of dealing with  parties  related to the
          Company.

     8.   Any other matters related to the annual Company audit, including those
          matters that are required to be  communicated  to the Committee  under
          applicable law and generally accepted auditing standards.

     E. OVERSIGHT OF CORPORATE COMPLIANCE FUNCTION. The Committee will:

     1.   Establish   procedures   whereby  employees  can   confidentially  and
          anonymously  submit to the Committee  concerns or issues regarding the
          Company's accounting or auditing matters.

     2.   Establish  procedures  for the  receipt,  retention  and  treatment of
          complaints regarding  accounting or auditing matters,  including their
          controls.

     3.   Discuss with the independent auditors whether they believe or have any
          reason to believe  that an illegal  act has  occurred,  regardless  of
          whether they believe it will materially affect the Company's financial
          statements.

     4.   Review any  transactions  with related parties and the procedures used
          to identify related parties.

     5.   Perform  an  evaluation  of  its  performance  at  least  annually  to
          determine whether it is functioning effectively.

     F. AUDIT COMMITTEE FORMALITIES AND CHARTER. The Committee will:

     1.   Review  and  reassess  annually  the  adequacy  of  this  Charter  and
          recommend any changes to the Board.

     2.   Report  periodically  to the Board on the  Committee's  activities and
          findings,  including any issues  regarding the quality or integrity of
          the Company's  financial  statements,  the Company's  compliance  with
          legal or regulatory requirements,  the performance and independence of
          the Company's  independent auditors or the performance of the internal
          auditors.

     3.   Cause appropriate minutes of the Committee's meetings to be kept.


                                                                      APPENDIX B

                        OMEGA HEALTHCARE INVESTORS, INC.

                              ARTICLES OF AMENDMENT


     OMEGA  HEALTHCARE  INVESTORS,  INC.,  a  Maryland  corporation  having  its
principal  Maryland office at 9690 Deereco Road, Suite 100,  Timonium,  Maryland
21093 (the  "Company"),  hereby certifies to the State Department of Assessments
and Taxation of Maryland that:

     FIRST:  The board of directors of the Company,  at a meeting duly  convened
and held on April 20, 2004,  adopted a resolution  in which it was set forth the
following  amendment  to the charter of the Company (the  "Charter"),  declaring
that said  amendment  to the  Charter was  advisable  and  directing  that it be
submitted for action thereon at a meeting of the  stockholders of the Company to
be held on June 3, 2004.

     SECOND:  Notice  setting forth the  aforesaid  amendment of the Charter and
stating  that a purpose  of the  meeting  of the  stockholders  would be to take
action  therein,  was given as required by law to all  stockholders  entitled to
vote  thereon.  The amendment of the Charter of the Company as  hereinafter  set
forth was  approved by the  stockholders  of the Company at said  meeting by the
affirmative vote required by law and the Charter.

     THIRD:  The Charter is hereby  amended by striking out Section 1 of Article
IV in its entirety and inserting in lieu thereof the following:

                                   ARTICLE IV

                                  CAPITAL STOCK

     SECTION  1.  The  total  number  of  shares  of  capital  stock  which  the
corporation  shall  have  authority  to  issue  is One  Hundred  Twenty  Million
(120,000,000)  of which One  Hundred  Million  (100,000,000)  shall be shares of
Common  Stock  having  a  par  value  of  $.10  per  share  and  Twenty  Million
(20,000,000)  shall be shares of Preferred Stock having a par value of $1.00 per
share.  The  aggregate  par value of all said  shares  shall be  Thirty  Million
Dollars  ($30,000,000).  Prior to the  increase,  the aggregate par value of all
said shares was Twenty Million Dollars ($20,000,000).

     FOURTH:  (a) The total  number of  shares  of all  classes  of stock of the
Company  heretofore  authorized,  and the  number and par value of the shares of
each class, were as follows:

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

                       Common Stock                  Par Value
               ------------------------------ ------------------------

                        100,000,000               $.10 per share

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

                      Preferred Stock                Par Value
               ------------------------------ ------------------------

                        10,000,000                $1.00 per share
               ------------------------------ ------------------------


     (b) The total  number of shares of all  classes of stock of the  Company as
increased,  and the  number and par value of the  shares of each  class,  are as
follows:

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

                       Common Stock                  Par Value
               ------------------------------ ------------------------

                        100,000,000               $.10 per share

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

                      Preferred Stock                Par Value
               ------------------------------ ------------------------

                        20,000,000                $1.00 per share
               ------------------------------ ------------------------


     (c) The  aggregate  par value of all shares of all  classes of stock of the
Company  heretofore  authorized was $20,000,000.  The aggregate par value of all
shares of all classes of stock as  increased by this  amendment is  $30,000,000.
This  amendment  has the effect of  increasing  the  aggregate  par value of all
shares of all classes of stock of the Company by $10,000,000.

     FIFTH: The undersigned Chief Executive Officer of the Company  acknowledges
the Articles of Amendment to be the  corporate act of the Company and, as to all
matters or facts  required to be  verified  under oath,  the  undersigned  Chief
Executive  Officer of the  Company  acknowledges  that to the best of his or her
knowledge,  information  and  belief,  these  matters  and facts are true in all
material  respects  and that this  statement  is made  under the  penalties  for
perjury.

     IN WITNESS  WHEREOF,  the Company has caused these Articles of Amendment to
be  executed  under  seal in its name and on its  behalf by its Chief  Executive
Officer and attested to by its Secretary on this ___ day of June, 2004.




      ATTEST                                  OMEGA HEALTHCARE INVESTORS, INC.


      By:  /s/ DANIEL J. BOOTH                By:  /s/  C. TAYLOR PICKETT
               Daniel J. Booth                          C. Taylor Pickett
               Secretary                                Chief Executive Officer


                                                                      APPENDIX C


                        OMEGA HEALTHCARE INVESTORS, INC.
                            2004 STOCK INCENTIVE PLAN





                        OMEGA HEALTHCARE INVESTORS, INC.
                            2004 STOCK INCENTIVE PLAN

                                TABLE OF CONTENTS

SECTION I.  DEFINITIONS...................................................1

   1.1    DEFINITIONS.....................................................1

SECTION 2  THE STOCK INCENTIVE PLAN.......................................3

   2.1    PURPOSE OF THE PLAN.............................................3
   2.2    STOCK SUBJECT TO THE PLAN.......................................3
   2.3    ADMINISTRATION OF THE PLAN......................................4
   2.4    ELIGIBILITY AND LIMITS..........................................4
   2.5    NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS.......................4

SECTION 3  TERMS OF STOCK INCENTIVES......................................4

   3.1    TERMS AND CONDITIONS OF ALL STOCK INCENTIVES....................4
   3.2    TERMS AND CONDITIONS OF OPTIONS.................................5
        (a)    Option Price...............................................5
        (b)    Option Term................................................5
        (c)    Payment....................................................5
        (d)    Conditions to the Exercise of an Option....................6
        (e)    Termination of Incentive Stock Option......................6
        (f)    Special Provisions for Certain Substitute Options..........6
   3.3    TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS...............6
        (a)    Settlement.................................................6
        (b)    Conditions to Exercise.....................................6
   3.4    TERMS AND CONDITIONS OF STOCK AWARDS............................6
   3.5    TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS..............7
        (a)    Payment....................................................7
        (b)    Conditions to Payment......................................7
   3.6    TERMS AND CONDITIONS OF PERFORMANCE UNIT AWARDS.................7
        (a)    Payment....................................................7
        (b)    Conditions to Payment......................................7
   3.7    TERMS AND CONDITIONS OF PHANTOM SHARES..........................7
        (a)    Payment....................................................7
        (b)    Conditions to Payment......................................7
   3.8  TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS....................7
        (a)    Payment....................................................7
        (b)    Conditions to Payment......................................8
   3.9  TREATMENT OF AWARDS UPON TERMINATION OF EMPLOYMENT................8

SECTION 4  RESTRICTIONS ON STOCK..........................................8

   4.1    ESCROW OF SHARES................................................8
   4.2    RESTRICTIONS ON TRANSFER........................................8

SECTION 5  GENERAL PROVISIONS.............................................8

   5.1    WITHHOLDING.....................................................8
   5.2    CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION..................9
   5.3    CASH AWARDS.....................................................9
   5.4    COMPLIANCE WITH CODE............................................9
   5.5    RIGHT TO TERMINATE EMPLOYMENT...................................9
   5.6    NON-ALIENATION OF BENEFITS......................................9
   5.7    RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS............9
   5.8    LISTING AND LEGAL COMPLIANCE...................................10
   5.9    TERMINATION AND AMENDMENT OF THE PLAN..........................10
   5.10   STOCKHOLDER APPROVAL...........................................10
   5.11   CHOICE OF LAW..................................................10
   5.12   EFFECTIVE DATE OF PLAN.........................................10



                        OMEGA HEALTHCARE INVESTORS, INC.
                            2004 STOCK INCENTIVE PLAN


                             SECTION I. DEFINITIONS

     1.1 Definitions. Whenever used herein, the masculine pronoun will be deemed
to include the  feminine,  and the  singular  to include the plural,  unless the
context clearly  indicates  otherwise,  and the following  capitalized words and
phrases are used herein with the meaning thereafter ascribed:

          (a)  "Affiliate" means:

               (1)  Any Subsidiary or Parent,

               (2)  An   entity   that   directly   or   through   one  or  more
                    intermediaries  controls,  is  controlled  by,  or is  under
                    common  control  with  the  Company,  as  determined  by the
                    Company, or

               (3)  Any  entity  in which  the  Company  has such a  significant
                    interest that the Company  determines it should be deemed an
                    "Affiliate,"  as  determined  in the sole  discretion of the
                    Company.

          (b)  "Board of Directors" means the board of directors of the Company.

          (c)  "Code" means the Internal Revenue Code of 1986, as amended.

          (d)  "Committee"  means  the  Compensation  Committee  of the Board of
               Directors.

          (e)  "Company"  means Omega  Healthcare  Investors,  Inc.,  a Maryland
               corporation.

          (f)  "Disability"  has the same  meaning as provided in the  long-term
               disability  plan or policy  maintained  or, if  applicable,  most
               recently  maintained,  by the  Company  or,  if  applicable,  any
               Affiliate  of the Company for the  Participant.  If no  long-term
               disability  plan or policy was ever  maintained  on behalf of the
               Participant or, if the determination of Disability  relates to an
               Incentive Stock Option, Disability means that condition described
               in Code Section  22(e)(3),  as amended from time to time.  In the
               event of a dispute,  the determination of Disability will be made
               by the  Committee  and will be supported by advice of a physician
               competent in the area to which such Disability relates.

          (g)  "Dividend Equivalent Rights" means certain rights to receive cash
               payments as described in Section 3.5.

          (h)  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
               amended from time to time.

          (i)  "Fair Market Value" with regard to a date means:

               (1)  the price at which  Stock  shall have been sold on that date
                    or the last  trading  date prior to that date as reported by
                    the national  securities  exchange selected by the Committee
                    on which the shares of Stock are then actively traded or, if
                    applicable, as reported by the NASDAQ Stock Market.

               (2)  if such market  information  is not  published  on a regular
                    basis, the price of Stock in the over-the-counter  market on
                    that  date or the last  business  day  prior to that date as
                    reported by the NASDAQ  Stock Market or, if not so reported,
                    by a generally accepted reporting service.

               (3)  if Stock is not publicly traded, as determined in good faith
                    by the Committee with due  consideration  being given to (i)
                    the most recent  independent  appraisal of the  Company,  if
                    such  appraisal is not more than twelve  months old and (ii)
                    the valuation methodology used in any such appraisal.

     For purposes of Paragraphs  (1),  (2), or (3) above,  the Committee may use
     the closing price as of the  applicable  date,  the average of the high and
     low prices as of the applicable date or for a period certain ending on such
     date, the price  determined at the time the  transaction is processed,  the
     tender  offer  price for  shares of Stock,  or any other  method  which the
     Committee determines is reasonably indicative of the fair market value.

          (j)  "Incentive  Stock Option" means an incentive  stock option within
               the meaning of Section 422 of the Internal Revenue Code.

          (k)  "Option" means a Non-Qualified Stock Option or an Incentive Stock
               Option.

          (l)  "Over 10% Owner" means an individual who at the time an Incentive
               Stock  Option is granted owns Stock  possessing  more than 10% of
               the total  combined  voting  power of the  Company  or one of its
               Subsidiaries,  determined  by applying the  attribution  rules of
               Code Section 424(d).

          (m)  "Non-Qualified  Stock Option" means a stock option that is not an
               Incentive Stock Option.

          (n)  "Parent"  means any  corporation  (other than the  Company) in an
               unbroken chain of  corporations  ending with the Company if, with
               respect to Incentive  Stock Options,  at the time of the granting
               of the Option,  each of the  corporations  other than the Company
               owns stock  possessing 50% or more of the total  combined  voting
               power of all classes of stock in one of the other corporations in
               such  chain.  A Parent  shall  include  any  entity  other than a
               corporation  to the extent  permissible  under Section  424(f) or
               regulations and rulings thereunder.

          (o)  "Participant"  means an individual who receives a Stock Incentive
               hereunder.

          (p)  "Performance Goals" means the measurable performance  objectives,
               if any,  established  by the Committee  for a Performance  Period
               that are to be achieved with respect to a Stock Incentive granted
               to a  Participant  under  the  Plan.  Performance  Goals  may  be
               described  in terms  of  Company-wide  objectives  or in terms of
               objectives  that are  related  to  performance  of the  division,
               Affiliate,  department  or  function  within  the  Company  or an
               Affiliate in which the Participant  receiving the Stock Incentive
               is employed or on which the  Participant's  efforts have the most
               influence.  The achievement of the Performance  Goals established
               by the  Committee for any  Performance  Period will be determined
               without  regard to the  effect on such  Performance  Goals of any
               acquisition or disposition by the Company of a trade or business,
               or of  substantially  all of the  assets of a trade or  business,
               during the Performance Period and without regard to any change in
               accounting  standards by the Financial Accounting Standards Board
               or any successor entity. The Performance Goals established by the
               Committee for any Performance  Period under the Plan will consist
               of one or more of the following:

               (1)  earnings  per share  and/or  growth in earnings per share in
                    relation  to  target  objectives,  excluding  the  effect of
                    extraordinary or nonrecurring items;

               (2)  operating  cash flow and/or growth in operating cash flow in
                    relation to target objectives;

               (3)  cash available in relation to target objectives;

               (4)  net income and/or growth in net income in relation to target
                    objectives,   excluding  the  effect  of   extraordinary  or
                    nonrecurring items;

               (5)  revenue  and/or  growth in  revenue  in  relation  to target
                    objectives;

               (6)  total  shareholder  return  (measured  as the  total  of the
                    appreciation of and dividends  declared on the Common Stock)
                    in relation to target objectives;

               (7)  return on invested capital in relation to target objectives;

               (8)  return  on   shareholder   equity  in   relation  to  target
                    objectives;

               (9)  return on assets in relation to target objectives; and

               (10) return  on  common   book   equity  in  relation  to  target
                    objectives

     If the Committee  determines that, as a result of a change in the business,
     operations, corporate structure or capital structure of the Company, or the
     manner in which the Company  conducts its business,  or any other events or
     circumstances,  the Performance Goals are no longer suitable, the Committee
     may in its discretion  modify such Performance Goals or the related minimum
     acceptable  level of  achievement,  in whole or in part,  with respect to a
     period as the Committee deems appropriate and equitable,  except where such
     action would result in the loss of the otherwise available exemption of the
     Stock  Incentive  under  Section  162(m) of the  Code.  In such  case,  the
     Committee  will not  make  any  modification  of the  Performance  Goals or
     minimum acceptable level of achievement.

          (q)  "Performance Period" means, with respect to a Stock Incentive,  a
               period of time within  which the  Performance  Goals  relating to
               such Stock Incentive are to be measured.  The Performance  Period
               will be  established  by the  Committee  at the  time  the  Stock
               Incentive is granted.

          (r)  "Performance  Unit Award" refers to a  performance  unit award as
               described in Section 3.6.

          (s)  "Phantom Shares" refers to the rights described in Section 3.7.

          (t)  "Plan"  means the Omega  Healthcare  Investors,  Inc.  2000 Stock
               Incentive Plan.

          (u)  "Restricted Stock Unit" refers to the rights described in Section
               3.8.

          (v)  "Stock" means Company's common stock.

          (w)  "Stock  Appreciation  Right"  means  a stock  appreciation  right
               described in Section 3.3.

          (x)  "Stock Award" means a stock award described in Section 3.4.

          (y)  "Stock  Incentive  Agreement"  means  an  agreement  between  the
               Company and a Participant  or other  documentation  evidencing an
               award of a Stock Incentive.

          (z)  "Stock Incentive Program" means a written program  established by
               the  Committee,  pursuant to which Stock  Incentives  are awarded
               under the Plan under uniform terms,  conditions and  restrictions
               set forth in such written program.

          (aa) "Stock  Incentives"  means,  collectively,   Dividend  Equivalent
               Rights,  Incentive  Stock Options,  Non-Qualified  Stock Options,
               Phantom  Shares,  Stock  Appreciation  Rights  and Stock  Awards,
               Performance Unit Awards and Restricted Stock Units.

          (bb) "Subsidiary" means any corporation (other than the Company) in an
               unbroken chain of corporations  beginning with the Company if, at
               the time of the granting of the Option,  each of the corporations
               other than the last  corporation in the unbroken chain owns stock
               possessing 50% or more of the total combined  voting power of all
               classes of stock in one of the other corporations in the chain. A
               "Subsidiary" shall include any entity other than a corporation to
               the extent  permissible  under Section  424(f) or  regulations or
               rulings thereunder.

          (cc) "Termination   of  Employment"   means  the  termination  of  the
               employee-employer  relationship  between  a  Participant  and the
               Company and its  Affiliates,  regardless of whether  severance or
               similar  payments  are made to the  Participant  for any  reason,
               including,  but  not by  way  of  limitation,  a  termination  by
               resignation,  discharge,  death,  Disability or  retirement.  The
               Committee will, in its absolute discretion,  determine the effect
               of  all  matters  and  questions  relating  to a  Termination  of
               Employment, including, but not by way of limitation, the question
               of  whether  a leave of  absence  constitutes  a  Termination  of
               Employment.


                       SECTION 2 THE STOCK INCENTIVE PLAN

     2.1 Purpose of the Plan.  The Plan is intended to (a) provide  incentive to
officers, employees, directors and consultants of the Company and its Affiliates
to stimulate  their efforts  toward the continued  success of the Company and to
operate and manage the business in a manner that will provide for the  long-term
growth and  profitability  of the  Company;  (b)  encourage  stock  ownership by
officers, employees, directors and consultants by providing them with a means to
acquire a proprietary  interest in the Company,  acquire shares of Stock,  or to
receive compensation which is based upon appreciation in the value of Stock; and
(c) provide a means of obtaining,  rewarding and retaining officers,  employees,
directors, and consultants.

     2.2 Stock Subject to the Plan.  Subject to  adjustment  in accordance  with
Section  5.2,  three  million  (3,000,000)  shares of Stock (the  "Maximum  Plan
Shares") are hereby  reserved  exclusively for issuance upon exercise or payment
pursuant to Stock Incentives. The shares of Stock attributable to the nonvested,
unpaid,  unexercised,  unconverted or otherwise  unsettled  portion of any Stock
Incentive that is forfeited or cancelled or expires or terminates for any reason
without becoming vested, paid, exercised, converted or otherwise settled in full
will again be available for purposes of the Plan.

     2.3  Administration of the Plan. The Plan is administered by the Committee.
The  Committee has full  authority in its  discretion to determine the officers,
key  employees,  directors and  consultants  of the Company or its Affiliates to
whom Stock  Incentives  will be granted  and the terms and  provisions  of Stock
Incentives,  subject to the Plan.  Subject to the  provisions  of the Plan,  the
Committee has full and conclusive authority to interpret the Plan; to prescribe,
amend and rescind rules and  regulations  relating to the Plan; to determine the
terms and provisions of the respective  Stock  Incentive  Agreements and to make
all other determinations necessary or advisable for the proper administration of
the Plan. The Committee's  determinations under the Plan need not be uniform and
may be made by it  selectively  among  persons who  receive,  or are eligible to
receive,  awards  under the Plan  (whether  or not such  persons  are  similarly
situated). The Committee's decisions are final and binding on all Participants.

     2.4  Eligibility  and  Limits.  Stock  Incentives  may be  granted  only to
officers, employees, directors, and consultants of the Company, or any Affiliate
of the Company;  provided,  however,  that an Incentive Stock Option may only be
granted  to an  employee  of the  Company  or any  Subsidiary.  In the  case  of
Incentive Stock Options,  the aggregate Fair Market Value  (determined as at the
date an Incentive  Stock Option is granted) of stock with respect to which stock
options intended to meet the requirements of Code Section 422 become exercisable
for the first time by an individual  during any calendar year under all plans of
the Company and its Subsidiaries may not exceed $100,000; provided further, that
if the limitation is exceeded,  the Incentive  Stock  Option(s)  which cause the
limitation to be exceeded will be treated as Non-Qualified Stock Option(s).

     2.5 Non-Employee Director Stock Option Grants. A Non-Qualified Stock Option
with  respect to 10,000  shares of Stock  shall be granted to each  non-employee
director as of the date he is first  elected as a  non-employee  director of the
Company.  An additional  Non-Qualified Stock Option with respect to 1,000 shares
of Stock  shall be granted to each  non-employee  director  of the Company as of
each  January 1 following  the initial  grant.  Each Stock  Option  granted to a
non-employee  director  will vest with  respect to 1/3 of the grant on the first
anniversary of the grant,  with respect to an additional 1/3 of the grant on the
second  anniversary of the grant, and with respect to the final 1/3 on the third
anniversary  of the grant;  provided that an Optionee will cease to vest when he
or she ceases to provide services to the Company as an employee,  consultant, or
director.

     The  existence of the  preceding  formula  grants shall not be construed to
preclude  further  grants of Options or other Stock  Incentives to  non-employee
directors of the Company.


                       SECTION 3 TERMS OF STOCK INCENTIVES

     3.1 Terms and Conditions of All Stock Incentives.

          (a)  The number of shares of Stock as to which a Stock  Incentive  may
               be  granted  will be  determined  by the  Committee  in its  sole
               discretion,  subject to the  provisions  of Section 2.2 as to the
               total  number of shares  available  for grants under the Plan and
               subject to the limits on Options and Stock Appreciation Rights in
               the  following  sentence.  On such date as  required  by  Section
               162(m)   of  the  Code  and  the   regulations   thereunder   for
               compensation  to  be  treated  as  qualified   performance  based
               compensation,  the maximum number of shares of Stock with respect
               to which  Options  or Stock  Appreciation  Rights  may be granted
               during any  calendar  year period to any  employee may not exceed
               1,100,000. If, after grant, an Option is cancelled, the cancelled
               Option shall continue to be counted against the maximum number of
               shares  for  which  options  may be  granted  to an  employee  as
               described in this  Section  3.1.  If,  after grant,  the exercise
               price of an Option is reduced or the base amount on which a Stock
               Appreciation  Right is  calculated  is reduced,  the  transaction
               shall be treated as the  cancellation  of the Option or the Stock
               Appreciation Right, as applicable,  and the grant of a new Option
               or Stock Appreciation Right, as applicable. If an Option or Stock
               Appreciation  Right is deemed to be cancelled as described in the
               preceding  sentence,  the Option or Stock Appreciation Right that
               is deemed to be  canceled  and the  Option or Stock  Appreciation
               Right that is deemed to be granted shall both be counted  against
               the  maximum   number  of  shares  for  which  Options  or  Stock
               Appreciation Rights may be granted to an employee as described in
               this Section 3.1.

          (b)  Each  Stock  Incentive  will  either  be  evidenced  by  a  Stock
               Incentive  Agreement  in such  form and  containing  such  terms,
               conditions and  restrictions as the Committee may determine to be
               appropriate, including without limitation, Performance Goals that
               must be  achieved  as a  condition  to  vesting or payment of the
               Stock  Incentive,  or be made  subject  to the  terms  of a Stock
               Incentive   Program,   containing  such  terms,   conditions  and
               restrictions  as the Committee  may determine to be  appropriate,
               including  without  limitation,  Performance  Goals  that must be
               achieved  as a  condition  to  vesting  or  payment  of the Stock
               Incentive.  Each Stock  Incentive  Agreement  or Stock  Incentive
               Program is  subject  to the terms of the Plan and any  provisions
               contained in the Stock  Incentive  Agreement  or Stock  Incentive
               Program that are inconsistent with the Plan are null and void.

          (c)  The date a Stock  Incentive  is granted will be the date on which
               the Committee has approved the terms and  conditions of the Stock
               Incentive and has determined the recipient of the Stock Incentive
               and the number of shares covered by the Stock Incentive,  and has
               taken all such other  actions  necessary to complete the grant of
               the Stock Incentive.

          (d)  Any Stock  Incentive may be granted in connection with all or any
               portion  of  a  previously  or  contemporaneously  granted  Stock
               Incentive.  Exercise or vesting of a Stock  Incentive  granted in
               connection  with another Stock Incentive may result in a pro rata
               surrender or  cancellation  of any related  Stock  Incentive,  as
               specified in the applicable  Stock  Incentive  Agreement or Stock
               Incentive Program.

          (e)  Stock  Incentives are not  transferable  or assignable  except by
               will  or  by  the  laws  of  descent  and  distribution  and  are
               exercisable,  during  the  Participant's  lifetime,  only  by the
               Participant;   or  in  the  event  of  the   Disability   of  the
               Participant,  by the legal representative of the Participant;  or
               in  the  event  of  death  of  the  Participant,   by  the  legal
               representative  of  the  Participant's  estate  or  if  no  legal
               representative  has been appointed,  by the successor in interest
               determined under the Participant's will; provided,  however, that
               the Committee may waive any of the  provisions of this Section or
               provide otherwise as to any Stock Incentives other than Incentive
               Stock Options.

          (f)  The  Committee  may  establish  rules and  procedures to permit a
               holder  of a Stock  Incentive  to defer  recognition  of  taxable
               income upon the exercise or vesting of a Stock Incentive.

     3.2 Terms and  Conditions  of Options.  Each Option  granted under the Plan
must be  evidenced  by a Stock  Incentive  Agreement.  At the time any Option is
granted,  the Committee will determine  whether the Option is to be an Incentive
Stock Option described in Code Section 422 or a Non-Qualified  Stock Option, and
the Option must be clearly  identified  as to its status as an  Incentive  Stock
Option or a  Non-Qualified  Stock  Option.  Incentive  Stock Options may only be
granted to employees of the Company or any Subsidiary. At the time any Incentive
Stock Option  granted under the Plan is exercised,  the Company will be entitled
to legend the certificates  representing the shares of Stock purchased  pursuant
to the Option to clearly identify them as representing the shares purchased upon
the exercise of an Incentive Stock Option. An Incentive Stock Option may only be
granted  within ten (10) years from the  earlier of the date the Plan is adopted
or approved by the Company's stockholders.

          (a)  Option Price.  Subject to  adjustment in accordance  with Section
               5.2 and the other  provisions  of this  Section 3.2, the exercise
               price (the "Exercise Price") per share of Stock purchasable under
               any Option must be as set forth in the applicable Stock Incentive
               Agreement,  but in no event may it be less  than the Fair  Market
               Value on the date the Option is granted.  Except for  adjustments
               as  contemplated  by  Section  5.2  hereof,  in no event will the
               Exercise  Price per share of Stock of any Option be reduced after
               the date of grant of the Option and no Option may be cancelled or
               surrendered in exchange for an Option with a lower Exercise Price
               per share of Stock.  With  respect to each grant of an  Incentive
               Stock  Option  to a  Participant  who is an Over 10%  Owner,  the
               Exercise Price may not be less than 110% of the Fair Market Value
               on the date the Option is granted.

          (b)  Option Term. Any Incentive  Stock Option granted to a Participant
               who is not an  Over  10%  Owner  is  not  exercisable  after  the
               expiration  of ten  (10)  years  after  the date  the  Option  is
               granted.  Any Incentive Stock Option granted to an Over 10% Owner
               is not  exercisable  after the expiration of five (5) years after
               the date the  Option is  granted.  The term of any  Non-Qualified
               Stock  Option  must  be as  specified  in  the  applicable  Stock
               Incentive Agreement.

          (c)  Payment.  Payment for all shares of Stock  purchased  pursuant to
               exercise  of an  Option  will  be  made  in any  form  or  manner
               authorized by the Committee in the Stock  Incentive  Agreement or
               by amendment thereto,  including, but not limited to, cash or, if
               the Stock Incentive Agreement provides:

               (1)  by  delivery  to the  Company of a number of shares of Stock
                    which  have been  owned by the  holder  for at least six (6)
                    months  prior to the date of  exercise  having an  aggregate
                    Fair  Market  Value of not  less  than  the  product  of the
                    Exercise  Price  multiplied  by the  number  of  shares  the
                    Participant  intends to purchase upon exercise of the Option
                    on the date of delivery;

               (2)  in a cashless exercise through a broker; or

               (3)  by having a number of  shares  of Stock  withheld,  the Fair
                    Market  Value  of  which  as of  the  date  of  exercise  is
                    sufficient to satisfy the Exercise Price.

     In its discretion, and except to the extent precluded by the Sarbanes-Oxley
     Act of 2002, as amended,  the Committee  also may authorize (at the time an
     Option  is  granted  or  thereafter)   Company   financing  to  assist  the
     Participant  as to  payment of the  Exercise  Price on such terms as may be
     offered by the  Committee  in its  discretion.  Payment must be made at the
     time that the Option or any part thereof is exercised, and no shares may be
     issued or delivered  upon exercise of an option until full payment has been
     made by the Participant.  The holder of an Option, as such, has none of the
     rights of a stockholder.

          (d)  Conditions  to the  Exercise of an Option.  Each  Option  granted
               under the Plan is  exercisable  by the  Participant  or any other
               designated  person, at such time or times, or upon the occurrence
               of such event or events,  and in such  amounts,  as the Committee
               specifies in the Stock Incentive  Agreement;  provided,  however,
               that subsequent to the grant of an Option, the Committee,  at any
               time before complete  termination of such Option,  may accelerate
               the time or times at which such Option may be  exercised in whole
               or in part,  including,  without  limitation,  upon a  Change  in
               Control  as  defined  in the Stock  Incentive  Agreement  and may
               permit the Participant or any other designated person to exercise
               the  Option,  or any  portion  thereof,  for  all or  part of the
               remaining Option term, notwithstanding any provision of the Stock
               Incentive Agreement to the contrary.

          (e)  Termination  of  Incentive  Stock  Option.  With  respect  to  an
               Incentive Stock Option, in the event of Termination of Employment
               of a  Participant,  the  Option or  portion  thereof  held by the
               Participant  which is  unexercised  will expire,  terminate,  and
               become  unexercisable  no later than the  expiration of three (3)
               months after the date of  Termination  of  Employment;  provided,
               however,  that  in the  case of a  holder  whose  Termination  of
               Employment  is due to death or  Disability,  one (1) year will be
               substituted  for such three (3) month period;  provided,  further
               that such time limits may be exceeded by the Committee  under the
               terms of the grant,  in which case,  the  Incentive  Stock Option
               will be a Non-Qualified  Option if it is exercised after the time
               limits  that  would  otherwise   apply.   For  purposes  of  this
               Subsection (e), Termination of Employment of the Participant will
               not be deemed to have occurred if the  Participant is employed by
               another  corporation  (or a parent or subsidiary  corporation  of
               such other  corporation)  which has assumed the  Incentive  Stock
               Option of the  Participant in a transaction to which Code Section
               424(a) is applicable.

          (f)  Special    Provisions    for    Certain    Substitute    Options.
               Notwithstanding anything to the contrary in this Section 3.2, any
               Option issued in substitution for an option  previously issued by
               another entity,  which  substitution  occurs in connection with a
               transaction  to which  Code  Section  424(a) is  applicable,  may
               provide for an exercise  price  computed in accordance  with such
               Code Section and the regulations  thereunder and may contain such
               other terms and  conditions  as the  Committee  may  prescribe to
               cause such substitute Option to contain as nearly as possible the
               same terms and conditions  (including the applicable  vesting and
               termination  provisions)  as those  contained  in the  previously
               issued option being replaced thereby.

     3.3  Terms  and  Conditions  of  Stock  Appreciation   Rights.  Each  Stock
Appreciation Right granted under the Plan must be evidenced by a Stock Incentive
Agreement.  A Stock  Appreciation  Right entitles the Participant to receive the
excess of (1) the Fair Market  Value of a specified  or  determinable  number of
shares of the Stock at the time of payment or exercise  over (2) a specified  or
determinable  price which, in the case of a Stock  Appreciation Right granted in
connection  with an  Option,  may not be less than the  Exercise  Price for that
number of shares subject to that Option. A Stock  Appreciation  Right granted in
connection  with a Stock  Incentive may only be exercised to the extent that the
related Stock Incentive has not been exercised, paid or otherwise settled.

          (a)  Settlement.  Upon settlement of a Stock  Appreciation  Right, the
               Company must pay to the Participant  the  appreciation in cash or
               shares of Stock (valued at the aggregate Fair Market Value on the
               date of payment or exercise)  as provided in the Stock  Incentive
               Agreement or, in the absence of such provision,  as the Committee
               may determine.

          (b)  Conditions  to Exercise.  Each Stock  Appreciation  Right granted
               under the Plan is  exercisable  or payable at such time or times,
               or upon  the  occurrence  of such  event or  events,  and in such
               amounts,  as  the  Committee  specifies  in the  Stock  Incentive
               Agreement;  provided,  however, that subsequent to the grant of a
               Stock  Appreciation  Right,  the  Committee,  at any time  before
               complete  termination  of  such  Stock  Appreciation  Right,  may
               accelerate  the time or times at which  such  Stock  Appreciation
               Right may be exercised or paid in whole or in part.

     3.4 Terms and  Conditions  of Stock  Awards.  The number of shares of Stock
subject to a Stock Award and restrictions or conditions on such shares,  if any,
will be as the Committee  determines,  and the  certificate for such shares will
bear evidence of any  restrictions or conditions.  Subsequent to the date of the
grant  of the  Stock  Award,  the  Committee  has the  power to  permit,  in its
discretion,  an  acceleration  of the  expiration of an  applicable  restriction
period  with  respect  to any part or all of the  shares of Stock  awarded  to a
Participant. The Committee may require a cash payment from the Participant in an
amount no greater  than the  aggregate  Fair Market Value of the shares of Stock
awarded  determined  at the date of grant in  exchange  for the grant of a Stock
Award or may grant a Stock Award without the requirement of a cash payment.

     3.5  Terms  and  Conditions  of  Dividend  Equivalent  Rights.  A  Dividend
Equivalent  Right entitles the Participant to receive  payments from the Company
in an amount  determined by reference to any cash  dividends paid on a specified
number of shares of Stock to Company  stockholders  of record  during the period
such  rights are  effective.  The  Committee  may impose such  restrictions  and
conditions on any Dividend  Equivalent  Right as the Committee in its discretion
shall  determine,  including  the date any such right  shall  terminate  and may
reserve the right to terminate, amend or suspend any such right at any time.

          (a)  Payment. Payment in respect of a Dividend Equivalent Right may be
               made by the  Company  in cash or shares of Stock  (valued at Fair
               Market  Value as of the date  payment is owed) as provided in the
               Stock Incentive Agreement or Stock Incentive Program,  or, in the
               absence of such provision, as the Committee may determine.

          (b)  Conditions  to Payment.  Each Dividend  Equivalent  Right granted
               under the Plan is  payable  at such  time or  times,  or upon the
               occurrence of such event or events,  and in such amounts,  as the
               Committee  specifies in the applicable Stock Incentive  Agreement
               or Stock Incentive Program; provided, however, that subsequent to
               the grant of a Dividend  Equivalent Right, the Committee,  at any
               time before  complete  termination  of such  Dividend  Equivalent
               Right,  may  accelerate  the time or times at which such Dividend
               Equivalent Right may be paid in whole or in part.

     3.6 Terms and Conditions of  Performance  Unit Awards.  A Performance  Unit
Award shall  entitle the  Participant  to receive,  at a specified  future date,
payment of an amount  equal to all or a portion of the value of a  specified  or
determinable  number of units (stated in terms of a designated  or  determinable
dollar amount per unit) granted by the Committee.  At the time of the grant, the
Committee  must  determine  the base  value of each  unit,  the  number of units
subject to a Performance Unit Award, and the Performance Goals applicable to the
determination  of the ultimate  payment value of the Performance Unit Award. The
Committee  may provide for an alternate  base value for each unit under  certain
specified conditions.

          (a)  Payment.  Payment in respect of  Performance  Unit  Awards may be
               made by the  Company  in cash or shares of Stock  (valued at Fair
               Market  Value as of the date  payment is owed) as provided in the
               applicable Stock Incentive  Agreement or Stock Incentive  Program
               or,  in the  absence  of such  provision,  as the  Committee  may
               determine.

          (b)  Conditions to Payment.  Each Performance Unit Award granted under
               the Plan  shall be  payable  at such time or  times,  or upon the
               occurrence of such event or events,  and in such amounts,  as the
               Committee  shall  specify  in  the  applicable   Stock  Incentive
               Agreement or Stock Incentive  Program;  provided,  however,  that
               subsequent  to  the  grant  of  a  Performance  Unit  Award,  the
               Committee,  at any  time  before  complete  termination  of  such
               Performance Unit Award, may accelerate the time or times at which
               such Performance Unit Award may be paid in whole or in part.

     3.7 Terms and  Conditions of Phantom  Shares.  Phantom Shares shall entitle
the  Participant to receive,  at a specified  future date,  payment of an amount
equal to all or a portion  of the Fair  Market  Value of a  specified  number of
shares of Stock at the end of a specified  period. At the time of the grant, the
Committee  will  determine  the  factors  which will  govern the  portion of the
phantom shares so payable,  including,  at the discretion of the Committee,  any
performance  criteria that must be satisfied as a condition to payment.  Phantom
Share awards  containing  performance  criteria may be designated as performance
share awards.

          (a)  Payment.  Payment in respect of Phantom Shares may be made by the
               Company in cash or shares of Stock  (valued at Fair Market  Value
               as of the date  payment is owed) as  provided  in the  applicable
               Stock Incentive Agreement or Stock Incentive Program,  or, in the
               absence of such provision, as the Committee may determine.

          (b)  Conditions to Payment.  Each Phantom Share granted under the Plan
               is payable at such time or times,  or upon the occurrence of such
               event  or  events,  and in such  amounts,  as the  Committee  may
               specify in the  applicable  Stock  Incentive  Agreement  or Stock
               Incentive  Program;  provided,  however,  that  subsequent to the
               grant of a  Phantom  Share,  the  Committee,  at any time  before
               complete  termination of such Phantom  Share,  may accelerate the
               time or times at which such Phantom Share may be paid in whole or
               in part.

     3.8 Terms and  Conditions  of Restricted  Stock Units.  If permitted by the
Committee,  a Participant may defer the receipt of Stock from the exercise of an
Option  or defer  the  receipt  of  Stock  from a Stock  Award  or  other  Stock
Incentive.  If a  Participant  defers  receipt  of  such  Stock,  the  Company's
obligation  to issue the  shares of Stock  will be  reflected  in a  bookkeeping
account in the form of Restricted Stock Units,  with each unit  representing the
Company's obligation to issue one share of Stock, or the cash value thereof. All
such  deferrals  shall be subject to such terms and  conditions as the Committee
may establish.

          (a)  Payment. Payment in respect of Restricted Stock Units may be made
               by the Company in cash or shares of Stock  (valued at Fair Market
               Value at the date payment is owed) as provided in the  applicable
               Stock Incentive  Agreement or Stock Incentive Program,  or in the
               absence of such provision, as the Committee may determine.

          (b)  Conditions to Payment.  Each Restricted  Stock Unit granted under
               the Plan is payable at such time or times or on the occurrence of
               such event or events,  and in such amounts as the  Committee  may
               specify in the  applicable  Stock  Incentive  Agreement  or Stock
               Incentive  Program;  provided,  however,  that  subsequent to the
               grant of a  Restricted  Stock Unit,  the  Committee,  at any time
               before complete  termination of such  Restricted  Stock Unit, may
               accelerate the time or times at which the Restricted  Stock Units
               may be paid in whole or in part.

     3.9 Treatment of Awards Upon Termination of Employment. Except as otherwise
provided by Plan Section 3.2(e),  any award under this Plan to a Participant who
has experienced a Termination of Employment may be cancelled,  accelerated, paid
or continued,  as provided in the applicable Stock Incentive  Agreement or Stock
Incentive  Program,  or, in the absence of such provision,  as the Committee may
determine.  The portion of any award exercisable in the event of continuation or
the amount of any  payment  due under a  continued  award may be adjusted by the
Committee to reflect the Participant's  period of service from the date of grant
through the date of the  Participant's  Termination  of Employment or such other
factors as the Committee determines are relevant to its decision to continue the
award.


                         SECTION 4 RESTRICTIONS ON STOCK

     4.1 Escrow of Shares.  Any  certificates  representing  the shares of Stock
issued  under the Plan will be issued in the  Participant's  name,  but,  if the
applicable Stock Incentive Agreement or Stock Incentive Program so provides, the
shares of Stock will be held by a custodian  designated  by the  Committee  (the
"Custodian").  Each  applicable  Stock  Incentive  Agreement or Stock  Incentive
Program  providing for transfer of shares of Stock to the Custodian must appoint
the Custodian as the attorney-in-fact for the Participant for the term specified
in the applicable  Stock Incentive  Agreement or Stock Incentive  Program,  with
full power and authority in the Participant's name, place and stead to transfer,
assign and convey to the Company any shares of Stock held by the  Custodian  for
such Participant,  if the Participant forfeits the shares under the terms of the
applicable  Stock  Incentive  Agreement or Stock Incentive  Program.  During the
period  that the  Custodian  holds  the  shares  subject  to this  Section,  the
Participant  is  entitled to all  rights,  except as provided in the  applicable
Stock Incentive  Agreement or Stock Incentive  Program,  applicable to shares of
Stock  not so held.  Any  dividends  declared  on  shares  of Stock  held by the
Custodian  must provide in the  applicable  Stock  Incentive  Agreement or Stock
Incentive  Program,   to  be  paid  directly  to  the  Participant  or,  in  the
alternative, be retained by the Custodian or by the Company until the expiration
of the term  specified  in the  applicable  Stock  Incentive  Agreement or Stock
Incentive Program and shall then be delivered,  together with any proceeds, with
the shares of Stock to the Participant or to the Company, as applicable.

     4.2  Restrictions on Transfer.  The Participant  does not have the right to
make or permit to exist any  disposition of the shares of Stock issued  pursuant
to the Plan  except as provided in the Plan or the  applicable  Stock  Incentive
Agreement or Stock  Incentive  Program.  Any  disposition of the shares of Stock
issued under the Plan by the Participant not made in accordance with the Plan or
the applicable  Stock  Incentive  Agreement or Stock  Incentive  Program will be
void.  The  Company  will not  recognize,  or have the  duty to  recognize,  any
disposition  not made in  accordance  with the  Plan  and the  applicable  Stock
Incentive  Agreement or Stock Incentive  Program,  and the shares so transferred
will  continue  to be  bound  by the Plan  and the  applicable  Stock  Incentive
Agreement or Stock Incentive Program.


                          SECTION 5 GENERAL PROVISIONS

     5.1 Withholding.  The Company must deduct from all cash distributions under
the  Plan  any  taxes  required  to be  withheld  by  federal,  state  or  local
government.  Whenever  the Company  proposes or is required to issue or transfer
shares of Stock  under the Plan or upon the  vesting  of any  Stock  Award,  the
Company has the right to require the recipient to remit to the Company an amount
sufficient to satisfy any federal, state and local tax withholding  requirements
prior to the delivery of any certificate or certificates  for such shares or the
vesting of such Stock Award. A Participant may pay the withholding obligation in
cash, or, if the applicable Stock Incentive Agreement or Stock Incentive Program
provides, a Participant may elect to have the number of shares of Stock he is to
receive  reduced  by,  or with  respect  to a Stock  Award,  tender  back to the
Company,  the smallest number of whole shares of Stock which, when multiplied by
the Fair  Market  Value of the  shares  of Stock  determined  as of the Tax Date
(defined  below),  is sufficient to satisfy  federal,  state and local,  if any,
withholding  obligation arising from exercise or payment of a Stock Incentive (a
"Withholding  Election").  A Participant may make a Withholding Election only if
both of the following conditions are met:

          (a)  The Withholding  Election must be made on or prior to the date on
               which the amount of tax  required to be  withheld  is  determined
               (the "Tax Date") by  executing  and  delivering  to the Company a
               properly  completed notice of Withholding  Election as prescribed
               by the Committee; and

          (b)  Any Withholding  Election made will be irrevocable  except on six
               months advance written notice delivered to the Company;  however,
               the Committee may in its sole  discretion  disapprove and give no
               effect to the Withholding Election.

     5.2 Changes in Capitalization; Merger; Liquidation.

          (a)  The number of shares of Stock  reserved for the grant of Options,
               Dividend  Equivalent  Rights,  Performance  Unit Awards,  Phantom
               Shares, Stock Appreciation Rights and Stock Awards; the number of
               shares  of Stock  reserved  for  issuance  upon the  exercise  or
               payment,  as applicable,  of each  outstanding  Option,  Dividend
               Equivalent Right,  Phantom Share and Stock Appreciation Right and
               upon vesting or grant,  as applicable,  of each Stock Award;  the
               Exercise  Price  of each  outstanding  Option  and the  specified
               number  of  shares of Stock to which  each  outstanding  Dividend
               Equivalent  Right,  Phantom  Share and Stock  Appreciation  Right
               pertains  must be  proportionately  adjusted  for any increase or
               decrease in the number of issued shares of Stock resulting from a
               subdivision  or  combination  of shares or the payment of a stock
               dividend in shares of Stock to holders of  outstanding  shares of
               Stock or any other  increase  or decrease in the number of shares
               of Stock outstanding effected without receipt of consideration by
               the Company.

          (b)  In  the  event  of  a  merger,   consolidation,   reorganization,
               extraordinary  dividend,  spin-off,  sale of substantially all of
               the Company's  assets,  other change in capital  structure of the
               Company, tender offer for shares of Stock, or a change in control
               of the  Company (as defined by the  Committee  in the  applicable
               Stock   Incentive   Agreement)   the   Committee  may  make  such
               adjustments  with respect to awards and take such other action as
               it  deems  necessary  or  appropriate  to  reflect  such  merger,
               consolidation, reorganization or tender offer, including, without
               limitation,  the substitution of new awards, or the adjustment of
               outstanding  awards,  the acceleration of awards,  the removal of
               restrictions  on  outstanding   awards,  or  the  termination  of
               outstanding  awards in exchange for the cash value  determined in
               good faith by the Committee of the vested and/or unvested portion
               of the award.  Any  adjustment  pursuant to this  Section 5.2 may
               provide,  in the  Committee's  discretion,  for  the  elimination
               without  payment  therefor  of any  fractional  shares that might
               otherwise  become subject to any Stock  Incentive,  but except as
               set forth in this  Section may not  otherwise  diminish  the then
               value of the Stock Incentive.

          (c)  The  existence  of the  Plan  and the  Stock  Incentives  granted
               pursuant  to the Plan  must not  affect  in any way the  right or
               power  of the  Company  to  make  or  authorize  any  adjustment,
               reclassification,  reorganization  or other change in its capital
               or  business  structure,  any  merger  or  consolidation  of  the
               Company,   any  issue  of  debt  or  equity   securities   having
               preferences or priorities as to the Stock or the rights  thereof,
               the  dissolution  or  liquidation  of the  Company,  any  sale or
               transfer  of all or any part of its  business  or assets,  or any
               other corporate act or proceeding.

     5.3 Cash  Awards.  The  Committee  may, at any time and in its  discretion,
grant to any holder of a Stock Incentive the right to receive, at such times and
in such amounts as determined by the Committee in its discretion,  a cash amount
which is intended to reimburse  such person for all or a portion of the federal,
state and local income taxes  imposed upon such person as a  consequence  of the
receipt of the Stock Incentive or the exercise of rights thereunder.

     5.4  Compliance  with  Code.  All  Incentive  Stock  Options  to be granted
hereunder  are intended to comply with Code Section 422, and all  provisions  of
the Plan and all Incentive Stock Options granted  hereunder must be construed in
such manner as to effectuate that intent.

     5.5  Right to  Terminate  Employment.  Nothing  in the Plan or in any Stock
Incentive  confers upon any  Participant the right to continue as an employee or
officer  of the  Company  or any of its  Affiliates  or affect  the right of the
Company or any of its  Affiliates to terminate the  Participant's  employment or
services at any time.

     5.6  Non-Alienation of Benefits.  Other than as provided herein, no benefit
under the Plan may be subject in any manner to anticipation,  alienation,  sale,
transfer,  assignment,  pledge,  encumbrance or charge; and any attempt to do so
shall be void. No such benefit may, prior to receipt by the  Participant,  be in
any  manner  liable  for  or  subject  to  the  debts,  contracts,  liabilities,
engagements or torts of the Participant.

     5.7  Restrictions  on  Delivery  and Sale of  Shares;  Legends.  Each Stock
Incentive is subject to the condition that if at any time the Committee,  in its
discretion,  shall determine that the listing,  registration or qualification of
the shares covered by such Stock Incentive upon any securities exchange or under
any state or federal law is  necessary  or  desirable  as a  condition  of or in
connection with the granting of such Stock Incentive or the purchase or delivery
of shares  thereunder,  the delivery of any or all shares pursuant to such Stock
Incentive  may be  withheld  unless  and until  such  listing,  registration  or
qualification  shall have been effected.  If a registration  statement is not in
effect under the Securities Act of 1933 or any applicable  state securities laws
with respect to the shares of Stock  purchasable or otherwise  deliverable under
Stock Incentives then outstanding,  the Committee may require, as a condition of
exercise of any Option or as a condition to any other delivery of Stock pursuant
to a Stock  Incentive,  that  the  Participant  or  other  recipient  of a Stock
Incentive represent,  in writing, that the shares received pursuant to the Stock
Incentive are being acquired for investment and not with a view to  distribution
and  agree  that the  shares  will not be  disposed  of  except  pursuant  to an
effective  registration  statement,  unless the Company  shall have  received an
opinion of counsel that such disposition is exempt from such  requirement  under
the Securities Act of 1933 and any applicable state securities laws. The Company
may include on certificates  representing  shares delivered  pursuant to a Stock
Incentive   such  legends   referring  to  the  foregoing   representations   or
restrictions or any other applicable  restrictions on resale as the Company,  in
its discretion, shall deem appropriate.

     5.8 Listing and Legal Compliance. The Committee may suspend the exercise or
payment of any Stock Incentive so long as it determines that securities exchange
listing or registration or  qualification  under any securities laws is required
in connection  therewith and has not been  completed on terms  acceptable to the
Committee.

     5.9  Termination  and Amendment of the Plan.  The Board of Directors at any
time may amend or terminate  the Plan without  stockholder  approval;  provided,
however, that the Board of Directors may condition any amendment on the approval
of  stockholders  of the Company if such approval is necessary or advisable with
respect to tax,  securities or other  applicable  laws. No such  termination  or
amendment  without the consent of the holder of a Stock  Incentive may adversely
affect the rights of the Participant under such Stock Incentive.

     5.10 Stockholder  Approval.  The Plan must be submitted to the stockholders
of the Company for their approval  within twelve (12) months before or after the
adoption of the Plan by the Board of Directors of the Company.  If such approval
is not obtained, any Stock Incentive granted hereunder will be void.

     5.11  Choice of Law.  The laws of the State of  Maryland  shall  govern the
Plan,  to the extent not  preempted  by federal  law,  without  reference to the
principles of conflict of laws.

     5.12  Effective  Date of Plan.  This  Plan  was  approved  by the  Board of
Directors as of ________________, 2004.

                                    OMEGA HEALTHCARE INVESTORS, INC.


                                    By:
                                       --------------------------------------

                                    Title:
                                          -----------------------------------



                        OMEGA HEALTHCARE INVESTORS, INC.
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

PROXY

The undersigned  hereby appoints Robert O. Stephenson and Thomas H. Peterson and
each of them,  as  proxies,  each with the power to appoint  his  substitute  to
represent  and to vote as  designated  below,  all the shares of common stock of
Omega Healthcare Investors,  Inc. ("Omega") held of record by the undersigned on
April 26, 2004 at the Annual Meeting of  Stockholders to be held on June 3, 2004
or any adjournment thereof.

This Proxy, when properly executed,  will be voted in the manner directed herein
by the undersigned. If no specification is made, this Proxy will be voted FOR:

     1.   The Election of Directors
          NOMINEES:
          Edward Lowenthal and Stephen D. Plavin

     2.   The amendment to our Articles of  Incorporation to increase the number
          of  authorized  shares  of our  preferred  stock  from  10,000,000  to
          20,000,000 shares.

     3.   To approve the Omega Healthcare  Investors,  Inc. 2004 Stock Incentive
          Plan.

          In their  discretion,  the  proxies are  authorized  to vote upon such
     other  business  as  may  properly  come  before  the  meeting  and  at any
     adjournment thereof.

       (Continued, and to be marked, dated and signed, on the other side)

                                SEE REVERSE SIDE

                           -- FOLD AND DETACH HERE --




[X] (Please mark your
    votes as in this
    example.)

     The Directors recommend a vote "FOR" Proposal 1.

                                                      FOR    AGAINST   ABSTAIN
     1.   The Election of Directors                  [  ]     [  ]      [  ]
          NOMINEES:
          Edward Lowenthal and Stephen D. Plavin

          (Instruction:  To  withhold  authority  to  vote  for  any  individual
          nominee, write that nominee's name here.)

     2.   To  consider  and vote  upon a  proposal
          to amend  our Articles of  Incorporation
          to  increase the  number  of  authorized
          shares  of  our  preferred   stock  from
          10,000,000 to 20,000,000 shares.           [  ]     [  ]      [  ]

     3.   To approve the Omega Healthcare Investors,
          Inc. 2004 Stock Incentive Plan.            [  ]     [  ]      [  ]
--------------------------------------------------------------------------------



NOTE:  Please sign exactly as your name  appears on this Proxy.  When shares are
held by joint  tenants,  both should sign.  When signing as attorney,  executor,
administrator,  trustee  or  guardian,  please  give  full  title as such.  If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.

Please check the box if you plan to attend the Annual Meeting in person. [ ]


SIGNATURE(S)                                               DATE



NOTE:Please sign exactly as your name appears  hereon.  Joint owners should each
     sign.  When  signing  as  attorney,  executor,  administrator,  trustee  or
     guardian,  please  give full title as such.  This proxy will not be used if
     you attend the meeting in person and so request.

--------------------------------------------------------------------------------
                           -- FOLD AND DETACH HERE --